IFR International Frontier Resources Corp

International Frontier Resources Corporation (“IFR”) (TSX-V: IFR) is pleased to announce that it has entered into a non-binding Letter of Intent (“LOI”) dated May 3, 2021 with respect to a potential reverse takeover of IFR (the “Proposed Transaction”) by a private oil and gas company (“PrivateCo”). The final structure and terms of the Proposed Transaction have not yet been finalized and further details will be announced at a later date. The Proposed Transaction is an arm's length transaction. IFR also announced today a US$750,000 10% per annum secured convertible debenture (“Convertible Debenture”) private placement (the “CD Offering”) from PrivateCo, and an up to CDN$1,000,000 non-brokered common share private placement offering ‎(“Common Share Offering”) ‎at $0.025 per IFR common share (“Common Share”).

Completion of the Proposed Transaction is subject to a number of conditions and other ‎contingencies as set forth below in this news release ‎and as set forth in the LOI, including, but not limited to: the ‎negotiation and execution of a definitive agreement for the Proposed Transaction (the ‎‎“Definitive Agreement”); any required approvals of relevant government authorities, determination of favourable tax structuring for the Proposed ‎Transaction; TSX Venture Exchange (the “TSXV”) acceptance of the Proposed Transaction; ‎‎satisfactory due diligence; board of director approval; shareholder consent; and ‎other conditions typical for transactions of a similar nature. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is ‎obtained. ‎There can be no assurance that the ‎parties will execute the Definitive Agreement or that the Proposed 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 Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of IFR should be considered highly speculative. The TSXV has in no way passed upon the merits of the Proposed ‎‎Transaction and has neither approved nor disapproved the contents of this news release.‎

RTO With PrivateCo

The indicative terms of the LOI contemplate the following terms and conditions as part of the Proposed Transaction:

• That all of the common shares in the capital of PrivateCo will be purchased or exchanged for Common Shares of IFR at an exchange ratio determined for the Proposed Transaction
• Prior to the closing of the Proposed Transaction, IFR will complete a consolidation (the “Consolidation”) of its outstanding share capital at a rate yet to be determined
• That upon completion of the Proposed Transaction, the directors and officers of IFR will be replaced by nominees of PrivateCo
• Renaming of IFR and a change of the Ticker Symbol
• Subject to TSXV acceptance, IFR intends to complete a spin-out of IFR’s non-Mexican assets creating a new spin-out company (“SpinCo”) holding such assets
• IFR or its wholly owned subsidiary Petro Frontera, S.A.P.I. de C.V. will have purchased all of the outstanding shares in ‎the joint venture company, Tonalli Energia S.A.P.I. de C.V. (“Tonalli”) held by its joint venture partner, Grupo IDESA S.A. de C.V.
• Funding of the $US750,000 CD Offering will have been completed
• Completion of a concurrent financing in relation to the Proposed Transaction in an expected range of US$20,000,000 to US$60,000,000
• Management, insiders, control persons, and such other persons entering into lock-ups to support the Proposed Transaction in an amount no less 30% of the outstanding IFR Common Shares
• The Definitive Agreement will contemplate a break fee in the amount of $500,000 payable by IFR to PrivateCo upon the occurrence of certain events

Further updates and particulars of the Proposed Transaction will be provided upon IFR and PrivateCo entering into a Definitive Agreement for the Proposed Transaction.

US$750,000 10% Secured Convertible Debenture Offering

Pursuant to the LOI and prior to the execution of a Definitive Agreement, subject to TSXV acceptance, IFR intends to complete the 10% per annum secured CD Offering for US$750,000 from PrivateCo. The net proceeds of the CD Offering is intended as bridge financing and will be used as follows: (a) drilling of a potential Tecolutla 12 well;‎ (b) regulatory costs and contract license fees for Tecolutla;‎ (c) IFR expenses related to the Proposed Transaction; and (d) IFR expenses related to the other transactions described in the LOI.‎ The Convertible Debenture Offering is expected to close ‎within ‎two weeks of the execution of the LOI.

