Maverick Springs Property

The Maverick Springs Project

Element79 Gold's flagship property, the Maverick Springs Project, consists of approximately 4,800 acres across 247 unpatented claims that straddle the border of Elko County and White Pine County, proximate to the Carlin Trend, a belt of gold deposits approximately 5 miles wide and 40 miles long that is one of the world's richest gold mining districts, having produced more gold than any other mining district in the US.(1) The Maverick Springs Project is located just 30 kilometers northeast of Kinross's Bald Mountain Mine with measured and indicated resources (inclusive of proven and probable reserves) of 4.5 million ounces grading 0.52 g/t gold.(2)

The Carlin Trend hosts Nevada Gold's Carlin Mine (a combination of Newmont's Carlin Mine and Barrick's Goldstrike Mine), the world's second largest gold mine, which reported 1.665 million ounces of gold produced in 2020.(1) Through 2019, the Carlin Trend has produced over 92.5 million ounces of gold since the original Carlin Mine went into production in 1965(3), and between 1987 and the end of 2018, Barrick produced over 44 million ounces of gold from Goldstrike Mine alone.(4)

"...through the pending acquisition of Maverick Springs and the Battle Mountain Portfolio, Element79 Gold is gaining access to one of the most prolific gold mining districts in the world."

-James Tworek, President and CEO of Element79 Gold

The Maverick Springs Project hosts a historic gold equivalent resource of 1.7 million ounces (indicated) and 1.9 million ounces (inferred) with cutoff grade of 34.3 g/t silver equivalent, calculated using circa 2004 values of $327 USD per ounce of gold and $4.77 USD per ounce of silver.(5) Element79 Gold is not treating this historic estimate as current mineral resources and a qualified person has not reviewed the work to define the quality of work associated with this historic estimate.

class Mtons Ag g/t Ag Moz Au g/t Au Moz Ag Eq g/t Ag Eq Moz Au Eq g/t Au Eq Moz Spot Ag Eq g/t* Spot Ag Eq Moz* Spot Au Eq g/t* Spot Au Eq Moz*
Indicated 69.63 34.3 69.6 0.34 0.70 61.7 125.3 0.84 1.71 60.0 121.9 0.80 1.62
Inferred 85.55 34.3 85.6 0.27 0.68 51.4 128.3 0.78 1.93 54.9 136.9 0.73 1.83

Maverick Springs 2004 Historic Resource Estimate (5)

*Spot Ag Eq and Au Eq is calculated for comparison only, using recent prices of $US1,800/oz gold and $US24/oz silver

Maverick Springs is a silver-rich sediment/carbonate hosted or Carlin-type deposit, which are among the largest hydrothermal gold deposits in the world.(6) Gold production in Nevada is dominated by Carlin-type deposits, similar to Maverick Springs. Maverick Springs is a blind deposit comprising a 30-120 meter thick, flat-lying zone centered on an anticlinal structure with oxidation pervasive to 120 meters and intermittent to 270 meters.(5,7) The claims at Maverick Springs were first staked in 1986, with several exploration programs conducted from 1987 to 2004, including a total of 195 drill holes totaling 47,000 metres.(5,8)

The Maverick Springs Project is accessible year-round via gravel road, with a network of drill roads spread throughout its claims. Nearby electrical power can be sourced from the eastern Nevada grid system to the northwest.

Under the terms of the Securities Exchange Agreement between Element79 Gold and 1316524 B.C. Ltd. ("Goldco"), Element79 Gold has agreed to acquire, subject to regulatory approval, all of the issued and outstanding shares of Goldco in exchange for a $300,000 cash payment, and 2,525,000 common shares of Element79 Gold. The Securities Exchange Agreement contains customary representations, warranties, covenants and closing conditions applicable to a transaction of this nature. Element79 expects to complete the acquisition of Goldco on or around November 30, 2021.

