Mr. James Tworek reports

ELEMENT79 ANNOUNCES PROPOSED SPIN OUT AND MERGER

Element79 Gold Corp., in connection with its proposed spinout transaction, has entered an arrangement agreement dated Jan. 10, 2025, with its majority-owned subsidiary, Synergy Metals Corp., and has also entered into a merger agreement dated Jan. 10, 2025, with Synergy, Synergy's wholly owned subsidiary, 1515041 B.C. Ltd. (Synergy SubCo), and 1425957 B.C. Ltd. (142), as further described below.

Arrangement

On July 17, 2023, the company transferred all rights and data related to the Dale property, being 90 unpatented mining claims, located approximately 100 kilometres southwest of Timmins, Ont., to its newly incorporated subsidiary, Synergy. In exchange for this transfer, the company was issued two million Class A common voting shares in the capital of Synergy.

In anticipation of the reverse takeover of Synergy by 142 under the merger agreement, described below, the arrangement agreement has been entered by the company, whereby one million of the two million Synergy shares held by the company will be distributed to the shareholders of the company on a pro rata basis. In consideration for administrative support provided by the company in connection with the arrangement transaction and Synergy's proposed subsequent application to list on the Canadian Securities Exchange and pursuant to the arrangement agreement, Synergy will issue an additional 10,000 Synergy shares to the company, which will also be distributed to the company shareholders as part of the spinout arrangement. The spinout arrangement will be a court ordered arrangement under the Business Corporations Act (British Columbia), and will be subject to approval by the company shareholders, as well as the British Columbia Supreme Court. It is anticipated that the company will publish and distribute an information circular in respect of the meeting of the company shareholders to be held to vote on the spinout arrangement.

The company currently holds approximately 60.24 per cent of the Synergy shares, excluding the 10,000 Synergy shares to be issued to the company under the arrangement agreement, and following the completion of the proposed spinout arrangement, the company is anticipated to hold approximately 30.03 per cent of the Synergy shares, while the company shareholders will hold approximately 30.33 per cent of the Synergy shares.

Merger

Subsequent to the spinout arrangement, Synergy proposes to acquire all of the issued and outstanding common shares in the capital of 142 in exchange for an equivalent number of Synergy shares by way of a three-cornered amalgamation, whereby Synergy SubCo and 142 will amalgamate under the provisions of the Business Corporations Act (British Columbia) to continue as one corporation pursuant to the terms of the merger agreement. As consideration for the 142 shares, shareholders of the 142 shares will receive, pursuant to the merger agreement, one Synergy share for each 142 share held.

Following completion of the amalgamation under the merger agreement, the issued and outstanding Synergy shares will be held: (i) approximately 86.35 per cent by the former 142 shareholders (excluding participants in the concurrent financing (defined herein)); (ii) approximately 4.02 per cent by the company shareholders; (iii) approximately 3.98 per cent by the company; (iv) approximately 5.25 per cent by other existing holders of Synergy shares; and (v) 0.40 per cent by participants in the concurrent financing. As such, the amalgamation will constitute a reverse takeover of Synergy by 142. Holders of warrants to purchase 142 shares will also receive one replacement warrant to purchase a Synergy share for each 142 warrant held. There are currently 21 million 142 warrants outstanding.

The amalgamation will be subject to approval by the 142 shareholders, as well as Synergy (being the sole shareholder of Synergy SubCo). The amalgamation's closing will also be subject to 142's completion of a private placement of 100,000 142 shares at a price of 10 cents per 142 share for gross proceeds of a minimum of $10,000, or an amount otherwise agreed by Synergy and 142. Upon completion of the amalgamation, Synergy intends to make an application that the Synergy shares be listed and posted for trading on the Canadian Securities Exchange.

The company is expected to hold one million Synergy shares after the amalgamation, all of which will be subject to escrow on the same terms of as insiders of Synergy after the amalgamation.

Together, the spinout arrangement and the amalgamation are intended to effect a reorganization of the company's current business into two separate corporate entities. The company will maintain its business as a gold exploration company with the objective of exploring and ultimately developing gold projects in Peru and the United States, while Synergy will be an exploration company focused on the Dale property.

About Element79 Gold Corp.

Element79 Gold is a mining company actively exploring and developing its portfolio of assets, including the high-grade, past-producing Lucero project in Arequipa, Peru, and properties along the Battle Mountain trend in Nevada. The company also holds an option to acquire the Dale property in Ontario and is advancing the plan of arrangement spinout process for its majority owned subsidiary, Synergy Metals.

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