Concurrent $11.5 Million Private Placement Equity Financing and Proposed Debt Restructuring

NexGold Mining Corp. (TSX-V: NEXG) (OTCQX: NXGCF) and Signal Gold Inc. (TSX: SGNL) (OTCQB: SGNLF) are pleased to announce that they have entered into a definitive arrangement agreement dated October 9, 2024 to combine the two companies and create a top near-term gold developer advancing NexGold’s Goliath Gold Complex Project in Northern Ontario and Signal’s Goldboro Gold Project in the historic Goldboro Gold District in Nova Scotia. All dollar references in this release are to Canadian dollars, unless otherwise stated.

Transaction Highlights:

• Two Canadian, near-term development projects, with Environmental Assessment Approvals in place, and a plan to attain production of over 200,000 ounces per year.
• Combined 4.7 million gold ounces of Measured and Indicated Mineral Resources and 1.3 million gold ounces of Inferred Mineral Resources between both companies*.
• Significant growth potential at both Projects, across a combined property package of more than 60,000 hectares (600 km²) with potential along strike, at depth, and through new discoveries, including recent high-grade drill results at the western extension of the Goldboro Deposit.
• Concurrent non-brokered private placement financing for up to $11.5 million with NexGold Board and Management to subscribe for up to $1.0 million in the financing. In addition, current greater than 10% NexGold shareholder, Frank Giustra, will be participating in a meaningful way.
• Elimination of single asset risk for both Signal and NexGold, as both Projects are in advanced stages of permitting, with the completion of project permits expected in 2025. The Goliath Project has Federal Environmental Assessment Approval and the Goldboro Project has Provincial Environmental Assessment Approval.
• Combined team brings complementary skills and experience required for successful development, including geology, engineering, finance and capital markets, governance and sustainability.
• Robust Financial Position – The concurrent financing, proposed debt restructuring, and available cash resources provide significant funding to advance both projects towards a construction decision while deleveraging the combined entity.
• Value Creation – Operational and administrative synergies and savings with workflow sequencing and phased development approach for the two projects have the potential to unlock significantly more value for NexGold and Signal shareholders than could be realized on a standalone basis.
• Growth and consolidation strategy – The combined company will focus on showing growth in the Goldboro and Goliath Districts through drilling while assessing further opportunities for corporate growth.
• Restructured Credit Facility with Nebari to deleverage combined entity:
  • It is proposed that Signal’s outstanding credit facility of approximately US$20.4 million with Nebari and NexGold’s US$6.0 million facility with Extract Capital will be repaid.
  • NexGold is working to arrange a new US$12 million secured credit facility with Nebari over a term of 30 months and the issuance of US$4.0 million of NexGold shares, with a one (1) year right to place.
  • The arrangement would also grant a 0.6% NSR on the Goldboro Project to Nebari for US$6 million with a 100% buy-back right at the Company’s option for the first 30 months.

*Refer to Mineral Projects Section below.

Morgan Lekstrom, President of NexGold, commented: “This will be a transformative transaction that combines two near-term buildable projects in Canada on a potential path to a production profile of over 200,000 ounces per year. This reflects the execution of NexGold’s strategy of targeting high-value gold projects with potential production of over 100,000 ounces and a capital expenditure of under $400 million. I am proud to have led this acquisition and worked closely with Kevin, Orin, Jeremy, and the entire team to execute on this vision of combining these two companies. With the Transaction, we have significantly de-risked the combined company as it will no longer be a single asset company but rather a company with a pipeline of low-cost, low risk, high return mine development and expansion projects in Canada. Not only do we have a path to construction on both Projects when project financing is obtained, but both historic gold districts have demonstrated tremendous expandability and upside potential that could contribute to larger, longer-life Projects.”

Kevin Bullock, President and CEO of Signal, commented: “I believe that the Transaction brings together two cornerstone Canadian gold projects and presents an exciting opportunity to create a leading gold development company in Canada during a time of increasing gold prices. The combined company will be led by an experienced and skilled leadership team and will benefit from a strong balance sheet. I am excited to work towards unlocking significant value for the shareholders of NexGold after the completion of this transformative business combination.”

