Mr. James Mackie reports

MAJESTIC GOLD CORP. ANNOUNCES PROPOSED DISPOSAL OF MUJIN GOLD PROJECT INTEREST

Majestic Gold Corp.'s 58.75-per-cent-owned Hong Kong Stock Exchange-listed subsidiary, Persistence Gold Group Ltd., and a wholly owned subsidiary of Persistence have entered into two equity transfer agreements for the proposed disposal of Persistence group's entire indirect 52-per-cent interest in Yantai City Mujin Mining Company Ltd., together with related shareholder loans, for aggregate consideration of approximately $25.9-million (U.S.) (174.0 million Chinese yuan).

Yantai Mujin owns and operates the Mujin gold project in Yantai City, Shandong province, China. The Mujin gold project comprises the Denggezhuang Underground gold mine (DGZ mine), the Houzhuang-Heiniutai Underground gold mine (HH mine) and the Chahe Underground gold mine (CH mine).

Transaction details

The transaction comprises two separate equity transfer agreements:

• Persistence has agreed to sell to Fan Zhong Kong its entire interest in PRG RES Holding 2 Ltd., which indirectly holds a 41.051-per-cent interest in Yantai Mujin, together with a related shareholder loan, for consideration of approximately $20.4-million (U.S.) (137.3 million Chinese yuan). Mr. Kong currently beneficially owns approximately 9.4 per cent of Majestic's outstanding common shares.
• Majestic Yantai Gold Ltd., a wholly owned subsidiary of Persistence, has agreed to sell to Yantai Yihui Investment Company Ltd. its 10.949-per-cent interest in Yantai Mujin, together with a related shareholder loan, for consideration of approximately $5.5-million (U.S.) (36.6 million Chinese yuan). Yihui Investment currently owns a 40-per-cent interest in Yantai Mujin.

The aggregate consideration payable under the agreements is approximately $25.9-million (U.S.) (174.0 million Chinese yuan) in cash, of which approximately $15.9-million (U.S.) (106.6 million Chinese yuan) relates to the equity interests in Yantai Mujin and approximately $10.0-million (U.S.) (67.4 million Chinese yuan) relates to the repayment of shareholder loans.

Under the agreement with Mr. Kong, approximately 84.2 million Chinese yuan ($12.5-million (U.S.)) is payable following satisfaction of the applicable conditions precedent, with the remaining approximately 53.2 million Chinese yuan ($7.9-million (U.S.)), representing repayment of the related shareholder loan, payable on or before Dec. 31, 2026. The consideration under the agreement with Yihui investment is payable following satisfaction of the applicable conditions precedent.

The two equity transfer agreements are not inter-conditional and may complete separately.

Completion of the transaction is subject to the satisfaction or waiver, as applicable, of the conditions precedent contained in the respective agreements, including required corporate, regulatory and governmental approvals, and other customary closing conditions.

Upon completion of the transaction, Persistence will cease to hold any equity interest in Yantai Mujin and Yantai Mujin will cease to be a subsidiary of Persistence and Majestic. Accordingly, Yantai Mujin's financial results will no longer be consolidated into Majestic's consolidated financial statements.

Reasons for the disposal

Following a review of the financial performance and operating status of the Mujin gold project, Majestic believes the transaction provides an opportunity to realize value from its investment while strengthening the company's liquidity and financial flexibility.

The company and its subsidiaries originally acquired the 52-per-cent interest in Yantai Mujin in February, 2025, for aggregate consideration of approximately $11.4-million (U.S.) (81.9 million Chinese yuan), as reported in Majestic's financial statements. Subsequent to the acquisition, the company and its subsidiaries made an additional equity contribution of approximately 20.9 million Chinese yuan to Yantai Mujin, bringing the aggregate equity investment to approximately 102.8 million Chinese yuan.

The proposed consideration attributable to the equity interests is approximately $15.9-million (U.S.) (106.6 million Chinese yuan), representing approximately 3.8 million Chinese yuan, or 3.7 per cent, above the aggregate equity investment, before transaction costs, taxes and accounting adjustments. In addition, the transaction provides for the repayment of approximately $10.0-million (U.S.) (67.4 million Chinese yuan) of shareholder loans.

The foregoing comparison is based on the RMB transaction values and does not represent the accounting result that Majestic will ultimately recognize on the transaction.

The company believes the transaction will allow financial and management resources to be reallocated toward other growth opportunities while Majestic continues to focus on the operation and development of its Songjiagou gold project and the evaluation of additional growth opportunities.

The company will provide further updates regarding the transaction as material developments occur.

About Majestic Gold Corp.

Majestic Gold is a junior gold producer engaged in commercial gold production in eastern Shandong province, China, with mining operations at its Songjiagou gold mines and the Mujin gold project.

We seek Safe Harbor.