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May 01, 2018
VANCOUVER, BC - May 1, 2018. Maritime Resources Corp. (MAE-TSX Venture) ("Maritime" or the "Company") recommends that shareholders of Maritime ("Shareholders") do not tender to the inadequate, all share bid made by Anaconda Mining Inc. Maritime has filed on SEDAR and commenced the mailing of its Directors' Circular and a letter to Shareholders which provide reasons to not tender. The letter is as follows:


We Know Anaconda Needs Maritime's Assets But,

Why Would Maritime Shareholders Give Up 80% of Their Upside for Anaconda Shares?

Don't be fooled by Anaconda's low-ball, opportunistic share exchange offer.

They offered one third of the value for our assets (and one-fifth based on current prices) with shares that are trading at highly inflated prices.

They are spending more money than they are making and they have less than five months of reserves.

Anaconda wants to use your money to fund their agenda.

Your Board of Directors recommends you REJECT the offer.
To REJECT the offer shareholders do not need to take any action.

April 30, 2018

Dear Shareholder,

On April 13, 2018 Anaconda Mining Inc. ("Anaconda") made an unsolicited offer (the "Hostile Bid") to acquire all of the outstanding shares (the "Maritime Shares") of Maritime Resources Corp. ("Maritime") for shares of Anaconda on the basis of 0.39 of a common share of Anaconda (an "Anaconda Share") for each Maritime Share. By now, you have likely received materials from Anaconda asking you to tender your Maritime Shares to the Hostile Bid.

The Hostile Bid Significantly Undervalues the Maritime Shares and Maritime's Assets

  X   A C$14m offer for an asset conservatively worth between C$71.2m and C$92.6m:
Anaconda is offering you 0.39 of an Anaconda Share for each Maritime Share you hold. At current market prices, this would be approximately $0.16 per Maritime Share, or total consideration for all of the outstanding Maritime Shares of approximately $14 million. The Board views this consideration as inadequate based on the substantial value of the Maritime assets, which is supported by the results of the independent pre-feasibility study conducted for Maritime by WSP Canada Inc. and disclosed in the report entitled "Pre-Feasibility Technical Report, Green Bay Property" dated April 13, 2017, which is available under Maritime's profile on SEDAR (the "Technical Report").
 
  X   Offer not a good value:
The Technical Report suggests that Maritime's Hammerdown Mine will produce 35,000 oz of gold/year over the first five years of production. The pre tax NPV of the Hammerdown Mine at an 8% discount rate at US$1,250 per ounce gold price is $71.2 million, and at US$1,375 is $92.6 million. The current spot price of gold is approximately US$1,314. The Hostile Bid does not offer good value to our shareholders.
 
  X   Anaconda shares are highly inflated:
Of additional concern is that Anaconda is offering shares [which are declining in value] in exchange for Maritime shares and not cash. On December 19, 2017 Anaconda "sponsored" an opinion piece on www.321gold.com. Coincidentally, Anaconda's share price and trading volumes increased shortly thereafter. In our view, Anaconda's share price is being temporarily inflated by their share consolidation, completed in January 2018, and a recent unsubstantiated share price appreciation, while having nearly exhausted their reserve base. As a result, the "premium" in their offer is likely to disappear as production at their Pine Cove mine winds down over the coming months and a lack of new revenue will put a strain on the little available cash they have. Effectively, the Hostile Bid is a scheme to take advantage of a temporary elevation in the price of their shares and offer a "premium" for your Maritime shares.

Anaconda's Future is Highly Uncertain - Do Not make it Your Investment

  X   Anaconda's assets are depleting and fast:
In its Management Discussion and Analysis of December 2017, Anaconda states it expects to complete mining in the main pit at Pine Cove late in the first quarter of 2018 (essentially, now). According to their most recent 43-101, Anaconda's Stog'er Tight deposit, which also feeds the Pine Cove Mill, only has approximately 191,500 tonnes of reserves. Based on Pine Cove's milling history, this is less than 5 months of ore supply to the mill. Anaconda claims they have a 145,000 tonne stockpile, however they do not disclose the grade, nor the economic viability of that ore. The Goldboro project in Nova Scotia has no reserves, is not the subject of a feasibility or pre-feasibility study, and is to date only the subject of a preliminary economic assessment. The following table sets out current disclosed reserves:

