Selten Metal Enters into Reverse Takeover Transaction with Railtown Capital

The Transaction is not a Non-Arm’s Length Qualifying Transaction under TSXV Policy 5.4. Accordingly, Railtown will not be required to obtain shareholder approval of the Transaction.

About Selten Metal Corp.

Selten Metal was incorporated in May of 2021 and, pursuant to an option agreement (the “Option Agreement“) with NexOptic Technology Corp. (“NexOptic“) dated December 15, 2021, as amended on February 17, 2022 and March 17, 2022, holds an option to acquire up to a 100% interested in the THOR heavy and light rare earth project (“THOR” or the “THOR Project“), consisting of roughly 2,170 hectares located in Clark County, Nevada.

German for “rare,” the word “Selten” represents Selten Metal Corp’s desire to become a leading producer of heavy and light rare earth elements in the United States-as US sourced rare earths are becoming increasingly critical to the climate economy, modern technologies and for global geopolitical stability.

The THOR Heavy & Light Rare Earth Project

The THOR Project is situated 120km from Las Vegas in an active mining region in Southern Nevada, 26 kilometres from what was once the largest rare-earth element (“REE“) mine in the world, Mountain Pass. In 2017, Mountain Pass reopened as the largest REE mine in the Western Hemisphere, and the only REE mine in North America (operated by MP Materials Corp). Reference to mineralization on any properties beyond THOR isn’t necessarily indicative of mineralization on the THOR Project. Selten Metal is focused on sustainable exploration and development for the THOR Project.

Selten is in the process of having a current technical report on the THOR Project commissioned and further and more fulsome disclosure will be provided in subsequent news releases. The technical report will be filed on the Resulting Issuer’s (as defined below) SEDAR profile on completion of the Transaction.

Pursuant to the Option Agreement, in order for Selten to acquire an initial 75% interest in and to the THOR Project, Selten must: (a) make a cash payment of $1,100,000 to NexOptic by May 15, 2022 (the “Option Cash Payment“), (b) issue to NexOptic such number of common shares in its capital as will represent 9.5% of the issued and outstanding Selten shares post-issuance (on a pre-Transaction basis), (c) issue to NexOptic an additional 500,000 shares on the date which is 12 months following the date on which Selten is listed on a Canadian securities exchange (the “Listing Date“) and (d) issue to NexOptic a further additional 500,000 shares on the date which is 24 months following the Listing Date. If a Listing Date does not occur within 24 months of the date of the Option Agreement, the option contemplated thereunder will terminate. The Option Agreement provides that, upon the exercise of the initial option, Selten Metal will have the right (the “Second Option“) to acquire the remaining 25% interest in the THOR project, by issuing to NexOptic an additional 5,000,000 common shares, which issuance shall occur upon the date which is either 36 months following the Listing Date or 48 months following the Listing Date, at the discretion of Selten. For greater certainty, any and all share issuance obligations of Selten Metal under the Option Agreement will be satisfied through the issuance of an equal number of common shares of the Resulting Issuer, in the event the Transaction is consummated.

Resulting Issuer Board of Directors and Management

Upon completion of the Transaction, the board of directors and senior management of the Resulting Issuer is expected to be drawn largely from the current Selten Metal team and will be comprised of individuals with extensive experience in the development, financing and growth of public resource companies.

The following sets out the backgrounds of the persons who are currently expected to be directors and officers of the Resulting Issuer following completion of the Transaction.

Jenny-Claire M. Ganasi, CEO and Director, is a Chartered Professional Accountant with more than 15 years experience working with public companies. Prior to joining Selten Metal, Jenny-Claire spent six years on secondment in Norway supporting Teekay Offshore Partners (L.P. (now Altera Infrastructure L.P. owned by Brookfield Business Partners) (NYSE: ALIN) with corporate, management reporting and finance, planning and analysis for the executive leadership team and board of directors. Prior to this, Jenny-Claire spent four years with Teekay LNG Partners (NYSE: TGP) in Vancouver in corporate reporting and four years with PricewaterhouseCoopers LLP in Vancouver in both audit and assurance and tax groups. Jenny-Claire holds a bachelor of Technology in Accounting and a diploma in Financial Management, Advanced Taxation from British Columbia Institute of Technology, and a certificate in Sustainability Management from University of British Columbia.

