Desert Lion Energy Announces up to $10MM Convertible Note Financing with AIP Asset Management and $2MM Equity Private Placement

TORONTO, Nov. 5, 2018 -  Desert Lion Energy Inc. (TSXV: DLI) (OTCQB: DSLEF) ("Desert Lion" or the "Company") is pleased to announce it has executed a note purchase agreement (the "NPA") with AIP Asset Management and AIP Global Macro Fund L.P. ("AIP") providing for a secured convertible note financing for gross proceeds of up to $10,000,000 (the "Note Offering").

The initial tranche of secured convertible promissory notes (the "Notes") for gross proceeds of $5,000,000 shall be purchased by AIP on the date (the "Closing Date") certain standard conditions precedent are satisfied, including, approval of the TSX Venture Exchange ("TSXV") and completion of the Equity Offering (as described below).  A second tranche of Notes for proceeds of an additional $5,000,000 is also available to the Company under the NPA to fund acquisitions as mutually agreed by AIP and the Company.

The Notes may be converted to common shares of the Company at a price of $0.20 per share at any time prior to maturity, which is 24 months following the Closing Date. The Notes will bear interest at a rate of 12% per annum with 8% settled in cash and 4% settled by the issuance of common shares. Interest will reduce to 8% per annum with all interest settled in cash or shares, as determined by the Company, where the closing price of the Company's common shares on the TSXV is at or above $0.20 on the last trading day of any month.  On the Closing Date the Company shall pay a fee to AIP to be settled by a cash payment of $150,000 and, subject to approval of the TSXV, the issuance of 2,857,142 common shares.

The Company is also pleased to announce a non-brokered private placement financing of 28,571,428 units (the "Units") at a price of $0.07 per Unit for gross proceeds of $2,000,000 (the "Equity Offering" and together with the Note Offering, the "Offering"). Each Unit is comprised of one common share of the Company and one-half of one common share purchase warrant (a "Warrant"). Each whole Warrant will entitle the holder thereof to acquire one additional common share of the Company at a price of $0.20 for a period of 24 months following the Closing Date.

Closing of the Offering is expected to occur on or about November 23, 2018 and remains subject to certain conditions, including receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange. All securities issued in connection with the Offering will be subject to a four month hold period.

"AIP's commitment to investment a minimum of $5,000,000 and up to $10,000,000 in conjunction with support from our existing shareholders and management in the private placement reiterates management's belief in the potential for the Desert Lion Energy project," commented Tim Johnston, CEO of Desert Lion Energy Inc. "The financing will facilitate the continued advancement of both organic and strategic growth initiatives as we develop a world class lithium company."

"AIP invests in companies with strong management teams, world class assets and large upside growth potential. This strategy used by AIP Global Macro Fund LP has resulted in an average return of over 40% per year since 2014.  We are highly selective of management teams and the companies we work with and we are proud to announce that Desert Lion was able to meet these requirements" commented Jay Bala, Senior Portfolio Manager of AIP Asset Management.   

Concurrently, the Company has entered into a loan agreement with Pella Ventures Limited ("Pella"), pursuant to which Desert Lion has borrowed $150,000. The loan in unsecured, is subject to an interest rate of 8.0% per annum and matures on December 31, 2018. The Company expects to use the proceeds from the loan for general corporate and working capital purposes.

Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the loan constitutes a "related party transaction" as Pella is a related party of Desert Lion as it is controlled by Adonis Pouroulis, Chairman of the board of Desert Lion. The Company is relying on an exemption from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to exemptions contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 on the basis that the value of the loans is less than 25% of the Company's market capitalization.

About Desert Lion Energy
Desert Lion Energy is a lithium exploration and development company focused on building Namibia's first large-scale lithium mine to be located approximately 210 km from the nation's capital of Windhoek and 220 km from the Port of Walvis Bay. The Company's Rubicon and Helikon mines are located within a 301 km² prospective land package. The project site is accessible year-round by road and has access to power, water, rail, port, airport and communication infrastructure.

About AIP Asset Management
It is a well-recognized, award-winning asset management firm.  Most recently, it took home the 2017 Hedge week Award for Best Macro Hedge Fund and in 2014, it was nominated for the Ernst and Young Entrepreneur of the Year Award – the world's most prestigious business award for entrepreneurs.  Its core focus is to help clients, be they institutions, hedge funds, mutual funds, family offices, or retail investors, achieve their investment goals.

Cautionary Note Regarding Forward-Looking Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws. Generally, any statements that are not historical facts may contain forward-looking information, and forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget" "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or indicates that certain actions, events or results "may", "could", "would", "might" or "will be" taken, "occur" or "be achieved." Forward-looking information includes, but is not limited to, statements and expectations regarding the closing of the Offering and the timing thereof. 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 the Company to be materially different from those expressed or implied by such forward-looking information.

Although the Company has attempted to identify important factors that cause results not to be as anticipated, estimated or intended, there can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking information is made as of the date of this presentation and the Company does not undertake to update or revise any forward-looking information this is included herein, except in accordance with applicable securities laws.

NEITHER 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

SOURCE Desert Lion Energy