CEO.CA Chairman's Briefing

Calgary, Alberta--(Newsfile Corp. - July 24, 2024) - Prestwick Capital Corporation Limited (TSXV: PWIK.P) ("Prestwick" or the "Company") is pleased to announce that it has entered into a binding option agreement dated effective July 22, 2024 (the "Option Agreement") with Champion Electric Metals Inc. ("Champion") that provides for the grant of an option (the "Option") to Prestwick to acquire a 100% undivided interest in and to the mineral claims comprising the Baner gold project located in Idaho County, Idaho, USA (the "Baner Gold Project"). Prestwick is a "capital pool company" (as defined in the policies of the TSX Venture Exchange (the "Exchange")) and the Option and transactions contemplated in the Option Agreement (the "Transaction") are to constitute its "Qualifying Transaction" (as such term is defined in the policies of the Exchange).

The Baner Gold Project

The Baner Gold Project is located in Idaho Country, Idaho, approximately 6.2 miles (10 km) southwest of Elk City and is comprised of 215 unpatented lode claims covering approximately 3,818 contiguous acres (1,545 hectares).

Champion acquired the Baner Gold Project in 2015 and through 2020 and completed prospecting, rock and soil sampling, drilling of 30 diamond drill holes, an induced polarization geophysical survey, geological mapping and additional claim staking. The exploration work led to the definition of a number of exploration zones of interest among and/or on trend of historical mining activities. Some highlights of the Baner Gold Project identified by the Company include the following:

• Multiple high-grade gold intersections in previous drilling⁽¹⁾, including:
  • 8.7 g/t Au over 6.3m, including 147.7 g/t Au over 0.3m (ICG2018-08);
  • 5.1 g/t Au over 5.1m, including 24.3 g/t Au over 0.5m (ICG2018-16); and
  • 20.8 g/t Au over 12.0m, including 48.9 g/t Au over 4.5m (ICG2018-13).
• Only 30 holes drilled within which there are 37 assays reporting greater than 5.0 g/t Au (with three over 50 g/t Au).⁽¹⁾⁽²⁾
• Mineralization has been identified by drilling over a N-NE to S-SW surface extent of approximately 2,300m.⁽¹⁾⁽²⁾
• Multiple strong vein sets are present (e.g. 9 zones in drill hole ICG2018-15).⁽¹⁾
• Distinct soil and rock geochemistry anomalies associated with cross-over structures, geophysical anomalies, and historic prospects. Two major north-south mineralized structures -and likely crossover (shear) structures in between.
• Soils/geophysics show numerous strong untested anomalies along trend, plus elsewhere on the Baner Gold Project.
• Prospective areas that have not yet been drilled, including:
  • east-west Baner veins (3 known veins to date);
  • cross-over structures - with strong gold in soil and geophysical anomalies (conductors); and
  • 9,000ft by 600ft aplite dike with 360 historical samples averaging 1.9 g/t Au.⁽³⁾
• Approximately 3 million ounces Au recovered in area rivers which surround the Baner Gold Project (which occupies the triangular middle high ground) and adjacent districts in central Idaho.⁽⁴⁾

Sources: (1) NI43-101 Technical Report on the Baner Project, Updated from the August 2018 Report by Darren W. Lindsay, P. Geo. (EGBC 30145) dated July 2, 2020, amended July 21, 2020 and dated effective March 31, 2020; (2) Champion's May 9, 16 and 22, 2021 press releases; (3) Wagner, E R. (1946); Report, Baner Mine and Baner-Champion Combination; and (4) Reid, R. R., 1959, Reconnaissance Geology of the Elk City region, Idaho: Idaho Bureau of Mines and Geology Pamphlet 120.

A National Instrument 43-101 - Standards of Disclosure for Mineral Projects compliant technical report (the "Technical Report") has been prepared in respect of the Baner Gold Project and is currently being reviewed by the Exchange. Information regarding the Technical Report and the Baner Gold Project will be disclosed in detail in the Filing Statement being prepared in connection with the Transaction, and the Technical Report will be filed under the Company's SEDAR+ profile at www.sedarplus.ca when the Filing Statement is similarly filed on SEDAR+.

The Resulting Company

Board of Directors and Management

The founders of the Company are an experienced group that have successfully founded, financed, and developed numerous world class mining operations and companies (including Kirkland Lake Gold and Rupert Resources) and have assembled the proposed management team and Board members below whom they believe have the experience and expertise to explore and develop the Baner Gold Project and build the resulting Company into a successful mining exploration and development company. Upon completion of the Transaction, the proposed directors and officers of the resulting Company are as follows:

Brian Hinchcliffe - New York, USA - Chairman and CEO - Mr. Hinchcliffe has been involved in the founding of mining projects in the natural resources sector for nearly 30 years working with Harry Dobson. Mr. Hinchcliffe is a co-founder of Kirkland Lake Gold and served as its President and CEO. Mr. Hinchcliffe is also formerly the Executive Chairman and CEO of Rupert Resources Ltd. (TSXV) and co-founded American Pacific Mines. Prior to launching this mine founding career, Mr. Hinchcliffe worked for Goldman Sachs in New York and London in the mining and metals sector.