Deposit Reserves
(ounces)
Status Other
Pine Cove 0 Will be depleted by end of Q1 2018  
Stog'er Tight 14,740 Less than 5 months of mill feed  
Argyle 0 Q3-19 Production Target No economics. Land is adjacent to a protected watershed
Thor 0 Early stage exploration Requires undisclosed capital
Rattling Brook 0 Early stage exploration Requires undisclosed capital
Goldboro 0 Projected 2021 Production Requires $89M of upfront capital and a recommended budget of $9.2M to confirm preliminary economic assessment (as of March 2018)

chart above show that Anaconda's reserves are almost depleted. With a dwindling stockpile of ore and mines that will either end production before July 2018 or be inactive until further investment is made, Anaconda has not made public their plan to create new revenue streams for its shareholders. Argyle and Stog'er Tight have no disclosed mine plans, no disclosed strip ratios and metallurgy, and Argyle is located immediately adjacent to the watershed boundaries of Baie Verte. According to its 43-101 Anaconda does not even know if Argyle can be mined
 
  X   Anaconda wants to use your investment to fund their agenda:
Anaconda's plan is to try to take over Maritime and use the future cash flow from our high grade Hammerdown Gold Mine to drive their own agenda forward. As Pine Cove will need additional investment just to process the Hammerdown ore, the ownership of the Maritime Shareholders in Anaconda will be less than 23% despite supplying the bulk of the revenue generating assets.
 
  X   Cash will be required:
Without positive cash flow, Anaconda will need to raise additional capital not only to develop its own assets, but to process ore from Maritime's Hammerdown Mine. The most likely outcome in this scenario is that Anaconda will require an equity offering that will dilute your economic interest even further if the Hostile bid is successful.
 
  X   Anaconda is spending more than it is making:
Anaconda's general and administrative costs have increased significantly and now exceed its mine operating earnings. Mine operating earnings equaled C$4.64 million while corporate general and administrative costs consumed C$7.3 million over the three year period. Operations at Anaconda's producing mine in Pine Cove are scheduled to end in the second half of 2018. Not only is Anaconda spending more money than it is generating, its mines will be producing less revenue in the short- to mid- term future. Not only is the bid inadequate from a financial point of view, Anaconda does not have the funds to move the Hammerdown project forward. The following table is derived from Anaconda's annual financial statements for the last three years and demonstrates the lack of free cash flow:

12 months ending
all figures in C$
FY-2015
05/31/2015
FY-2016
05/31/2016
FY-2017
05/31/2017
Income Statement      
Revenues      
Gold $ 22,234,071 $ 24,361,471 $ 25,670,331
less: Net Smelter Royalty - - -
Silver - - 26,298
Total Revenue 22,234,071 24,361,471 25,696,629
Mine Operating Income 538,781 3,202,418 906,208
Expenses and other income
Corporate Administration 2,032,265 2,630,745 2,637,276
Loss before income taxes and interest (3,704,631) 243,449 (1,127,188)
Net income (loss) and comprehensive      
income (loss) for the period (2,774,766) 195,449 (3,602,188)
Operating Income (EBIT) (3,704,631) 243,449 (1,127,188)
Operating Cash Flow 2,861,432 5,143,023 4,782,426
Total Capex (4,077,601) (6,309,235) (6,282,275)
Free Cash Flow $ (1,216,169) $ (1,166,212) $ (1,499,849)

Maritime's Plan

Maritime has a plan and the capacity to restart the Hammerdown Mine in a cost effective and efficient manner, without the dilution that would result from the Hostile Bid:

  ✓   A View Towards Production.Richmont Mines Inc. produced 143,000 ounces of gold from the Hammerdown Mine between 2000 and 2004. All of the ore was processed at the Nugget Pond mill, which is now owned and operated by Rambler Metals with an average gold recovery of 97.1%, which is well in excess of the historical 85% to 86% recovery at Anaconda's Pine Cove mill. The Nugget Pond mill remains intact and fully operational. The mill would require only modest capital to construct an additional grinding circuit, and Rambler could easily place the gold stream into production.
 
  ✓   Enhanced Management Team.In line with the plan to move the Hammerdown project towards production, we recently added significant underground mine development experience to our management team with the addition of Andrew Pooler as Chief Operating Officer and Larry Pilgrim as Hammerdown Project Manager.

