Hanstone Capital Corp. Announces Proposed Qualifying Transaction with Milestone Infrastructure Inc.

Vancouver, British Columbia--(Newsfile Corp. - February 24, 2020) - Hanstone Capital Corp. (TSXV: HANS.P) ("Hanstone" or the "Company") is pleased to announce that it has entered into a non-binding letter of intent with Milestone Infrastructure Inc. ("Milestone") dated as of February 19, 2020 (the "Milestone LOI") respecting the proposed acquisition by Hanstone of all of Milestone's right, title and interest in and to the Doc Property (the "Doc Property"), comprised of 10 mineral claims located in the Skeena Mining Division in British Columbia (the "Transaction"). Under the Milestone LOI, Hanstone and Milestone have agreed to act in good faith to draft, negotiate and execute a definitive asset purchase agreement (the "Definitive Agreement") respecting the Transaction. The Transaction is intended to qualify as Hanstone's "Qualifying Transaction" as defined by Policy 2.4 of the TSX Venture Exchange (the "Exchange").

Trading of the common shares of Hanstone will remain halted in connection with the dissemination of this news release and will recommence at such time as the Exchange may determine, having regard to the completion of certain requirements pursuant to Exchange Policy 2.4. Further details of the proposed Transaction will follow in future news releases.

Milestone's Interest in the Doc Property

Milestone, as optionee, is party to an option agreement dated as of July 3, 2019 (the "Option Agreement") with respect to the Doc Property, under which Milestone has the exclusive and irrevocable right to acquire a 100% interest in the Doc Property from the registered owner of the Doc Property (the "Optionor"). To successfully exercise the option under the Option Agreement, Milestone is required to make cash payments having an aggregate of $1,825,000 to the Optionor, over six years. In addition, Milestone has granted to the Optionor a 1.5% net smelter returns royalty ("NSR") on the Doc Property. Milestone has the right at any time to repurchase the NSR from the Optionor by paying $500,000 to the Optionor. Until Milestone has successfully exercised the option under the Option Agreement, Milestone is required to grant the Optionor a bulk sample royalty of 5% on the Doc Property.

To date, Milestone has paid $50,000 to the Optionor under the Option Agreement and is current in its obligations thereunder. In addition, since executing the Option Agreement in July 2019, Milestone has spent an aggregate of $183,702.85 conducting exploration activities on the Doc Property. Note that the foregoing option payment and exploration expenditure amounts are unaudited and are based on information provided by Milestone.

The Transaction is an asset acquisition, and Hanstone will not be acquiring any corporate entity under the Transaction. Hanstone will acquire all of Milestone's right, title and interest in the Doc Property pursuant to the Definitive Agreement, and Hanstone will enter into an assignment and assumption agreement with Milestone and the Optionor pursuant to which Hanstone will assume all rights and obligations of Milestone under the Option Agreement.

The Transaction

Under the Transaction and pursuant to the Definitive Agreement, Hanstone will issue an aggregate of 4,500,000 Hanstone common shares to Milestone's stakeholders at a deemed price of $0.20 per share, as follows: 4,000,000 Hanstone shares will be issued to Bob Hans; and 500,000 shares will be issued to Raymond Marks. The Transaction is subject to completion of certain conditions precedent, including without limitation: execution of the Definitive Agreement; the preparation and filing of an Information Circular with the Exchange; receipt of approval of the shareholders of Hanstone (including minority shareholder approval); completion by Hanstone of a private placement (the "Private Placement") for gross proceeds of no less than $1,500,000; completion of satisfactory mutual due diligence; and receipt of all necessary regulatory and Exchange approvals.

Under the Private Placement, Hanstone is expected to raise gross proceeds of no less than $1,500,000 through: the issuance of $500,000 in units (each, a "Unit") at a price of $0.20 per Unit, with each Unit comprised of one common share and one common share purchase warrant (each warrant exercisable for an additional Hanstone common share at an exercise price of $0.25 for two years from the date of issuance); and the issuance of $1,000,000 in "flow-through" units (each, a "FT Unit") at a price of $0.25 per FT Unit, with each FT Unit comprised of one "flow-through" common share and one common share purchase warrant (each warrant exercisable for an additional Hanstone common share at an exercise price of $0.35 for two years from the date of issuance). It is anticipated that approximately $1,000,000 of the Private Placement (i.e. the "flow-through" component) will be used for exploration of the Doc Property and the Snip North Property, while approximately $500,000 of the Private Placement (i.e. the non-flow-through component) will be used for general working capital. Hanstone may pay finder's or agent's fees and may issue finder's or agent's warrants in connection with the Private Placement. Hanstone will provide an update respecting the Private Placement, including with respect to any proposed fees or warrants, in due course.