Jeremy Wyeth, CEO of NexGold, commented: “The combination of the Goliath and Goldboro Projects and the experience and skills of the combined team positions the Company uniquely with two of the next few gold mines to be built in Canada, as both projects are already significantly advanced in permitting. The synergies in the teams allows the new NexGold executive to specifically focus on core areas of expertise and competence as we progress towards a construction decision on one of our assets and continue to advance project financing discussions. We are well-positioned to become the next mid-tier gold producer in Canada.”

Board of Directors and Senior Management of Combined Company

The combined company’s board of directors will be led by Jim Gowans as Chair and will comprise six (6) board members nominated by NexGold and two (2) board members nominated by Signal. Reporting to the board of directors, the combined company will be managed by Kevin Bullock as President and Chief Executive Officer & Director, Jeremy Wyeth as Chief Operating Officer, and Orin Baranowsky as Chief Financial Officer.

Mr. Bullock is a registered Professional Mining Engineer and has been President and Chief Executive Officer of Signal since 2019 and is currently a director of B2Gold. Mr. Bullock was previously President and CEO of Volta Resources Inc. since its inception in 2002 and through to the ultimate sale of the company to B2Gold in 2013. Mr. Bullock has over 30 years of senior mining experience in exploration, mine development, mine operations and capital markets. Throughout his career, Mr. Bullock has been involved in projects from inception through exploration to development and production. Mr. Bullock has also worked for Kirkland Lake Gold and Iamgold Corporation.

Mr. Wyeth, CEO of NexGold and President and Chief Executive Officer of Treasury Metals since December 2020, was previously Operations Director at Wood Canada Ltd. and an operational executive of De Beers, where he led the development, construction, commissioning and ramp-up of the Victor Diamond Mine in Northern Ontario. He has held various senior management positions, including with Excellon Resources and Anglo American, and served on the boards of Vector Resources Inc., DRA Americas Inc., DRA Brazil and the Ontario Mining Association and is a member of the Board of NexGold.

Mr. Baranowsky, Chief Financial Officer of NexGold and Chief Financial Officer of Treasury Metals since March 2021, has more than 25 years of finance and capital markets experience. Previously, he was the Chief Financial Officer for Blue Thunder Mining Inc. and Chief Financial Officer of Stornoway Diamond Corporation, where he was instrumental in raising more than $1 billion for the construction of the Renard Diamond Mine in northern Québec. He holds an Honours Bachelor of Business Administration degree from Wilfrid Laurier University, is a member of the Chartered Professional Accountants of Ontario and is a CFA Charterholder.

Transaction Terms

Pursuant to the Transaction, NexGold will acquire all the issued and outstanding common shares of Signal in exchange for common shares of NexGold by way of a plan of arrangement under the Business Corporations Act (Ontario). Each SGNL share will be exchanged for 0.1244 of a NEXG Share. Upon completion of the Transaction, existing NexGold and Signal shareholders will own approximately 71% and 29% of NexGold, respectively, on a fully diluted in-the-money basis (prior to the completion of the concurrent financing, which is described below).

The Transaction will be completed pursuant to a court-approved plan of arrangement under the Business Corporations Act (Ontario). The Transaction will require approval of at least: (i) 66⅔% of the votes cast by Signal shareholders; and (ii) a simple majority of the votes cast by Signal shareholders, excluding the votes cast by certain persons in accordance with Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions. In addition to shareholder and court approvals, the Transaction is subject to the approvals of the Toronto Stock Exchange and TSX Venture Exchange, the completion of the Debt Restructuring and the satisfaction of certain other closing conditions customary in transactions of this nature.

