X-Terra Resources Inc. (TSX-V: XTT) (FRANKFURT: XTR) is pleased to announce that it has completed the closing of its previously announced non-brokered private placement pursuant to which the Corporation issued an aggregate of 2,000,000 units at a price of $0.75 per Unit, for gross proceeds to the Corporation of $1,500,000.

Each Unit is comprised of one common share of the Corporation and one (1) common share purchase warrant of the Corporation. Each Warrant will entitle the holder thereof to acquire one additional Common Share at a price of $1.00 until March 7, 2025.

There is an offering document related to the Offering that can be accessed under the Corporation’s profile at www.sedar.com and on the Corporation’s website at www.xterraresources.com.

The net proceeds from the issuance of the Units will be used for general and administrative purposes and for exploring the Corporation’s mining properties located in the provinces of Québec and New Brunswick, with a focus on its lithium properties. Please see the Offering Document for details on the use of proceeds.

The Units were issued to purchasers pursuant to the listed issuer financing exemption under Part 5A of National Instrument 45-106 – Prospectus Exemptions or in Québec pursuant to Regulation 45–106 – Prospectus Exemptions. Units offered under the Listed Issuer Financing Exemption are not subject to resale restrictions pursuant to applicable Canadian securities laws.

The Corporation has not engaged a security dealer in connection with the Offering and no finder’s fees or commissions were paid in connection with the Offering.

As a result of the closing of the Offering, there are now 18,428,372 Common Shares issued and outstanding. The Offering is subject to final acceptance by the TSX Venture Exchange.

Two insiders of X-Terra purchased an aggregate of 28,375 Units for total consideration of $21,281.25, as follows: (i) Sylvain Champagne, the Chief Financial Officer and a director of X-Terra purchased 1,708 Units for a total consideration of $1,281 (representing 0.01% of the issued and outstanding common shares of the Corporation following the closing of the Offering) and (ii) JKP Holding Ltd., a company controlled by Jordan Potts, a director of X-Terra purchased 26,667 Units for a total consideration of $20,000 (representing 0.16% of the issued and outstanding common shares of the Corporation following the closing of the Offering). Under policies of the TSX Venture Exchange, the securities issued to Messrs. Champagne and Potts are subject to a four-month hold period, expiring on July 8, 2023.

Immediately after the closing of the Offering, (i) Mr. Champagne owned, directly and indirectly, or exercise control over 85,707 common shares and 203,568 stock options of the Corporation and (ii) Mr. Potts owned, directly and indirectly, or exercise control over 37,381 common shares and 42,857 stock options of the Corporation.

Each of the Insiders is considered a “related party” and an “insider” of the Corporation for the purposes of applicable securities laws and stock exchange rules. The subscription and issuance of Units to each of the Insiders constitute a related party transaction, but is exempt from the formal valuation and minority approval requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions as the Corporation’s securities are not listed on any stock exchange identified in Section 5.5(b) of MI 61-101 and neither the fair market value of the Units issued to each of the Insiders, nor the fair market value of the entire Offering, exceeds 25% of the Corporation’s market capitalization. The Corporation did not file a material change report with respect to the participation of the Insiders at least 21 days prior to the closing of the Offering as the Insiders participation was not determined at that time.

Messrs. Champagne and Potts, each of whom is a director of the Corporation, have disclosed their interest to the Board of the Directors of the Corporation pursuant to Section 120 of the Canada Business Corporations Act to the effect that they may participate in the Offering and subscribe to Units. The terms of the Offering and the agreements relating thereto were submitted to and unanimously approved by way of a resolution adopted by all the directors of the Corporation other than the Non-Independent Directors. The Non-Independent Directors did not vote on the resolution to approve the Offering and the agreements relating thereto. The directors of the Corporation, other than the Non-Independent Directors, determined that the Offering was in the best interest of the Corporation.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities of the Corporation in the United States. The securities of the Corporation offered pursuant to the Offering have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About X-Terra

X-Terra Resources is a resource company focused on acquiring and exploring lithium and precious metals properties in Canada.