ROK Resources Inc. — Capital/Financing Update 2022

Feb 7, 2022

TERM SHEET

ROK RESOURCES INC.

BOUGHT DEAL OFFERING OF SUBSCRIPTION RECEIPTS

February 4, 2022

A preliminary short form prospectus containing important information relating to the securities described in this document has not yet been filed with the securities regulatory authorities in the provinces of Alberta, British Columbia and Ontario. A copy of the preliminary short form prospectus is required to be delivered to any investor that received this document and expressed an interest in acquiring the securities.

Copies of the preliminary short form prospectus may be obtained from Echelon Wealth Partners Inc. at ecm@echelonpartners.com. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final short form prospectus has been issued.

This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the preliminary short form prospectus, final short form prospectus and any amendment, for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.

The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This term sheet shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

Issuer:	ROK Resources Inc. (the "Company").
Issue:	Bought deal offering of subscription receipts (each, a_“Subscription Receipt”_) (the “Offered
	Securities”).
Issue Price:	$0.18 per Offered Security
Issue Size:	$15,000,120 (the "Offering").
Over-Allotment	The Company will grant the Underwriters an option to increase the size of the Offering by
Option:	up to 15%, exercisable in whole or in part to purchase Subscription Receipts or if the
	Subscription Receipts are no longer outstanding, Units, as determined by the Underwriters
	at any time up to 30 days following the Closing Date (the “Over-Allotment Option”).
Use of Proceeds:	The Company will use the net proceeds of the Offering to fund; (i) the cash portion of the
	$72 million purchase price (the “Purchase Price”) for the acquisition of certain oil & gas
	assets in Saskatchewan and Alberta from Federated Co-operatives Limited (“FCL”) (the
	“Acquisition”), pursuant to a definitive agreement dated February 3, 2022, (the “Purchase
	Agreement”); and (ii) working capital and general corporate purposes. The closing of the
	Acquisition (the “Acquisition Closing”) is expected to be completed in late February 2022
	(the “Acquisition Closing Date”).
Subscription	Each Subscription Receipt will be sold at the Issue Price and will be automatically
Receipts:	exchanged, for no additional consideration, into one unit of the Company (a “Unit”) upon
	the satisfaction of the Escrow Release Conditions (as defined below). Each Unit will be
	comprised of one common share of the Company (each, a “Common Share”) and one
	common share purchase warrant (each, a “Warrant”). Each Warrant will entitle the holder
	thereof to acquire one additional Common Share at an exercise price of $0.25 for a period
	of 36 months from the Closing Date (as defined below).

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Termination Event: A “ Termination Event ” means the earliest to occur of any of: (i) the failure to satisfy the Escrow Release Conditions (as defined below), including for the Company to deliver the Escrow Release Notice (as defined below) to the Subscription Receipt Agent (as defined below) and the Underwriter (as defined below), on or before 5:00 p.m. (Toronto time) on May 24, 2022 (the “ Acquisition Outside Time ”), (ii) the Purchase Agreement being terminated in accordance with its terms prior to the Acquisition Outside Time for any reason, and (iii) the Company advising the Subscription Receipt Agent and the underwriters, or announcing to the public by way of a press release, that it no longer intends to complete the Acquisition.

Termination Date: On the date upon which the first of the Termination Event occurs (the “ Termination Date ”), holders of Subscription Receipts will receive the full purchase price of the Subscription Receipt, together with their pro rata portion of interest earned thereon between the Closing Date and the Termination Date.

Escrow Release The proceeds from the sale of the Subscription Receipts (the “ Escrowed Proceeds ”) will be Conditions: held in trust by the subscription receipt agent (the “ Subscription Receipt Agent ”) and invested in short-term interest bearing or discount debt obligations issued or guaranteed by the Government of Canada or a province or one or more of the five largest Canadian chartered banks and such other approved investments as determined by the Underwriter.

Provided a Termination Event has not occurred, on or immediately prior to the Acquisition Closing, the Company will deliver an irrevocable notice (the “ Escrow Release Notice ”) to the Subscription Receipt Agent and the Underwriter, that the Escrow Release Conditions have been satisfied, upon which the Escrowed Funds, less half of the Underwriter’s Commission (as defined below), will be released to the Company (to be used to fund a portion of the Purchase Price of the Acquisition) and the balance of the Underwriters’ Commission will be released to the Underwriter.

“ Escrow Release Conditions ” means (i) the satisfaction or waiver of all conditions to the Acquisition in all material respects in accordance with the terms of the Purchase Agreement (other than the payment of the Purchase Price pursuant to the Purchase Agreement and such conditions precedent that by their nature are to be satisfied at the Acquisition Closing), without material amendment or waiver adverse to the Company, unless the consent of the Underwriter is given to such amendment or waiver, and without the prior occurrence of a Termination Event; (ii) the Company has available to it all additional funds necessary for the completion of the Acquisition; and (iii) such other escrow release conditions agreed to by the Company and the Underwriter to be set forth in the underwriting agreement.

Form of Offering: The Offered Securities will be offered (i) by way of a short form prospectus to be filed in the provinces of Ontario, Alberta, British Columbia, and such other provinces as agreed to by Echelon and the Company, (ii) in the United States pursuant to available exemptions from registration under the United States Securities Act of 1933, as amended, and (iii) outside of Canada and the United States without: (A) giving rise to any requirement under the laws of such jurisdiction to prepare and/or file a prospectus, registration statement or document having similar effect; or (B) creating any ongoing compliance or continuous disclosure obligations for the Company pursuant to the laws of such jurisdiction.

Listing: The Company will apply to list the Common Shares and Warrants underlying the Unit on the TSXV. Listing will be subject to the Company fulfilling all of the applicable listing requirements of the TSXV.

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Eligibility: The Common Shares and Warrants shall be eligible for RRSPs, RRIFs, RDSPs, RESPs, TFSAs, and DPSPs. Lead Underwriter: Echelon Wealth Partners Inc. (“ Echelon ”) (the “ Underwriter ”). Underwriter’s The Company will pay to the Underwriter a cash commission equal to 7.0% of the aggregate Commission: gross proceeds received from the sale of the Offered Securities, 50% payable on the Closing Date and 50% payable upon the satisfaction of the Escrow Release Conditions. In addition, the Company shall issue warrants to the Underwriter (collectively, the “ Broker Warrants ” and each a “ Broker Warrant ”) equal to 7.0% of the Offered Securities sold in the Offering (including the Over-Allotment Option). Each Broker Warrant will be exercisable into the resulting securities from the automatic exchange of the Subscription Receipts.

Notwithstanding the foregoing, the Company shall (i) pay the Underwriters a cash fee of 3.5% of the aggregate gross proceeds of the Offering (including the Over-Allotment Option), 50% payable on Closing and 50% payable upon the satisfaction of the Escrow Release Conditions (as defined in Schedule “A”), and (ii) issue to the Underwriters Broker Warrants equal to 3.5% of the number of Offered Securities sold in the Offering (including the Over-Allotment Option) for any Offered Securities sold to President’s List Purchasers.

“ President’s List Purchasers ” means the written list of purchasers of Offered Securities in an aggregate amount not to exceed $3,000,000, introduced by the Company and as agreed upon between the Company and Echelon.

Closing Date:

February 24, 2022, or such other date as the Company and the Underwriter may agree (the “ Closing Date ”).

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