The Convertible Debenture will have a 3 year term from the date of issuance (the “Maturity Date”) and will bear an interest rate of 10% per annum, calculated semi-annually, and payable on the Conversion Date ‎(as defined below)‎ or Maturity Date. The Convertible Debenture will be secured by a promissory note and a share pledge agreement, both in respect of the shares of Tonalli held by IFR or its subsidiaries. There will be no other security over the assets of IFR in relation to the Convertible Debenture.‎ The Convertible Debenture will be convertible at PrivateCo’s option into post-Consolidation Common Shares of IFR (“Resulting Issuer Shares”) at any time prior to the Maturity Date at a conversion price equal to a 10% discount to the deemed price of the Resulting Issuer Shares on completion of the Proposed Transaction ‎(the “Conversion Price”)‎ provided that the minimum Conversion Price will equal $0.025 multiplied by the Consolidation ratio (being the number of pre-Consolidation Common Shares that will be exchanged for one post-Consolidation Common Share). At IFR’s Option, IFR may prepay without penalty the principal amount of the Convertible Debenture in cash or in Common Shares at the Conversion Price in whole or in part. If the Proposed Transaction does not close by October 1, 2021, or the LOI is Terminated, IFR has the option to satisfy all or a portion of the principal ‎amount and accrued and unpaid interest under the Convertible Debenture by converting the same to services. Upon conversion of such principal and interest into services, IFR will have satisfied its obligations under the Convertible Debenture.

CDN$1,000,000 Common Share Offering at $0.025 Per Common Share

IFR announced today a non-brokered Common Share Offering for gross proceeds of up to ‎‎$1,000,000 at a price of $0.025 per Common Share, subject to TSXV acceptance. The ‎net proceeds from the Common Share Offering are expected to be used for: G&A Expenses including salaries with the remainder for general working capital purposes‎. ‎The Common Share Offering will be completed pursuant to certain exemptions from the prospectus requirements under ‎applicable securities laws. Subject to acceptance by IFR, in addition to other available exemption for the ‎Common Share Offering, the Common Share Offering is open to all existing shareholders of IFR in reliance upon the prospectus ‎exemption described in Alberta Securities Commission Rule 45-516 “Prospectus Exemptions For Retail Investors ‎And Existing Security Holders” and set forth in the various corresponding blanket orders and rules in certain ‎jurisdictions of Canada (the “Existing Shareholder Exemption”), subject to the terms and conditions therein. The ‎aggregate acquisition cost to a subscriber under the Existing Shareholder Exemption cannot exceed $15,000 unless ‎that subscriber has obtained advice from a registered investment dealer regarding the suitability of the investment. ‎IFR has fixed May 6, 2021 as the record date for the purpose of determining existing shareholders of IFR who are entitled to participate in the Common Share Offering pursuant to the Existing Shareholder Exemption. ‎Subscribers purchasing Common Shares under the Existing Shareholder Exemption will need to represent in writing that they ‎meet certain requirements of the Existing Shareholder Exemption, including that on or before the record date, they ‎became a shareholder of IFR and that they continue to be a shareholder of IFR. In accordance ‎with the requirements of the Existing Shareholder Exemption and Investment Dealer Exemption, IFR ‎confirms there is no material fact or material change related to IFR which has not been generally disclosed. The closing of the Common Share Offering is expected to occur on or about June 4, 2021 and is subject to regulatory approval, including the approval of the TSXV.

OTHER INFORMATION IN RESPECT OF THE CD OFFERING AND THE COMMON SHARE OFFERING

The closings of the CD Offering and the Common Share Offering (collectively, the “Offerings”) are subject to a number of conditions, including receipt of all necessary corporate and regulatory approvals, including TSXV acceptance. As such, there is no assurance that IFR will complete the Offerings as described above or at all. It is anticipated that the Offerings will be completed pursuant to certain exemptions from the prospectus requirement under applicable securities laws. The Offerings may be closed in one or more tranches. The Convertible Debenture and all of the Common Shares issued pursuant to the Offerings, and any securities into which the Convertible Debenture may be converted, are subject to resale restrictions imposed by applicable law or regulation, including a statutory hold period expiring four months and a day from the closing dates of the Offerings. It is not anticipated that any new insiders will be created, nor that any change of control will occur, ‎as a result of the Offerings. Any participation by insiders of IFR in the Offerings will be on the same terms as arm’s length investors. Depending on market conditions, ‎the gross proceeds of the Offerings could be increased or decreased. ‎None of the securities issued in connection with the Offerings will be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), and none of them may be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act. This news release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any state where such offer, solicitation, or sale would be unlawful.

Shares for Debt Settlement

In conjunction with the Common Share Offering, IFR has agreed to settle outstanding debt of $392,900 with certain officers and consultants of IFR by issuing 15,716,000 Common Shares of IFR at a deemed price of $0.025 per Common Share. The issuance of Common Shares in connection with the shares for debt settlement is subject to the approval of the TSXV. The Common Shares issued pursuant to the shares for debt settlement will be subject to a four-month and one day hold period in accordance with applicable securities legislation.

Trading Halt

Trading in IFR’s Common Shares on the TSXV is halted and will remain halted until the documentation required by the TSXV in relation to the Proposed Transaction has been reviewed and accepted by the TSXV. 

