Mr. Akiba Leisman reports

MAKO MINING ANNOUNCES ITS INTENT TO ACQUIRE THE MOSS MINE IN ARIZONA EXPANDING ITS OPERATIONS IN THE AMERICAS

Mako Mining Corp. has entered into of a non-binding letter of intent to acquire 100 per cent of the issued and outstanding common shares of EG Acquisition LLC, a recently created private corporation controlled by Mako's controlling shareholder, Wexford Capital LP, established solely to acquire the Moss gold mine located in the historic Oatman district in Arizona. It is anticipated that EGA will complete the acquisition of the Moss gold mine on Dec. 31, 2024, through its acquisition of 100 per cent of the common shares of Golden Vertex Corp. (GVC), which holds direct ownership of the Moss gold mine. Each of EGA and GVC will become wholly owned subsidiaries of Mako as a result of the proposed transaction. The purchase price for the proposed transaction is expected to be in the range of $4.9-million (U.S.) up to $6.4-million (U.S.) if certain royalties are extinguished, all payable in cash. The proposed transaction is expected to close by February, 2025.

EGA's acquisition of GVC is pursuant to a court-approved sale process under the Companies' Creditors Arrangement Act and Chapter 15 of Title 11 of the United States Code, the terms of which included, among other things, the elimination of over $60-million (U.S.) of liabilities associated with the Moss mine owed by GVC and its former parent.

Prior to the bankruptcy process, there were several royalties and a silver stream on the Moss mine that entitled the silver stream holder to 100 per cent of the payable silver over the life of the mine. The silver stream was eliminated upon EGA's acquisition of GVC. The two remaining material royalties (net smelter return royalties of 3 per cent and 1 per cent, respectively) are being disputed by GVC and its former parent in Arizona through the Chapter 15 bankruptcy process. If these royalties are vested away, Mako, through its then wholly owned subsidiary, EGA, has agreed to pay up to an additional $1.5-million (U.S.) to the creditors. Mako expects the status of these royalties to be determined in the first half of 2025.

The proposed transaction will allow Mako to add a producing asset located in a top-tier jurisdiction financed solely out of cash flow generated from the last quarter of Mako's current mining operations. The Moss mine has been producing gold throughout the bankruptcy process through its beneficiation facilities. Mining was temporarily suspended at the beginning of the bankruptcy process and Mako plans to restart mining operations upon completion of the proposed transaction once it has had an opportunity to optimize the mine plan and debottleneck the crushing plant. This is expected to be achieved within a few months of closing of the proposed transaction. Mako currently operates the high-grade San Albino mine in northern Nicaragua and owns the Eagle Mountain project in Guyana. Over the last quarter, even after an extensive drill program at both properties, the cash and gold in sales receivables balance in Mako has increased by over $6-million (U.S.) to nearly $13-million (U.S.) at year-end.

In connection with the proposed transaction, Trisura Guarantee Insurance Company has prearranged the terms and conditions of a bonding facility for Mako in connection with the completion of the proposed transaction, which provides that Trisura will release approximately $1.5-million (U.S.) of the $3-million (U.S.) currently held as collateral for various environmental reclamation bonds at the Moss mine, the result of which effectively reduces Mako's net cash acquisition cost. In connection with the bonding facility, Mako has agreed to execute an indemnity in favour Trisura having a value of approximately $12-million (U.S.), which shall terminate in the event Mako does not complete the proposed transaction.

For more details about the proposed transaction, see below.

The Moss gold mine is an open-pit heap leach operation located in the historic Oatman district in western Arizona. The operation is currently at limited capacity during the bankruptcy process while heap leaching continues to operate while producing minor amounts of gold and silver. All operating permits are in good standing.

Akiba Leisman, chief executive officer of Mako, commented: "The acquisition of the producing Moss gold mine in Arizona, after the elimination of over $60-million (U.S.) of existing liabilities associated with the mine, for a base purchase price of $4.9-million (U.S.), further reduced by $1.5-million (U.S.) through the release of certain collateral, funded out of a fraction of this quarter's corporate cash generation, is a testament to the powerful platform Mako has at its disposal. Combining the company's experience in building and operating small-and-medium-scale mines in the Americas, with the bankruptcy and distressed investing expertise of the controlling shareholder, with the profitability and pipeline that exists within our current portfolio, puts Mako into a very select class of companies. The Moss mine is central to the large-scale historic Oatman mining district, and we will be looking to expand our opportunities, especially with the new mining-friendly United States administration about to take office next month."

