Mr. Richard Wilson reports

BAROYECA PROVIDES UPDATE ON PROPOSED BUSINESS COMBINATION TRANSACTION WITH TERRA ROSSA

Further to Baroyeca Gold & Silver Inc. news release dated Nov. 1, 2024, announcing its proposed business combination with Terra Rossa Gold Ltd., the company and Terra Rossa have entered into an amending agreement amending the terms of the previously disclosed amalgamation agreement dated Oct. 30, 2024.

Concurrent financing

Pursuant to the amended amalgamation agreement, in connection with the transaction, Terra Rossa will complete a concurrent non-brokered private placement of seven million special warrants at a price of 50 cents per special warrant for aggregate gross proceeds of $3.5-million.

The gross proceeds derived from the sale of the special warrants will be held in escrow by Terra Rossa, pursuant to the terms of a special warrant subscription agreement to be entered into in connection with the offering. Each special warrant will be, in accordance with the subscription agreement, automatically converted, without payment of any additional consideration and without any further action on the part of the holder thereof, upon the satisfaction of certain conditions related to the transaction into a unit, comprising one common share of the Terra Rossa and one share purchase warrant exercisable to acquire a Terra Rosa common share at a price of 75 cents per common share for a period of two years.

Pursuant to the terms of the amended amalgamation agreement, in connection with the closing of the transaction, the Terra Rosa common shares will be exchanged for resulting issuer shares (as defined below) on the basis of one resulting issuer share for each Terra Rosa common share held, respectively, and the Terra Rossa unit warrants will cease to represent the right to acquire Terra Rosa common shares and will be exercisable to acquire resulting issuer shares on the basis of one resulting issuer share for each Terra Rossa unit warrant held at a price of $0.75 per resulting issuer share.

The net proceeds of the offering derived from the special warrants will be used by the company to finance exploration as well as for general corporate purposes following completion of the transaction.

Consolidation and capitalization

As disclosed in the company's Nov. 1, 2024, news release, in connection with the completion of the transaction, the company will complete a consolidation of its outstanding common shares on the basis of one postconsolidation common share for every 14 preconsolidation common shares. Baroyeca Gold currently has 86,108,470 common shares issued and outstanding. After giving effect to the consolidation, and prior to giving effect to the transaction and the offering, the company will have approximately 6,150,605 resulting issuer shares, 892,143 share purchase warrants and 100,000 stock options issued and outstanding.

In accordance with the policies of the TSX Venture Exchange, because the consolidation is being conducted on a consolidation ratio in excess of one postconsolidation share for every 10 preconsolidation shares, at its annual general meeting held on Jan. 17, 2025, the company sought and obtained shareholder approval for the consolidation.

After giving effect to the transaction, the consolidation and offering, the company is expected to have an aggregate of 67,847,205 resulting issuer shares issued and outstanding undiluted and 81,431,348 shares outstanding on a diluted basis. On completion of the transaction, it is anticipated that current Terra Rossa shareholders will hold an aggregate of 54,696,600 resulting issuer shares, or approximately 80.6 per cent, and current Baroyeca Gold shareholders will hold an aggregate of 6,150,605 resulting issuer shares, or approximately 9.1 per cent.

Selected financial information

As previously disclosed, Terra Rossa Gold is a private British Columbia natural resource company engaged in the acquisition, exploration and development of natural resource properties. Through its wholly owned subsidiary, Mineras Vetas Ltd., a British Virgin Island company, Terra Rossa holds a 100-per-cent interest in the Vetas gold project, located in Colombia. Please refer to the company's news release of Nov. 1, 2024, for a description of the Vetas gold project.

The following table sets out selected financial information with respect to Terra Rossa as at the dates noted. The selected financial information is derived from Terra Rossa's financial statements for the financial year ended Dec. 31, 2023, and denominated in Canadian dollars.

Further financial information will be included in the filing statement to be prepared in connection with the transaction.

Board and management of the resulting issuer

Following the completion of the transaction, in accordance with the terms of the amended amalgamation agreement, the current board of directors and management of resulting issuer will be reconstituted to consist of five directors, three of whom will be nominees of Terra Rossa and two of whom will be nominees of the company. It is proposed that the following persons will be appointed as management of the resulting issuer, in the capacities set forth below. Brief biographies of the proposed nominees are as follows.

Patrick Downey -- director and chief executive officer

Mr. Downey has over 40 years of international experience in the resource industry. Mr. Downey held the position of president, chief executive officer and director of Elgin Mining Inc., Aura Minerals Inc. and previously Viceroy Exploration Ltd. before its acquisition by Yamana Gold Inc. in 2006. He has held numerous senior engineering positions at several large-scale global gold mining operations and has also held operating positions at several mining projects for Anglo American Corp. in South Africa. Mr. Downey was a member of the boards of Claude Resources and Dalradian Resources before their recent successful acquisitions, and he is a member of the board of a number of active resource companies. He holds a bachelor of science (honours) in engineering from Queen's University.

