Midnight Sun Signs Binding Letter Of Intent And Term Sheet To Acquire Remaining 40% Of Zambian Licences

Vancouver, British Columbia, February 20, 2018 – Midnight Sun Mining Corp. (the “Company”, “MMA” or “Midnight Sun”) (TSX-V: MMA) is pleased to announce that it has signed a binding letter of intent and term sheet (the “Binding Letter and Term Sheet”) with Kam Chuen Resource Holdings Inc. (“Kam Chuen”), its joint venture partner in Zambian High Light Mining Investment Limited (“ZHLMIL”), to acquire the remaining 40% interest in ZHLMIL (the “Purchased Shares”).

Midnight Sun Agrees to Acquire Kam Chuen’s Outstanding 40% Ownership in the Licences

Midnight Sun previously satisfied its obligations under the Option Agreement with Kam Chuen, originally announced on November 29, 2013, pursuant to which it acquired a 60% interest in the Solwezi Group of Exploration Licences (the “Licences”) from Kam Chuen, as shown in Illustration 1.0 – The Solwezi Group of Licences.

On February 18, 2018, Midnight Sun and Kam Chuen signed a Binding Letter of Intent and Term Sheet for the Company to acquire the remaining 40% interest in ZHLMIL for aggregate consideration of CA $30 million in cash payable over time, as illustrated below in Table 1.0 below (the “Acquisition”).  The Acquisition will give Midnight Sun 100% equity ownership of ZHLMIL, which holds the Licences, and Kam Chuen will maintain a 2% net smelter returns royalty covering the Licenses.

The Company’s President and Chief Executive Officer, Brett Richards stated: “The acquisition of the remaining 40% of Zambian High Light Mining Investment Limited represents tremendous value and future optionality for Midnight Sun shareholders. With Midnight Sun now controlling 100% of the Licences, it will be able to efficiently drive and execute on its work programs in 2018 and 2019 by controlling all aspects of the exploration project.  Assuming positive results in our forthcoming programs, I feel that the deferred payment structure provides Midnight Sun with adequate time to complete a large portion of our exploration work, whereby the increase in value will more than substantiate the current valuation of the payment structure.  By owning 100% of the Licences, it also makes potential new partnerships and joint ventures much more attractive to third parties.”

Table 1.0 – Deferred Consideration Payments

Completion of the Acquisition is subject to a number of customary closing conditions, including, but not limited to, the Purchased Shares not being subject to any encumbrances or transfer restrictions; TSX Venture Exchange conditional approval of the Acquisition; no material adverse change to ZHLMIL; and that any other required Zambian corporate or securities law approvals shall have been obtained.

As security for the deferred consideration payments, a portion of the Purchased Shares will be placed in escrow by MMA with an escrow agent on closing of the Acquisition and will be held as security in favour of Kam Chuen.  A proportionate amount of the Purchased Shares will be released to MMA as the deferred payments are satisfied. In the event of a payment default by MMA, the escrowed Purchased Shares will represent the sole and absolute recourse of Kam Chuen.  As part of the definitive documents for the Acquisition, MMA and Kam Chuen will enter into a shareholder and governance agreement for ZHLMIL in the event of any reacquisition of the Purchased Shares by Kam Chuen following any default by MMA.

Entities affiliated with Kam Chuen hold 9,437,500 common shares of the Company (representing approximately 12.32% of the outstanding shares), and as such, the Acquisition constitutes a “related party transaction” under Multilateral Instrument 61-101 – Protection of Security Holders in Special Transactions (“MI 61-101”). Accordingly, the Company is required to obtain “minority approval” (as such term is defined in MI 61-101) of the Acquisition at a special meeting of shareholders of MMA. Additional details regarding the date of the special meeting of shareholders of the Company to approve the Acquisition will be provided to shareholders in due course.

The Solwezi Group of Exploration Licences

The Licences consist of two individual exploration licences, 21509-HQ-LEL (formerly 14039-HQ-LPL) and 12124-HQ-LEL, covering over 506 km2 of surface area.  The Licences are located in the Northern province of Zambia, adjacent to Africa’s largest copper producer, the Kansanshi Mining Complex, on the prolific Zambia-Congo Copper Belt.

Illustration 1.0 – Solwezi Group of Licences

 Please also refer to the Company’s previous news releases as well as the Company’s presentation on its website at:  www.midnightsunmining.com.

ON BEHALF OF THE BOARD OF MIDNIGHT SUN MINING CORP.

Brett A. Richards – President and Chief Executive Officer

For Further Information Contact:

Brett A. Richards                                                         Al Fabbro

President and Chief Executive Officer                       Lead Director

Tel:  +1 905 449 1500                                                 Tel:  +1 604 351 8850

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEW RELEASE.

This news release includes certain statements that may be deemed as “forward-looking statements” within the meaning of applicable Canadian securities laws.  All statements in this release, other than statements of historical facts, are forward-looking statements, including, without limitation, statements pertaining to completion of the Acquisition and any approvals required in connection with the Acquisition.  Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements.  Factors that could cause actual results to differ materially from those in the forward-looking statements include:  changes in market conditions, unsuccessful exploration results, changes in the price of commodities (particularly copper, cobalt, gold and nickel), unanticipated changes in key management personnel and general social, economic or geo-political conditions.  Mining exploration and development is an inherently risky business.  Accordingly the actual events may differ materially from those projected in the forward-looking statements.  This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements.  These and other factors should be considered carefully and readers should not place undue reliance on the Company’s forward-looking statements.  The Company does not undertake to update any forward–looking statement that may be from time to time by the Company or on its behalf, except in accordance with applicable securities laws.