Proposed transaction terms

Under the terms of the non-binding letter of intent, it is proposed that Mako will acquire all of the issued and outstanding common shares of EGA for a total consideration value of $4.9-million (U.S.). Pursuant to the terms of the bankruptcy process, subject to the extinguishment of the 1-per-cent net smelter return royalty at the Moss mine held by affiliates of Sandstorm Gold Ltd., EGA will pay the former parent of GVC an additional $500,000 (U.S.), and, subject to the extinguishment of the 3-per-cent net smelter return royalty at the Moss mine held by Patriot Gold Corp., EGA will pay the former parent of GVC an additional $1-million (U.S.) for total consideration of up to $6.4-million (U.S.) payable in cash. Mako is acquiring the shares of EGA at the approximate cost basis of EGA's acquisition of GVC. If the proposed transaction is completed, Mako has agreed to reimburse the owners of EGA for any operational costs from Dec. 31, 2024. Unless the proposed transaction is cancelled, all gold and silver produced until the proposed transaction is complete, will be to the credit of Mako. EGA has agreed to deal exclusively and in good faith with Mako regarding the proposed transaction until March 31, 2025.

Definitive agreement and voting and support agreements

Following execution of this letter, the parties will, in good faith, negotiate a definitive agreement to effect the transaction incorporating terms and provisions as are customary for transactions of this nature as well as customary voting support and lock-up agreements with the senior officers, directors and any significant shareholder of EGA with Mako on terms satisfactory to Mako, pursuant to which, among other things, they will agree to vote the EGA shares that they own or over which they have control or direction in favour of the transaction and against any other transaction that would prevent, delay or interfere in any way with the transaction, not to solicit other transactions and otherwise support the transaction, and not sell, dispose of or otherwise encumber any of their EGA shares (including any EGA shares under outstanding options, warrants or other convertible securities). Such voting and support agreement shall be terminable by the shareholder in the event that the definitive agreement between Mako and EGA is validly terminated in accordance with its terms.

In the definitive agreement, each of Mako and EGA will make such representations and warranties as are customary in transactions of this nature, including, without limitation, representations as to the power, authority and standing of such parties to engage in the proposed transaction; the absence of material pending or threatened litigation and liabilities (contingent or otherwise) affecting the business of GVC or Mako in relation to the proposed transaction; the absence of any encumbrances of any kind and nature relating to the outstanding shares of EGA; the absence of any material default by the parties under any material contracts; and will also provide covenants and restrictions customary for transactions of this nature, including, without limitation, on the conduct of business by EGA during the period preceding the completion of the proposed transaction.

The obligations of the parties to complete the proposed transaction in accordance with the definitive agreement will be subject to specified conditions precedent, including, but not limited to, the completion of satisfactory due diligence by Mako, the formal approval of the definitive agreement and all ancillary matters related to the proposed transaction by Mako's board of directors upon the recommendation of the special committee and the approval of the TSX Venture Exchange. No approval by Mako's shareholders is expected to be required for the proposed transaction. The proposed transaction is expected to close by February, 2025.

Qualified persons

John Rust, SME, is a qualified person within the meaning of National Instrument 43-101, Standards of Disclosure for Mineral Projects, and has reviewed and approved the scientific and technical information in this news release on behalf of Mako. Mr. Rust has verified the data disclosed in this news release based on a review of the source noted and no limitations were imposed on his verifications process.

Related party transaction and formation of special committee

As EGA is a wholly owned subsidiary of Mako's controlling shareholder, Wexford, the proposed transaction is a related party transaction for Mako within the meaning of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. As a result, the board of directors of Mako has appointed a special committee to assist in the evaluation, negotiation and supervision of all matters relating to the proposed transaction and to consider and make recommendations to the board. The proposed transaction will not have any impact on the percentage of securities of Mako beneficially owned or controlled by Wexford Capital.

Pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61-101, Mako is exempt from obtaining a formal valuation and minority approval of its shareholders for the proposed transaction on the basis that the fair market value of the proposed transaction is below 25 per cent of Mako's market capitalization as determined in accordance with MI 61-101.

About Mako Mining Corp.

Mako Mining is a publicly listed gold mining, development and exploration company. The company operates the high-grade San Albino gold mine in Nueva Segovia, Nicaragua, which ranks as one of the highest-grade open-pit gold mines globally. Mako's primary objective is to operate San Albino profitably and finance exploration of prospective targets on its district-scale land package. The company also owns 100 per cent of the Eagle Mountain gold project in Guyana, South America.

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