Cancana Shareholders Approve Rio Madeira Joint Venture and Cancana Closes US$5.7 Million Private Placement and Appoints a New Director - Seite 2

2. A secured convertible debenture, (the "Debenture") for a purchase price of US$4.15 million (approximately CDN$4.58 million) (the "Debt Offering" and, collectively with the Equity Offering, the "Offerings"). The Debenture has a term of three (3) years and bears interest at a rate of 8% per annum. The principal of the Debenture is convertible, in whole or in part, into Common Shares at a price of CDN$0.20 per Common Share at the option of Ferrometals.

Upon closing of the Offerings, Ferrometals owns an aggregate of 13,857,656 Common Shares and an aggregate of 13,857,656 common share purchase warrants, including the Warrants issued under the Offerings and the common share purchase warrants issued to Ferrometals in the private placements of the Company previously disclosed in the Company's press releases of February 24, 2014 and March 6, 2014. Accordingly, Ferrometals currently holds approximately 24% of the issued and outstanding Common Shares on a non-diluted basis (or approximately 53.5% of the Company's then issued and outstanding Common Shares on a partially-diluted basis, assuming the exercise by Ferrometals of all of the warrants of the Company held by it and the conversion in full of the principal amount of the Debenture). As Ferrometals currently owns more than 20% of the Company's issued and outstanding Common Shares, Ferrometals is a "control person" of Cancana pursuant to the policies of the TSXV.

In connection with the Offerings, an aggregate amount of CDN$102,000 and US$166,000 in cash finder's fees are payable to certain eligible arm's length persons and an aggregate of 510,000 non-transferable finder's warrants (the "Finder Warrants") are issuable to certain eligible arm's length persons. Each Finder Warrant is exercisable into a Unit at an exercise price of CDN$0.20 per Unit and is exercisable for a period of two (2) years from the date hereof.

All securities issued pursuant to the Offerings, including the Common Shares and Warrants comprising the Units and the Finder's Warrants and the Common Shares underlying the Warrants, the Debenture and any Common Shares issuable upon conversion of the Debenture, are subject to a four (4) month and one (1) day statutory hold commencing from the date of issuance. The Offerings are subject to TSXV final acceptance of requisite regulatory filings.