Era Resources Inc. Announces Proposed Financing with its Major Shareholder

TORONTO, ONTARIO--(Marketwired - Oct. 27, 2016) -

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Era Resources Inc. ("Era" or the "Company") (TSX VENTURE:ERX) is pleased to announce it has entered into a binding agreement (the "Letter Agreement") with its major shareholder, Sentient Executive GP IV, Limited, acting as the general partner of Sentient GP IV, L.P., itself acting as the general partner of Sentient Global Resources Fund IV, L.P. (collectively, "Sentient") in connection with the proposed issuance of US$7,000,000 principal amount of convertible unsecured debentures (the "Debentures") of the Company (the "Transaction"). In addition to the Company, its wholly-owned subsidiaries, Yandera Mining Company Limited and Marengo Mining (PNG) Limited (collectively, the "PNG Subsidiaries") have executed the Letter Agreement as co-issuers of the Debentures.

Sentient intends to subscribe for the Debentures, which shall be issued on a private placement basis, following the approval of the Company's shareholders at the annual general and special meeting to be held on November 24, 2016 (the "Meeting"). Sentient is a "related party" of the Company as Sentient is a person that has beneficial ownership of, and control or direction over, directly or indirectly, securities of the Company carrying more than 10% of the voting rights attached to all the Company's outstanding voting securities. As a result, the transaction is considered a related party transaction for purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") and TSX Venture Exchange ("TSXV") Policy 5.9 - Protection of Minority Security Holders in Special Transactions. As a result, the Transaction will be subject to "minority shareholder approval" (within the meaning of MI 61-101) and as such the Company will be seeking such approval at the Meeting in accordance with TSXV policies and MI 61-101. The Transaction is also subject to approval by the TSXV.

The Debentures will mature on December 31, 2017, (the "Maturity Date"); the Debentures will not bear interest. Each US$1,000 principal amount of Debentures will be convertible into common shares of the Company ("Common Shares") at a conversion price of C$0.25 per Common Share (the "Conversion Price"). Each Debenture will be convertible, in whole or in part, at the option of Sentient and at any time, into Common Shares at the Conversion Price, for each US$1,000 principal amount of Debentures, subject to adjustment in certain circumstances as described below. In addition, the Debentures will be guaranteed by each of Marengo Mining (Australia) Limited and Yandera Mining Company (Holdings) Pty Limited.