Mike Sutton - Ontario, Canada - VP, Exploration and Director - Mr. Sutton's career spans over 40 years as an exploration geologist which included the founding of Kirkland Lake Gold with Mr. Hinchcliffe and Mr. Dobson. Mr. Sutton served as exploration and production geologist at Kirkland Lake Gold and was awarded the Prospector of the Year for Ontario (along with Stew Carmichael) for the discovery of the very high-grade South Mine Complex. He is a member of the Association of Professional Geoscientists of Ontario and has been a member of the Prospectors and Developers Association of Canada since 1982.

Andrew Dunlop - Ontario, Canada - Chief Financial Officer and Corporate Secretary - A finance and accounting professional with over ten years of experience in the mining sector, focused primarily on assets in North and South America. Mr. Dunlop was previously the Corporate Controller of Discovery Silver Corp. where, over his three-year tenure, had a broad scope of authority, including executive guidance for finance, accounting, treasury, taxation, and regulatory filings. Mr. Dunlop holds a Bachelor of Accountancy, with Honours, from Brock University and holds the designation of Chartered Professional Accountant and Chartered Accountant.

Trevor Gabriel - Monaco - Director (Independent) - Mr. Gabriel is qualified as a Chartered Accountant and spent 12 years in financial and general management roles with Jardine Matheson in Southeast Asia before returning to Europe in 1985. He subsequently ran a privately owned oil company based in the United Kingdom and had concessions in Gabon and a distribution infrastructure in several West African countries. Mr. Gabriel previously had a non-executive director role with Kirkland Lake Gold (where he also chaired the audit committee) and is currently a non-executive director and Audit Committee Chair of LSE listed DG Innovate Plc, a hi-tech sector start-up in energy storage and hi-torque electric motors.

John Gravelle - Ontario, Canada - Director (Independent) - Mr. Gravelle is currently a director of Century Global Commodities Corporation, KP3993 Resources Inc. and AXMIN Inc. He was previously on the Board of Directors of several companies in the mining sector, including Century Metals Inc., Brio Gold Inc. and Foremost Lithium Resource & Technology Ltd. He is a retired partner at PricewaterhouseCoopers where he served in various leadership roles related to the mining sector including being the Global Mining Industry Leader. He is a Canadian CPA/CA with a strong financial background and is recognized as a financial expert. His public company board experience includes roles on Audit, Compensation and Strategic Committees.

Proposed Name Change

It is expected that the name of the Company will be changed to "Legacy Gold Mines Ltd." in connection with the completion of the Transaction to reflect the resulting Company and its business going forward. Any such name change is subject to applicable Exchange and other regulatory approvals, as applicable. At its annual meeting of shareholders on March 1, 2024, shareholders of the Company approved an amendment to the Articles of the Company to change its name to such other name as may be determined and acceptable to the Board of Directors of the Company in their absolute discretion.

Pre-Closing Capitalization of the Company

As of the date hereof, Prestwick's authorized share capital consists of an unlimited number of Common Shares, of which 11,050,100 Common Shares are issued and outstanding. As well there are 1,105,000 options and 200,000 broker options outstanding, each exercisable to acquire one Common Share at an exercise price of $0.10 per share.

Other Insiders of the Resulting Company

The Company proposes to complete a concurrent financing in connection with the Transaction and the terms of any such concurrent financing will be disclosed by separate press release when finalized. If, for example, that concurrent financing was for $2.7 million worth of Common Shares at $0.20 per share and none of the current shareholders of the Company participated in such financing, it is not expected there would be any additional insiders (10%+ shareholders) of the Company. Additional information regarding insiders of the Company upon completion of the Transaction and any concurrent financing will be disclosed once terms and of any concurrent financing and participation by subscribers are finalized.

Finder's Fees and Transfer of Shares within Escrow

Subject to Exchange approval, it is proposed that in connection with the completion of the Transaction: (a) 150,000 Common Shares be issued to Mr. Mike Sutton as a finder's fee; and (b) certain founding shareholders of the Company whose Common Shares are in escrow pursuant to the policies of the Exchange, will transfer an aggregate of 500,000 Common Shares within escrow to Mr. Sutton.

The Transaction

Terms of the Option Agreement

Under the terms of the Option Agreement, Champion has agreed to grant the Option to the Company. In order to exercise the Option and keep it in good standing, the Company will be required to make cash payments and issues securities to Champion as follows:

1. On completion of the Transaction, paying or issuing (as applicable) to Champion:
   1. $75,000;
   2. 1.1 million common shares of the Company ("Common Shares"); and
   3. warrants to purchase up to 200,000 Common Shares at $0.30 per share for two (2) years from the date of issuance.
2. Paying or issuing (as applicable) to Champion within 18 months from the completion of the Transaction ("Payment #1 Date"):
   1. $350,000;
   2. 200,000 Common Shares; and
   3. warrants to purchase up to 200,000 Common Shares at the last closing price for the Common Shares prior to the date of issuance, for two (2) years from the date of issuance.
3. Paying or issuing (as applicable) to Champion within 12 months from the Payment #1 Date ("Payment #2 Date"):
   1. $500,000; and
   2. warrants to purchase up to 200,000 Common Shares at the last closing price for the Common Shares prior to the date of issuance, for two (2) years from the date of issuance.

The Company paid Champion $25,000 upon execution of a binding letter of intent with Champion dated May 13, 2024 (see the Company's May 15, 2024 press release).

During the term of the Option, the Company will have the exclusive right to manage and operate all work programs carried out on the Baner Gold Project in its sole discretion. The Company will also be responsible for maintaining the Baner Gold Project in good standing through such time.

Upon satisfaction of the payments and securities issuances above, the Option will be deemed to be exercised and a 100% undivided interest in the Baner Gold Project will be transferred to the Company, free and clear of all encumbrances, subject to a 1% net smelter return royalty (the "NSR") in favour of Champion. The Company may buy-back the NSR in consideration for payment of $7.5 million to Champion.

The Common Shares issuable under the Option will be deemed to be issued at a price equal to $0.235 per share, being the price of the Common Shares on the Exchange on May 13, 2024. These Common Shares will be subject to hold periods under applicable securities laws, and subject to voluntary escrow.

Voluntary Escrow

Upon completion of the Transaction, it is proposed that the Company and Champion, along with an escrow agent, will enter into an escrow agreement providing for voluntary escrow as follows: (i) the Common Shares issued to Champion upon completion of the Transaction (including any Common Shares issued on exercise of the warrants issued on that date) will be subject to voluntary escrow until the Payment #1 Date; and (ii) the Common Shares issued to Champion on the Payment #1 Date (including any Common Shares issued on exercise of the warrants issued on that date) will be subject to voluntary escrow until the Payment #2 Date.

Conditions of Completion of the Transaction

The completion of the Transaction is subject to a number of conditions, including Exchange approval, obtaining all necessary third-party consents and the Baner Gold Project satisfying the Exchange's Initial Listing Requirements for a Mining Issuer (pursuant to Policy 2.1 - Initial Listing Requirements of the Exchange), including, without limitation, the public float requirements.

The Company expects that upon completion of the Transaction, it will be an exploration stage company with no producing properties and, consequently, no current operating income, cash flow or revenues. The Company can give no assurances at this time that commercially viable mineralization exists on the Baner Gold Project.

The Company intends to use its working capital and a concurrent financing to be completed in connection with the Transaction to make the cash payments required under the terms of the Option.

Arm's Length Transaction and Shareholder Approvals

The proposed Transaction will not constitute a "Non-Arm's Length Qualifying Transaction" (as such terms is defined by the Exchange), because of which, it is not expected that the Company will be required to obtain shareholder approval for the Transaction.

Trading Halt

The Common Shares are presently halted, and it is expected they will remain halted until the Transaction is approved by the Exchange and completed.

Sponsorship

Sponsorship of the Transaction is required by the Exchange unless an exemption or waiver from sponsorship requirement is available. The Company is currently reviewing the requirements for and expects to apply for an exemption from the sponsorship requirements pursuant to the policies of the Exchange.

Resignation and Appointment of Director

Effective July 24, 2024, Mr. Rupert Williams has resigned as a director of the Company and Mr. Brian Hinchcliffe has been appointed as his replacement (see Mr. Hinchcliffe's bio above). The Board of Directors of the Company would like to thank Mr. Williams for his efforts in connection with the initial public offering of the Company and the proposed Transaction. Mr. Williams currently remains an "insider" of the Company by the fact that he holds 13.57% of the outstanding Common Shares prior to the completion of the Transaction and any concurrent financing.

Review by Qualified Person

Mr. Mike Sutton, P.Geo., a consultant of the Company at this time, is the Qualified Person, as defined under National Instrument 43-101 - Standards of Disclosure for Mineral Projects, who reviewed and approved scientific and technical disclosure in this press release. The Qualified Person has not reviewed the mineral tenure, nor independently verified the legal status and ownership of the Baner Gold Project or any underlying property agreements.

Additional Information

Prestwick will issue additional press releases related to the Transaction, concurrent financing terms, sponsorship, and other material information as it becomes available.

Any reference to "$" in this press release is to Canadian dollars.

For further information, please contact:

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

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.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This press release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-Looking statements include, but are not limited to, statements with respect to the proposed timing for completion of the Transaction, any concurrent financing; the ability of Prestwick to complete the Transaction and any concurrent financing; the resumption in trading of the Common Shares; the Company's future business operations and results; the receipt of all necessary shareholder, Exchange, securities regulatory authority and other third party consents and approvals; and the receipt by Prestwick of an exemption from the sponsorship requirements of the Exchange. Forward-Looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors, which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive shareholder or regulatory approvals; and the results of continued development, marketing and sales. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Prestwick disclaims any intention or obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise, except as required by law.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/217559