Collective Mining Completes Qualifying Transaction With POCML…

Collective Mining Completes Qualifying Transaction With POCML 5 and Receives Proceeds From $15M Subscription Receipt Financing 

TORONTO, May 20, 2021 (GLOBE NEWSWIRE) — Collective Mining Ltd. (formerly POCML 5 Inc.) (“Collective” following completion of the Qualifying Transaction (as hereinafter defined), or prior to completion of the Qualifying Transaction, “POCML5”) is pleased to announce the completion of its previously announced qualifying transaction (“Qualifying Transaction”) pursuant to Policy 2.4 – Capital Pool Companies of the TSX Venture Exchange (the “TSXV”). Trading in the common shares of POCML5 was previously halted on November 30, 2020 at the request of POCML5 in connection with the announcement of the Qualifying Transaction. Trading in the common shares of Collective (the “Resulting Issuer Shares”) is expected to commence on the TSXV during the week of May 25, 2021 under the symbol “CNL”, following the issuance by the TSXV of its final bulletin in respect of the Qualifying Transaction. 

Pursuant to the Qualifying Transaction, POCML5 acquired all of the issued and outstanding shares (the “Collective Shares”) of Collective Mining Inc. (“CMI”), with the former shareholders of CMI receiving one common share of POCML5 for each CMI Share held (the “Exchange Ratio”). The outstanding warrants and options of CMI were also exchanged for comparable securities of POCML5 on the basis of the Exchange Ratio. Immediately prior to the closing of the Qualifying Transaction, POCML5 consolidated its issued and outstanding common shares on a four-for-one basis and changed its name to “Collective Mining Ltd.” in accordance with the Business Corporations Act (Ontario) (“OBCA”). CMI subsequently amalgamated with a wholly-owned subsidiary of POCML5 pursuant to Section 174 of the OBCA, with the amalgamating company continuing as a wholly-owned subsidiary of Collective. The new CUSIP number for the Collective Shares is 19425C100 and the new ISIN is CA19425C1005. 

The Qualifying Transaction constitutes a reverse take-over, as the former securityholders of CMI now own (on a non-diluted basis) approximately 89% of the outstanding Resulting Issuer Shares immediately after the closing of the Qualifying Transaction. The newly constituted board of directors of Collective consists of the following four directors: Ari Sussman (Executive Chairman), Paul Murphy, Kenneth Thomas, and María Constanza García. In addition to Ari Sussman serving as Executive Chairman, Omar Ossma will serve as Chief Executive Officer and President, and Paul Begin will serve as Chief Financial Officer and Corporate Secretary of Collective. Listing of the Resulting Issuer Shares remains subject to the final approval of the TSXV. 

In connection with the Qualifying Transaction, Collective issued an aggregate of 37,901,965 Resulting Issuer Shares as consideration for the acquisition of CMI. In addition, the board of directors of Collective today issued an aggregate of 590,000 options to employees and consultants of Collective, exercisable for a period of three years from the date of grant at a price of $1.00 per Resulting Issuer Share, and the former officers and directors of POCML5 exercised an aggregate of 250,000 options prior to completion of the Qualifying Transaction. After giving effect to the Qualifying Transaction, there are 40,436,965 Resulting Issuer Shares issued and outstanding (on a non-diluted basis). In addition, the Resulting Issuer’s capitalization consists of the following convertible securities: an aggregate of 2,200,000 options to purchase Resulting Issuer Shares, 7,500,000 common share purchase warrants to acquire Resulting Issuer Shares, and 267,250 finder warrants to purchase Resulting Issuer Shares. 

Prior to the closing of the Qualifying Transaction, each of POCML5 and CMI completed nonbrokered private placements, resulting in the sale of an aggregate of $15,000,000 of subscription receipts, collectively (the “Offering”). The proceeds from the Offering were placed into escrow on completion of the Offering. In connection with the completion of the Qualifying Transaction, the subscription receipts were converted into an aggregate of 15,000,000 Resulting Issuer Shares and 7,500,000 common share purchase warrants of the Resulting Issuer (“RI Warrants”), with each whole RI Warrant entitling the holder to acquire one Resulting Issuer Share at a price of $2.00 for a period of 36 months following the completion of the Qualifying Transaction, subject to the right of the Resulting Issuer to accelerate the expiry of the RI Warrants in the event that the closing price of the Resulting Issuer Shares on the TSXV remains equal to or higher than $2.60 for 20 consecutive trading days. Outstanding finder warrants issued in connection with the Offering were also exchanged for comparable securities of the Resulting Issuer on a one-for-one basis. 

David D’Onofrio, the former Chief Executive Officer and a director of POCML5, acquired 800,000 subscription receipts of POCML5, and Adam Parsons, a former director of POCML5, acquired 80,000 subscription receipts of POCML5. Mr. Pat DiCapo, a former director and control person of POCML5, acquired, directly and indirectly, an aggregate of 2,950,000 subscription receipts of Collective. In addition, the Resulting Issuer issued 375,000 finder securities as compensation to PowerOne Capital Markets Limited, an entity beneficially owned and controlled by Mr. DiCapo, in connection with the offering of subscription receipts of Collective. Each finder security was comprised of one Resulting Issuer Share and one-half of one RI Warrant. 

Participation by Messrs. D’Onofrio and Parsons in the offering of subscription receipts of POCML5 was considered a “related party transaction” pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). POCML5 was exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the insiders’ participation in the offering in reliance of sections 5.5(a) and 5.7(1)(a) of MI 61-101. A material change report was filed in connection with the participation of Insiders in the offering less than 21 days in advance of the closing of the offering, which POCML5 deemed reasonable in the circumstances so as to be able to avail itself of potential financing opportunities and complete the offering in an expeditious manner. 

