COTEC HOLDINGS CORP. PROVIDES UPDATE ON PROPOSED CHANGE OF BUSINESS TRANSACTION - Announces Proposed Private Placement of Subscription Receipts For Gross Proceeds of up to $12 million - Seite 2

The Fund is Basic Industries Venture Fund I, LP, a limited partnership governed by the laws of New South Wales, Australia. The manager and general partner of the Fund are affiliates of RFC Ambrian Group Limited ("RFC Ambrian"), an Australian corporation that is an experienced institutional investor and adviser in the resources, energy and basic industries. The Fund is seeking total capital commitments of AUS$75 million and is targeting an initial closing in the first quarter of 2022. The Fund will have a ten year term (subject to extension by the general partner for up to two consecutive one year periods), and will provide that the limited partners will receive, prior to any distributions to the general manager, a return of their capital contributions plus an 8% preferred return after which distributions will be allocated 20% to the general partner and 80% to the limited partners. Capital commitments (including the Fund's capital commitment) will be funded based on capital calls made at the discretion of the general partner during an investment period of five years from the initial closing.

The Corporation has finalized the terms of its subscription into the Fund and intends to sign a binding subscription agreement following the completion of the Proposed Financing (as defined below). Completion of the Corporation's subscription into the Fund will be subject to a number of customary conditions, including receipt of all necessary TSXV, shareholder and board approvals.

In connection with its investment in the Fund, CoTec expects to enter into an agreement with RFC Ambrian pursuant to which CoTec will have certain co-investment rights with respect to investments by RFC Ambrian in projects that utilize technologies in which the Fund has invested.

Non-Arm's Length Transaction and Sponsorship

RFC Ambrian is an independent third party without any involvement of any related party to the Corporation. Therefore, the Corporation's proposed investment in the Fund is an arm's length transaction.

A company affiliated with Julian Treger, the Corporation's Chief Executive Officer designate and a director, is a significant investor in BSL. Therefore, the Corporation's investment in BSL is not an arm's length transaction. Given his interest in BSL, Mr. Treger has not been involved in the Corporation's evaluation of BSL or the negotiation of its investment in BSL.