Signal stock options will be exchanged for fully vested replacement stock options exercisable to acquire NEXG Shares as adjusted to reflect the Exchange Ratio, share purchase warrants of Signal will become exercisable to purchase NEXG Shares based on the Exchange Ratio, and share units of Signal will vest for anyone not continuing with the combined company and for continuing individuals entitling them to NEXG Shares upon vesting as adjusted to reflect the Exchange Ratio.

The officers and directors of Signal, collectively holding approximately 3.1% of the Signal Shares issued and outstanding, have entered into voting support agreements pursuant to which they have agreed, among other things, to vote their Signal Shares in favour of the Transaction.

The Agreement contains customary reciprocal deal-protection provisions including non-solicitation covenants and a right to match any superior proposal as defined in the Agreement. Under certain circumstances, NexGold or Signal would be entitled to a reciprocal termination fee of C$1,750,000.

Complete details of the Transaction will be included in a management information circular to be delivered to Signal shareholders in due course. It is anticipated that the Signal shareholder meeting and closing of the Transaction will take place in December 2024.

Recommendation by the Boards of Directors and Fairness Opinion

The Arrangement Agreement has been unanimously approved by the Board of Directors of each of NexGold and Signal after consultation with their respective financial and legal advisors. The Board of Directors of Signal unanimously recommend that its shareholders vote in favour of the Transaction.

The Board of Directors of Signal has received an opinion from BMO Capital Markets stating that, as of the date of such opinion, based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Signal shareholders pursuant to the Transaction is fair, from a financial point of view, to Signal shareholders.

Concurrent Financing

In connection with the Transaction, each of Signal and NexGold will conduct a concurrent non-brokered private placement for the sale of units of Signal comprised of one common share and one-half of one warrant and units of NexGold comprised of one flow-through common share and one-half of one warrant, issued on a non-flow-thorough basis, for total gross proceeds of up to C$11,500,000. Each of Signal and NexGold will have the option to sell up to an additional 50% of the NFT Units and FT Units.

Hard Dollar Financing

The NFT Units will be issued by Signal at a price of C$0.08705 per NFT Unit, for aggregate gross proceeds of up to C$6,500,000. Each NFT Unit Warrant will entitle the holder thereof to purchase one Signal Share at a price of $0.11818 for a period of 24 months after the Closing Date (as hereinafter defined). At the effective time of the Transaction, the Signal Shares underlying the NFT Units will be exchanged pursuant to the Transaction for NEXG Shares at the Exchange Ratio, and the NFT Unit Warrants will be adjusted in accordance with their terms such that the NFT Unit Warrants will be exercisable to acquire NEXG Shares based on the Exchange Ratio.

Signal will offer up to 74,669,730 NFT Units at a price of C$0.08705 per NFT Unit, for aggregate gross proceeds of up to C$6,500,000. If the Option is fully exercised, an additional 37,334,865 NFT Units will be issued, for additional gross proceeds of C$3,250,000. The net proceeds of the Hard Dollar Financing are expected to be used by the combined company to fund the retirement of certain debt, the exploration and advancement of the Goliath Project and Goldboro Project and for working capital and general corporate purposes.

The Hard Dollar Financing is being conducted in all of the provinces and territories of Canada, and/or in jurisdictions other than Canada, including the United States, pursuant to applicable exemptions from the prospectus and/or registration requirements.

FT Financing

The FT Units will be issued by NexGold at a price of $0.80 per FT Unit for aggregate gross proceeds of up to C$5,000,000 million. If the Option is fully exercised, an additional 3,125,000 FT Units will be issued for additional gross proceeds of C$2,500,000. The FT Shares will be issued as “flow-through shares” within the meaning of the Income Tax Act (Canada).

Each FT Unit Warrants will entitle the holder thereof to purchase one NEXG Share at a price of C$1.05 for a period of 24 months following the date of issuance. Each FT Unit Warrant will be exercisable by the holder to acquire one common share of NexGold at a price of C$1.05 for a period of two years following the Closing Date.