Latika Prasad -- chief financial officer and corporate secretary

Ms. Prasad has been an officer and/or a director of private and publicly traded companies for over 30 years. She is currently a director at Military Metals Corp. since January, 2020, and the chief financial officer of Greyridge Exploration Corp. since March, 2024. She was a director and member of the audit committee of Turmalina Metals Corp. from July 31, 2021, to Oct. 15, 2024. She was a director and corporate secretary of Turmalina Metals Corp. from April, 2017, to July, 2019, and previously director at Southern Empire Resources Corp. from March, 2020, to June, 2021, and director and assistant corporate secretary at Wabi Exploration Inc. from September, 2015, to July, 2017. She served as the chief financial officer of Azincourt Resources Inc. from October, 2011, until June, 2013, and as a director from May, 2011, to April, 2013. Ms. Prasad also has 30 years of audit experience from starting with Vancouver Stock Exchange (VSE) companies in 1988, preparing quarterly reports for reporting issuers and filing with the VSE and the British Columbia Securities Commission (BCSC) and serving as chief financial officer of several companies, of which five were reporting issuers. In addition to Turmalina Metals, Ms. Prasad was also on the audit committee of Carmanah Minerals Corp. and was on the audit committee of Southern Empire Resources Corp. from March, 2020, to June, 2021.

Michael Halvorson -- director

Mr. Halvorson has extensive experience as a board member for natural resource companies. Notable past directorships in the mineral exploration and mining sector include Orezone Gold Corp., Viceroy Exploration Ltd., Western Silver Inc., Novagold Resources Inc., Pediment Gold Corp., Esperanza Resources Corp., Fission Energy Corp. and Strathmore Minerals Corp. In addition, in the oil and gas business, he served on the boards of Gentry Resources Ltd. and Novus Energy Inc.

Tim Moody -- director

Mr. Moody has more than 30 years of experience in the mining industry, including mineral exploration, resource assessment, business development, strategy and government relations. He spent 24 years with Rio Tinto, where he held the posts of exploration director (2005 to 2010) and vice-president and director of business development (2010 to 2015). He currently holds directorships on the boards of Mirasol Resources, Prism Resources and Indico Resources. Mr. Moody has a bachelor of science in geology and geophysics (honours) from the University of New England. He is a graduate of the senior leadership program from the London Business School, a graduate of the business leadership development program from the Australian Graduate School of Management and a fellow of the Society of Economic Geologists.

Richard Wilson -- director

Mr. Wilson brings over 20 years experience working with public junior mining issuers and has been instrumental in raising millions of dollars for exploration work. Mr. Wilson has served as a director of Baroyeca Gold and Silver since March, 2006, and has served as the company's chief executive officer since December, 2011. In addition, Mr. Wilson previously served as a director and president and chief executive officer of Nevada Energy Metals from April, 2016, to April, 2020, and a director and president and chief executive officer of Surge Battery Metals from May, 2020, to April, 2021.

Patrick Robinson -- director

Mr. Robinson has acted as an investment adviser to individuals and institutions for over 30 years. Since April, 2014, Mr. Robinson has served as the president of the Robinson Sauder Family Office Inc., a private institutional investment firm. In addition, since June, 2018, Mr. Robinson has served as chairman of the board of UIT Growth Equity General Partnership Ltd., a private venture investment fund and, since October, 2013, as the chairman and co-founder of Arius Technology Inc., a leader in laser-based optical scanning systems. Previously, from January, 2016, to September, 2020, Mr. Robinson served as director and co-founder of Vitaeris Inc., a company focused on the development of the multiuse drug, Claza. From July, 1987, to April, 2014, Mr. Robinson worked as an investment adviser, initially at Pemberton Securities, then as senior vice-president and investment adviser at BMO Nesbitt Burns from February, 1991, to 1997, and subsequently as branch manager, divisional manager and finally as senior vice-president and managing director of BMO British Columbia from March, 2003, to April, 2014. Mr. Robinson earned his chartered accountant designation from the Institute of Chartered Accountants of British Columbia in 1984 and his bachelor of commerce from the University of British Columbia in 1982.

Conditions and stock exchange matters

As previously disclosed, completion of the transaction will be subject to certain conditions, including among others: (i) the requirement for Terra Rossa to obtain shareholder approval with respect to the amalgamation; (ii) the completion of the offering; and (iii) obtaining the approval of the TSX-V with respect to the listing of the resulting issuer shares.

The company will be relying on the exemption form the requirement to obtain shareholder approval for the transaction available under Section 4.1 of TSX-V Policy 5.2, as a result of: (i) the transaction is not a related party transaction as that term is defined under TSX-V policies; (ii) the company previously having been put on notice to be transferred to the NEX exchange for failure to meet TSX-V continued listing requirements, prior to the announcement of the transaction; (iii) the company will not be subject to a cease trade order or suspended from trading on completion of the RTO; and (iv) approval of the transaction by the company's shareholders is not required under applicable corporate or securities laws.

As previously disclosed, the transaction may require sponsorship under the policies of the TSX-V unless an exemption or waiver from sponsorship is granted. Baroyeca Gold intends to apply for an exemption or waiver from sponsorship requirements of the TSX-V in connection with the transaction. There can be no assurance that such exemption or waiver will ultimately be granted.

Trading in the common shares of the company has been halted and will remain halted pending review and approval of the transaction by the applicable stock exchange. For further information with respect to the transaction, please refer to the amended amalgamation agreement, which is available on the company's profile on SEDAR+.

Completion of the transaction is subject to a number of conditions, including, but not limited to, TSX-V acceptance and, if applicable, disinterested shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Terra Rossa and Baroyeca Gold should be considered highly speculative.

We seek Safe Harbor.