Paul McKenzie, Director, is the CEO and a director of NexOptic and was the CEO of NexOptic’s predecessor Elissa Resources, the company that made the original rare earth discoveries on the THOR Project. Paul’s experience includes founder, co-founder, CEO, CFO and director roles for several successful public companies in the strategic minerals sector (including discoveries through to feasibility stage, green energy, and battery metals) and the technology sector (including software solutions and artificial intelligence). Paul has assisted in raising approximately USD $120 million in working capital for his affiliated corporations and has managed subsidiaries and projects in Canada, the United States, South Korea, Mongolia, and China. Paul has been directly involved in partnerships, joint ventures, asset sales, license agreements and mergers and acquisitions between his companies and numerous corporations ranging from start-ups to multinationals with market capitalization exceeding USD $600 billion.

Jim Guilinger, Director and Lead THOR Consultant, is a geologist with extensive REE expertise spanning more than 40 years. This includes project management and being a technical lead on rare earths projects throughout the USA including Wyoming, Nevada, and Arizona. Jim has completed numerous industrial and strategic minerals market studies, analysis, and investigations for clients and companies around the world. Jim is the Chief Operating Officer at Bradda Head Lithium and has been a private consultant for more than 20 years through World Industrial Minerals (“WIM”). Prior to forming WIM, Jim was a director of Exploration and Development in Mexico for Eldorado Gold and managed numerous industrial minerals, precious and base metal projects. Jim is a “qualified person” as such term is defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

Jessie Friend, Director, has overseen brand and business direction from start-ups to divisions of multinationals including Panavision and has assembled sales and marketing teams that continue to work globally. Jessie is also a fleet advisor for Boom & Bucket, a modern marketplace for everything heavy equipment for the mining industry, renewable energy companies, pipelines and more. Jessie brings to Selten Metal exceptional negotiating, business management, budgeting, financial reporting, and team building skills.

Jason Felsman, THOR Project Manager, is a geologist with over a decade of experience working as a consulting geologist and project manager to companies such as Agnico Eagle (NYSE: AEM), Newmont (NYSE: NEM) and others. His extensive REE experience includes senior geologist with Rare Element Resources (OTCQB: REEMF). Jason is an expert in project management including drill program planning and management and has extensive skills and experience in mineral property evaluation, project mapping and sampling. Jason is highly proficient in GIS: ArcGIS & QGIS and experienced in Petrographic and Micro-Analytical Techniques (SEM, LA-ICPMS, CL). Jason completed his geological studies at University of Arkansas: B.S., and University of Idaho: M.S.

James Clark, Senior Project Consultant, has more than 30 years of experience as an exploration geologist for a variety of commodities, including REE’s, industrial minerals, precious, base, and other specialty metals. James has extensive REE experience that includes working on 33 REE prospects across three continents. In 1998, James founded Applied Petrographics to provide petrographic and microanalytical services to the mining industry and clients include Barrick Gold (NYSE: GOLD), Newmont (NYSE: NEM), Hecla (NYSE: HL), AngloGold (NYSE: AU), CVRD, Quest Rare Minerals, and Rare Element Resources. Prior to this, James worked for a variety of mining companies, including Molycorp, Hecla, Newmont, and Rare Element Resources. During his time at Hecla he played a key role in identifying Rare Element Resources’ current Bear Lodge rare earth resource and the property’s underlying gold mineralization potential. While at Rare Element Resources, James served as VP of Exploration.

