LGC Capital Ltd.

Symbol: TSX-V: LG



MONTREAL, Sept. 26, 2017 /CNW Telbec/ - LGC Capital Ltd. (TSXV: LG) ("LGC") announces that it has entered into a binding term sheet with Habi Pharma Pty Ltd of Perth, Australia, doing business as "Little Green Pharma", which provides that LGC will acquire an initial strategic 4.99% interest in Little Green Pharma, one of the few licenced companies authorized to cultivate and produce Medical Cannabis within Australia. The binding term sheet provides that LGC has the option to increase its interest in Little Green Pharma to a maximum of 19.03%, subject to a number of conditions, including Australian Government regulatory approvals.

Little Green Pharma (www.lgpharma.com.au) has advised LGC that it plans to commence cultivation and production of one of the first clean locally-grown Medical Cannabis products for use solely within Australia, giving hope and relief to those suffering from certain debilitating illnesses.

John McMullen, LGC's CEO, commented; "This will be LGC's first investment into the legalized Medical Cannabis sector in the Asia-Pacific region. This will be an important investment initiative for LGC in the region as Little Green Pharma is one of the few companies in Australia licenced to cultivate and produce Medical Cannabis. Australia has now legalized the use of Medical Cannabis and Little Green Pharma plans to commence production shortly."

Fleta Solomon, Little Green Pharma's Managing Director, commented; "We look forward to having LGC on board as a new strategic long-term shareholder in Little Green Pharma. LGC's support and funding will assist in providing the necessary working capital to allow Little Green Pharma to cultivate and produce our product range for Australian patients in the coming months."

Binding Term Sheet

The binding term sheet between LGC and Little Green Pharma provides that:

1. LGC will subscribe for 2,161,091 shares of Little Green Pharma, representing 4.99% of its issued and outstanding shares, by paying AUD $432,218 and issuing 5,660,000 LGC common shares to Little Green Pharma at a deemed issue price of $0.11 per share.

2. Subject to the issuance by Little Green Pharma of shares to various third parties, LGC will subscribe for a further 752,937 shares of Little Green Pharma for cash consideration of AUD $150,587, so as to maintain its shareholding of 4.99% in Little Green Pharma.

3. Subject to approval by Little Green Pharma in its sole discretion, LGC may further subscribe, at its option, for additional shares of Little Green Pharma in order to increase its shareholding to a maximum of 19.03%. In the event that this option is exercised, LGC will subscribe for a maximum of 4,585,972 shares of Little Green Pharma for maximum cash consideration of AUD $917,194.

On September 25, 2017, the Bank of Canada's daily average exchange rate for the Australian dollar was AUD $1.00 = CAD $0.9806.

Closing Conditions

Closing of the transaction with Little Green Pharma is subject to standard conditions, including the negotiation and signing of a definitive subscription agreement between LGC and Little Green Pharma. LGC cannot give any assurance that the transaction with Little Green Pharma will close in accordance with the terms and conditions of the binding term sheet or at all. Further, LGC cannot proceed with any investment in Little Green Pharma prior to obtaining formal approval from the TSX Venture Exchange with respect thereto. Although LGC has commenced the process for obtaining formal approval from the TSX Venture Exchange, LGC cannot give any assurance that it will be able to obtain such approval.

LGC will require the approval of the Australian Government's Office of Drug Control (ODC) in order to increase its interest in Little Green Pharma to more than 4.99% and may require the approval of the Australian Foreign Investment Review Board (FIRB) to increase its interest in Little Green Pharma to more than 15%. Little Green Pharma has agreed to provide all necessary assistance and support to LGC with respect to such government approvals. LGC cannot give any assurance that it will be able to obtain such approvals, to the extent necessary.

Little Green Pharma

LGC understands that Little Green Parma is a privately-owned company based in Western Australia and that in April 2017, Little Green Pharma was granted one of the few licenses in Australia by the Australian Government's Office of Drug Control (ODC) to cultivate and produce Medicinal Cannabis for Australian patients from June 1, 2017.

Little Green Pharma has stated that its goal is to make safe, reliable and cost-effective Medicinal Cannabis products available to Australians through approved medical practitioners, and that it will produce a range of Medical Cannabis preparations with differing cannabinoid profiles from multiple plant varieties.