Goldco had previously entered into an Asset Purchase Agreement with Clover Nevada LLC, a wholly-owned subsidiary of Waterton Precious Metals Fund II Cayman, LP and Maverick Springs Mining Company, LLC (collectively, the "Vendors") to acquire 100% interest in the Maverick Springs Project and the Battle Mountain Projects. Pursuant to the Asset Purchase Agreement, the Vendors will retain a $500,000 deposit previously advanced by Goldco and Element79 Gold, which will assume all obligations under the Asset Purchase Agreement upon completion of its acquisition of Goldco, will make an additional $1,500,000 cash payment as directed by the Vendors. Element79 Gold will also issue such number of shares as is required to result in the Vendors holding a 9.9% equity interest in Element79 Gold on a basic, non-diluted, basis immediately following the issuance of such shares, subject to a maximum of $6,000,000 worth of shares being issued. Element79 Gold must also create and issue a contingent value right (the "CVR") to Waterton Nevada Splitter, LLC ("Splitter LLC"), a subsidiary of Waterton Precious Metals Fund II Cayman, LP. Pursuant to the CVR, Splitter LLC will be entitled to receive a cash payment of $2,000,000 payable on the earlier of the occurrence of commercial production and the date that is 12 months following the closing of the acquisition of Maverick Springs and the Battle Mountain Portfolio. Splitter LLC will also be entitled to receive a second payment, in cash or common shares of Element79 Gold, on the date that is 12 months following the closing of the acquisition of Maverick Springs and the Battle Mountain Portfolio. The amount of the second payment will be equal to the shortfall (if any) between $6,000,000 and the value of the common shares of Element79 Gold issued at closing pursuant to the Asset Purchase Agreement. Splitter LLC will be granted a security interest in Maverick Springs and the Battle Mountain Portfolio, which will be released upon completion of the payments under the CVR. Splitter LLC will also enter into a voting support and lock-up agreement pursuant to which it will agree to: (i) vote all shares of Element79 Gold it holds in accordance with managements recommendations; (ii) retain 50% of the common shares of Element79 Gold issued to it pursuant to the Asset Purchase Agreement for at least six months after closing and the remaining 50% for at least twelve months after closing; and (iii) grant Element79 Gold a right of first offer to in relation to the sale of any common shares of Element79 Gold held by Splitter LLC.

The Maverick Springs Project possesses a total net smelter return royalty ("NSR") of 7.4%, including 1.5% payable to Maverix Metals Inc. Element79 Gold hopes to renegotiate the various NSRs in order to create an economically viable path forward to the benefit of all parties.

Sources

Element79 Gold makes no warranty as to the completeness, accuracy, verifiability, or suitableness of any of the information contained on the following third-party links and expressly undertakes no obligation to update the following links.

(1) https://www.kitco.com/news/2021-04-05/Top-10-biggest-gold-mines-in-the-United-States-report.html

(2) Kinross Bald Mountain Mine 2020 Mineral Reserves and Resources https://www.kinross.com/operations/default.aspx#reserves

(3) Special Publication MI-2019: The Nevada Mineral Industry 2019 - Nevada Bureau of Mines and Geology, p. 3 https://pdacnv.com/wp-content/uploads/2021/03/2019_MI_Report_Draft_21621.pdf

(4) Barrick Gold Corporation, March 22, 2019, NI 43-101 Technical Report on the Goldstrike Mine, Eureka and Elko Counties, State of Nevada, USA, available on SEDAR

(5) Technical Report Maverick Springs Project Nevada, USA prepared for Vista Gold Corp. and Silver Standard Resources, April 13, 2004, available on SEDAR

(6) Evidence for a magmatic origin for Carlin-type gold deposits: isotopic composition of sulfur in the Betze-Post-Screamer Deposit, Nevada, USA - Stephen E. Kesler, Lee C. Riciputi, Zaojun Ye, May 28, 2005 https://deepblue.lib.umich.edu/bitstream/handle/2027.42/46046/126_2005_Article_477.pdf;jsessionid=34000A663A86E4DA526E84CEB03811AD?sequence=1

(7) Vista Gold Corp. News Release 2004 https://www.vistagold.com/news/archive/news-2004/578-vista-gold-corp-announces-updated-resource-estimate-for-the-maverick-springs-project-in-nevada

(8) Vista Gold Corp., December 16, 2002, Resource Estimate Report for the Maverick Springs Project Nevada, USA, available on SEDAR

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