Hemlo Mining Corp. — Annual Report 2022

Feb 17, 2023

News Release

Carcetti Capital Announces Fourth Quarter 2022 Results

Calgary, Alberta – February 17, 2022 – Carcetti Cpital Corp. (formerly Cub Energy Inc.) (the “ Company ”) ( TSX-V NEX: CART.H ), announced today its audited financial and operating results for the year ended December 31, 2022. All dollar amounts are expressed in United States Dollars unless otherwise noted.

Patrick McGrath, CEO of the Company said: “ During the year ended December 31, 2022, the Company completed a major reorganization including divesting all its remaining oil and gas assets, issuing a Special Distribution totaling $6,900,000 and completing a name change and share consolidation. As of December 31, 2022, the Company had remaining working capital of approximately $202,000 and is seeking a new business opportunity.”

Operational Highlights

• On February 2, 2022, the Company closed the sale of its 35% interest in KUB Holdings Limited (“KUB Holdings”) and received a cash payment of $2,600,000. In conjunction with closing, the Company received the final cash dividend of $2,046,000 and repaid the final loan balance to a subsidiary of KUB Holdings in the amount of $2,474,000 as part of the final debt settlement between the parties.

• On July 29, 2022, the Company signed a definitive Share Sale and Purchase Agreement (“SPA”) for the sale of its 100% interest in 3P International Energy Ltd (“3P”) and its whollyowned Ukraine subsidiary, Tysagaz LLC (“Tysagaz”). Tysagaz owns the RK field in western Ukraine. The sale was for nominal consideration of $1 and the buyer assumed all of 3P’s and Tysagaz’ liabilities including the bank loan and all reclamation liabilities. The buyer group was two officers of the Company, Eugene Chaban, the Company’s Chief Financial Officer and Sergey Panchuk, the Company’s former Chief Operating Officer. The sale closed on August 17, 2022.

• On December 30, 2022, the Company completed the reorganization of the Company’s share capital to permit the Company to pay a special cash distribution of CAD $9.00 per share (CAD$0.03 per share pre-share consolidation) to shareholders of record as at December 23, 2022 for a total distribution of approximately $6,900,000 (the “Special Distribution”).

• Also on December 30, 2022, the Company changed its name to “Carcetti Capital Corp.” and completed a share consolidation on the basis of one (1) new share for every three hundred (300) old shares as part of the Company’s reorganization. All share and per share amounts in the financial statements have been adjusted to give retroactive effect to the share consolidation.

• Achieved average natural gas price of $25.49/Mcf during the year ended December 31, 2022 as compared to $9.60/Mcf for 2021. Regional pricing materially improved in Ukraine period over period.

• Production averaged 20 boe/d for the year ended December 31, 2022 as compared to 537 boe/d for 2021. Production decreased due to the sale of the Company’s 35% equity investment in KUB Holdings. The Company ceased all production effective July 31, 2022 with the sale of its last oil and gas asset, being 3P.

• The Company’s listing was transferred from a Tier 2 issuer on the TSXV to the NEX board of the TSXV.

Financial Highlights

• The Company reported a net loss of $42,287,000 or $40.39 per share during the year ended December 31, 2022 as compared to net income of $8,259,000 or $7.89 per share during 2021. The 2022 financial results includes a $42,786,000 non-cash reclassification of foreign currency translation as a result of the sale of assets. Excluding this non-cash reclassification, the Company would have recorded net income of $499,000 in 2022. The Company’s revenues

  • and income were materially impacted in 2022 by the sale of KUB Holdings which was the primary contributor to the financial performance of the Company historically.

• Netbacks of $49.38/boe or $8.23/Mcfe were achieved for the year ended December 31, 2022 as compared to netback of $30.91/Boe or $5.15/Mcfe for 2021.

Supporting Documents

The Company’s complete reporting package, including the audited financial statements and associated Management’s Discussion and Analysis, have been filed on SEDAR (www.sedar.com).

Patrick McGrath Chief Executive Officer (832) 499-6009 patrick.mcgrath@cubenergyinc.com

Oil and Gas Equivalents

A barrel of oil equivalent (“boe”) or units of natural gas equivalents (“Mcfe”) is calculated using the conversion factor of 6 Mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil. A boe conversion ratio of 6 Mcf: 1 bbl (barrel) or a Mcfe conversion of 1bbl: 6 Mcf is, based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead and is not based on either energy content or current prices. While the boe ratio is useful for comparative measures, it does not accurately reflect individual product values and might be misleading, particularly if used in isolation. As well, given that the value ratio, based on the current price of crude oil to natural gas, is significantly different from the 6:1 energy equivalency ratio, using a 6:1 conversion ratio may be misleading as an indication of value. The disclosure in this press release is prepared in accordance with NI 51-101 standards.

This press release contains certain forward-looking statements within the meaning of applicable securities law. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company cannot assure that actual results will be consistent with these forward-looking statements. They are made as of the date hereof and are subject to change and the Company assumes no obligation to revise or update them to reflect new circumstances, except as required by law. Prospective investors should not place undue reliance on forward looking statements. These factors include the inherent risks involved in the resource industry.

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 release.

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