Midnight Sun Mining Provides Corporate Update

Vancouver, British Columbia, January 31, 2018 – Midnight Sun Mining Corp. (the “Company” or “Midnight Sun”) (TSX-V: MMA) provides a corporate update and announces its exploration plans for 2018.

Solwezi Licenses Option Agreement Vesting

Midnight Sun has satisfied all of its obligations under the Option Agreement with Kam Chuen Resource Holdings Ltd. (“Kam Chuen”) and has earned a 60% interest in the Solwezi Group of Exploration Licences (the “Licences”) (See November 29, 2013 news release titled “Midnight Sun Signs Definitive Option Agreement for Exploration Permits in Zambia”).

The Licences consist of two individual exploration licences, 21509-HQ-LEL (formerly 14039-HQ-LPL) and 12124-HQ-LEL (as shown below in Illustration 1.0 – Solwezi Group of Licences), covering over 506 km2 of surface area.  The Licences are located in northern Zambia, adjacent to Africa’s largest copper producer, the Kansanshi Mine, on the prolific Zambia-Congo Copper Belt. Having satisfied all obligations under the option agreement, the Company is now in the process of formalising a shareholders and governance agreement with Kam Chuen to govern the further exploration and operation of the Licenses as a joint venture.

2018 Exploration Program

The Company is planning a comprehensive exploration program for 2018, beginning in April, immediately after the rainy season in northern Zambia.

Initially, Midnight Sun will conduct an airborne geophysical survey [Heli-borne Versatile Time Domain Electromagnetic (“VTEM”)] over the three main targets: Mitu, 22 Zone and Dumbwa (north and central), and the additional prospective targets of Khaziba and Kifubwe.

Once completed, the Company will prepare a comparative interpretation utilizing the new data from the VTEM survey and the known drill data from its 2016 and 2017 drilling campaign to determine primary and secondary drill targets on the 3 main mineralized areas, with a principle focus on Mitu.

The Company’s President and Chief Executive Officer, Brett Richards stated: “This year, Midnight Sun is going to increase capacity in almost every area of its business.  We are going to increase our presence and activities on the ground in Zambia and will be ramping up with multiple geological teams to quickly and efficiently understand the prospective targets than have been located and proven from our campaign last year.  We intend to initiate the forthcoming season starting with an airborne geophysical program over the licences, followed by a ground geo-physical program and an aggressive drilling campaign on each of the targets identified:  Mitu, 22 Zone and Dumbwa (North and Central).”


Illustration 1.0 – Solwezi Group of Licences

2016 and 2017 Exploration Work

The focus of the 2016 and 2017 exploration programs and drill campaigns was to expand and further define the extent of the previously announced ore-shale type copper-cobalt discovery at the Mitu area of the Solwezi Licences.  These programs included drill hole MDD-17-15 which stepped out 3.72 kilometres (“km”) southeast from discovery hole MDD-16-01, and reported 3.44% copper, 0.067% cobalt, 0.058% nickel and 331 parts per billion gold (4.23% copper equivalent) over 11.6 meters (see news releases dated January 12, 2017; February 10, 2017; May 3, 2017; and July 4, 2017).

A secondary focus of the 2016 and 2017 joint campaign was to understand the mineralization and lithology of the two other regional targets on the Licenses, identified as 22 Zone and Dumbwa (north and central).

Please refer to the Company’s previous New Releases as well as the Company presentation on its website at:  www.midnightsunmining.com.

Warrant Exercise

During January 2018, the Company received gross proceeds of $635,800 upon the exercise of 3,179,000 share purchase warrants priced at $0.20.  The share purchase warrants were issued as part of a unit financing, which was announced on October 26, 2015 and had its final close on January 29, 2016.

Stock Option Grant

Midnight Sun has granted stock options to purchase an aggregate of 2,575,000 common shares of the Company, at an exercise price of $0.36 per share, to certain employees, consultants and directors.  The stock options are granted pursuant to Midnight Sun’s 10% rolling stock option plan, are subject to vesting provisions, and shall expire 5 years from the date of grant.

ON BEHALF OF THE BOARD OF MIDNIGHT SUN MINING CORP.

Brett A. Richards – President and Chief Executive Officer

For Further Information Contact:

Brett A. Richards
President and Chief Executive Officer
Tel:  +1 905 449 1500

Al Fabbro
Lead Director
Tel:  +1 604 351 8850

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEW RELEASE.

This news release includes certain statements that may be deemed as “forward-looking statements”.  All statements in this release, other than statements of historical facts, the expected completion of any Offering, and the expected use of proceeds are forward-looking statements.  Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements.  Factors that could cause actual results to differ materially from those in the forward-looking statements include:  changes in market conditions, unsuccessful exploration results, changes in the price of commodities (particularly copper, cobalt, gold and nickel), unanticipated changes in key management personnel and general social, economic or geo-political conditions.  Mining exploration and development is an inherently risky business.  Accordingly the actual events may differ materially from those projected in the forward-looking statements.  This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements.  These and other factors should be considered carefully and readers should not place undue reliance on the Company’s forward-looking statements.  The Company does not undertake to update any forward–looking statement that may be from time to time by the Company or on its behalf, except in accordance with applicable securities laws.