Mr. Mathew Ball reports

GOLDEN DAWN ANNOUNCES PROPOSED RESTRUCTURING OF INDEBTEDNESS

Golden Dawn Minerals Inc. has entered into a debt reorganization agreement with 1136130 B.C. Ltd., an arm's-length private company controlled by Vancouver businessman Christopher Anderson. The debt reorganization agreement provides the company with an opportunity to convert a significant amount of its existing debts into equity and to put its remaining liabilities owing to its major creditor, RIVI Opportunity Fund LP, onto more manageable terms.

Summary highlights of proposed debt reorganization:

• Lender to receive a cash payment equal to $1,524,500 (U.S.) on closing (as defined below);
• Company to receive certain credit accommodations and concessions from the lender with respect to the RIVI debt (as defined below);
• 1136130 to receive the consideration shares (as defined below) and reimbursement of its reasonable costs and expenses incurred in connection with the proposed debt reorganization transaction;
• In connection with any remaining principal (as defined below) that may remain outstanding on certain triggering dates following the closing, the company may grant up to a 2.0-per-cent net smelter return royalty to the lender on production from the company's Lexington and Golden Crown properties;
• 1136130 to have the option to purchase from the company a net smelter return royalty to 1136130 on production from the company's properties in royalty rate increments of 0.25 per cent at a purchase price of $25,000 per increment up to a maximum royalty rate of 2.5 per cent (with subject to reduction in proportion to any new NSR royalties granted to the lender).

RIVI assignment agreement

Presently, the company has the following liabilities owing to the lender:

• $4-million (U.S.) principal amount loaned to the company by the lender at an interest rate of 16 per cent pursuant to the gold purchase agreement dated Dec. 23, 2016, as amended;
• $1-million (U.S.) principal amount advanced to the company by the lender at an interest rate of 14 per cent pursuant to a promissory note dated May 4, 2018;
• Other RIVI advances totalling $281,700 (U.S.) at an interest rate of 14 per cent pursuant to demand loans.

Pursuant to an agreement between the lender and 1136130, 1136130 holds an assignable option, exercisable by mid-July, 2019, to purchase certain portions of the RIVI debt to the extent of approximately $2.11-million (U.S.). The exact amount of the RIVI debt purchasable by 1131630 will include outstanding loan principal of $1,286,700 (U.S.), plus all amounts of interest, fees, penalties and other amounts accrued in respect of all of the RIVI debt as of the option exercise date.

1136130 has agreed to assign the RIVI debt agreement to the company subject to the company's obligation to finance the option payment of $1,524,500 (U.S.) and to make certain payments of cash and shares to 1136130. The option will provide the company with the opportunity to secure certain credit accommodations and concessions with respect of the RIVI debt that in the opinion of management of the company are likely to materially improve its financial outlook. The credit accommodations include, with respect to the $4.0-million (U.S.) that will remain owing to RIVI following the exercise of the option during the 23-month period following the exercise of the option:

• In substitution of any and all interest, penalty and fee amounts arising under the gold purchase agreement, 10-per-cent simple interest on the outstanding principal, payable to RIVI semi-annually on each of June 30 and Dec. 31;
• In substitution for any and all principal payment, and gold stream purchase and sale obligations of the company to RIVI arising under the gold purchase agreement, the remaining principal will be repayable by the company in a maximum of four principal payments aggregating to the total of the remaining principal, each such payment being in a minimum amount of $1.0-million (U.S.) (provided that a final payment may be in any such lesser amount as is then needed to repay the amount then owing).

In addition, during the period of the debt reorganization agreement presently in effect until the expiry or termination of the option under the RIVI debt agreement in mid-July, RIVI has agreed temporarily to suspend from being payable or enforced all interest, fees, penalties and other amounts accruing on or with respect to RIVI's rights as a creditor to the company (provided that they will continue to accrue), which will better enable the company to reorganize its liabilities. Whether the company is able to finance the proposed assignment of the RIVI debt agreement will depend on its ability to raise additional equity financing over the next three months.

Upon the completion of the assignment of the RIVI debt agreement, the lender will receive the option exercise payment of $1,524,500 (U.S.). Additionally, should any amount of the remaining principal remain outstanding as of Jan. 15, 2020, the company will grant the lender a new 1.0-per-cent net smelter return royalty on the production of the company's Lexington and Golden Crown properties. Additional 0.5-per-cent net smelter return royalties will be granted to the lender if such remaining principal remains outstanding as of July 15, 2020, and Jan. 15, 2021, respectively. The lender will maintain any and all security granted to the lender over assets of the company in connection with the entering into of agreements pertaining to the RIVI debt.

Debt reorganization agreement

If it is able to raise sufficient new equity financing to finance the $1,524,500 (U.S.) option payment prior to the expiration of the option in mid-July, 2019, the company intends to accept and assume all of 1136130's interest in the RIVI debt agreement as of the closing. In consideration for the assignment of 1136130's interest, on the closing the company will issue a maximum of 15,527,437 common shares in the capital of the company at a deemed issue price of five cents per consideration share, provided that the actual number of consideration shares issued will be adjusted downward by the minimum extent necessary to ensure that, based on the total number of issued and outstanding shares of the company as at the date of the closing, 1136130 does not become a new control person (as defined in the policies of the TSX Venture Exchange), with any reduction in value being payable to 1131630 in cash, or at the option of 1136130 by issuance of a demand promissory note bearing 10-per-cent interest. Additionally, the company will grant an option right to 1136130, exercisable at 1136130's sole discretion at any time in the 36 months following the closing, to purchase from the company new net smelter returns royalty rights in the production on the company's Lexington and Golden Crown properties. 1136130 may purchase royalty rights in 0.5-per-cent increments at a price of $25,000 per increment up to a maximum royalty rate of 2.5 per cent (subject to reduction in proportion to any new NSR royalties granted to the lender). If the company is not able to fulfill the closing requirements by mid-July, 2019, then the debt reorganization agreement will terminate without imposing any new obligations to the company.

The completion of the company's proposed debt reorganization is subject to the acceptance of the debt reorganization agreement by the TSX-V.

We seek Safe Harbor.