Andy Pooler COO, holds a Bachelor of Science degree in Mining Engineering from the University of Idaho and has more than 30 years of experience as a mining engineer and operations executive including 5 years as Senior Vice President, Mine Operations, for Pan American Silver Corporation where he was responsible for the production performance of six operating mines of which 5 were underground mines ranging from 750 to 2,300 ore tonnes per day. Mr. Pooler was also the Vice President of Operations for Amax Gold Inc. where he was responsible for 5 operating mines. Additionally, Mr. Pooler held positions as the COO of Esperanza Resources, Chief Executive Officer of PanTerra Gold LTD. and COO of Abacus Mining and Exploration Corp and has been responsible for a multitude of development projects in south, central and north America.
 

Larry Pilgrim was recently appointed as Maritime's Project Manager at Hammerdown. Mr. Pilgrim holds a Bachelor of Science degree in geology from Memorial University and is a member of Professional Engineers and Geoscientists of Newfoundland, with more than 30 years of experience in exploration, ore grade control and mineral resource planning. Mr. Pilgrim was the Chief Geologist for Richmont at the Hammerdown Mine while it operated from 2000 through 2004 in charge of grade control, resource/reserve calculation, delineation and exploration. Prior to joining Maritime, Mr. Pilgrim was the Exploration Superintendent with Rambler Metals and Mining Canada PLC, where he managed large exploration programs, ore grade control for the mine, and was a senior staff member participating in mine planning and acquisition evaluations

Creating Value for our Shareholders

Maritime is continuing to advance its Hammerdown Mine and concurrently considering strategic opportunities to enhance shareholder value in the short term. The Board does not view the Hostile Bid as adding to shareholder value. As outlined in detail in the "Background to the Offer" section of the circular, Anaconda has been pursuing Maritime over the last two years about a potential transaction. Talks about a potential transaction between Maritime and Anaconda have broken down on several occasions during that period for two key reasons:

  X   Each of the offers that Anaconda has presented to Maritime's management and board, including the Hostile Bid, since March 2016 significantly undervalue Maritime's assets
 
  X   Anaconda has repeatedly rejected Maritime's due diligence requests for access to Anaconda's records and relevant information, thereby preventing the Board of Directors of Maritime from fully assessing the merits of a transaction with Anaconda

After thorough consideration of all aspects of the Hostile Bid, the Anaconda Circular, the opinion from Dundee, as financial advisors, as well as the factors included in this Directors' Circular, and after consulting with their respective financial and legal advisors, Maritime's Board has UNANIMOUSLY concluded that the Hostile Bid is inadequate from a financial point of view and not in the best interests of Maritime, Maritime's Shareholders or its other stakeholders. This letter is a summary of the principal reasons the Maritime Board recommends that Maritime Shareholders REJECT the Hostile Bid by taking no action - DO NOT TENDER your Maritime Shares

Reject the Opportunistic Offer and Take No Action

We are confident that you will conclude, as we have, that the Hostile Bid falls significantly short of providing fair value to Maritime Shareholders and is an attempt by Anaconda to force Maritime to merge with Anaconda on unfair terms to the Maritime Shareholders.

To reject the Hostile Bid, simply take no action - do not tender your shares. If you have tendered your shares in error or now wish to withdraw them, simply ask your broker or Laurel Hill Advisory Group at 1-877-452-7184 (North America Toll Free), 1-416-304-0211 (collect calls outside North America) or assistance@laurelhill.com to assist with that process.

We look forward to sharing the bright future of Maritime with you. Yours truly,

On behalf of the Board of Directors,

"Allan Williams"
Allan Williams, Chairman

Shareholder Questions

Shareholders may contact Maritime's information agent at:

Laurel Hill Advisory Group
North America Toll Free: 1-877-452-7184
Collect Calls Outside North America: 1-416-304-0211
Email: assistance@laurelhill.com

About Maritime Resources Corp:
Maritime Resources holds 100% of the Green Bay Property, located near Springdale, Newfoundland and Labrador. The property hosts the past producing Hammerdown gold mine and the Orion gold deposit separated by a 1.5 km distance that sits within an overall strike length of 4000 metres.

