Lahontan Consolidates Ownership of West Santa Fe, Eliminates Royalties, and Adds Strategic New York Canyon Project Through Acquisition of Emergent Metals

Lahontan Gold Corp. has entered into a definitive arrangement agreement to acquire all issued and outstanding common shares of Emergent Metals Corp. through a court-approved plan of arrangement. Under the terms of the deal, Emergent shareholders will receive one Lahontan common share for every 3.21 Emergent shares. This exchange ratio represents an implied consideration of $0.115 per Emergent share, which constitutes a 47.8% premium based on the 30-day volume-weighted average price (VWAP).

The transaction is designed to consolidate Lahontan’s ownership of the West Santa Fe project, thereby eliminating associated royalties, while adding the New York Canyon project to its portfolio. The acquisition also includes the transfer of various assets, including a US$3.5 million promissory note from Fairchild Gold Corp and a portfolio of gold royalties in Quebec. Following the completion of the transaction, existing Lahontan shareholders are expected to own approximately 95.3% of the combined entity, while Emergent shareholders will hold approximately 4.7%.

Key asset consolidations include Lahontan gaining 100% ownership of the West Santa Fe project and acquiring the New York Canyon project, which consists of two blocks of unpatented mining claims adjacent to the Santa Fe Mine. Additionally, Lahontan will acquire a portfolio of properties and gold royalties in Quebec, as well as leased mining claims in Nevada.

The agreement also addresses the elimination of specific royalties. The 1% net smelter return (NSR) royalty on West Santa Fe and the 1% NSR royalty on 27 York claims at the Santa Fe Mine will cease. Furthermore, 2,000,000 Lahontan shares previously issued to Emergent for the York claims will be returned to treasury, representing an approximate value of $770,000.

Financially, Lahontan will assume a US$3.5 million promissory note (approximately $4.83 million CAD) from Fairchild Gold Corp, which is related to the sale of the Golden Arrow property. The company will also acquire 12.5 million Fairchild common shares, valued at approximately $625,000, and a 0.5% NSR royalty on the Golden Arrow property.

The transaction is subject to several conditions precedent, including approval by at least 66⅔% of Emergent shareholder votes cast and a simple majority of votes excluding those required to be excluded under National Instrument 61-101. The deal also requires interim and final orders from the Supreme Court of British Columbia, as well as acceptance by the TSX Venture Exchange and other regulatory approvals.

Kimberly Ann, Founder, Executive Chair, CEO and President of Lahontan Gold Corp., stated: “The acquisition of Emergent Metals represents another important step in Lahontan's disciplined growth strategy. This Transaction consolidates our ownership of West Santa Fe, eliminates royalties at both West Santa Fe and the York claims at Santa Fe, adds the strategically important New York Canyon project to our regional-scale Walker Lane land package, and provides Lahontan with additional royalties, claims and other assets.”

The transaction has been advised by Irwin Lowy LLP for Lahontan, and Capiche Legal LLP for Emergent. Evans & Evans, Inc. served as the financial advisor to Emergent and provided a fairness opinion.

Mineral resources at the Santa Fe Mine are reported as follows:

• Indicated: 1,195,000 oz Au Eq (47.5M tonnes @ 0.72 g/t Au, 5.55 g/t Ag).
• Inferred: 1,190,000 oz Au Eq (60.6M tonnes @ 0.59 g/t Au, 2.40 g/t Ag).

Cut-off grades for the resources are 0.10 g/t AuEq for oxide/transition material and 0.30 g/t AuEq for non-oxide material.