Mr. Ronald Woo reports

GOLD MOUNTAIN ANNOUNCES RELIANCE ON FINANCIAL HARDSHIP EXEMPTION IN CONNECTION WITH DEBT SETTLEMENTS AND DEFERRALS AND PRIVATE PLACEMENT OFFERING UP TO $750,000

Gold Mountain Mining Corp. has reached agreements with two secured creditors for the settlement and postponement of certain secured debts. The secured creditors are Nhwelmen Construction LP Ltd., which is currently owed $7,784,850.71 (the Nhwelmen secured debt), and Hedge Minerals Corp., which is currently owed $1,241,669.18.

Nhwelmen is the contract miner at the company's Elk gold mine, and Hedge is an arm's-length lender to the company pursuant to a loan arrangement entered into effective Sept. 13, 2023. Nhwelmen has agreed to accept common shares of the company in payment of $1.25-million of the Nhwelmen secured debt at an issuance price of 0.75 cent per share, which pricing is at a discount to market price (for a maximum of 166,666,667 common shares being issued to Nhwelmen), and the remaining amount of the Nhwelmen secured debt will be repaid in equal cash payments over 24 months commencing in April, 2024, and including interest at a rate of 18 per cent per annum. The entire Hedge secured debt will be repaid through the issuance of common shares of the company at the issue price (for a maximum of 165,555,891 common shares being issued to Hedge).

The company has also approached certain unsecured vendors which provide critical services to the company for the conversion of up to $1.5-million of unsecured debt for settlement of such debts in payment of common shares of the company at the issue price for a maximum issuance of 200 million common shares.

Further, the company is pleased to announce a non-brokered private placement of up to 100 million common shares in the capital of the company at the issue price for gross proceeds to the company of up to $750,000, which would represent a maximum of up to 14.28 per cent of the company's issued and outstanding common shares following the issuance of common shares with respect to the debt settlements. The common shares issued are subject to applicable resale restrictions, including a hold period of four months and one day from the closing of the private placement under Canadian securities rules. The private placement is subject to customary closing conditions including final Toronto Stock Exchange (TSX) approval. Proceeds of the private placement will be used to ramp up operations at the Elk gold mine, and for working capital and general corporate purposes. No insiders of the company will be participating in the private placement.

Insider participation

None of the creditors currently own (directly or indirectly) any securities of the company. Upon completion of the debt settlements (assuming no settlement of unsecured debts and prior to closing of the private placement), Hedge would own 39.38 per cent of the company's common shares (non-diluted) and Nhwelmen would own 39.65 per cent of the company's common shares (non-diluted). Assuming settlement of all $1.5-million of the unsecured debt and closing of the private placement of $750,000 in gross proceeds, Hedge would own 23.64 per cent, Nhwelmen would own 23.8 per cent, and the unsecured creditors would own 28.6 per cent of the company's common shares, all on a non-diluted basis. As a result of such ownership, Nhwelmen and Hedge will become insiders of the company for purposes of the TSX Company Manual and a related party of the company pursuant to Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions (MI 61-101). Depending on the participation of the unsecured creditors, such unsecured creditors may also become insiders and related parties, and the company will make such disclosure in future press releases once determined. The debt settlements will result in a change of control of the company as both Nhwelmen and Hedge will become control persons in the company, owning more than 20 per cent of the current issued and outstanding shares. The company does not anticipate that any of subscribers pursuant to the private placement will become insiders or related parties of the company.

The debt settlement is a related party transaction within the meaning of MI 61-101. However, in light of the fact that the board and special committee have determined that the company is in serious financial difficulty and that the debt settlement is designed to improve the company's financial situation, the company is relying on the exemption from the formal valuation and minority approval requirements of MI 61-101 contained in Section 5.5(g) and Section 5.7(1)(e) of MI 61-101, respectively, on the basis of the financial hardship exemption therein.

Special committee

A special committee of the board of directors of the company was constituted, and considered the fairness of the debt settlements and related matters. The special committee comprises two independent directors. The special committee has determined that the debt settlements are reasonable for the company in the circumstances and recommends that the company proceed with the debt settlement.

The special committee carefully considered management's efforts in recent years in exploring various alternatives to improve the financial situation of the company, and considered whether other alternatives may be available (such as various corporate transactions, merger and acquisition transaction with third parties, accessing public or private debt or equity markets). The special committee has concluded that the company is in serious financial difficulty and there are no viable alternatives available on commercially reasonable terms that would be more likely to improve the financial situation of the company compared with the debt settlement (and related transactions).

Financial hardship exemption

As the debt settlement will: (i) result in the issuance of shares to Hedge and Nhwelmen in an amount greater than 25 per cent of the number of common shares outstanding, and materially affect control of the company (Section 604(a)(i) of the TSX Company Manual); (ii) dilute the company's market capitalization by more than 25 per cent (Section 607(g)(i) of the TSX Company Manual); and (iii) the issuance of common shares in the debt transactions and private placement are being priced lower than market price less the maximum applicable discount (Section 607(e) of the TSX Company Manual), disinterested shareholder approval and an independent report regarding the value of the transaction consideration are required. However, the company has applied to the TSX for a financial hardship exemption from the requirements to obtain disinterested shareholder approval and an independent valuation report on the basis that the company is in serious financial difficulty and the debt settlement is designed to improve the company's financial situation. The application was made upon the recommendation of the special committee, free from any interest in the debt settlement and unrelated to the parties involved in such transactions (other than the company), and was based on its determination that the debt settlement is reasonable for the company in the circumstances.

There is no certainty that the terms of the debt settlement will be acceptable to any of the unsecured vendors.

The company anticipates that a resolution will be put to shareholders approving a share consolidation at its next annual meeting.

Appointment of director

The company's chief executive officer, Ronald Woo, has been appointed to the board of directors of the company effective immediately. Mr. Woo has served as president of the company between Dec. 23, 2020, until Dec. 23, 2021, and has served as chief executive officer of the company since July 10, 2023.

About Gold Mountain Mining Corp.

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

We seek Safe Harbor.