C:CC - Orla Mining to Acquire Contact Gold

(TheNewswire)

Vancouver, B.C. - TheNewswire - February 26, 2024 – Contact Gold Corp.(“Contact Gold” or the “Company”) (TSXV:C ) ( OTC:CGOLF) is pleased to announce that it has entered into a definitivearrangement agreement dated February 25 , 2024 (the “DefinitiveAgreement”) with Orla Mining Ltd. (“Orla”) (TSX: OLA) pursuantto which Orla has agreed to acquire all of the issued and outstandingcommon shares (“Shares”) of Contact Gold by way of acourt-approved plan of arrangement at an implied value of $0.03 perShare (the “Transaction”) based upon the ten-day volume weightedaverage prices of each company as of February 23, 2024.

Pursuant to the terms of the Definitive Agreement,Contact Gold shareholders will receive 0.0063 of a common share ofOrla for each Share held (the “Exchange Ratio”). The ExchangeRatio represents a substantial premium of 106% to Contact Goldshareholders, based upon the closing prices for each company on theTSX Venture and Toronto Stock Exchanges, respectively, as of February23, 2024.

The Transaction will result in consolidation of theRailroad-Pinion district in Nevada, combining Contact Gold’s PonyCreek oxide gold project (“Pony Creek”) with Orla’s SouthRailroad project (“South Railroad”), which is located immediatelyadjacent to the north of Pony Creek. South Railroad is afeasibility-stage, open-pit heap leach project located on the prolificCarlin trend in Nevada, which Orla is advancing towards a constructiondecision.

Matthew Lennox-King, President & CEO of ContactGold, stated: “On behalf of the board of directors of Contact Gold,we are excited to have come to an agreement with Orla at a significantpremium, which will result in the Company’s shareholders receivingshares of Orla, which boasts a strong balance sheet, excellent tradingliquidity, a robust development pipeline and substantial cash flow atthe Camino Rojo mine in Mexico. The Transaction will also prevent anyfurther equity dilution to Contact Gold’s shareholders in thecontext of an exceptionally difficult market for precious metalsexploration companies.”

Transaction Highlights

• Significant premium of 100% to Contact Goldshareholders.

• Immediate exposure to gold production, with Orla’s2024E guidance of 110,000-120,000 oz Au, at a compelling all-insustaining cost of US$875-975/oz Au.

• Participation in the expansion and developmentpotential at both South Railroad and Camino Rojo.

• Access to Orla’s financial strength of US$96.6million in cash and US$61.7 million in undrawn revolving creditcapacity as of December 31, 2023.

• Consideration in the form of highly liquid shares ofOrla, which average more than $9 million of trading per day (trailingthree-month average) and are covered by nine researchanalysts.

Transaction Details

Under the terms of the Definitive Agreement, each ofthe issued and outstanding Shares will be exchanged, at the ExchangeRatio, for 0.0063 of a common share of Orla. The Company’soutstanding warrants to purchase Shares will be adjusted in accordancewith their terms so that on exercise the holders will receive commonshares of Orla adjusted to reflect the Exchange Ratio. In-the-moneyoptions of Contact Gold will immediately vest and be cashed out at thedifference between their strike price and $0.03, and out-of-the moneyoptions of Contact Gold will be cancelled. The Company’s outstandingRestricted Share Units (“RSUs”) and Deferred Share Units(“DSUs”) will similarly be cashed out at $0.03 for each RSU andDSU held.

The board of directors of Contact  Gold (the“Contact Board”), after consultation with its financial and legaladvisors, and on the recommendation of a special committee ofindependent directors (the “Special Committee”), unanimouslydetermined that the Transaction is in the best interests of theCompany and recommends that Contact Gold shareholders vote in favourof the Transaction. Evans & Evans, Inc. provided a fairnessopinion to the Contact Board stating that, subject to the assumptions,limitations and qualifications set out therein, the consideration tobe received by Contact Gold shareholders in connection with theTransaction is fair, from a financial point of view, to suchshareholders.

All of the Company’s directors and officers,representing approximately 11.9% of the Shares outstanding, haveentered into support agreements with Orla pursuant to which, amongother things, they have agreed to vote all the securities of ContactGold they own and control in favour of the Transaction.

The Transaction will be effected by way of acourt-approved plan of arrangement under the Business Corporations Act (British Columbia) and will require approval by (i) 66 2/3%of the votes cast by Contact Gold shareholders, (ii) 66 2/3% of thevotes cast by Contact Gold shareholders and optionholders (votingtogether as a single class), and (iii) a simple majority of the votescast by Contact Gold shareholders, excluding certain related partiesas prescribed by Multilateral Instrument 61-101 – Protection of Minority Security Holders inSpecial Transactions , at a special meeting ofContact Gold securityholders that will be called to consider theTransaction.

