Canary Gold closes Madeira River tenement buy for $1.7M

Executive Summary

• Canary Gold Corp. has closed the acquisition of 10 additional mineral tenements (approx. 94,700 hectares) at its Madeira River Project in Brazil from Talisman Venture Partners Ltd., significantly expanding its land position.
• The company simultaneously closed a non-brokered private placement of up to 4 million units at $0.25 per unit, raising gross proceeds of up to $1 million to fund exploration and working capital.
• The acquisition consideration consists of cash and equity, including an initial cash payment, share issuance, and a future election for cash or shares, with a retained 1% NSR royalty on the acquired property.

Key Details

• Acquisition Target: 100% interest in 10 additional mineral tenements totaling approximately 94,700 hectares in Rondonia, Brazil.
• Seller: Talisman Venture Partners Ltd. (private B.C. corporation).
• Total Consideration: $1.7 million, structured as follows:
  • Initial Cash: $50,000 paid on execution of the definitive agreement (dated Aug. 29, 2025).
  • Initial Equity: Issuance of 4,000,000 common shares at a deemed price of $0.30 per share (deemed value $1.2 million).
  • Deferred Payment (180 days post-execution): At Canary Gold’s sole discretion, either:
    • (A) Cash payment of $450,000; or
    • (B) Issuance of common shares valued at $450,000, priced at the higher of $0.30 or the 10-day VWAP on the CSE preceding the payment date.
• Royalty Terms: Talisman retains a 1.0% Net Smelter Return (NSR) royalty on commercial production. Canary Gold has the option to purchase one-half of this royalty (reducing it to 0.5%) for $1 million at any time.
• Tenement Status: All tenements are in the application to permit stage and are held through Talisman do Brasil Mineracao Ltda. and Canopus Geologia e Projetos Ltda.
• Hold Periods:
  • Shares issued on closing: 4-month hold period expiring Dec. 30, 2025.
  • Shares issued on final payment date: 4-month hold period from date of issuance.
  • Private placement securities: Statutory hold period of 4 months and 1 day from issuance.
• Private Placement Terms:
  • Structure: Up to 4,000,000 units at $0.25 per unit.
  • Gross Proceeds: Up to $1,000,000.
  • Warrants: Each unit includes one transferable warrant to buy one common share at $0.35 for 3 years.
  • Acceleration Provision: If CSE shares close at ≥$0.55 for 10 consecutive trading days, the company may accelerate warrant expiry to 20 days post-announcement (effective 4 months + 1 day after issuance).
  • Finder’s Fees: Up to 7% in cash and up to 7% in warrants.
  • Use of Proceeds: Advance exploration at Madeira River project and general working capital.
• Marketing Agreement: Entered into a digital marketing service agreement with Machai Capital Inc. (effective Sept. 2, 2025) for $200,000 + GST (plus GST) for a 3-month term, with an option to expand to $400,000 + GST. Campaign runs Sept–Nov 2025.

Notable Quotes

• No direct quotes from the CEO/President were included in the provided text.