Emgold to Sell its East-West Property, QC to O3 Mining Inc.

Rhea-AI Summary

Emgold Mining Corporation has signed a Binding Letter Agreement to sell its East-West Property in Quebec to O3 Mining Inc. for C$750,000 in cash and 325,000 common shares. Additionally, Emgold will receive a 1% net smelter returns royalty, subject to a buy-back right by O3. The transaction is contingent upon due diligence and regulatory approvals, to be finalized by March 31, 2022. The East-West Property is strategically located adjacent to O3's Marban Property, which is undergoing a Pre-Feasibility Study, offering potential future value for Emgold.

Positive

• Emgold will receive C$750,000 cash and 325,000 shares from O3 Mining, enhancing liquidity.
• The sale allows Emgold to monetize a property with limited development potential.
• The 1% net smelter returns royalty could provide future revenue depending on O3's exploration success.

Negative

• None.

VANCOUVER, BC / ACCESSWIRE / March 15, 2022 / Emgold Mining Corporation (TSXV:EMR), (OTC PINK:EGMCF), (FRA:EMLM), (BSE:EMLM) ("Emgold" or the "Company") announces it has signed a Binding Letter Agreement (the "LOI") to sell 100% of its interests, rights, and title to its East-West Property, Quebec to O3 Mining Inc. ("O3") (TSXV: OIII). As consideration for the acquisition of Emgold's interest in the East West Property (the "Transaction"), O3 will:

1. pay to Emgold cash consideration of C$750,000 at closing;
2. issue to Emgold an aggregate of 325,000 common shares in the capital of O3 (the "Share Consideration") at closing; and
3. grant to Emgold a 1% net smelter returns ("NSR") royalty over the East West Property in favour of Emgold (the "Royalty"), which shall be subject to a buy-back right in favour of O3 (the "Buy-Back Right"), whereby O3 may elect to buy back the Royalty for: (i) C$500,000 if the Buy-Back Right is exercised within the first three years from the date of the Definitive Agreement (as defined herein); (b) C$1,000,000 if the Buy-Back Right is exercised within the fourth and fifth years from the date of the Definitive Agreement.

For greater certainty, subsequent to the fifth anniversary date of a Definitive Agreement for the Transaction, the Royalty will no longer be subject to the Buy-Back Right. The Transaction is subject to due diligence by O3, completion of a Definitive Agreement as soon as possible, but no later than March 31, 2022, and any necessary regulatory approvals.

The East-West Property consists of 7 mining claims covering an area of 184 hectares, located in the Val d'Or Mining Camp adjacent to and east of O3 Marban Property. O3 is in the process of completing a Pre-Feasibility Study on the Marban Property with the goal of bringing the property into production.

David Watkinson, President and CEO of Emgold, stated, "This transaction benefits both O3 and Emgold. The East-West Property sits to the southeast of O3 Mining's current open-pit resource on their Marban Property. They are in the best position to advance exploration at East-West and potentially develop resources on the property. Due to the limited size of the East-West Property, the potential to develop it as stand-alone project is limited and as such, management believes monetizing this asset at this time, with the upside potential of the O3 commons shares, along with the potential value of the royalty in the future represents a significant positive outcome for Emgold and fits our acquisition and divestiture ("A&D") business model.

About Emgold

Emgold is a gold and base metal exploration company focused on Nevada and Quebec. The Company's strategy is to look for quality acquisitions, add value to these assets through exploration, and monetize them through sale, joint ventures, option, royalty, and other transactions to create value for our shareholders (acquisition and divestiture (A&D) business model).

In Nevada, Emgold's Golden Arrow Property, the core asset of the Company, is an advanced stage gold and silver property with a well-defined measured and indicated resource. New York Canyon is a base metal property subject to an Earn-in with Option to Joint Venture Agreement with Kennecott Exploration, a subsidiary of Rio Tinto Plc (NYSE:RIO). The Mindora Property is a gold, silver, and base metal property located twelve miles from New York Canyon. Buckskin Rawhide East is a gold and silver property leased to Rawhide Mining LLC, operators of the adjacent Rawhide Mine.

In Quebec, the Casa South Property, is an early-stage gold property adjacent to Hecla Mining Corporation's (NYSE:HL) operating Casa Berardi Mine. The East-West Property is a gold property adjacent to and on strike with Wesdome Gold Mine Ltd.'s (TSX:WDO) Kiena Complex and O3 Mining Corporation's (TSX:OIII) Malarctic Property (Marban Project). The Trecesson Property is located about 50 km north of the Val d'Or mining camp. Emgold also has a 1% NSR in the Troilus North Property, part of the Troilus Mine Property being explored by Troilus Gold Corporation (TSX:TLG).

Note that the location of Emgold's properties adjacent to producing or past producing mines does not guarantee exploration success at Emgold's properties or that mineral resources or reserves will be delineated. For more information on the Company, investors should review the Company's website at www.emgold.com or view the Company's filings available at www.sedar.com.

On behalf of the Board of Directors
David G. Watkinson, P.Eng.
President & CEO

For further information, please contact:

David G. Watkinson, P.Eng.
Tel: 530-271-0679 Ext 101
Email: info@emgold.com

Neither TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note on Forward-Looking Statements

Certain statements made and information contained herein may constitute "forward looking information" and "forward looking statements" within the meaning of applicable Canadian and United States securities legislation. These statements and information are based on facts currently available to the Company and there is no assurance that actual results will meet management's expectations. Forward-looking statements and information may be identified by such terms as "anticipates", "believes", "targets", "estimates", "plans", "expects", "may", "will", "could" or "would". Forward-looking statements and information contained herein are based on certain factors and assumptions regarding, among other things, the estimation of mineral resources and reserves, the realization of resource and reserve estimates, metal prices, taxation, the estimation, timing and amount of future exploration and development, capital and operating costs, the availability of financing, the receipt of regulatory approvals, environmental risks, title disputes and other matters. While the Company considers its assumptions to be reasonable as of the date hereof, forward-looking statements and information are not guarantees of future performance and readers should not place undue importance on such statements as actual events and results may differ materially from those described herein. The Company does not undertake to update any forward-looking statements or information except as may be required by applicable securities laws. The Company's Canadian public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including any technical reports filed with respect to the Company's mineral properties.

SOURCE: Emgold Mining Corporation

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FAQ

What is the recent transaction involving EGMCF?

Emgold Mining Corporation signed an agreement to sell its East-West Property in Quebec to O3 Mining Inc. for C$750,000 and shares.

How much will Emgold receive from the sale to O3 Mining?

Emgold will receive C$750,000 in cash and 325,000 common shares from O3 Mining.

What does the agreement include regarding royalties?

The agreement includes a 1% net smelter returns royalty for Emgold, subject to a buy-back right by O3.

When is the transaction expected to be finalized?

The transaction is expected to be finalized by March 31, 2022, pending due diligence and regulatory approvals.