Squire agrees to purchase companies with cloud computing assets totaling 2,985 petahash to become one of the world’s largest public crypto mining companies

VANCOUVER, British Columbia , May 31, 2019 — Squire Mining Ltd. (CSE:SQR | FWB:9SQ | OTCQB:SQRMF) (“Squire”) is pleased to announce that on May 29, 2019 it entered into a letter agreement (the “Agreement“) with Calvin Ayre, Cunning Hams Limited (“Cunning Hams”) and Tansley Equipment Limited (“Tansley”) to directly or indirectly purchase all of the issued and outstanding shares of four corporations (consisting of Cunning Hams, Tansley, Woodland Technology Group Inc. (“Woodland”) and Laser Lollipop Limited (collectively, the “Companies”) which own and operate a fleet of cloud computing assets in Canada, the United States and China, representing approximately 2,985 petahash (the “Transaction”).

As consideration for the Transaction, Squire will issue to Calvin Ayre (i) 80,000,000 common shares (the “Common Shares”) in the capital of Squire and 827,000,000 non-voting participating shares (“NVPS”, and together with the Common Shares, the “Shares”), a new class of shares to be created, subject to shareholder approval. The aggregate consideration payable to Calvin Ayre in respect of the Transaction will further be subject to adjustments for pre-payments and payments under an income-sharing agreement to be entered into on closing (the “Closing”) of the Transaction. Squire expects to provide further information as to Transaction valuation following receipt of a fairness opinion in respect of the Transaction.

Transaction Highlights:

• Creates Leading Blockchain Business, with one of the Largest Public Portfolios of Mining Rigs:

* Pro forma the Transaction, Squire will own and operate approximately 217,000 mining rigs, representing approximately 3,300 petahash.

• Diversified Operations:

* The Transaction will diversify Squire’s mining rigs across geography as the Transaction assets are located in the United States, Canada and China. Squire’s current fleet is currently operating out of Kazakhstan.

* The Transaction will also diversify Squire’s hosting partners from one group to six groups.

• Highly Accretive:

* Management believes the Transaction is over 20.0% accretive to Squire’s expected next twelve month cash flow as measured by EBITDA.

• Attractive Transaction Structure:

* The Transaction is being financed 100.0% through share consideration, preserving Squire’s robust cash balance of over CAD$19,000,000.

“We are proud of what the team has accomplished to date. Squire has diversified away from a single business purpose to inject a revenue generating cloud computing operation and established a solid foundation for sustainable growth and returns, and has become a dominant force in the blockchain industry,” Stefan Matthews, Chairman of Squire.

The Transaction signifies Squire’s commitment to ensuring that the crypto mining industry, that is supporting and securing the Bitcoin network, continues to scale and remain profitable in the long term after Bitcoin’s block reward halves in 2020 and every several years after that. For each block they mine, Bitcoin miners earn a fixed block reward amount (currently 12.5 coins, but halving to 6.25 coins next year), as well as fees for each individual transaction mined in the block. When the reward halving event takes place, to remain profitable, miners will need to generate more revenue from higher volumes of transaction fees (for example, from new applications that are processing large amounts of data on the blockchain).

This is why Squire supports the BSV roadmap, as it aims to enable massive on‐chain scaling by significantly increasing the block size such that blocks can fit much more transactions and data, and outlines for the crypto mining sector why such scaling is important for the entire interrelated Bitcoin ecosystem.

“We need to focus on massive scaling of the Bitcoin blockchain to accommodate the throughput needed for enterprises to make use of this technology. By vending my mining assets into Squire, I am doubling‐down on my commitment to Bitcoin’s success. These assets will enable Squire Mining Ltd. to compete at a global level to pave a path for enterprise usage of blockchain technology to flourish,” Calvin Ayre.

