Mr. Allan Larmour reports

NORSEMONT MINING TO ACQUIRE CHOQUELIMPIE GOLD/SILVER PROJECT

Norsemont Mining Inc. has entered into a letter agreement dated May 19, 2020, with Tavros Gold Corp., an arm's-length private British Columbia corporation, whereby the company has agreed to acquire all of the issued and outstanding shares of Tavros from the shareholders thereof. Tavros holds the exclusive right to acquire all of the shares of Sociedad Contractual Minera Vilacollo, a private Chilean corporation which holds a 100-per-cent interest in the Choquelimpie gold/silver project in northern Chile.

Inversiones Alxar SA, a wholly owned subsidiary of the Chilean conglomerate Empresas Copec, currently holds all of the issued and outstanding shares of Vilacollo. The transaction constitutes an acquisition pursuant to Section 3 of Policy 6 of the policies of the Canadian Securities Exchange.

Allan Larmour, chief executive officer of the company, stated: "We are excited about the opportunity to acquire this well-known and significant gold project in Chile, which had an enormous amount of work previously completed by major mining companies. We are working hard with the deal team towards an expedited closing as we believe this will help to create shareholder value for all our patient stakeholders."

Terms of the proposed transaction

The transaction is proposed to be structured as a share exchange pursuant to a definitive share purchase agreement, whereby the company will acquire all of the shares of Tavros from the Tavros shareholders in consideration for aggregate cash payments of $3.3-million (U.S.) (broken down into various property acquisition and other payments payable over 18 months) and the issuance of 15 million common shares in the capital of the company.

Pursuant to the terms of the agreement, the company has agreed to appoint Cesar Lopez to its board of directors as an additional board member resulting in four directors of the company on the closing date. No additional changes to the company's board or management team are anticipated at this time.

Mr. Lopez has over 25 years of experience in the natural resources sector, with a strong focus on mining and mineral exploration within Latin America and Eurasia. From 2015 to mid-2018 he served as executive chairman at Southern Pioneer Resources, a private Canadian mineral exploration company with silver and copper projects in Chile. Prior to that, Mr. Lopez served as president and chief executive officer of Aegean Metals Group, where he successfully led the senior exploration team that discovered the Hot Maden project in Turkey which is currently being developed by Artmin Madencilik, a joint venture between the operator Lidya Madencilik (70 per cent) and Sandstorm Gold (30 per cent).

A founding partner and the former CEO of AQM Copper Inc., Mr. Lopez successfully managed the acquisition and development of the Zafranal copper and gold deposit in southern Peru, which resulted in the acquisition of AQM Copper Inc. by Teck Resources Ltd. in November of 2016. Prior to these positions, Mr. Lopez acted as director of Centenario Copper Corp. from 2004 to 2009.

Mr. Lopez holds a law degree from Universidad Gabriela Mistral in Chile and a master's degree in international law from Golden Gate University in San Francisco. He holds a diploma in marketing from UC Berkeley and is also a candidate for a master of science in mineral economics from Universidad de Chile and Curtin University of Perth (Western Australia). He is a member of the Chilean Bar Association since 1989 and the Rocky Mountain Mineral Law Foundation.

The company currently has 15,213,496 shares issued and outstanding. On the closing of the transaction, and (i) assuming the financing is fully subscribed; (ii) disregarding any shares issued as a finder's fee for the transaction; and (iii) disregarding any additional shares issued as a result of exercise in any currently outstanding stock options or share purchase warrants, there will be 37,713,496 shares issued and outstanding with the current shareholders of the company holding 40.34 per cent of the shares, subscribers in the financing holding 19.89 per cent and Tavros shareholders holding 39.77 per cent of the shares (all on an undiluted basis). Other than the appointment of Mr. Lopez who is anticipated to be appointed to the board of directors of the company on the closing date, the company does not anticipate the creation of any new insiders (as that term is defined in CSE policies) of the company on the closing date.

The company anticipates payment of a finder's fee payable in shares to an arm's-length finder in an amount equal to the maximum amount permitted by CSE policies. The issuance of such shares will be subject to CSE approval and will be subject to a restricted period of four months and one day.

Conditions of the proposed transaction

Closing of the transaction is subject to: (i) Norsemont completing its due diligence review on Tavros, Vilacollo and the project or before June 30, 2020; (ii) receipt of all regulatory approvals with respect to the transaction; and (iii) closing of the financing (as defined below).

Financing

The company is also pleased to announce a non-brokered private placement financing of up to $3-million (Canadian) in units of the company at a price of 40 cents per unit, subject to an overallotment option of up to an additional 10 per cent of the financing. The company may elect to close the financing in one or more tranches.

Each unit consists of one share and one-half of one transferable common share purchase warrant. Each warrant will entitle the holder thereof to purchase one additional share at a price of 75 Canadian cents for a period of one year from the closing date of the financing, subject to an acceleration provision whereby if the shares trade at a price on the CSE (or such other exchange on which the shares may be traded at such time) of $1 (Canadian) or greater per share for a period of 10 consecutive trading days after four months and one day from the closing of the offering, the company may accelerate the expiry of the warrants by giving notice to the holders thereof (by disseminating a news release advising of the acceleration of the expiry date of warrants) and, in such case, the warrants will expire on the 31st day after the date of such notice.

Proceeds from the financing are intended to be used in connection with the transaction, including property purchase and other payments required under the agreement, professional fees, due diligence expenses, and technical expenses including geological reports.

Securities issued in connection with the financing will be subject to a restricted period of four months plus one day in accordance with applicable Canadian securities laws. The company may elect to pay a finder's fee in connection with the financing to eligible finders in compliance with applicable securities laws and CSE policies.

We seek Safe Harbor.