Mr. Ian Slater of Red Eagle reports

RED EAGLE MINING ANNOUNCES SUPERIOR BID FOR CB GOLD

Red Eagle Mining Corp. intends to make a takeover bid to acquire all of the issued and outstanding shares of CB Gold Inc. in exchange for shares of Red Eagle Mining. Under the terms of the offer, each CB Gold common share will be exchanged for 0.162 of a Red Eagle Mining common share with an implied value of 5.1 cents per CB Gold common share and an implied total offer value for all outstanding CB Gold shares of approximately $8.4-million.

The offer represents a premium of 46 per cent to CB Gold's 20-day volume-weighted average share price of 3.5 cents and to CB Gold's closing share price of 3.5 cents on June 12, 2015, the last trading day prior to CB Gold's announcement of Red Eagle Mining's proposal.

"Following the announcement of the OM.L transaction, Red Eagle Mining was contacted by several of CB Gold's largest shareholders who were unhappy with the proposed sale of CB Gold's principal asset. Red Eagle Mining submitted an indicative term sheet to CB Gold on June 4, 2015, and a binding proposal on June 10, 2015, in good faith. All overtures were rebuffed with the only response being CB Gold's press release dated June 12, 2015. As a result, we are presenting our proposal directly to CB Gold shareholders," commented Ian Slater, chief executive officer. "We believe that the offer represents a clearly superior alternative for CB Gold shareholders."

Reasons to accept the Red Eagle Mining offer:

• Significant premium: The offer represents a premium of 46 per cent to CB Gold's 20-day VWAP of 3.5 cents and CB's closing share price of 3.5 cents on June 12, 2015, the last trading day prior to CB Gold's announcement of Red Eagle Mining's proposal.
• Premium to OM.L transaction: A measurable market value of $8.4-million to CB Gold shareholders versus $2-million and a royalty with uncertain value.
• Major shareholder rejection of the OM.L transaction: Red Eagle Mining has been advised by shareholders holding approximately 30 per cent of the CB Gold shares outstanding that they currently intend to vote against the proposed transaction between CB Gold and OM.L Trading Inc. for the proposed sale of Leyhat Corp. that was announced on May 19, 2015.
• Market rejection of the OM.L transaction: CB Gold's closing share price on May 19, 2015 (prior to the announcement of the OM.L transaction), was 5.0 cents with the shares subsequently trading as low as 2.5 cents before closing at 3.5 cents on June 12, 2015 (prior to CB Gold's announcement of Red Eagle Mining's proposal). CB Gold's VWAP was 5.1 cents for the 20-day period prior to the announcement of the OM.L transaction and 3.5 cents for the 20-day period postannouncement.
• Gold development company exposure: Participation in the fully permitted Santa Rosa gold project in Colombia, which is expected to be in production during 2016.
• Vetas exposure: Continued participation in CB Gold's Vetas project.
• Colombian experience: Red Eagle Mining's proven experience in permitting, financing and developing underground gold projects in Colombia.
• Superior financial capacity: Red Eagle Mining's stronger financial capacity and institutional shareholder base, including 19.9-per-cent shareholders Liberty Metals & Mining Holdings LLC and Orion Mine Finance.

Proposed OM.L Trading transaction

The OM.L transaction as announced on May 19, 2015, proposes the sale of the Vetas project for $2-million, advance royalty payments of $30,000 per month (assuming $1,200 per ounce gold) commencing in 24 months, increasing to $60,000 per month commencing in 36 months, and a 3-per-cent royalty capped at $15-million. This is not a fully financed royalty company as presented. Moreover, this cash flow will just cover the amount required to pay CB Gold's aggregate annual management salaries of approximately $521,290 (based on the disclosed NEO payments for CB Gold's 2014 fiscal year).

In CB Gold's disclosure regarding the proposed OM.L transaction, CB Gold has consistently described the transaction as having a combined value to CB Gold shareholders in excess of $20-million. This disclosure is misleading as it either: (i) adds the full price of the potential $15-million buyback of the 3-per-cent net smelter royalty being granted to OM.L Trading into the value of the transaction without also clearly stating that there is no requirement for OM.L Trading to exercise the buyback or that the buyback can be exercised in whole or in part, meaning that potentially none of or only a portion of the $15-million would ever be received by CB Gold; or (ii) adds the full value of the royalty capped at $15-million without taking into consideration discounting future cash flows to current net present value and that the amount of royalty payments and their timing remain uncertain.

About the Red Eagle Mining offer

The offer will be made for all of the issued and outstanding common shares of CB Gold and will be open for acceptance for at least 35 days following commencement of the offer. The offer will be subject to the rejection of the proposed OM.L transaction by CB Gold shareholders at CB Gold's annual general and special meeting to be held June 23, 2015, as well as certain customary conditions, including the deposit under the offer of CB Gold common shares representing not less than 51 per cent of CB Gold shares, receipt of all necessary regulatory approvals, and no material adverse change in CB Gold and CB Gold's shareholder rights plan being waived, invalidated or cease traded. The offer will not be subject to the approval of Red Eagle Mining's shareholders and is not subject to any financing or due diligence conditions.

The full details of the offer will be set out in a takeover bid circular and accompanying offer documents, which Red Eagle Mining will file with Canadian securities regulatory authorities upon formally making the offer. Red Eagle Mining has requested a shareholders list from CB Gold and, when received, will send the offer documents to CB Gold's shareholders.

Advisers and information agent

Red Eagle Mining has engaged National Bank Financial as its financial adviser and Farris Vaughan Wills & Murphy LLP as its legal counsel in respect of the offer. Questions and requests for assistance may be directed to Laurel Hill Advisory Group, the information agent for the offer.

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