Closing is subject to customary conditions, including: (i) approval of the Canadian Securities Exchange (the “CSE“) Canadian Securities Exchange (the “CSE“)  and CSE acceptance of a revised Form 2A Listing Statement from Squire; and (ii) shareholder approval by at least 66 2/3% of the votes cast by the shareholders of Squire in respect of an amendment to the articles and notice of articles of Squire to create the NVPS and by a simple majority of the votes cast by the shareholders of Squire in respect of a change of business to provide for the Transaction (the “Shareholder Approvals”) in each case at a shareholders meeting (the “Shareholders Meeting”) expected to be held on or about July 31, 2019. Further details regarding the Transaction will be provided to shareholders by way of a management information circular to be distributed prior to the Shareholders Meeting in accordance with applicable corporate and securities laws.

The Companies

The Companies, each of which is incorporated under the laws of Antigua and Barbuda, except for Woodland which is incorporated under the laws of the Province of British Columbia, own and operate 203,121 ASIC mining rigs, representing approximately 2,985 petahash, or approximately 285 MW of power consumption, which, upon Closing, would make Squire one of the largest publicly traded crypto mining companies globally, as measured by terahash/s. The rigs are all operated by leading hosting providers and are allocated across the United States, Canada, and China. Together with the fleet operated by Squire’s subsidiary Freschette Limited in Kazakhstan, the Transaction will result in one of the largest publicly traded blockchain mining operations in the world.

The Consideration

As noted above, Calvin Ayre would receive approximately 80,000,000 Common Shares and 827,000,000 NVPS of Squire at Closing. The NVPS, the creation of which is subject to the Shareholder Approvals, would be identical in all respects to the Common Shares other than that they will not be entitled to a vote at meetings of the shareholders of Squire unless required by law. Squire and Calvin Ayre would enter into a comprehensive coattail agreement on or prior to Closing to provide for the Common Shares and NVPS to be treated equally in a take-over bid and other fundamental transaction situations.

The Transaction would result in Mr. Ayre having 45% of the voting control of Squire and would effectively constitute a reverse take-over and fundamental change of business. Under the terms of the Transaction, at any time the percentage of Common Shares held by Calvin Ayre falls below 40% of the issued and outstanding Common Shares at that time, a number of NVPS shall be converted into an equal number of Common Shares until the percentage is 45% or there are no further NVPS outstanding. The parties have further agreed to amend the unsecured convertible debenture note issued in connection with Squire’s acquisition of Freschette Limited (the “First Step Transaction”) on Closing to provide for the shares issuable upon conversion of the debenture to be NVPS.

Mr. Ayre has agreed to a one (1) year lock-up of the Shares issued to him in connection with the Transaction to be released in equal quarterly tranches, subject to exceptions for private or over-the-counter trades outside of the facilities of the CSE or pledging arrangements to secure debt.

The consideration payable to Calvin Ayre in respect of the Transaction is subject to adjustment based on a pre-closing audit of the Companies to be completed by an independent auditor acceptable to Squire and Calvin Ayre, a post-closing reconciliation of operational units in excess of an agreed margin for wear and tear, breakdowns or damage and payment by Squire to Calvin Ayre of all pre-payment balances or advances for hosting services advanced by the Companies and existing as of the Closing and the terms of an income sharing agreement to be entered into on Closing.

Pursuant to the income sharing agreement profits and operating expenses from the operation of approximately 100,000 units will be shared as to approximately 42% with Calvin Ayre, subject to terms agreed to in respect of their continued operation.

Additional Details about the Transaction

The parties will enter into definitive agreements in respect of the Transaction on the terms agreed to in the Agreement and otherwise substantially on the same terms as the First Step Transaction, including a definitive purchase agreement, income-sharing agreement, coattail agreement and a cost-plus based services agreement in respect to the ongoing management and operation of any remaining cloud computing assets owned by Calvin Ayre or his affiliates. The parties expect Closing to occur as soon as possible after the Shareholders Meeting.