Maritime announced a Prefeasibility Study (March 2nd, 2017) that evaluated the Measured & Indicated NI43-101 mineral resource estimate for the past producing Hammerdown gold deposit. The study was completed by WSP Canada Inc. ("WSP"), an independent third party engineering firm, with the mandate to evaluate the potential of bringing the past producing gold mine back into commercial production.

1. Pre - Feasibility highlights
  • Project Pre-tax net present value ('NPV8%') of $71.2 million with an IRR of 46.8% per cent.
  • Project after-tax net present value ('NPV8%') of $44.2 million with an internal rate of return ('IRR') of 34.8%
  • Net pre-tax cash flow of $104 million, undiscounted. Net after-tax cash flow of $69 million, undiscounted.
  • Cash cost to produce an ounce of gold is $558 CDN with an all in sustaining cost (including capital, sustaining capital and operating cost) of $955 CDN per ounce of gold.
  • Mine life for the current plan at Hammerdown is five years, producing approximately 174,000 ounces at an average of approximately 35,000 ounces per year. Basic assumptions used for the compilation of the PFS:
    • Gold Price of US$ 1,250 per ounce
    • Exchange Rate of 0.8 US$: 1 CA$ (or 1 US$: 1.25 CA$)
    • Project discount rate of 8%
    • Mill recovery of 97% based on the historic treatment of the ore at the nearby Nugget Pond Gold Mill from 2000 to 2004.
    (All currency is expressed in Canadian dollars ($CA) unless otherwise noted.)
The Hammerdown gold deposit was successfully mined by Richmont Mines between 2000 and 2004 while gold prices averaged $325/oz. During its operation, a total of 291,400 tonnes of ore were mined and milled, at an average grade of 15.83 g/t Au, recovering a total of 143,000 ounces of gold at an 8 g/t cut-off. All of the ore was processed at the Nugget Pond mill, now owned and operated by Rambler Metals and Mining Canada Limited, with an average gold recovery of 97.1%. Mining terminated in 2004 due to low gold prices with extensive gold mineralization remaining, although uneconomic at that time.

The Orion gold deposit consists of two main vein systems, both of which are open along strike, and down plunge to the northeast.

Bernard H. Kahlert, P.Eng. is the Qualified Person as defined by National Instrument 43-101 and has reviewed and approved the technical disclosure contained in this release.

Further information on the Green Bay Gold Property can be found on our website at www.maritimeresourcescorp.com along with the NI43-101 compliant Technical Report and Prefeasibility Report filed on SEDAR.

On behalf of the Board of Directors,


Doug Fulcher President, CEO

For further information, please call:
Doug Fulcher: Telephone: (604) 336-7322
info@maritimeresourcescorp.com


The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. Statements in this press release, other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, may include forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements

Caution Regarding Forward Looking Statements:

Certain information included in this press release, including information relating to future financial or operating performance and other statements that express the expectations of management or estimates of future performance constitute "forward-looking statements". Such forward-looking statements include, without limitation, statements regarding copper, gold and silver forecasts, the financial strength of the Company, estimates regarding timing of future development and production and statements concerning possible expansion opportunities for the Company. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief are based on assumptions made in good faith and believed to have a reasonable basis. Such assumptions include, without limitation, the price of and anticipated costs of recovery of, copper concentrate, gold and silver, the presence of and continuity of such minerals at modeled grades and values, the capacities of various machinery and equipment, the availability of personnel, machinery and equipment at estimated prices, mineral recovery rates, and others. However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to, interpretation and implications of drilling and geophysical results; estimates regarding timing of future capital expenditures and costs towards profitable commercial operations. Other factors that could cause actual results, developments or events to differ materially from those anticipated include, among others, increases/decreases in production; volatility in metals prices and demand; currency fluctuations; cash operating margins; cash operating cost per pound sold; costs per ton of ore; variances in ore grade or recovery rates from those assumed in mining plans; reserves and/or resources; the ability to successfully integrate acquired assets; operational risks inherent in mining or development activities and legislative factors relating to prices, taxes, royalties, land use, title and permits, importing and exporting of minerals and environmental protection. Accordingly, undue reliance should not be placed on forward-looking statements and the forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained herein are made as at the date hereof and the Company does not undertake any obligation to update publicly or revise any such forward-looking statements or any forward-looking statements contained in any other documents whether as a result of new information, future events or otherwise, except as required under applicable security law.