Mr. Matthew Lennox-King reports

ORLA MINING TO ACQUIRE CONTACT GOLD

Contact Gold Corp. has entered into a definitive arrangement agreement dated Feb. 25, 2024, with Orla Mining Ltd., pursuant to which Orla has agreed to acquire all of the issued and outstanding common shares of Contact Gold by way of a court-approved plan of arrangement at an implied value of three cents per share, based upon the 10-day volume-weighted average prices of each company as of Feb. 23, 2024.

Pursuant to the terms of the definitive agreement, Contact Gold shareholders will receive 0.0063 of a common share of Orla for each share held (the exchange ratio). The exchange ratio represents a substantial premium of 106 per cent to Contact Gold shareholders, based upon the closing prices for each company on the TSX Venture and Toronto Stock Exchanges, respectively, as of Feb. 23, 2024.

The transaction will result in consolidation of the Railroad-Pinion district in Nevada, combining Contact Gold's Pony Creek oxide gold project with Orla's South Railroad project, which is located immediately adjacent to the north of Pony Creek. South Railroad is a feasibility-stage, open-pit heap-leach project located on the prolific Carlin trend in Nevada, which Orla is advancing toward a construction decision.

Matthew Lennox-King, president and chief executive officer of Contact Gold, stated: "On behalf of the board of directors of Contact Gold, we are excited to have come to an agreement with Orla at a significant premium, which will result in the company's shareholders receiving shares of Orla, which boasts a strong balance sheet, excellent trading liquidity, a robust development pipeline and substantial cash flow at the Camino Rojo mine in Mexico. The transaction will also prevent any further equity dilution to Contact Gold's shareholders in the context of an exceptionally difficult market for precious metals exploration companies."

Transaction highlights:

• Significant premium of 100 per cent to Contact Gold shareholders;
• Immediate exposure to gold production, with Orla's 2024E guidance of 110,000 ounces to 120,000 oz gold (Au), at a compelling all-in sustaining cost of $875 (U.S.) to $975 (U.S.)/oz Au;
• Participation in the expansion and development potential at both South Railroad and Camino Rojo;
• Access to Orla's financial strength of $96.6-million (U.S.) in cash and $61.7-million (U.S.) in undrawn revolving credit capacity as of Dec. 31, 2023;
• Consideration in the form of highly liquid shares of Orla, which average more than $9-million of trading per day (trailing three-month average) and are covered by nine research analysts.

Transaction details

Under the terms of the definitive agreement, each of the issued and outstanding shares will be exchanged, at the exchange ratio, for 0.0063 of a common share of Orla. The company's outstanding warrants to purchase shares will be adjusted in accordance with their terms so that on exercise the holders will receive common shares of Orla adjusted to reflect the exchange ratio. In-the-money options of Contact Gold will immediately vest and be cashed out at the difference between their strike price and three cents, and out-of-the money options of Contact Gold will be cancelled. The company's outstanding restricted share units (RSUs) and deferred share units (DSUs) will similarly be cashed out at three cents for each RSU and DSU held.

The board of directors of Contact Gold, after consultation with its financial and legal advisers, and on the recommendation of a special committee of independent directors, unanimously determined that the transaction is in the best interests of the company and recommends that Contact Gold shareholders vote in favour of the transaction. Evans & Evans Inc. provided a fairness opinion to the Contact board stating that, subject to the assumptions, limitations and qualifications set out therein, the consideration to be received by Contact Gold shareholders in connection with the transaction is fair, from a financial point of view, to such shareholders.

All of the company's directors and officers, representing approximately 11.9 per cent of the shares outstanding, have entered into support agreements with Orla, pursuant to which, among other things, they have agreed to vote all the securities of Contact Gold they own and control in favour of the transaction.

The transaction will be effected by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia), and will require approval by: (i) 66-2/3 per cent of the votes cast by Contact Gold shareholders; (ii) 66-2/3 per cent of the votes cast by Contact Gold shareholders and optionholders (voting together as a single class); and (iii) a simple majority of the votes cast by Contact Gold shareholders, excluding certain related parties, as prescribed by Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions, at a special meeting of Contact Gold security holders that will be called to consider the transaction.

In addition to security holder and court approval, completion of the transaction is subject to applicable regulatory approvals, including the approval of the TSX Venture Exchange and the Toronto Stock Exchange, and the satisfaction of certain other closing conditions. The definitive agreement contains customary provisions, including representations and warranties of each party, non-solicitation covenants of Contact Gold, and fiduciary-out provisions, as well as right-to-match provisions in favour of Orla. The company has also agreed to pay a termination fee of approximately $500,000 to Orla in the case of certain terminating events. The definitive agreement, which describes the full particulars of the transaction, will be made available under Contact Gold's issuer profile on SEDAR+.

Complete details of the transaction will be included in the Contact Gold management information circular to be prepared and filed with regulatory authorities, in accordance with applicable securities laws, and mailed to Contact Gold shareholders in April, 2024. The transaction is expected to be completed by the end of April, 2024.

Advisers

Haywood Securities Inc. acted as financial adviser, and Cassels Brock & Blackwell LLP acted as legal counsel to the company.

Qualified person and technical disclosure

The scientific and technical information contained in this news release has been reviewed and approved by Vance Spalding, CPG, vice-president of exploration for Contact Gold, who is a qualified person within the meaning of National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.

About Contact Gold Corp.

Contact Gold is an exploration company focused on making district-scale gold discoveries in Nevada. The company's extensive landholdings are on the prolific Carlin and Cortez gold trends, which host numerous gold deposits and mines. Contact Gold's land position comprises approximately 117.4 square kilometres of target-rich mineral tenure hosting numerous known gold occurrences, ranging from early- to advanced-exploration and current gold resources.

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