Under the terms of the Agreement, either party may terminate the Agreement if the Closing does not occur by August 31, 2019 or the approval of the CSE or the Shareholder Approvals have not been obtained by or the Shareholders Meeting has not been held by August 31, 2019 or it becomes reasonably apparent that such approval will not be obtained by August 31, 2019. In such circumstances, Squire would be obligated to pay to Calvin Ayre liquidated damages equal to USD$1,000,000 and shall have no obligation thereafter.

Prior to Closing, at Squire’s request and subject to certain expense sharing between the Parties and indemnification from Squire in respect of any extended period of non-operation of such units, the Companies will cause certain of the units to be relocated from their current location for strategic reasons.

Further information regarding the Transaction will be included in the information circular that Squire will prepare, file, and mail in due course to its shareholders in connection with the Shareholders Meeting. The Agreement will be filed on the SEDAR profile of Squire on the SEDAR website.

CSE Stock Halt

As the Transaction would constitute a “fundamental change” for Squire as defined in CSE policies, pursuant to CSE policies, Squire’s stock has been halted and will remain halted at least until the meeting materials to be sent to Squire shareholders for approval of the Fundamental Change have been reviewed and accepted by the CSE and posted to the CSE website. The halt is considered a Regulatory Halt as defined in National Instrument 23-101-Trading Rules.

Advisors to the Parties

Canaccord Genuity Corp. is acting as exclusive financial advisor to Squire in respect of the Transaction. Norton Rose Fulbright Canada LLP is acting as legal counsel to Squire. Fasken Martineau DuMoulin LLP is acting as legal counsel to Calvin Ayre, Cunning Hams and Tansley.

Cannacord Genuity Corp. will be paid a success fee in connection with the Transaction further details of which will be disclosed in the information circular in respect of the Shareholder Meeting.

About Squire Mining Ltd.

Squire is a Canadian based technology company engaged, through its subsidiaries, in the business of developing and operating cloud computing data infrastructure and system technology to support global blockchain applications related to Bitcoin SV, Bitcoin Core and other associated SHA‐256 derived digital assets.

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This news release includes “forward‐looking information” as defined under applicable Canadian securities legislation. Forward-looking information and statements include, but are not limited to, disclosure regarding possible events, that are based on assumptions about future economic conditions and courses of action. Forward‐looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward‐looking information. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties, uncertain and volatile equity and capital markets, lack of available capital, future demand for Bitcoin SV, Bitcoin Core and other cryptocurrencies and risks related to the mining thereof, when and if halving of Bitcoin will take place and the impact such halving will have on profitability, the ability to increase block size and the effects of such increases, integration issues, the timing for release of the halt of trading of the Common Shares on the CSE, personnel and staffing requirements and technological change and obsolescence and risks that the transaction will not be completed or will not be completed on the same terms or in the time provided or that conditions to closing in respect of the transaction will not be satisfied including without limitation: required Squire shareholder approval; certain termination rights available to the parties under the Agreement; Squire obtaining the necessary approvals from the CSE for the listing of the Common Shares in connection with the Transaction and acceptance of the Form 2A Listing Statement by the CSE; and other closing conditions, including compliance by the parties with various covenants contained in the Agreement, statements with respect to the effect of the Transaction on Squire and its strategy going forward, statements with respect to the anticipated benefits associated with the Transaction, the timing and completion of the acquisition of the Transaction (on the terms presently contemplated or otherwise), or the negotiation, entering into and completion of any definitive agreements (on the terms presently contemplated or at otherwise). Actual results and future events could differ materially from those anticipated in such forward looking information. Accordingly, readers should not place undue reliance on forward‐looking information. All forward looking information in this news release is made as of the date hereof and qualified by these cautionary statements and those in our continuous disclosure filings available on SEDAR website. Squire disclaims any intention or obligation to update or revise such forward‐looking information, whether as a result of new information, future events or otherwise, except as required by law.

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