Mr. Paul Jones reports

PHOENIX ANNOUNCES PRIVATE PLACEMENT AND LETTER OF INTENT WITH FOX AUTOMOTIVE SWITZERLAND AG FOR REVERSE TAKEOVER AND SPIN-OUT

Phoenix Gold Resources Corp. has entered into an arm's-length binding letter of intent accepted April 13, 2019, pursuant to which the company will, subject to approval of the TSX Venture Exchange, acquire all of the issued and outstanding shares in the capital of Fox Automotive Switzerland AG. CM-Equity AG, a fully licensed and regulated financial service boutique, headquartered in Munich, Germany, acts as global co-ordinator for the transaction between the company and Fox.

Fox's chairman, Patrick Bigger, stated: "The management of Fox Automotive is excited about the going-public transaction through Phoenix Gold on the TSX Venture Exchange in Canada. The public listing will allow us to create strong awareness for our MIA [electric vehicle] with our customers, who are young adults, families, city commuters, fleet- and car-sharing operators, public transportation companies, and even property developers with innovative package solutions. Investors, on the other hand, can get early exposure in a 100-per-cent EV company that is street certified for European roads and operates under the highest standards of environmental, social and corporate governance. Time to market is of essence in the EV industry. The public listing of Fox comes timely, as it will enable the company to attract licence partners for MIA EV and to conquer the global EV industry from the affordable to everybody price level."

Phoenix's director, Andrew Lee, stated, "We are very excited about the prospect of creating additional value for our shareholders both with a continued participation in the business mineral exploration with our properties in Nevada through a contemplated spinout, as well as the additional opportunity to participate in the fast-growing electric vehicle business through the reverse takeover of the strategically positioned Fox Automotive in Europe."

Pursuant to the contemplated transaction between the company and Fox, the company and Fox will enter into a plan of arrangement, amalgamation or similar business combination whereby:

1. Phoenix will consolidate all of its issued and outstanding share capital on a one-for-three basis, Phoenix will change its name to Fox Automotive International Corp. (or such other name as determined by Fox), and the consolidation will require approval of the shareholders of Phoenix pursuant to the policies of the TSX Venture Exchange.
2. Phoenix will spin off its mineral property interests composed of gold mineral exploration properties in the Battle Mountain mining district in Nevada by way of a plan of arrangement, amalgamation or other such transaction steps (as determined by Phoenix to be advantageous from a corporate and tax perspective, based on advice from its legal, tax and financial advisers) wherein the Phoenix properties will be transferred to a wholly owned subsidiary of Phoenix (new Phoenix) and the shareholders of Phoenix will receive common shares of New Phoenix on the basis of one common share of New Phoenix for every one postconsolidation common share of Phoenix held by the shareholders, and new Phoenix will thereby be spun out as a second reporting issuer, will have the same shareholders as Phoenix and will own the Phoenix properties, and new Phoenix intends to seek a listing on the TSX Venture Exchange as a Tier 2 mining issuer pursuant to the policies of the TSX-V, but this is not a condition of the reverse takeover (as defined herein), and there is no assurance that such listing will be completed upon completion of the RTO or at all.
3. After the spinoff, Fox will complete a reverse takeover of Phoenix by way of a plan of arrangement, amalgamation or similar business combination whereby Phoenix will acquire all of the issued and outstanding share capital of Fox in exchange for common shares of Phoenix on the basis of 300 postconsolidation common shares of Phoenix for every one Fox share, representing an aggregate of 37.5 million postconsolidation common shares of Phoenix issuable to the shareholders of Fox in connection with the transaction (including postconsolidation common shares of Phoenix reserved for issuance to holders of outstanding options or warrants of Fox). Upon completion of the transaction, Phoenix will become the resulting issuer of the RTO, and Fox will become a wholly owned subsidiary of the resulting issuer.

In connection with the transaction and subject to approval of the TSX-V, Phoenix will, together with Fox, complete a concurrent equity financing of a minimum of $3-million to a maximum of $9-million at a price of $1.78 per postconsolidation common share of Phoenix, as described herein.

The completion of the transaction and the spinoff is subject to a number of conditions, including, but not limited to: (i) the Consolidation of all of the company's outstanding common shares; (ii) the company and Fox negotiating a definitive agreement in respect of the transaction; (iii) the company securing financing through the debt settlement (previously announced on March 22, 2019) and the private placement (described herein) so that the company will have sufficient working capital for the parties under transaction and under the policies of the TSX Venture Exchange; (iv) the company securing other financing, including the concurrent financing, to satisfy other requirements of the TSX-V for the resulting issuer; (v) approval of the shareholders of the company; and (vi) approval of the TSX-V.

The final structure of the transaction and the spinoff will be determined by the parties following receipt of tax, corporate and securities law advice. Upon the closing of the transaction, it is expected that shareholders of the company (assuming completion of the debt settlement announced on March 22, 2019, completion of the maximum private placement and completion of the minimum concurrent financing) will hold 17.30 per cent of the common shares of the resulting issuer, and current shareholders of Fox will hold 79.15 per cent of the resulting issuer shares (on a non-diluted basis). The consideration shares held by the directors, officers and insiders of Fox will be subject to escrow requirements pursuant to the policies of the TSX-V.

