Mr. Brian Arkell reports

CAZA GOLD CORP.: US$3.8-MILLION UNIT FINANCING AT $0.05 PER UNIT WITH POLYGON MINING OPPORTUNITY MASTER FUND AND PURCHASE OF LOS ANDES GOLD PROJECT, NICARAGUA

Caza Gold Corp. has entered into an investment agreement with Polygon Mining Opportunity Master Fund, a fund managed by Polygon Global Partners. Under the terms of the investment agreement, Polygon has agreed to invest an additional $3.8-million (U.S.) in the company. In addition, the company has entered into a purchase agreement to complete the purchase of the Los Andes gold project from Inversiones Ecologicas S.A. through the payment of shares and cash with a value of approximately $600,000 (U.S.).

Investment agreement and financing for $3.8-million (U.S.)

Under the terms of the investment agreement dated Dec. 18, 2014, Polygon has agreed to invest $3.8-million (U.S.) to purchase 88.16 million units of the company. The proceeds of the financing will be used to finance further exploration on the company's Los Andes gold project in Nicaragua, to hire new exploration personnel and for working capital.

The material terms of the investment agreement include the following terms and conditions:

• Under the terms of the financing, Polygon has agreed to purchase 88.16 million units of the company at five Canadian cents per unit for total gross proceeds of $3.8-million (U.S.), based on an exchange rate of $1 (U.S.) equals $1.16 (Canadian). Each unit will consist of one common share and one share purchase warrant exercisable for five years at five Canadian cents per share.
• By prior loan agreements with Polygon dated July 22, 2013, and Aug. 8, 2014, the company borrowed from Polygon, respectively, $200,000 (Canadian) and $600,000 (U.S.). The loans, plus accrued interest (12 per cent per annum, compounded and payable quarterly), will be repaid out of the proceeds of financing. The two underlying promissory notes issued by the company and related general security agreements will be cancelled upon repayment of the loans. Polygon has agreed to waive, in relation to the loans, the make-whole interest payment, which would otherwise have been due upon early repayment of the loan. Also, as partial consideration for the $600,000 (U.S.) loan, Polygon was entitled, subject to certain conditions, to 1,474,065 common shares of the company. Polygon has agreed to waive its right to the bonus shares.
• Consummation of the financing is subject to the purchase agreement being in full force and effect and all covenants, representations and warranties made by Inecosa and its shareholders having been complied with and remaining true, as well as a number of customary conditions of closing, including that no material adverse change with respect to the company shall have occurred and that the company's representations and warranties made under the investment agreement shall continue to be accurate at closing.

Polygon retains all of its rights under the terms of a prior investment agreement with the company, including participation rights in any future security offering of the company that will allow Polygon to maintain its proportionate interest in the company, rights regarding future material business decisions of the company, and the right to maintain two nominations for election to the board of directors provided that its proportional interest in the company is equal to or greater than 20 per cent (see the company's news release of Oct. 29, 2013, for further details).

Polygon is a control person and related party of the company (as defined by securities legislation) and currently owns 21,342,499 common shares of the company (49.0 per cent of its issued and outstanding share capital). Upon closing of the financing, Polygon will own 109,502,499 common shares of the company (78.9 per cent of its issued and outstanding share capital), in addition to holding an aggregate of 109.16 million warrants (88.16 million of which will have been acquired pursuant to the financing).

Los Andes gold project purchase agreement with Inecosa

The company has entered into the purchase agreement with Inecosa and its shareholders to complete the purchase by the company of the Los Andes gold project. The purchase agreement, dated Dec. 18, 2014, replaces and gives effect to the property option agreement dated Jan. 31, 2011, between the same parties, under which the company had the right to acquire a 100-per-cent interest in the Los Andes gold project. To date, the company has paid an aggregate amount of $570,000 (U.S.) and issued a total of 727,661 shares (on a postconsolidation basis), as well as expended in excess of the required minimum amount of $2.97-million (U.S.) in exploration expenditures under the property option agreement. Under the terms of the purchase agreement, the company will make a final cash payment in the aggregate amount of $300,000 (U.S.) to Inecosa or its shareholders upon the successful transfer of title to the company of the Los Andes gold project (along with certain other mineral properties staked by Inecosa on behalf of the company), and will, at the time of closing of the financing, issue to Inecosa or its shareholders 7.06 million common shares of company at a deemed value of five Canadian cents per share (for a total deemed value of approximately $300,000 (U.S.)). In the event that all transfers of title are not completed by Dec. 18, 2015, the company would, at its option, have the right to: (i) extend the date for the completion of the transfers; (ii) retain such properties as have been transferred, together with any part of the final cash payment not yet paid to Inecosa and, subject to certain requirements, terminate the purchase agreement; or (iii) release to Inecosa's shareholders any part of the final cash payment not yet paid to them in conjunction with acquiring 100 per cent of the shares of Inecosa at no additional cost and, subject to certain requirements, terminate the purchase agreement.

Brian Arkell, president and chief executive officer of the company, stated: "Closing the purchase agreement gives Caza Gold 100-per-cent ownership in the Los Andes project and control of a very large, highly prospective epithermal gold-silver district. Although still in the early stages of exploration, our work to date has identified at least eight large targets with strong alteration and highly anomalous gold and silver. Additionally, the purchase agreement includes a number of large and prospective concession blocks along the core of the Nicaraguan gold belt.

"Caza plans to significantly increase our exploration efforts in Nicaragua in 2015. We believe this is an opportune time to build up our exploration team and run an aggressive, efficient program, focused on discovery. Our plans include at least two geophysical surveys and detailed geological work to identify new targets, as well as an aggressive drilling campaign of both scout drilling and first-pass target testing."

The Los Andes gold project covers over 65 square kilometres within the central Nicaraguan gold belt. Caza has outlined a belt of extensive alteration and mineralization exposed at surface along an 11-kilometre structural corridor. The district exhibits characteristics of a large high-sulphidation gold-silver epithermal system with potential low-sulphidation veins along the periphery. At least eight targets have been identified to date associated with silicified and argillized volcanic rocks, diatremes and breccia pipes.

Caza Gold controls over 750 square kilometres of prospective ground within the central Nicaragua gold belt. In addition to the Los Andes gold project, Caza is exploring the Piedra Iman porphyry in northern Nicaragua along with five high-sulphidation volcanic hosted Au-Ag targets located in west-central Nicaragua near the Pan-American Highway.

We seek Safe Harbor.