Each of Mr. Hans and Mr. Marks is a director of Hanstone, and accordingly the Transaction constitutes a "Non-Arm's Length Qualifying Transaction" (as such term is defined by the Exchange). In addition, the Transaction is a "related party transaction" as such term is defined by Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") and is subject to Policy 5.9 of the Exchange. As a result, the Transaction must receive minority shareholder approval, with the votes of Messrs. Hans and Marks being excluded from the minority shareholder vote. The Transaction is exempt from the requirements under MI 61-101 to obtain a formal valuation pursuant to Section 5.5(b) of MI 61-101.

Sponsorship of a Qualifying Transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies or unless a waiver is granted by the Exchange. Hanstone intends to apply for an exemption from the sponsorship requirements under section 3.4 of Exchange Policy 2.2 or a waiver of sponsorship if an exemption from sponsorship is unavailable; however, there can be no guarantee that a waiver will be granted if no exemption is available.

Proposed Acquisition of the Snip North Property

Hanstone has also entered into a non-binding letter of intent with Richard Mill ("Mill") dated as of February 19, 2020 (the "Mill LOI") respecting the proposed acquisition by Hanstone from Mill of 100% of Mill's right, title and interest in and to the Snip North property (the "Snip North Property"), comprised of five mineral claims located in British Columbia, approximately 50 kilometers north of the Doc Property. Under the Mill LOI, Hanstone and Mill have agreed to act in good faith to draft, negotiate and execute a definitive property purchase and sale agreement respecting the proposed acquisition. Under the acquisition, Hanstone will issue an aggregate of 200,000 Hanstone common shares to Mill. The proposed acquisition of the Snip North Property is contemplated in conjunction with, and is conditional on, the closing of Hanstone's Qualifying Transaction with Milestone.

The Resulting Issuer

Upon completion of the Transaction, the resulting issuer (the "Resulting Issuer") will be engaged in the business of mineral exploration and the development of the Doc Property (and will assume all rights and obligations of Milestone under the Option Agreement) and the Snip North Property. In addition, certain directors and/or officers of Hanstone may resign and be replaced in connection with closing of the Transaction. The parties will provide an update respecting any proposed changes to the board and/or management of the Resulting Issuer in due course. In conjunction with closing the Transaction, Hanstone intends to change its name to "Hanstone Gold Corp.", or such other name as agreed to in writing by Hanstone and Milestone.

On closing of the Transaction and the acquisition of the Snip North Property from Mill, and assuming that Hanstone raises $1,500,000 under the Private Placement on the terms described above, the Resulting Issuer will have 17,200,000 common shares issued and outstanding. The current shareholders of Hanstone, excluding Messrs. Hans and Marks, would hold approximately 18.60% of the shares of the Resulting Issuer; participants in the Private Placement would hold approximately 37.79% of the shares of the Resulting Issuer; Messrs. Hans and Marks would hold approximately 42.44% of the shares of the Resulting Issuer; and Mill would hold approximately 1.16% of the shares of the Resulting Issuer. Each of Mr. Hans, Mr. Marks and Mr. Mill is a resident of Canada.

About Hanstone

Hanstone is a capital pool company in accordance with Exchange Policy 2.4 and its principal business is the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction.

For additional information, please refer to the Company's disclosure record on SEDAR (www.sedar.com) or contact the Company as follows: Aris Morfopoulos, CFO, at (604) 721-2650 or aris@morfopoulos.com.

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Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

Certain statements contained in this press release constitute "forward-looking information" as such term is defined in applicable Canadian securities legislation. The words "may", "would", "could", "should", "potential", "will", "seek", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to Hanstone, Milestone, the Doc Property, the Snip North Property, the Private Placement and the Transaction, are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect the companies' current views and intentions with respect to future events, and current information available to them, and are subject to certain risks, uncertainties and assumptions, including, without limitation: the risks that the parties will not proceed with the Transaction, the Definitive Agreement, the Private Placement and associated transactions, that the ultimate terms of the Transaction, the Definitive Agreement, the Private Placement and associated transactions will differ from those that currently are contemplated, and that the Transaction, the Definitive Agreement, the Private Placement and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of these risks or uncertainties materialize. Such factors include but are not limited to: changes in economic conditions or financial markets; increases in costs; litigation; legislative, environmental and other judicial, regulatory, political and competitive developments; and technological or operational difficulties. This list is not exhaustive of the factors that may affect forward-looking information. These and other factors should be considered carefully, and readers should not place undue reliance on such forward-looking information. Should any factor affect the companies in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, the companies do not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and the companies undertake no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described in this news release in the United States. Such securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and, accordingly, may not be offered or sold within the United States, or to or for the account or benefit of persons in the United States or "U.S. Persons", as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from such registration requirements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

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