Bluenose Gold Corp.  (TSX-V – BN.H)  announces, that it has entered into a letter of intent dated October 4, 2019 with Gran Colombia Gold Corp. (TSX: GCM) (OTCQX: TPRFF) in respect of the proposed acquisition by Bluenose of certain mining assets at Gran Colombia’s Marmato Project located in the Department of Caldas, Colombia.

The Mining Assets principally comprise the existing producing underground gold mine, including the right to mine in the lower portion of the Echandia license area, the existing 1200 tonnes per day processing plant and the area encompassing the Deeps mineralization, all located within the mining license area referred to as Zona Baja. Gran Colombia has reported that the existing underground mine at Marmato produced 24,951 ounces of gold in 2018 and is on track to produce between 24,000 and 26,000 ounces of gold in 2019. The Mining Assets have excellent infrastructure, being located by the Pan American Highway with access to Medellin to the north and Manizales to the south, and have access to the national electricity grid which runs near the property. Gran Colombia is currently working with SRK Consulting (US) Inc. to complete a technical report for the Mining Assets pursuant to National Instrument 43‐101 – Standards of Disclosure for Mineral Project. The Technical Report, expected to be completed by the end of November and filed on the Company’s SEDAR site, will include an updated Mineral Resource estimate for the Mining Assets. Gran Colombia will retain its existing ownership of the mining licenses in the areas known as Zona Alta and Echandia.  Gran Colombia and Bluenose are not related parties.

Terms of the Transaction

Prior to the completion of the Transaction, Bluenose will consolidate its outstanding Common Shares on a one for ten basis.

It is currently anticipated that Bluenose will acquire the Mining Assets by way of purchase from Gran Colombia of all of the issued and outstanding shares of Gran Colombia’s wholly-owned subsidiary, Medoro Resources Colombia Inc. Marmato Panama holds all of the issued and outstanding shares of Gran Colombia Gold Marmato S.A.S. which, in turn, holds all of the Mining Assets. The Mining Assets will be acquired by Bluenose for C$57,500,000 which will be satisfied by the issuance by Bluenose to Gran Colombia of an aggregate of 28,750,000 Bluenose Common Shares (on a post-Consolidation basis) having a deemed price of C$2.00 per post consolidation Bluenose Common Share.

Prior to, or concurrent with, the completion of the Transaction: (i) Gran Colombia will purchase from Bluenose, on a private placement basis, 2,500,000 units of Bluenose, at a price of C$2.00 per Unit, for aggregate gross proceeds to Bluenose of C$5,000,000; and Bluenose anticipates that it will complete a brokered private placement of a minimum of 5,000,000 Units and a maximum of 7,500,000 Units, at a price of C$2.00 per Unit, for aggregate gross proceeds to Bluenose of between C$10,000,000 and C$15,000,000. No agent has yet been engaged with respect to the Brokered Private Placement.

The Units to be issued pursuant to the Private Placement and Brokered Private Placement, respectively, will each be comprised of one Bluenose post-Consolidation Common Share and one share purchase warrant, with each Warrant being exercisable to acquire one additional Bluenose post-Consolidation Common Share at a price of C$3.00 for a period of five years from the closing of the Private Placement or Brokered Private Placement, as applicable.

Pursuant to an agreement between Fiore Management & Advisory Corp. and Bluenose, Fiore shall be entitled to 100,000 Bluenose post-Consolidation Common Shares upon the completion of the Transaction.

The following table outlines the anticipated share capital of Bluenose on a post-Consolidation basis following the completion of the Private Placement, Brokered Private Placement and Transaction.

The Company and Gran Colombia intend to negotiate and enter into a definitive agreement setting forth the detailed terms and conditions of the Transaction. The closing of the Transaction is subject to the receipt of all necessary regulatory and third-party consents, authorizations and approvals, including, without limitation, the approval of the listing of the Bluenose Common Shares issued in connection with the Transaction on the TSX-V which will be subject to Bluenose satisfying the TSX-V’s minimum listing conditions for a mining issuer.

The closing of the Transaction will also be subject to the following conditions, amongst others:

About the Resulting Issuer

Pursuant to the LOI, the initial members of the board of directors of Bluenose following the completion of the Transaction shall be selected by Gran Colombia and set forth in the Definitive Agreement.  If a meeting of the shareholders of Bluenose is required for the purposes of obtaining Bluenose Shareholder Approval, the members of the Resulting Issuer Board will be nominated and elected by the shareholders of Bluenose at the Bluenose Shareholder Meeting (subject to, and contingent upon, the completion of the Transaction). The current directors and officers of Bluenose shall resign at or prior to the completion of the Transaction.

The Resulting Issuer Board will be fixed at five directors as at the completion of the Transaction, or as soon as practicable thereafter. Pursuant to the LOI, Gran Colombia shall be provided a continuing right to nominate a minimum of: (i) two (2) directors to the Resulting Issuer Board, so long as it holds greater than 20% of the outstanding Bluenose Common Shares, or (ii) one (1) director to the Resulting Issuer Board, so long as it holds greater than 10% of the outstanding Bluenose Common Shares.

The proposed Resulting Issuer Board is expected to include the following members and Gran Colombia intends to appoint the following individuals as officers of the resulting entity upon completion of the Transaction; the two additional nominees to the Resulting Issuer Board are being recruited and will be disclosed when nominated:

Upon completion of the Transaction, the Resulting Issuer will continue to operate within mining and natural resources industry.

The Transaction does not need to be approved by Bluenose shareholders under TSX-V Policy 5.2, as the Company is inactive and in good standing, the Transaction is not a “Related Party Transaction”, and no other circumstances exist which may compromise the independence of the Company or other interested parties.

The Company intends to seek a waiver from the TSX-V to exempt the Transaction from the sponsorship requirements of TSX-V Policy 2.2.

About Gran Colombia Gold Corp.

Gran Colombia is a Canadian-based mid-tier gold producer with its primary focus in Colombia where it is currently the largest underground gold and silver producer with several mines in operation at its Segovia and Marmato Operations. Gran Colombia is continuing to focus on exploration, expansion and modernization activities at its high-grade Segovia Operations and, through the Transaction described in this press release, progressing toward a major expansion and modernization of its underground mining operations at the Marmato Project.