Mr. Richard Barnett reports

DAMON ANNOUNCES AGREEMENT TO ACQUIRE ARIZONA SILVER CORPORATION

Damon Capital Corp. has reached an agreement in principle pursuant to a letter of intent dated Aug. 11, 2016, with Arizona Silver Corp. pursuant to which Damon will acquire all of the issued and outstanding shares of Arizona Silver. The acquisition of Arizona Silver will constitute Damon's qualifying transaction as such term is defined in the policies of the TSX Venture Exchange.

Damon is a capital pool company as defined in the policies of the exchange. Trading in the common shares of Damon is halted at present. It is unlikely that the company's common shares will resume trading until the acquisition is completed, which is subject to exchange acceptance among other things.

Terms of the acquisition

Pursuant to the agreement, subject to satisfaction of certain conditions, including the execution of a definitive agreement, Damon will acquire the Arizona Silver shares by way of share exchange, whereby shareholders of Arizona Silver will receive 10 Damon shares for every one Arizona Silver share held, which would result in the issuance of an aggregate of 5,587,710 Damon shares based on the current number of outstanding Arizona Silver shares. Arizona Silver currently has no other securities outstanding.

The Damon shares to be issued to the Arizona Silver shareholders under the acquisition will be subject to any restrictions on resale, including escrow restrictions, imposed by applicable laws and the exchange.

The acquisition does not constitute a non-arm's-length qualifying transaction (as defined in the policies exchange).

At the closing of the acquisition, Arizona Silver will become a wholly owned subsidiary of Damon, and the shareholders of Arizona Silver will become shareholders of Damon.

Damon has advanced $15,000 to Arizona Silver pursuant to the agreement. Subject to exchange acceptance, Damon may loan additional funds for Arizona Silver to complete the acquisition, which would bear interest at an annual rate of 7 per cent.

Damon will seek exchange acceptance of the acquisition by completing and submitting a filing statement in accordance with applicable exchange policies.

The filing statement will be made available on the company's profile page on SEDAR. Other than exchange acceptance, the most significant conditions required to be satisfied in connection with the closing of the acquisition are: the preparation of an independent technical report in respect of Arizona Silver's principal property in accordance with National Instrument 43-101, which technical report will also be filed on SEDAR; Damon having received a title opinion in respect of such property; and completion of the private placement (as defined below).

The closing of the acquisition is expected to occur prior to Oct. 15, 2016, following submission of the filing statement and final acceptance from the exchange of the transaction, or such other date as the parties may agree pursuant to the terms of the agreement.

About Arizona Silver

Arizona Silver is a private B.C. company with silver exploration leases in Las Paz county, Arizona.

The business of the resulting issuer will be Arizona Silver's business of mineral exploration in Arizona. Arizona Silver owns 100 per cent of certain silver mining leases located in portions of sections 1, 2 and 12, T3N-R17W SRM (unsurveyed), of La Paz county, Arizona (the Ramsey silver mine property). Arizona Silver holds options to purchase two patented claims and 12 unpatented claims covering the core of the Ramsey silver mine property.

Arizona Silver also controls 16 unpatented lode mining claims that are held by Arizona Silver's chief executive officer for the benefit of Arizona Silver and which surround the above leases. Arizona Silver makes all annual Bureau of Land Management claim maintenance payments and controls 100 per cent of these claims free and clear of any obligation to the CEO.

It is a condition precedent to the completion of the acquisition that Arizona Silver assist Damon in the preparation and delivery of an independent technical report in respect of the Ramsey silver mine property.

Financial information

Based on the unaudited financial statements of Arizona Silver, which are currently being audited, over $150,000 of expenditures has been incurred in exploring and acquiring mineral properties since Arizona Silver was established in 2011.

Concurrent private placement

The agreement provides that, as a condition to closing the acquisition, Damon will carry out a non-brokered private placement of common shares to raise gross proceeds of not less than $750,000 and not more than $1.5-million at a purchase price of not less than 10 cents per share. Finders' fees may be paid in connection with the private placement, to be composed of a cash fee equal to 8 per cent of the proceeds raised.

Directors and officers of resulting issuer

On the completion of the acquisition, it is anticipated that the number of directors the company will be increased to five and that the members of the board will be composed of Gregory Hahn, Graham Scott, Mike Stark, Joseph Charland and Keturah Nathe.

It is expected that Mr. Hahn and Richard Barnett will be appointed chief executive officer and chief financial officer, respectively, of the resulting issuer.

The following is a short background of each of the insiders of the resulting issuer upon completion of the acquisition:

Mr. Hahn, chief executive officer and director

Mr. Hahn has been president, chief operating officer and a director of Canamex Resources Corp. since 2012 and is the principal of Greg Hahn Consulting LLC, a private mining and geological consulting firm since 2007. He has been a director of eCobalt Solutions Inc. (formerly Formation Metals Inc.) since 2013, and was formerly a director and interim president and chief executive officer of Silver Bull Resources (formerly Metalline Mining Company). Mr. Hahn was a founding shareholder and director of Marathon PGM Corp. from 2003 to 2010, when it was sold to Stillwater Mining Company. Previously, he was a director, president and CEO of Constellation Copper Corp. and its predecessor from 1991 to 2007, during which time he engineered, permitted, financed, constructed and started up the Lisbon Valley copper open-pit mine and heap-leach facility in Utah, which have been operating since 2005. Prior to that, Mr. Hahn was chief geological engineer for CoCa Mines from 1986 to 1991, where he helped build and operate the Cactus gold open-pit mine and heap-leach operations in Southern California for CoCa Mines, which was purchased by Hecla Mining Company. Prior to joining CoCa Mines, Mr. Hahn worked as a geologist and exploration manager for Noranda Exploration Inc. in the United States for 10 years.

Mr. Barnett, CPA, CGA, chief financial officer

Mr. Barnett has been CFO, secretary and a director of Damon since May, 2015. Mr. Barnett also has acted as the CFO for several companies listed on the TSX Venture Exchange since 2008, and is currently a director of Petrichor Energy Inc.

Mr. Scott, BSc, MA, LLB, director

Mr. Scott combines over 30 years as a resource and corporate finance lawyer, with eight years of practical experience as an exploration geologist to provide clients with advice on all resource-related matters. Mr. Scott represents many Canadian public companies which are listed on the Toronto Stock Exchange and TSX Venture Exchange, in addition to clients in the corporate finance business. Mr. Scott also represents a diverse group of clients in the mining industry, ranging from individual prospectors to multinational mining companies. In such work, Mr. Scott has negotiated and prepared participation and joint venture agreements for properties throughout the world.

Mr. Stark, director

Mr. Stark is currently a director of Canamex Resources and TransAmerican Energy Inc. He is a 25-year member of the Fire Service International Association of Fire Fighters, currently serving as captain.

Mr. Charland, director

Mr. Charland has been a financial and investment consultant since 1995, having over 30 years experience in the mining finance industry as a director, executive and/or consultant. Mr. Charland has acted as president, CEO and a director of Damon since 2011, and is also a director of Iconic Minerals Ltd.

Ms. Nathe, director

Ms. Nathe is currently vice-president of corporate development for Iconic Minerals and has over eight years experience in corporate and project development oversight for junior public companies involved in the energy and mineral exploration industries.

We seek Safe Harbor.