In addition, it is also anticipated that one of the current directors of Railtown will be appointed to the Resulting Issuer’s board of directors and a CFO and a corporate secretary will be appointed for the Resulting Issuer. Once determined, the identify of these individuals will be disclosed in a subsequent news release.

The Transaction

It is intended that the Transaction will constitute the “Qualifying Transaction” of Railtown, as such term is defined in the policies of the TSXV. Upon completion of the Transaction, the shareholders of Selten Metal will become shareholders of Railtown, a publicly traded company listed on the TSXV. The resulting company after completion of the Transaction (the “Resulting Issuer“) will carry on the current business of Selten Metal and intends to be listed on the TSXV as a Tier 2 resource issuer.

The Transaction is proposed to be effected by way of a “three-cornered” amalgamation under which securityholders of Selten Metal will exchange their shares of Selten Metal for Common Shares. Shareholders of Selten Metal will be issued one Common Share at a deemed price of $0.20 per share for each common share held of Selten. In addition, upon completion of the Transaction, the Resulting Issuer will assume Selten Metal’s obligation to issue common shares to NexOptic pursuant to the terms of the Option Agreement.

On completion of the Transaction, Selten Metal will be a wholly-owned subsidiary of the Resulting Issuer. On closing (the “Closing“) of the Transaction, the Resulting Issuer’s name will be changed to “Selten Metal Corp.” or another name acceptable to Selten Metal.

Closing of the Transaction is subject to certain conditions, including but not limited to: (a) the completion of satisfactory mutual due diligence; (b) the receipt of all necessary approvals of the boards of directors of Railtown and Selten Metal; (c) the receipt of all required consents and approvals, including without limitation, approval of the Transaction by the TSXV as Railtown’s Qualifying Transaction; (d) the Resulting Issuer satisfying the initial listing requirements set by the TSXV for a Tier 2 mining issuer; (e) the entry into of a definitive agreement; (f) approval of the shareholders of Selten Metal; and (g) the completion of the Financing (defined below).

The Company also intends to issue 475,000 Common Shares to Canaccord Genuity Corp. at a deemed price of $0.20 per share in connection with the Transaction. The payment of the finder’s fee is subject to TSXV acceptance. Further details regarding the Transaction and any finder’s fees payable will be included in a subsequent news release once additional details become available.

Sponsorship

Railtown will be seeking an exemption from the sponsorship requirements of the TSXV pursuant to the provisions of section 3.4(a)(ii) of TSXV Policy 2.2.

Proposed Financing

In connection with the Transaction, Selten Metal intends to complete a private placement (the “Financing”) of 15,000,000 common shares at a price of $0.15 per share, for aggregate gross proceeds of $2,250,000. Finder’s fees may be paid to qualified finders in accordance with the Financing.

It is anticipated that $1,100,000 of the net proceeds from the Financing will be used towards the Option Cash Payment.

Further details regarding the Financing will be included in a subsequent news release once additional details become available.

Pro Forma Share Capital of the Resulting Issuer

Assuming the sale of all 15,000,000 shares pursuant to the Financing, it is anticipated that, on Closing of the Transaction, there will be 50,911,602 common shares of the Resulting Issuer issued and outstanding (52,711,602 common shares on a fully diluted basis), assuming the exercise of all outstanding options and warrants. It is expected that following the completion of the Transaction and the Financing, but assuming no exercise of the Second Option, existing Railtown shareholders will hold approximately 25.5% of the common shares of the Resulting Issuer, former shareholders of Selten Metal will hold approximately 35.5% of the common shares of the Resulting Issuer and NexOptic will hold approximately 9.5% of the common shares of the Resulting Issuer.

It is anticipated that a portion of the issued and outstanding Common Shares of the Resulting Issuer will be subject to the escrow and resale restrictions pursuant to the policies of the TSXV.

Selected Financial Information

The following table sets out selected financial information with respect to Selten as at and for the period noted. This information has not been audited, and may be subject to adjustment: