Drummond Ventures Corp. ('Drummond' or the 'Company') (TSX Venture: DVX.P) is pleased to announce that, further to its news release dated September 26, 2019, it has entered into an amalgamation agreement dated December 2, 2019 (the 'Amalgamation Agreement') with Sun Machine Entertainment Inc. ('Sun Machine' or 'SME'), an arm's length private company, to acquire all of the issued and outstanding securities of Sun Machine.

The transaction shall constitute Drummond's Qualifying Transaction (as defined in the policies of the TSX Venture Exchange ('TSXV')) (the 'Qualifying Transaction') and the combined company that will result from the completion of the Qualifying Transaction (the 'Resulting Issuer') will be renamed 'Sun Machine Entertainment Inc.'. Subject to TSXV approval, the common shares of the Resulting Issuer will trade on the TSXV and the business of the Resulting Issuer will be the business of Sun Machine. Closing of the Qualifying Transaction is expected to occur by the first quarter of 2020.

Private Placements and CPC Loan

In connection with the Qualifying Transaction, Sun Machine intends on closing a non-brokered private placement (the 'Bridge Financing') of convertible debentures (the 'Debentures'), whereby Sun Machine will issue $500,000 of Debentures, which will effectively convert into Resulting Issuer common shares at a conversion price of $0.30 per share for 1,666,666 shares. The Debentures will have a maturity date of June 30, 2020 and bear interest at a rate of 8.0% per annum in the event the Qualifying Transaction is not completed. The Bridge Financing is expected to occur on or before December 12, 2019 and the proceeds shall be used for the launch of Sun Machine's first IP/product, the Qualifying Transaction costs, and other general working capital. Concurrent with or immediately prior to the closing of the Qualifying Transaction, Sun Machine also expects to complete a non-brokered private placement of shares for aggregate gross proceeds of $3,000,000 (the 'Concurrent Financing'). The Concurrent Financing is expected to be comprised of 8,571,428 shares of Sun Machine and thereafter the Resulting Issuer at an effective price of $0.35 per Resulting Issuer share. Additional details of the Concurrent Financing will be provided in a subsequent news release. Net proceeds of the Concurrent Financing are intended to fund product development as well as for general working capital purposes.

Further to its news release dated September 26, 2019, Drummond announces that is has advanced $225,000 by way of secured loan (the 'CPC Loan') to Sun Machine, which is due and payable at the earlier of completion of the proposed Qualifying Transaction and February 28, 2020, bears interest at prime rate, and is secured against all of the assets of Sun Machine. Proceeds of the CPC Loan are expected to be deployed for the launch of Sun Machine's first IP/product, the Qualifying Transaction costs, and other general working capital.

About Sun Machine

Sun Machine is a video game development and publishing company that was incorporated on October 5, 2018 under the Business Corporation Act (British Columbia) with its head office is located in Vancouver, British Columbia. Sun Machine was founded and is owned by a group of highly-acclaimed industry executives with a track record of delivering world class product quality and financial success across console and mobile game markets. To date, the team has been focused on development of its first product, a casual but triple A quality multiplayer mobile game, which is in prototype stage with open beta (aka soft launch) anticipated for Q2 of 2020 and worldwide commercial launch anticipated for Q4 of 2020. Details of the game will be available and shared in due course. At this point, Sun Machine is preparing its audited financial information, which will be disclosed (with pro forma financial statements) once completed.

Disclaimer for Forward-Looking Information

Certain information in this news release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact are forward-looking statements. Forward looking statements are often identified by terms such as 'may', 'should', 'anticipate', 'expect', 'potential', 'believe', 'intend', 'estimate' or the negative of these terms and similar expressions. Forward-looking statements in this news release include but are not limited to: (i) renaming the Resulting Issuer; (ii) trading of Resulting Issuer shares; (iii) closing of the Qualifying Transaction by the first quarter of 2020; (iv) closing, timing of closing, and use of proceeds of the Bridge Financing and Concurrent Financing; (v) provision of additional details of the Concurrent Financing; (vi) use of proceeds of the CPC Loan; (vii) the Amalgamation procedure; (viii) the proposed Resulting Issuer shareholdings; (ix) open beta and worldwide game launch; (x) preparation and disclosure of financial information; (xi) preparation of the filing statement in respect of the Qualifying Transaction: and (xii) additional information regarding the proposed nominees for directors and officers of the Resulting Issuer. Forward-looking statements are based on certain assumptions regarding Sun Machine and Drummond, including the completion of the Qualifying Transaction, anticipated benefits from the transactions, and expected growth, results of operations, performance, industry trends and growth opportunities. While Sun Machine and Drummond consider these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Readers are cautioned not to place undue reliance on forwardlooking statements. The assumptions of Sun Machine and Drummond, although considered reasonable by them at the time of preparation, may prove to be incorrect. In addition, forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; future legislative, tax and regulatory developments; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the inability to implement business strategies; competition; currency and interest rate fluctuations and other risks. Among other things, there can be no assurance that the transactions will be completed or that the anticipated benefits from the transactions will be achieved. Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. For more information on the risk, uncertainties and assumptions that could cause anticipated opportunities and actual results to differ materially, please refer to the public filings of Drummond which are available on SEDAR at www.sedar.com. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and thus are subject to change thereafter. Sun Machine and Drummond disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The securities of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release 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 jurisdiction in which such offer, solicitation or sale would be unlawful.

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