Further details of the Qualifying Transaction are contained in news releases of POCML5 dated November 30, 2020, January 21, 2021, February 26, 2021, and May 12, 2021. Readers are also referred to the filing statement of POCML5 dated May 12, 2021 (the “Filing Statement”) which was prepared in accordance with the requirements of the TSXV and filed under Collective’s issuer profile on SEDAR at www.sedar.com

Early Warning Disclosure Pursuant to National Instrument 62-103

In connection with the Qualifying Transaction, Mr. Ari Sussman, of Miami, Florida, acquired ownership, control or direction over Resulting Issuer Shares, RI Warrants and options of Collective requiring disclosure pursuant to the early warning requirements of applicable securities laws. Mr. Sussman did not own or exercise control or direction over any securities of POCML5 prior to the completion of the Qualifying Transaction. Mr. Sussman acquired ownership, or control or direction over, of 10,440,000 Resulting Issuer Shares (including 600,000 Resulting Issuer Shares held by his spouse), 50,000 RI Warrants, and 100,000 options of Collective to acquire Resulting Issuer Shares, representing approximately 26% of the issued and outstanding Resulting Issuer Shares on a partially-diluted basis. 

In connection with the Qualifying Transaction, Mr. Pat DiCapo, of Toronto, Ontario, acquired ownership, control or direction over Resulting Issuer Shares and RI Warrants requiring disclosure pursuant to the early warning requirements of applicable securities laws. Immediately prior to completion of the Qualifying Transaction, Mr. DiCapo had ownership of, or exercised control or direction over, an aggregate of 7,000,000 pre-consolidation common shares of POCML5 (or 1,750,000 Resulting Issuer Shares) representing approximately 69% of the issued and outstanding voting securities of POCML5. In addition, Mr. DiCapo held 500,000 options of POCML5 exercisable into 500,000 pre-consolidation shares of POCML5 (or 125,000 Resulting Issuer Shares), which were exercised on the closing date of the Qualifying Transaction. In connection with the Qualifying Transaction, Mr. DiCapo acquired ownership of, or control over direction over, an aggregate of 5,274,166 Resulting Issuer Shares and 1,662,500 RI Warrants, representing approximately 16.5% of the issued and outstanding Resulting Issuer Shares on a partially-diluted basis. Immediately after the closing of the Qualifying Transaction, Mr. DiCapo directly and indirectly held 7,024,166 Resulting Issuer Shares and 1,662,500 RI Warrants, representing approximately 20.6% of the issued and outstanding Resulting Issuer Shares on a partially-diluted basis.

Each of Messrs. Sussman and DiCapo: (i) acquired the securities of Collective in connection with the Qualifying Transaction; (ii) hold the securities of Collective for investment purposes; and (iii) do not have any current intentions to increase or decrease its beneficial ownership or control or direction over any additional securities of Collective. As disclosed in the Filing Statement, the securities of Collective held or beneficially owned or controlled by each of Messrs. Sussman and DiCapo are subject to escrow restrictions. Each of Messrs. Sussman and DiCapo may, from time to time and depending on market and other conditions, acquire additional securities of the Collective through market transactions, private agreements, treasury issuances, dividend reinvestment programs, exercise of options, convertible securities or otherwise (if and when granted), or may sell all or some portion of the securities of Collective they own or control (upon release of the securities from escrow, or otherwise in accordance with the terms of the escrow restrictions and in accordance with applicable Canadian securities laws), or may continue to hold such securities of Collective.

Early warning reports will be filed by Messrs. Sussman and DiCapo on SEDAR in accordance with applicable securities laws. To obtain a copy of the early warning reports, please contact Mr. Sussman or Mr. DiCapo c/o Collective Mining Ltd., Suite 2100 Scotia Plaza, 40 King Street W., Toronto, Ontario M5H 3C2; Telephone: 416.270.3585 (Ari Sussman) or 416.362.4157 (Pat DiCapo).

About Collective Mining 

Collective is an exploration and development company focused on identifying and exploring prospective gold projects in South America. Collective has the ability to earn a 100% interest in two projects located in Colombia: (i) the San Antonio project (the “San Antonio Project”); and (ii) the Guayabales project (the “Guayabales Project”). The San Antonio Project is comprised of a 1,664-ha contiguous mining title located in a historical gold district in the Caldas department of Colombia. With recent geophysical and LIDAR surveys completed, an initial 5,000 metre drill program is underway at the San Antonio Project. The Guayabales Project is a contiguous land package comprised of two mining titles totalling 413 ha and a 2,012-ha mining application also located in the Caldas department of Colombia. The Guayabales Project is currently in the early stages of prospecting. Upon completion of Transaction, it is the intention of the parties that the Resulting Issuer will continue to primarily focus on the exploration and development of the San Antonio Project. 

Further Information 

All information contained in this news release with respect to POCML5 and Collective was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party. For further information regarding the Qualifying Transaction, please contact: Collective Mining Ltd. Paul Begin, Chief Financial Officer Tel. (416) 451-2727.

FORWARD-LOOKING STATEMENTS

This news release contains certain forward-looking statements, including, but not limited to, statements about Collective’s future plans and intentions, and the listing of the Resulting Issuer Shares on the TSXV. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forwardlooking statements. These statements reflect management’s current beliefs and are based on information currently available to management as at the date hereof.

Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, the Collective cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this news release, and the Collective assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.