Mr. Douglas Meirelles reports

SOUTH ATLANTIC IS GRANTED PRIORITY TO EVALUATE POTENTIAL ACQUISITION OF THE TUCANO GOLD MINE LOCATED IN AMAPA STATE, BRAZIL

South Atlantic Gold Inc. has manifested and been granted priority hearing under the judicial reorganization process (processo de recuperacao judicial) of Mina Tucano Ltda., Beadell (Brazil) Pty. Ltd. and Beadell (Brazil 2) Pty. Ltd., with the objective to investigate and potentially negotiate the acquisition of the Tucano gold mine, being the only exchange-listed company to have officially filed interest into the processo de recuperacao judicial.

Tucano gold mine highlights:

• Located in the state of Amapa, Brazil, Tucano is hosted on an approximately 197,285-hectare land package in the prospective Vila Nova greenstone belt of the Guyana Shield.
• Initially brought into production in 2005 as a conventional open-pit and heap-leach operation.
• The operation was expanded in 2013, including the construction of 3.5-million-tonne-per-annum (Mtpa) carbon-in-leach processing facility.
• The mine produced an average of approximately 130,000 ounces gold per annum from 2014 to 2020 at an average all-in sustaining cost of $1,100 (U.S.)/oz:
  • Produced approximately 120,000 oz Au during each of 2018, 2019 and 2020;
  • Produced approximately 80,000 oz Au and approximately 60,000 oz Au in 2021 and 2022, respectively;
  • Over one million oz Au produced to date.
• The mine was purchased by Great Panther Mining Ltd. in mid-2019:
  • Substantial work completed to date, including approximately 22,000 metres of drilling by Great Panther from 2020 to 2022.
• Most recent publicly available technical report (as defined in National Instrument 43-101 -- Standards of Disclosure for Mineral Projects) filed on SEDAR by Great Panther on June 8, 2022, and having an effective date of July 31, 2021, outlined:
• • Proven and probable reserves: 12.8 million tonnes (Mt) at 1.59 grams per tonne Au for 656,000 oz Au;
  • Measured and indicated resources (inclusive of reserves): 28.4 Mt at 1.43 g/t Au for 1,303,000 oz Au;
  • Inferred resources: 6.8 Mt at 2.37 g/t Au for 518,000 oz Au.
• All required exploration and mining permits are in place.
• All required nearby and on-site key infrastructure (roads, power, mine supply, plant, tailings facility) are in place.
• Operated through a wholly owned Brazilian subsidiary that subsequently entered the processo de recuperacao judicial in September, 2022. The Tucano mine was placed on care and maintenance in February, 2023, due to (i) unanticipated mine resequencing caused by pit wall instability, leading to the mining and processing of satellite pits and low-grade stockpiles, resulting in higher stripping costs, and lower grades and recoveries; (ii) various other operational issues, including but not limited to, accelerated capital spending on the tailings facility, accelerated spending on the advancement of the underground project, contractor and equipment availability during the pandemic, and inflationary pressures; and (iii) ability to service corporate and local debt and creditors.
• Assuming that South Atlantic is successful in its potential acquisition of Tucano, the company plans to keep operations on care and maintenance for a period of approximately two to three years in order to update and expand open-pit mineral resources and complete an updated feasibility study on the open-pit mine -- to ensure successful operations on a restart of mining.

Douglas Meirelles, president and chief executive officer of South Atlantic, stated: "South Atlantic is excited about the opportunity to participate in this unique process, especially given the successful track record of our company's leadership team on similar turnaround projects in Brazil, including the Aurizona mine operated by Equinox Gold Corp. and the Mara Rosa gold project recently acquired by Hochschild Mining PLC.

"We believe that Tucano is a strong candidate for a district-scale open-pit operation, with underground potential to be explored once the mine is recommissioned. South Atlantic is well positioned to deliver on Tucano's substantial near- and long-term resource growth potential and to enhance previous optimization initiatives."

Marc Leduc, chairman of South Atlantic's technical committee, stated: "Tucano represents a great opportunity for South Atlantic to expand its footprint in Brazil, with the goal of restarting gold mining as a new gold producer in a favourable brownfield camp. The technical committee of South Atlantic has the mandate to establish the best sustainable plan to move forward with the required steps with the ultimate potential goal of returning the Tucano mine to production."

Pursuant to the terms of the of the processo de recuperacao judicial, South Atlantic has filed and has been accepted with priority to evaluate and potentially negotiate with the creditors of Tucano a restructuring of the outstanding debt of Tucano. In accordance with the terms of the process, South Atlantic has the right to terminate negotiations at any time should negotiations with the creditors of Tucano fail to advance or if the company is not satisfied, in its sole discretion, with the results of its negotiations or its review due diligence of Tucano. There can be no assurances that a transaction involving South Atlantic and Tucano will be consummated.

Over the coming weeks, South Atlantic, in consultation with advisers and qualified persons, plans to advance its investigation and potentially advance with the proceedings of the legal process in Brazil, including potential negotiations with the creditors of Tucano. This timeline is indicative and may change or be delayed as determined by legal process.

Adviser

The company has appointed Haywood Securities Inc. as its exclusive financial adviser in connection with the potential acquisition.

Qualified person's statement

The scientific and technical information that forms the basis for parts of this news release was reviewed and approved by Marcelo Antonio Batelochi (PGeo), MAUSIMM (CP), the company's exploration manager who is a qualified person as defined by NI 43-101.

About South Atlantic Gold Inc.

South Atlantic Gold is an exploration company engaged in acquiring and advancing mineral properties located in the Americas. Its flagship asset is the 100-per-cent-owned Pedra Branca project, located 280 kilometres southwest of Fortaleza, Ceara state, Brazil. South Atlantic Gold is focused on creating value for its shareholders by engaging in the development and acquisition of high-quality mineral assets located in stable and mining-friendly jurisdictions. South Atlantic Gold is based in Kelowna, B.C., and is listed on the TSX Venture Exchange under the symbol SAO.

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