Q-Gold closes acquisition of option on Quartz Mountain

Executive Summary

• Q-Gold Resources Ltd. has closed the acquisition of an option to acquire the Quartz Mountain advanced-stage gold exploration project in Oregon from Alamos Gold Inc.
• The transaction was funded via a previously announced $11.5 million private placement, with $2.85 million (U.S.) of net proceeds paid as immediate cash consideration.
• The acquisition involves the issuance of 13,924,702 common shares (9.99% of pre-offering shares) and includes significant milestone payments totaling up to $18 million (U.S.) contingent on feasibility studies, permitting, and mine construction.

Key Details

• Acquisition Structure: Q-Gold acquired 0975828 B.C. Ltd., which holds an indirect interest in Quartz Mountain Gold Ltd. Quartz Mountain Gold holds a 50% unincorporated joint venture interest in the Angel's Camp property (with option to acquire remaining 50%) and an option to acquire 100% of the Quartz Mountain property, both from Seabridge Gold Inc.
• Project Assets: The Quartz Mountain project comprises approximately 4,823 acres in south-central Oregon. Approximately 100,000 metres of drilling have been completed to date. A technical report under NI 43-101 was filed on Oct. 20, 2025.
• Immediate Consideration:
  • Cash: $2.85 million (U.S.).
  • Shares: 13,924,702 common shares of Q-Gold, representing 9.99% of issued and outstanding shares on an undiluted basis immediately prior to closing (after accounting for the 76,666,667 units issued in the offering).
• Milestone Payments (Cash or Shares at Alamos's Election):
  • $3.15 million (U.S.) payable on the first anniversary of closing.
  • $2.5 million (U.S.) payable on the second anniversary of closing.
  • $2.5 million (U.S.) payable on the third anniversary of closing.
  • $5 million (U.S.) payable upon the earlier of: (i) completion of a feasibility study; or (ii) decision to commence construction.
  • $5 million (U.S.) payable upon project permitting.
• Share Cap and NSR Royalty: If milestone share issuances would cause Alamos to hold more than 19.9% of shares, excess value is satisfied by a repurchasable Net Smelter Return (NSR) royalty of 0.2% of net smelter return for each $1 million (U.S.) in value. Total share issuance for payments is capped at 138,326,406 shares.
• Financing Details:
  • Gross Proceeds: $11.5 million (U.S.) from the sale of 76,666,667 subscription receipts at 15 cents per receipt.
  • Agent: BMO Capital Markets.
  • Agent Fee: $690,000 total ($345,000 paid at closing, $345,000 paid upon escrow release).
  • Broker Warrants: 4.6 million non-transferable warrants issued to the agent at 15 cents per share, exercisable until Oct. 3, 2030. Vests if share price exceeds 30 cents for five consecutive days or by Oct. 3, 2028.
• Escrow Release: 76,666,667 subscription receipts were automatically exchanged into units (one common share + one-half warrant) upon satisfaction of escrow conditions.
• Warrant Terms: Each unit contains one-half warrant exercisable at 20 cents per share until Oct. 3, 2027. Acceleration clause triggers if shares trade at 25 cents or higher for 10 consecutive days after Feb. 4, 2026.
• Use of Proceeds: $2.85 million (U.S.) used for cash consideration. Remaining net proceeds allocated to: (i) exploration/engineering studies at Quartz Mountain; (ii) exploration at Mine Centre, Ont.; and (iii) working capital and general corporate purposes.
• Statutory Hold: All securities issued in the offering are subject to a statutory hold period ending Feb. 4, 2026.

Notable Quotes

• "We are pleased to announce the closing of the Quartz Mountain project acquisition, marking a significant milestone in Q-Gold's ultimate strategy to become a North American-based gold producer. I would like to thank Alamos, the Q-Gold team and everyone who contributed to making this acquisition a reality. We are excited to provide details of the updated mineral resource estimate as well as other exciting updates to our shareholders as we continue advancing our gold projects." — Peter Tagliamonte, President and CEO