The FT Financing is being conducted in all of the provinces and territories of Canada pursuant to applicable prospectus exemptions. The NEGX Shares to be issued in connection with the FT Financing will be subject to a statutory four-month and one day hold period from the closing date.

The securities to be offered in the Concurrent Financing have not been, and will not be, registered under the U.S. Securities Act or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

An amount equal to the gross proceeds from the issuances of the FT Shares will be used to fund advancement of NexGold’s projects. NexGold will, in a timely and prescribed manner and form, incur expenses which will: (i) constitute “Canadian exploration expenses,” and (ii) constitute “flow-through mining expenditures,” (as all such terms are defined in the Income Tax Act (Canada)), in an amount equal to the gross amount raised pursuant to the sale of FT Shares. NexGold will, in a timely and prescribed manner and form, renounce the Canadian exploration expenses (on a pro rata basis) to each subscriber with an effective date of no later than December 31, 2024, in accordance with the Income Tax Act (Canada), as applicable, all in accordance with the terms of the subscription and renunciation agreements to be entered into by NexGold and the subscribers in the FT Financing.

Completion of the Concurrent Financing is subject to TSX, TSXV and other necessary regulatory approvals, including disinterested shareholder approval of the Hard Dollar Financing by Signal shareholders. Closing of the Concurrent Financing is expected to occur two days prior to the closing of the Transaction in early December 2024 or such other date or dates as Signal and NexGold may agree in writing. Toronto Stock Exchange and shareholder approval is required for the completion of the Signal Offering.

It is anticipated that the NexGold Board and Management will subscribe for up to $1.0 million in the Concurrent Financing. In addition, current greater than 10% NexGold shareholder, Frank Giustra, will be participating in a meaningful way. By virtue of their participation, the Concurrent Financing would constitute a “related party transaction” under applicable Canadian securities laws. NexGold expects to file a material change report including details with respect to the related party transaction less than 21 days prior to the closing of the Concurrent Financing, which NexGold deems reasonable in the circumstances so as to be able to avail itself of potential financing opportunities and complete the Concurrent Financing in an expeditious manner. As the related party transaction will not exceed specified limits and will constitute a distribution of securities for cash, it is expected that neither a formal valuation nor minority shareholder approval will be required in connection with the Concurrent Financing, and that NexGold will be entitled to rely on applicable exemptions therefrom under applicable Canadian securities laws.

Debt Restructuring

NexGold has agreed to certain indicative terms with Nebari to complete a restructuring of the two entities’ respective debt facilities, which will significantly reduce the debt profile of the combined entity going forward. It is proposed that Signal’s outstanding credit facility of approximately US$20.4 million with Nebari and NexGold’s US$6.0 million facility with Extract Capital will be repaid. A new US$12.0 million facility with Nebari is contemplated that will have a 30-month term with an interest rate of 11.4%, payable monthly in arrears and secured against both the Goliath and Goldboro Projects. Existing warrants associated with the Nebari facility with Signal will be cancelled, and 3,160,602 new warrants will be issued to Nebari with an exercise price of $1.00 per NEXG Share with a term of 30 months. In addition, the arrangement contemplates the granting of a 0.6% NSR on the Goldboro Project to Nebari for US$6.0 million, which includes a 100% buy-back right for the first 30 months at the Company’s option. If the royalty is not repurchased during the 30-month period, then the royalty rate shall increase to 2.0%.

The proposed new loan and royalty, together with a proposed US$4.0 million equity placement with Nebari and certain proceeds from the Hard Dollar Financing, will be used to retire the existing debt. The Debt Restructuring is subject to reaching a binding agreement with Nebari and agreements with Extract Capital and Sprott Private Resource Streaming and Royalty (B) Corp. with respect to the early repayment and subordination of certain existing security.

Advisors and Counsel

Fiore Management & Advisory Corp. is acting as advisor to NexGold and DuMoulin Black LLP is acting as NexGold’s legal counsel in connection with the Transaction.

BMO Capital Markets has acted as financial advisor to Signal in connection with the Transaction. Cassels Brock & Blackwell LLP is acting as Signal’s legal counsel.