About International Frontier ResourcesInternational Frontier Resources Corporation (IFR) is a Canadian publicly traded company with a demonstrated track record of advancing oil and gas projects. Through its Mexican subsidiary, Petro Frontera S.A.P.I de CV (Frontera) and strategic joint ventures, it is advancing the development of petroleum and natural gas assets in Mexico. IFR also has projects in Canada and the United States, including the Northwest Territories, Alberta and Montana.

IFR’s shares are listed on the TSX Venture, trading under the symbol IFR. For additional information please visit www.internationalfrontier.com.

For further information

Steve Hanson – President and CEO		or		Tony Kinnon – Chairman
(403) 215-2780				(403) 215-2780
shanson@internationalfrontier.com				tkinnon@internationalfrontier.com

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 or accuracy of this release.

Forward Looking Statements

This press release contains forward‐looking statements and forward‐looking information (collectively "forward‐looking information") within the meaning of applicable securities laws. All statements, other than statements of historical fact, included herein are forward-looking information. In addition, and without limiting the generality of the foregoing, this news release contains forward‐looking information regarding: the Proposed Transaction, including the potential finalization and structuring of the Proposed Transaction and the potential terms and conditions in relation to the proposed transaction; the potential execution of a Definitive Agreement in relation to the proposed transaction and the terms and conditions of such Definitive Agreement; the required approvals for the proposed transaction, including TSXV acceptance, and regulatory, director and shareholder approvals of the Proposed Transaction; the potential issuance of Common Shares in relation to the Proposed transaction; the potential Consolidation, change of management, name change, change of ticker symbol and the US$20,000,000 to $US60,000,000 concurrent financing in relation to the Proposed Transaction; the potential spin-out; the potential purchase of Tonalli shares; the potential Offerings including, the potential subscriber in the CD Offering, the use of proceeds of the Offerings, the anticipated closing date of the CD Offering, the approval required for the Offerings, ‎including TSXV acceptance of the CD Offering‎, and the size of the Common Share Offering, the potential conversion of the Convertible Debenture into services; and the potential shares for debt settlement.

There can be no assurance that such forward-looking information will prove to be accurate. Actual results and ‎future events could differ materially from those anticipated in such forward-looking information. This forward-‎looking information reflects IFR’s current beliefs and is based on information currently available to ‎IFR and on assumptions IFR believes are reasonable. These assumptions include, but are not ‎limited to: the execution of a Definitive Agreement, the completion of satisfactory due diligence by IFR and PrivateCo in relation to the Proposed Transaction; satisfactory tax structuring of the Proposed Transaction; the satisfactory fulfilment of all of the conditions precedent to the Proposed Transaction; the receipt of all required approvals for the Proposed Transaction including director and shareholder approvals of both IFR and PrivateCo, TSXV acceptance and other regulatory approvals; the issuance of the Common Shares in relation to the Proposed Transaction and the purchase of the Tonalli shares; market acceptance of the Proposed Transaction, the Consolidation, the spin-out and the concurrent financing, and completion of the same; the value of PrivateCo in relation to the Proposed Transaction; the underlying value of IFR and its Common Shares; market acceptance of the Offerings; ‎TSXV acceptance of the Offerings; and expectations concerning prevailing commodity prices, exchange rates, interest rates, applicable ‎royalty rates and tax laws.‎

Forward looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of IFR, and the potential completion of the Proposed Transaction, to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; general capital market conditions and market prices for securities; delay or failure to receive board or regulatory approvals, including TSXV acceptance; the actual results of future operations; general economic, political, market and business conditions; risks inherent in oil and natural gas operations; fluctuations in the price of oil and natural gas, interest and exchange rates; the risks of the oil and gas industry, such as operational risks and market demand; governmental regulation of the oil and gas industry, including environmental regulation; actions taken by governmental authorities, including increases in taxes and changes in government regulations and incentive programs; geological, technical, drilling and processing problems; the uncertainty of reserves estimates and reserves life; unanticipated operating events which could reduce production or cause production to be shut-in or delayed; hazards such as fire, explosion, blowouts, cratering, and spills, each of which could result in substantial damage to wells, production facilities, other property and the environment or in personal injury; encountering unexpected formations or pressures, premature decline of reservoirs and the invasion of water into producing formations; failure to obtain industry partner and other third party consents and approvals, as and when required; competition; the timing and availability of external financing on acceptable terms; and lack of qualified, skilled labour or loss of key individuals. A description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in IFR’s disclosure documents on the SEDAR website at www.sedar.com. Although IFR has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur.

Forward-looking information contained in this news release is expressly qualified by this cautionary statement. The forward-looking information contained in this news release represents the expectations of IFR as of the date of this news release and, accordingly, is subject to change after such date. However, IFR expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.

IFR seeks Safe Harbor.‎