SolGold Signs Exploitation Agreement for Copper-Gold Project in Ecuador

SolGold (LSE & TSX: SOLG) is delighted to declare the finalization of the Exploitation Contract ("Exploitation Contract" or "EC") for the Cascabel Project ("Project"), its primary copper-gold venture in Ecuador. This achievement comes after fruitful negotiations and the Government of Ecuador's approval of the term sheet ("Term Sheet") in July 2023. The EC, alongside prevailing legislation and regulations, sets forth the necessary legal and financial terms and conditions for the advancement of the Cascabel Project.

Mr. Diego Ocampo, Vice Minister of Mines, expressed, "This Agreement marks the onset of a fresh phase of economic progress for Ecuador, underscoring our dedication to fostering investment and sustainable growth in the mining industry. The Government of Ecuador stands behind the Cascabel Project, anticipating substantial long-term advantages for our nation's economy and local communities, including noteworthy investment, job opportunities, and sustainable advancement."

Mr. Scott Caldwell, CEO and President of SolGold Ecuador, remarked, "Securing the Exploitation Contract for the Cascabel Project marks a significant milestone for SolGold and all our partners. This achievement is a testament to the invaluable collaboration and backing from the Government of Ecuador, regional authorities, and local communities. We remain steadfast in our commitment to fostering sustainable development and inclusive prosperity in Ecuador and its communities."

Exploraciones Novomining S.A. ("ENSA"), a wholly-owned subsidiary of SolGold in Ecuador, embarked on an extensive exploration endeavor at the Cascabel site in 2012. This journey bore fruit with the landmark discovery hole at Alpala in early 2014, followed by the unveiling of the Tandayama-Ameríca deposit in subsequent drill programs. Over the years, SolGold has diligently drilled more than 300,000 meters of cored exploration, resource definition, and geotechnical drill holes. This rigorous effort has also included a multitude of resource assessments, mining evaluations, metallurgical analyses, as well as thorough environmental and social studies. As a result of this exhaustive work, the Project has evolved into one of the globe's largest undeveloped copper-gold porphyry deposits. Its potential to significantly bolster the Ecuadorian economy is immense, positioning it as a beacon of hope and prosperity. Moreover, SolGold's meticulous approach serves as a blueprint for future exploration endeavors across its expansive regional targets throughout Ecuador, paving the way for further discoveries and socio-economic advancements.

Critical Exploitation Contract Terms (All monetary figures are expressed in United States Dollars)

• Share of Cumulative Benefits: The EC stipulates that the Government of Ecuador will receive a minimum share of cumulative discounted benefits from SolGold's Cascabel Project, amounting to at least 50%. This share is determined as the present value of the cumulative total of taxes remitted, comprising corporate income taxes, royalties, labor profit sharing paid to the State, non-recoverable VAT, and any prior sovereign adjustment payments.

• Development and Production Authorization: ENSA, as the designated "Mining Concessionaire," has secured authorization for the development of the Cascabel Project and the extraction of copper, gold, and silver within the contracted area, valid for 33 years with the possibility of extension for the duration of the mine's operational lifespan.

• Advance Royalty Payment: SolGold is obligated to make an advance royalty payment totaling $75 million, with the initial installment of $25 million due upon commencement of concentrator construction. The remaining two installments, each of $25 million, will be paid on the first and second anniversaries, respectively, from the date of the first payment. This advance royalty payment can be offset against the Government Royalty (as defined below).

• Government Royalty & Taxes: Upon the Government of Ecuador's approval of the new Investment Protection Agreement, the Company anticipates a corporate income tax rate of 20% over the Project's lifespan. In accordance with this corporate income tax rate, the Mining Concessionaire, the State, and SolGold have concurred on a variable royalty based on net smelter revenues, as prescribed by Ecuadorian Mining Law ("Government Royalty"). The Government Royalty on net smelter revenues will vary between 3% and 8%, contingent on the mineral type and its market price.

• Economic Imbalance Mechanism: The EC incorporates a mechanism to rectify any economic imbalances encountered by the Mining Concessionaire due to modifications in fiscal policies, taxes, laws, and regulations. This provision serves to mitigate significant uncertainties regarding the future economic framework governing the Project.

• Investor Autonomy: A fundamental principle outlined in the EC is the independence and liberty of the Company to make its commercial decisions. The technical configuration of the mine, investment quantum, production capacity, etc., remain within the purview of the Company and align with its business strategy. This autonomy and freedom ensure development in accordance with SolGold's ethos and principles.

• Investor Protection Rights: The EC encompasses various investor protection rights to safeguard the investment, including provisions for dispute resolution through international arbitration.