Mr. James Mackie reports

MAJESTIC ANNOUNCES LISTING OF SUBSIDIARY PERSISTENCE RESOURCES ON HKEX

Majestic Gold Corp.'s 70.5-per-cent-owned subsidiary, Persistence Resources Group Ltd., being the third-largest gold miner (1) in Shandong province, China, has listed on the main board of the Stock Exchange of Hong Kong Ltd. under stock code 02489. Persistence offered 25 per cent of its total issued and paid-up shares for subscription by public in Hong Kong and international placing under the global offering.

The HKEX listing represents a significant milestone for Persistence's entry into the Hong Kong capital market. Going forward, Persistence aims to capitalize on growth opportunities in the gold mining market, leveraging Hong Kong's international capital platform and prestige associated with the HKEX listing. Persistence is committed to enhancing its technological and operational management capabilities to strengthen its competitiveness in the market and aspiring to become a benchmark for gold companies in Yantai, Shandong province, ultimately rewarding its shareholders and investors.

Persistence conducted a global offering of the shares by way of issuing 500 million shares at 55 H.K. cents (9.43 Canadian cents) per share, generating gross proceeds of $275-million (H.K.) (approximately $47.2-million (Canadian)). After deducting the underwriting fees and other estimated expenses related to the global offering, net proceeds are approximately $217-million (H.K.) (approximately $37.2-million (Canadian)).

The allocation of net proceeds by Persistence will be as follows: Fifty-five per cent will be allocated to acquisition of gold mining assets, 20.4 per cent toward its mine optimization plan, and 12.6 per cent, 10.0 per cent and 2.0 per cent for the repayment of existing bank loan guarantees, working capital and additional exploration activities to upgrade gold reserves, respectively.

Allocation of proceeds

Selective acquisition of gold mining assets to increase market share

Persistence will direct 55.0 per cent of net proceeds toward the selective acquisition of surrounding high-quality gold mining assets to expand its mineral resources and market share. The criteria for acquisition targets include mines located in Shandong province with potential gold resources of at least 10 tonnes at a depth of fewer than 1,000 metres, a life of mine of more than five years and a payback period of fewer than 10 years.

Mine optimization plan

Persistence will dedicate 20.4 per cent of net proceeds to implementing the mine optimization plan, involving the expansion of the mining surface area to around 150 metres south of the existing boundary of Songjiagou open-pit mine so as to increase the pit opening area to 0.46 square metre and to deepen the depth of the pit to minus 171 metres above sea level.

Working capital and bank loan repayment

Approximately 12.6 per cent of net proceeds will be utilized to repay existing bank loans, and approximately 10 per cent will be allocated for working capital purposes.

Additional exploration at existing mine area to increase gold reserves

Two per cent will be allocated for additional exploration activities at the Songjiagou open-pit mine area. Persistence aims to identify additional mineral resources in the unmined areas adjacent to and below the current pit opening area covered by the Songjiagou open-pit mine mining licence. Exploration plans include 26 drilling surveys in three phases at various depths for a total of over 6,500 metres to identify additional gold mineral resources.

As previously announced, Persistence issued its prospectus in respect of its listing of shares on the HKEX on Dec. 14, 2023. Through its subsidiary, Persistence owns a 75-per-cent indirect interest in Yantai Zhongjia Mining Co. Ltd., which operates the Songjiagou gold mine located in the eastern part of Shandong province, China. Majestic owned 94 per cent of Persistence prior to the issuance of the shares. Majestic now owns approximately 70.5 per cent of the total issued and paid-up shares of Persistence. Pursuant to and at the time of listing of the shares on the HKEX, Persistence could issue additional shares, which may further dilute Majestic's cumulative effective interest in the property to less than 50 per cent. However, considering the greater valuation and improved access to capital and that the HKEX listing may afford Persistence for its future needs, the board of directors of Majestic, with the advice from its legal and financial advisers, unanimously approved the listing.

Majestic confirms that all necessary approvals, including those from the TSX Venture Exchange and HKEX, have been obtained for the successful closing of the listing.

About Majestic Gold Corp.

Currently focused on China, Majestic is a British Columbia-based company engaged in commercial gold production at the Songjiagou gold mine in eastern Shandong province, China. Majestic is the third-largest gold producing mining company (1) in Shandong province.

(1) Source: Frost & Sullivan report, based on mine production volume in 2022.

We seek Safe Harbor.