Stock Option Grant and Shares for Debt Settlement

MONTREAL, Jan. 28, 2021 (GLOBE NEWSWIRE) -- Geomega Resources Inc. (“Geomega” or the “Corporation”) (TSX.V: GMA) (OTC: GOMRF) a developer of clean technologies for the mining, refining and recycling of rare earths, announces that the Q2 interim financial statements for the six-month period ended November 30, 2020 have been approved at the Board of Directors meeting (“Board”) which was held on January 27, 2021 and have now been published on SEDAR and on the Corporation’s website.

Stock Option Grants
Other items that were approved at the Board include the grant of 1,350,000 stock options pursuant to the Corporation’s Stock Option Plan, at an exercise price of $0.34 per option, to officers, employees and consultants of the Corporation and its subsidiary. The options to the directors, officers and employees may be exercised for a period of 5 years after the grant date and they vest gradually over a period of 24 months from the day of grant, at a rate of 1/4 per six-month period. The options to consultants may be exercised for a period of 2 years after the grant date and they vest gradually over a period of 12 months from the day of grant, at a rate of 1/4 per three-month period. No stock options were granted at the Annual General Meeting that was held on October 21, 2020.

Shares for Debt Settlement
In connection with the Corporation’s efforts to clean its balance sheet in anticipation of starting production at the demonstration plant, the Corporation announced that it has entered into an agreement to issue shares in settlement of a debt of $47,858 representing accrued interest from a convertible debenture financing which closed on August 13, 2017 and other past consulting services. As consideration for the settlement of the debt, the Corporation will issue a total of 140,754 common shares at a deemed price of $0.34 per share. The convertible debentures, which were subscribed for by several members of the Corporation’s management and directors, carried an interest of 10% per annum, compounded quarterly. The debentures were converted into common shares at a price of $0.12 in August 2019 except for the accrued and compounded interest. Accordingly, this shares for debt settlement includes one current director, Gilles Gingras, and the CEO of the corporation, Kiril Mugerman. This agreement is considered a “related party transaction” under Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions (Québec) (“Regulation 61-101”) and the corresponding Policy 5.9 of the TSXV; however, the proposed settlement with the foregoing insiders is exempt from the formal valuation and minority shareholder approval requirements provided under Regulation 61-101 in accordance with sections 5.5(a) and 5.7(1)(a) of said Regulation 61-101. The exemption is based on the fact that neither the market value of the settlement with the insiders nor the consideration paid therefor exceeds 25% of the Corporation’s market capitalization. The Corporation did not file a material change report at least 21 days prior to the settlement since the transaction was not determined at that moment and the Corporation wished to close the agreement on an expedited basis for sound business reasons.