Gold Basin Resources Corporation Directors' Circular

Executive Summary

• The Board of Directors of Gold Basin Resources Corp. unanimously recommends that shareholders reject the unsolicited takeover offer by CANEX Metals Inc., which proposes to acquire all outstanding shares at a ratio of 0.592 CANEX share per Gold Basin share.
• The Board cites multiple concerns, including unrealistic conditionality (e.g., 66% tender requirement, lock‑up agreements, revocation conditions), misrepresentations in the Offer Circular, and the belief that continuing development of the Gold Basin Project is in shareholders’ long‑term best interests.
• No material corporate transactions have occurred since the last unaudited financial statements (Sept 30 2024) other than routine governance changes and a farm‑in agreement with Helix Resources; no extraordinary M&A, asset sales, or financing events are pending.

Key Details

• Offer Terms: 0.592 CANEX common share for each Gold Basin share; offer open until 5:00 p.m. Toronto time on Dec 12 2025 (subject to extension/withdrawal).
• Board Recommendation: Reject the Offer and withdraw any already‑tendered shares per procedures in the Offer Circular (“The Offer – 8. Right to Withdraw Deposited Shares”).
• Reasons for Rejection:
• Existing business plan and Gold Basin Project deemed superior to CANEX’s Gold Range Project.
• Misrepresentations by CANEX regarding White Hills and Helix farm‑in agreements.
• Excessive conditionality:
  • CTO Revocation Condition lacking objective criteria.
  • Mandatory tender of ≥66% of fully diluted shares (well above statutory 50%).
  • Requirement that ≥30% of shareholders enter lock‑up agreements.
  • Obligation for CANEX to confirm use of proceeds and Charrua Capital loan on “reasonable judgment.”
  • Condition requiring termination of the Helix Farm‑In Agreement, which Gold Basin does not intend to do.
• Recent Corporate Developments (non‑material):
• Feb 26 2025 – Termination of Option Agreement on New Pass Property; CFO/Corporate Secretary change; interim CEO appointment.
• Apr 28 2025 – Binding farm‑in agreement with Helix Resources (up to 40% earn‑in, A$3 M total spend, 1% net smelter royalty).
• May 6 2025 – BC Securities Commission cease‑trade order; trading halt imposed.
• Aug 18 2025 – Partial revocation of cease‑trade order for purpose of making the Offer; shares remain halted.
• Various director resignations and auditor/transfer agent departures (May–Sep 2025).
• No Material Transactions: Board confirms no extraordinary transactions, asset sales, competing bids, issuer bids, or changes to capitalization/dividend policy related to the Offer.
• Ownership Disclosure: Directors collectively hold ~4.56% of Gold Basin shares; stock options disclosed for Charles Straw (2 M @ $0.075) and Grant Duddle (500 k @ $0.075). No director/insider holds CANEX securities.

Notable Quotes

(No direct CEO/President quotes were included in the release.)