Mineral Projects

Goliath Project

Following is a summary of the mineral resource estimate for the Goliath Project as reflected in the technical report of NexGold entitled “Goliath Gold Complex NI 43-101 Technical Report and Prefeasibility Study, Kenora District, Ontario, Canada” dated March 27, 2023, with an effective date of February 22, 2023.

Goliath Project Mineral Resource Estimate

Notes: 1. Mineral Resources were estimated by ordinary kriging by Dr. Gilles Arseneau, associate consultant of SRK Consulting (Canada) Inc., Mineral Resources were prepared in accordance with NI 43-101 and the CIM Definition Standards for Mineral Resources and Mineral Reserves (2014) and the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines (2019). This estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. Mineral Resources that are not mineral reserves do not have demonstrated economic viability. 2. Mineral Resource effective date January 17, 2022. 3. Goliath Open Pit Mineral Resources are reported within an optimized constraining shell at a cut-off grade of 0.25g/t gold that is based on a gold price of US$1,700/oz, a silver price of US$23/oz, and a gold and silver processing recovery of 93.873*Au(g/t)^0.021 and 60% respectively. 4. Goldlund Open Pit Mineral Resources are reported within an optimized constraining shell at a cut-off grade of 0.3g/t gold that is based on a gold price of US$1,700/oz and a gold processing recovery of 90.344xAu(g/t)^0.0527. 5. Miller Open Pit Mineral Resources are reported within an optimized constraining shell at a cut-off grade of 0.3 g/t gold that is based on a gold price of US$1,700/oz and a gold processing recovery of 93.873*Au(g/t)^0.021. 6. Goliath Underground Mineral Resources are reported inside shapes generated from Deswick Mining Stope Optimiser (DSO) at a cut-off grade of 2.2g/t gold that is based on a gold price of US$1,700/oz, a silver price of US$23/oz, and a gold and silver processing recovery of 93.873*Au(g/t)^0.021 and 60% respectively. 7. Goldlund Underground Mineral Resources are reported inside DSO shapes at a cut-off grade of 2.2g/t gold that is based on a gold price of US$1,700/oz and a gold processing recovery of 90.344xAu(g/t)^0.0527. 8. Gold and Silver assays were capped prior to compositing based on probability plot analysis for each individual zones. Assays were composited to 1.5 m for Goliath, 2.0 m for Goldlund and 1.0 m for Miller. 9. Excludes unclassified mineralization located within mined out areas. 10. Silver grade and ounces are derived from the Goliath tonnage only. 11. Goliath Open Pit and Goldlund/Miller cut-off grades are 0.25g/t and 0.30g/t, respectively. 12. All figures are rounded to reflect the estimates’ relative accuracy, and totals may not add correctly.

Goldboro Project

Following is a summary of the mineral resource estimate for the Goldboro Project as reflected in the technical report of Signal entitled “NI 43-101 Technical Report and Feasibility Study for the Goldboro Gold Project, Eastern Goldfields District, Nova Scotia” dated January 11, 2022, with an effective date of December 16, 2021.

Goldboro Mineral Resource Estimate, Open Pit (0.45 g/t CoG) and Underground (2.40 g/t CoG)

* Combined Open Pit and Underground Mineral Resources; The Open Pit Mineral Resource is based on a CoG of 0.45 g/t gold and the Underground Mineral Resource is based on CoG of 2.40 g/t gold.