In addition to securityholder and court approval,completion of the Transaction is subject to applicable regulatoryapprovals, including the approval of the TSX Venture Exchange(“TSXV”) and the Toronto Stock Exchange (“TSX”), and thesatisfaction of certain other closing conditions. The DefinitiveAgreement contains customary provisions, including representations andwarranties of each party, non-solicitation covenants of Contact Goldand “fiduciary out” provisions, as well as “right-to-match”provisions in favour of Orla. The Company has also agreed to pay a termination fee of approximately $500,000 to Orla in the case ofcertain terminating events. The Definitive Agreement, which describesthe full particulars of the Transaction, will be made available underContact Gold’s issuer profile on SEDAR+.

Complete details of the Transaction will be included inthe Contact Gold management information circular to be prepared andfiled with regulatory authorities in accordance with applicablesecurities laws, and mailed to Contact Gold shareholders in April,2024. The Transaction is expected to be completed by the end of April,2024.

Advisors

Haywood Securities Inc. acted as financial advisor andCassels Brock & Blackwell LLP acted as legal counsel to theCompany.

Qualified Person and TechnicalDisclosure

The scientific and technical information contained inthis news release has been reviewed and approved by Vance Spalding,CPG, VP Exploration, Contact Gold, who is a “qualified person”within the meaning of National Instrument 43-101 – Standards of Disclosure for MineralProjects .

About Contact Gold Corp.

Contact Gold is an exploration company focused onmaking district scale gold discoveries in Nevada. The Company’sextensive land holdings are on the prolific Carlin and Cortez goldtrends which host numerous gold deposits and mines. Contact Gold’sland position comprises approximately 117.4 km 2 of target richmineral tenure hosting numerous known gold occurrences, ranging fromearly- to advanced-exploration and current gold resources.

Additional information about the Company is availableat www.contactgold.com .

For more information, please contact: +1 (604)449-3361

Matthew Lennox-King – President & CEO

E-mail: info@ContactGold.com

Neither the TSXV nor its RegulationService Provider (as that term is defined in the policies of the TSXV)accepts responsibility for the adequacy of this release. No stockexchange, securities commission or other regulatory authority hasapproved or disapproved the information contained herein.

Cautionary Note RegardingForward-Looking Information

This news release contains“forward-looking information” and “forward-looking statements”(collectively, “forward-looking statements”) within the meaning ofthe applicable Canadian securities legislation. All statements, otherthan statements of historical fact, are forward-looking statements andare based on expectations, estimates and projections as at the date ofthis news release. Any statement that involves discussions withrespect to predictions, expectations, beliefs, plans, projections,objectives, assumptions, future events or performance (often but notalways using phrases such as “expects”, or “does not expect”,“is expected”, “anticipates” or “does not anticipate”,“plans”, “budget”, “scheduled”, “forecasts”,“estimates”, “believes” or “intends” or variations of suchwords and phrases or stating that certain actions, events or results“may” or “could”, “would”, “might” or “will” betaken to occur or be achieved) are not statements of historical factand may be forward-looking statements. In this news release,forward-looking statements relate, among other things, to thecompletion of the Transaction, the anticipated benefits of theTransaction to Contact Gold shareholders, the consideration to be tobe paid and the treatment of options, warrants, RSUs and DSUs pursuantto the Transaction, the timing for the special meeting to consider theTransaction, and the timing for completion of the Transaction.

These forward-looking statements arebased on reasonable assumptions and estimates of management of theCompany at the time such statements were made. Actual future resultsmay differ materially as forward-looking statements involve known andunknown risks, uncertainties and other factors which may cause theactual results, performance or achievements of the Company tomaterially differ from any future results, performance or achievementsexpressed or implied by such forward-looking statements. Such factors,among other things, include: fluctuations in general macroeconomicconditions; fluctuations in securities markets; fluctuations in spotand forward prices of gold, silver, base metals or certain othercommodities; fluctuations in currency markets (such as the Canadiandollar to United States dollar exchange rate); change in national andlocal government, legislation, taxation, controls, regulations andpolitical or economic developments; risks and hazards associated withthe business of mineral exploration, development and mining (includingenvironmental hazards, industrial accidents, unusual or unexpectedformations pressures, cave-ins and flooding); inability to obtainadequate insurance to cover risks and hazards; the presence of lawsand regulations that may impose restrictions on mining; employeerelations; relationships with and claims by local communities andindigenous populations; availability of increasing costs associatedwith mining inputs and labour; the speculative nature of mineralexploration and development (including the risks of obtainingnecessary licenses, permits and approvals from governmentauthorities); and title to properties. Although the forward-lookingstatements contained in this news release are based upon whatmanagement of the Company believes, or believed at the time, to bereasonable assumptions, the Company cannot assure shareholders thatactual results will be consistent with such forward-lookingstatements, as there may be other factors that cause results not to beas anticipated, estimated or intended. Readers should not place unduereliance on the forward-looking statements and information containedin this news release. The Company assumes no obligation to update theforward-looking statements of beliefs, opinions, projections, or otherfactors, should they change, except as required by law.

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