Little Green Pharma has advised LGC that it has an advanced manufacturing technology for producing Medicinal Cannabis for oral administration. Its process ensures high bio-availability of the active cannabinoids, meaning that a therapeutic effect can be achieved with precise dosage control and with significantly lower cannabinoid doses.

Little Green Pharma has stated that its manufacturing process can maintain the integrity of CBD-A and THC-A if required, avoiding the carboxylation of important cannabinoids. Preparations will meet strict regulatory standards for medicinal cannabis specifications ensuring a clean, high-quality product. All growing, production and good manufacturing practice is subject to the terms of the Australian federal licence aimed at security and quality assurance by the relevant regulatory bodies.

The Australian Medical Cannabis Market

Little Green Pharma has advised LGC that Australia passed federal legislation in 2016 aimed at permitting the use of Medicinal Cannabis via a tightly-controlled licensed medical prescription system.

In March 2016, The White Paper, entitled Medicinal Cannabis in Australia: Science, Regulation & Industry, was developed by the University of Sydney Business School's Community Placement Program. Its publication followed the news that the Australian Government would shortly allow the cultivation of cannabis in Australia for medical or scientific purposes.

As the first-ever White Paper that analyses the medicinal cannabis industry in Australia, the paper examines international experiences and approaches, supply chain economics, quantities of cannabis required and potential regulatory dynamics. It also serves as a framework for the industry to commence engaging key stakeholders such as the Australian Government and the medical community.

The University of Sydney summary of the White Paper can be viewed via the below link:

http://sydney.edu.au/news-opinion/news/2016/03/29/legalising-medicinal-cannabis-would-create--100-million-industry.html

The White paper can be viewed at:

http://mgcpharma.com.au/wp-content/uploads/2016/03/mgc_whitepaper_final-sml.pdf

Highlights of the White Paper:

Australia would need to produce 8,000 kg of medicinal cannabis per year to service the existing market.

would need to produce 8,000 kg of medicinal cannabis per year to service the existing market. Australian market currently estimated to be worth AUD $100 million –AUD $150 million per annum, and is likely to grow significantly in the next decade.

–AUD per annum, and is likely to grow significantly in the next decade. Medical Cannabis has the potential to help tens of thousands of patients suffering from a wide range of medical conditions such as Multiple Sclerosis, Epilepsy, Cancer, and Severe and Chronic Pain.

Up to 51,000 square metres of greenhouse space - almost three times the size of the Sydney Cricket Ground - would be needed to produce the amount of cannabis required to meet demand.

About LGC (http://www.lgc-capital.com)

LGC Capital Ltd. is a Canadian incorporated public company listed on the TSX Venture Exchange (TSXV: LG). LGC's objective is to become a diversified business group with core business divisions that provide shareholders with exposure to a diverse range of businesses, products and services.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements with respect to LGC Capital Ltd. ("LGC"), its proposed investment in Little Green Pharma, and LGC's operations, strategy, investments, financial performance and condition. These statements generally can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe" or "continue" or the negative thereof or similar variations. The actual results and performance of LGC, including its proposed investment in Little Green Pharma, could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, government regulation and the factors described under "Risk Factors and Risk Management" in LGC's Management's Discussion and Analysis for the fiscal year ended September 30, 2016, as filed on SEDAR (www.sedar.com). The cautionary statements qualify all forward-looking statements attributable to LGC and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and LGC has no obligation to update such statements, except to the extent required by applicable securities laws.

Information Relating to Little Green Pharma

All information contained in this news release relating to Little Green Pharma has been provided to LGC by Little Green Pharma. LGC has relied upon this information without having made independent inquiries as to its accuracy or completeness and assumes no responsibility for any inaccuracy or incompleteness of such information.

Caution Regarding Press Releases

Neither the TSX Venture Exchange nor its Regulation Service 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 LGC Capital Ltd

For further information: Company & Media Contacts, Canada contact: John McMullen, Chief Executive Officer, Tel.: (416) 803-0698, Email: [email protected]; London contact: Anthony Samaha, Chief Financial Officer, Tel.: +44 (0) 20 7440 0640; Investor Relations contact: Dave Burwell, The Howard Group Inc., Tel.: (403) 221-9015, Toll Free: 1-888-221-0915, Email: [email protected]