Private placement of Phoenix

In addition and prior to the transaction described herein, the company also wishes to announce that, subject to approval of the TSX-V, it intends to complete a non-brokered private placement of common shares of the company for gross proceeds of up to $1.05-million at a price of 15 cents per share. The net proceeds of the private placement will be used for working capital and general corporate expenses of Phoenix.

In connection with the private placement, the company may pay a finder's fee of up to a 5-per-cent cash commission on the sale of shares to accredited investors introduced by eligible finders in accordance with applicable securities laws. All shares issued pursuant to the private placement are subject to a four-month hold period and regulatory approval. The private placement is independent of and not conditional upon completion of the transaction. The transaction remains subject to a number of conditions outlined herein, and is subject to approval of the company's shareholders and the TSX-V. There is no assurance that the transaction will be completed, and the subscribers under the private placement may acquire shares without the benefit of subsequent completion of the transaction.

Concurrent financing

As a condition to completion of the transaction and the spinoff, the parties will complete the concurrent financing by way of a private placement offering of subscription receipts of a wholly owned subsidiary of Fox (Fox Sub) at a price of $1.78 per subscription receipt for gross minimum proceeds of a minimum of $3-million to a maximum of $9-million. Each subscription receipt will be automatically exchanged, without payment of any additional consideration and subject to adjustment, for one common share of Fox Sub upon satisfaction of the escrow release conditions (as defined herein). Concurrent with the completion of the RTO, Fox Sub will amalgamate with a new wholly owned subsidiary of Phoenix (Phoenix Sub), and the SR shares will be exchanged for like postconsolidation common shares of Phoenix on a one-for-one basis.

One-half of the net proceeds of the concurrent financing will be released to Fox for use toward the costs of relocating and setting up the MIA production line in Hungary, working capital, transaction costs, and general and administrative costs, and the remaining half of the net proceeds of the concurrent financing will be placed in escrow with an escrow agent on behalf of the purchasers of the subscription receipts and will be released to Fox on satisfaction of certain escrow release conditions, which will include the completion of the transaction on or before Sept. 30, 2019. Should the conditions not be satisfied prior to the termination time, the escrowed proceeds will be returned to the subscribers, and the released proceeds will be used to acquire shares in the capital of Fox directly at a price equivalent to the effective vend-in price under the RTO.

In connection with the concurrent financing, the company may pay finders' fees of up to a 5-per-cent cash commission on the sale of subscription receipts to accredited investors introduced by eligible finders in accordance with applicable securities laws.

Board and management changes

Following completion of the transaction, the resulting issuer's board of directors will be reconstituted and is expected to be composed of five directors, including four nominees of Fox and one nominee of Phoenix. Details of the constitution of the new board and management of the resulting issuer and any additional information required pursuant to the policies of the TSX-V will be announced or disclosed in due course, in accordance with the policies of the TSX-V.

Upon completion of the spinoff, the board of directors and management of new Phoenix will be substantially the same as currently for Phoenix. Details of the constitution of the new board and management of new Phoenix and any additional information required pursuant to the policies of the TSX-V will be announced or disclosed in due course, in accordance with the policies of the TSX-V.

About Fox Automotive Switzerland AG

Fox is a company incorporated under the laws of Switzerland. Fox is the owner of all the IP (intellectual property), patents and trademarks of the MIA electric vehicle brand. It has a full-fledged assembly line, which will be capable of producing 12,000 EV cars per year as street certified cars for the European market by approximately December, 2019. Fox continues to advance its electric vehicle technology to increase mileage per charge to develop affordable mobility options in the electric vehicle space.

About Phoenix Gold Resources Corp.

Phoenix Gold Resources is a mineral exploration and development company. The business activity of the company includes the acquisition and exploration of the gold mineral rights located in Battle Mountain, Nev., the United States. It currently holds interests in the Plumas property, which consists of two patented lode mining claims with extra lateral rights covering an area of 40 acres, as well as one patented mill site claim consisting of 8.5 acres; and the Eldorado property comprising one patented lode mining claim covering an area of 20 acres, located in Battle Mountain, Lander county, Nevada. The company is based in Vancouver, Canada.

TSX-V matters and trading halt

The proposed transaction will result in a reverse takeover and constitute of change of business of Phoenix pursuant to the policies of the TSX-V. Sponsorship of a reverse takeover may be required by the TSX-V unless exemption from the sponsorship requirement is available. The company will review the TSX-V's sponsorship requirements and exemptions, and may seek an exemption from the sponsorship requirements pursuant to the policies of the TSX-V. There is no assurance that the company will qualify for or otherwise obtain an exemption from the sponsorship requirements.

Trading in the company's common shares is currently halted on the TSX-V, in accordance with TSX-V policies, following entering into of the letter of intent. Trading will remain halted until the documentation required by the TSX-V for the transaction can be provided to the TSX-V, the TSX-V provides approval for the transaction and the transaction is completed. The completion of the transaction is subject to the approval of the TSX-V.

General

Completion of the transaction is subject to a number of conditions, including, but not limited to: TSX-V acceptance and, if applicable, disinterested shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Phoenix should be considered highly speculative.

We seek Safe Harbor.