Mr. Grant Carlson reports

GOLD MOUNTAIN ENTERS INTO A SILVER ROYALTY AGREEMENT WITH SILVER CROWN ROYALTIES INC.

Gold Mountain Mining Corp. has entered into a royalty purchase agreement with Silver Crown Royalties Inc. (SCR) whereby the company sold to SCR a royalty on 45 per cent of the aggregate gross proceeds of silver sold from the company's Elk gold project located in British Columbia, Canada, for consideration of up to $3.3-million. SCR has an option to increase the royalty percentage to 90-per-cent in the next 10 business days through the payment of an additional $1.25-million in cash and increased contingent production bonuses (as defined below) of up to $2-million.

The agreement

Pursuant to the terms of the royalty purchase agreement, SCR has paid the company as the purchase price for the royalty:

• $1.25-million in cash;
• 250,000 units of SCR at a deemed price per unit of 20 cents with each such unit consisting of one common share in the capital of SCR and one-half of one SCR share purchase warrant exercisable to acquire one additional SCR share for a period of 24 months from the date of issuance thereof at an exercise price of 40 cents.

Additionally, pursuant to the terms of the royalty, SCR will be required to:

• Pay the company up to eight bonus payments of $250,000 each, for a total of $2-million in total bonus payments, upon the company achieving each of the production milestones set forth below measured on a trailing annualized basis for six consecutive calendar months, including those months of production prior to the date of the royalty agreement:
  • Sale of 6,666 contained ounces of silver on an annualized basis;
  • Sale of 8,888 contained ounces of silver on an Annualized basis;
  • Sale of 11,110 contained ounces of silver on an annualized basis;
  • Sale of 13,332 contained ounces of silver on an annualized basis;
  • Sale of 15,554 contained ounces of silver on an annualized basis;
  • Sale of 17,776 contained ounces of silver on an annualized basis;
  • Sale of 19,998 contained ounces of silver on an annualized basis;
  • Sale of 22,220 contained ounces of silver on an annualized basis.
• In the event the company files a technical report(s) disclosing aggregate measured, indicated and inferred silver ounces contained in the property in excess of 2.21 million ounces (the total number in situ silver ounces as disclosed in the company's existing technical report filed on Jan. 21, 2022), SCR will, within 30 days of the filing of such technical report, pay the company the lesser of: (i) $1; and (ii) 20 per cent of the then average silver price, in respect of each ounce of silver contained in the property disclosed in any such technical report(s) which is in excess of the number of silver ounces disclosed in the existing technical report.

In addition, the company granted SCR an option exercisable at any time prior to 2 p.m. (Vancouver time) on May 25, 2023, to increase the royalty percentage from 45 per cent to 90 per cent upon payment of an additional $1.25-million in cash to the company. In the event that SCR exercises the top-up option, each production bonus will increase from $250,000 to $500,000 for total consideration of up to $4-million.

The production bonuses are due within 60 days of the company providing notice that it achieved the applicable production target on an annualized basis to SCR for the first production bonus and then within 30 days of notice to SCR for the remaining production bonuses. The production bonuses are payable in cash while SCR is private and in the event SCR goes public, SCR shall have the option to pay the production bonuses in cash or SCR common shares.

The company retains the right to repurchase 50 per cent of the royalty at any time by making a payment in the amount of the purchase price and any bonuses paid to the company at the time of this election.

SCR is a private revenue-generating pure silver royalty company focusing on silver as byproduct credits. SCR aims to minimize the economic impact to mining projects while maximizing returns to shareholders. This inaugural transaction with Gold Mountain serves as a launching platform for SCR's pipeline of pure silver net smelter return royalties.

Qualified person

The foregoing technical information was approved by Grant Carlson, PEng, a qualified person, as defined under National Instrument 43-101, and the chief operating officer for the company.

About Gold Mountain Mining Corp.

Gold Mountain is a British Columbia-based gold and silver exploration and production focused on the development of the Elk gold project, located 57 kilometres from Merritt in south-central British Columbia.

We seek Safe Harbor.