Notes: (1) Mineral Resources were prepared in accordance with NI 43-101 and the CIM Definition Standards for Mineral Resources and Mineral Reserves (2014) and the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines (2019). Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. This estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. (2) Mineral Resources are inclusive of Mineral Reserves. (3) Open pit Mineral Resources are reported at a cut-off grade (CoG) of 0.45 g/t gold that is based on a gold price of C$2,000/oz (approximately US$1,600/oz) and metallurgical recovery factor of 89% around cut- off as calculated from ((GRADE-(0.0262*LN(GRADE)+0.0712))/GRADE*100)-0.083. (4) Underground Mineral Resource is reported at a CoG of 2.40 g/t gold that is based on a gold price of C$2,000/oz (approximately US$1,600/oz) and a gold processing recovery factor of 97%. Assays were variably capped on a wireframe-by-wireframe basis. SG was applied using weighted averages to each individual wireframe. Mineral Resource effective date November 15, 2021. All figures are rounded to reflect the relative accuracy of the estimates and totals may not add correctly. Excludes unclassified mineralization located within mined out areas. Reported from within a mineralization envelope accounting for mineral continuity.

For more information about NexGold and Signal, please refer to each company’s profile on SEDAR+ at www.sedarplus.ca.

Technical Disclosure and Qualified Persons

Adam Larsen, B.Sc., P. Geo., Director of Exploration of NexGold, is a “qualified person” within the meaning of National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and has reviewed and approved the scientific and technical information in this news release regarding the Goliath Project on behalf of NexGold.

Kevin Bullock, P. Eng., President, CEO and Director of Signal, is a “qualified person” within the meaning of NI 43-101 and has reviewed and approved the scientific and technical information in this news release regarding the Goldboro Project on behalf of Signal.

About NexGold Mining Corp.

NexGold Mining Corp. is a gold-focused company with assets in Canada and Alaska. NexGold’s Goliath Project (which includes the Goliath, Goldlund and Miller deposits) is located in Northwestern Ontario. The deposits benefit substantially from excellent access to the Trans-Canada Highway, related power and rail infrastructure and close proximity to several communities including Dryden, Ontario. For information on the Goliath Project, refer to the technical report, prepared in accordance with NI 43–101, entitled ‘Goliath Gold Complex – NI 43–101 Technical Report and Prefeasibility Study’ and dated March 27, 2023, with an effective date of February 22, 2023, led by independent consultants Ausenco Engineering Canada Inc. The technical report is available on SEDAR+ at www.sedarplus.ca, on the OTCQX at www.otcmarkets.com and on NexGold’s website at www.nexgold.com.

NexGold also owns several other projects throughout Canada, including the Weebigee-Sandy Lake Gold Project JV, and grassroots gold exploration property Gold Rock. In addition, NexGold holds a 100% interest in the high-grade Niblack copper-gold-zinc-silver VMS project, located adjacent to tidewater in southeast Alaska. NexGold is committed to inclusive, informed and meaningful dialogue with regional communities and Indigenous Nations throughout the life of all our Projects and on all aspects, including creating sustainable economic opportunities, providing safe workplaces, enhancing of social value, and promoting community well- being. Further details about NexGold are available on NexGold’s website at www.nexgold.com.

About Signal Gold Inc.

Signal is advancing the Goldboro Gold Project in Nova Scotia, a significant growth project subject to a positive Feasibility Study which demonstrates an approximately 11-year open pit life of mine with average gold production of 100,000 ounces per annum and an average diluted grade of 2.26 grams per tonne gold. For further details, refer to the technical report entitled ‘NI 43-101 Technical Report and Feasibility Study for the Goldboro Gold Project, Eastern Goldfields District, Nova Scotia’ dated January 11, 2022, with an effective date of December 16, 2021). The technical report is available on SEDAR+ at www.sedarplus.ca, on the OTCQX at www.otcmarkets.com and on Signal’s website at www.signalgold.com. On August 3, 2022, the Goldboro Project received its environmental assessment approval from the Nova Scotia Minister of Environment and Climate Change, a significant regulatory milestone, and Signal has now submitted all key permits including the Industrial Approval, Fisheries Act Authorization and Schedule 2 Amendment, and the Mining and Crown Land Leases. The Goldboro Project has significant potential for further Mineral Resource expansion, particularly towards the west along strike and at depth, and Signal has consolidated 28,525 hectares (~285 km²) of prospective exploration land in the Goldboro Gold District.