Florence One signs definitive deal for Cautivo Peru

Mr. Mohammad Fazil reports FLORENCE ONE CAPITAL INC. ENTERS INTO DEFINITIVE AGREEMENT WITH CAUTIVO MINING INC. FOR ITS QUALIFYING TRANSACTION Florence One Capital Inc., further to its news release dated May 16, 2025, has entered into a share exchange agreement dated Oct. 3, 2025, with Cautivo Mining Inc., a company managed by Arias Resource Capital Management LP, pursuant to which Florence One will acquire all of the issued and outstanding shares in the capital of Cautivo Peru Inc. The transaction is intended to constitute Florence One's qualifying transaction, pursuant to Policy 2.4, Capital Pool Companies, of the TSX Venture Exchange corporate finance manual. The transaction is subject to the approval of the TSX-V and other closing conditions customary for a transaction of this nature, as further set forth in the share exchange agreement and this news release. Terms of the transaction Share exchange agreement Pursuant to the share exchange agreement, Florence One will acquire all of the issued and outstanding shares of Cautivo Peru, being 228,177,223 common shares in the capital of Cautivo Peru, from Cautivo Mining, in exchange for the issuance of 60 million common shares in the capital of Florence One. The transaction will result in the reverse takeover of Florence One and will constitute Florence One's qualifying transaction. Following the completion of the transaction, the resulting issuer (as defined below) is expected to carry on the current business of Cautivo Peru. The business of the resulting issuer will primarily be focused on the mining operations and exploration package of Cautivo Peru, which includes 31,288 hectares of land in a prospective gold-copper district in the Piura region of northern Peru. Completion of the transaction will be subject to a number of terms and conditions to be set forth in the share exchange agreement, including, among other things: (i) there being no material adverse change in respect of either of the parties; (ii) the receipt of all necessary consents, orders, and regulatory and shareholder approvals, including the conditional approval of the TSX-V, subject only to customary conditions of closing; (iii) the completion of the name change and the subscription receipt financing (as defined below); (iv) the completion of a share consolidation (as defined below) of Florence One; and (v) such other customary conditions of closing for a transaction in the nature of the transaction. Prior to the closing of the transaction and as a condition of closing, Cautivo Mining will spin off certain Trujillo assets and liabilities located in the department of La Libertad to a new entity, which will not be included as part of the transaction and will not form any part of the property of the resulting issuer. Upon completion of the transaction, it is anticipated that the resulting issuer will be listed as a Tier 2 mining issuer on the TSX-V. Subscription receipt financing Following execution of the share exchange agreement, Florence One will complete a private placement of subscription receipts of Florence One, for aggregate gross proceeds of up to $4.5-million at 23 cents per subscription receipt or on such other terms as agreed to in writing by the parties. Each subscription receipt will entitle the holder thereof to receive one Florence One share upon the completion of the transaction. In connection with subscription receipt financing, the parties may engage a broker or pay finders' fees to persons who assist in identifying investors to participate in the subscription receipt financing. Any brokers' or finders' fees payable in connection with the transaction will made in accordance with TSX-V policies and be disclosed in the comprehensive news release. The proceeds of the subscription receipt financing will be used for the purposes of: (a) financing the business plan of the resulting issuer; (b) transaction expenses; and (c) general working capital. Terms of the subscription receipt financing are subject to market conditions and will be disclosed once they become available. Proceeds from the subscription receipt financing will be held in escrow pending satisfaction of certain escrow release conditions, including completion of the transaction, as will be set forth in the subscription receipt agreement to be entered into. Share consolidation Prior to the closing of the transaction, Florence One will complete a consolidation of its issued and outstanding shares on the basis of one Florence One postconsolidation share for every two Florence One preconsolidation shares. Resulting issuer Name change Subject to any requirements of the TSX-V and applicable Canadian securities laws, in connection with the closing of the transaction, Florence One will change its name to a new one as mutually agreed upon by Florence One and Cautivo Mining, and as may be accepted by the relevant regulatory authorities. The resulting issuer's issued and outstanding shares will be listed under a new trading symbol. Pro forma share ownership Upon completion of the transaction, including the subscription receipt financing, Cautivo Mining will hold approximately 67.35 per cent of the outstanding resulting issuer shares on a non-diluted basis. It is anticipated that there will be an aggregate of approximately 89,082,217 resulting issuer shares issued and outstanding upon completion of the transaction, assuming the subscription receipt financing is fully subscribed. Directors and officers Subject to TSX-V approval and applicable corporate law requirements, upon the closing of the transaction, it is expected that the board of directors of the resulting issuer will be reconstituted to include three nominees of Florence One and three nominees of Cautivo Mining. Non-arm's-length relationships If completed, the transaction will not be a non-arm's-length qualifying transaction (as defined in Policy 2.4) and would constitute Florence One's qualifying transaction. No insiders, promoters or control persons of Florence One (as such terms are defined in TSX-V manual) are also insiders of Cautivo Peru. No insider, promoter or control person of FONC has any material interest in Cautivo Peru prior to giving effect to the transaction. Sponsorship Sponsorship of the transaction, as the qualifying transaction of Florence One, is generally required by the TSX-V unless an exemption from this requirement can be obtained in accordance with the policies of the TSX-V. Should the parties apply for an exemption to the sponsorship requirement, there is no assurance that an exemption will be granted. Trading halt In accordance with the policies of the TSX-V, trading in Florence One shares is currently halted and will remain halted until completion of the transaction. Florence One does not intend to apply to the TSX-V to have the trading of Florence One shares reinstated at this time. Further information Florence One will provide further details in respect of the subscription receipt financing in due course by way of subsequent news releases; however, Florence One and Cautivo will make available to the TSX-V all information, including financial information, as may be requested or required by the TSX-V. All information contained in this news release with respect to Florence One and Cautivo Peru was supplied by the respective party for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party. Completion of the transaction is subject to a number of conditions, including, but not limited to, TSX-V acceptance and, if applicable pursuant to the policies of the TSX-V, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction or the subscription receipt financing will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the filing statement of Florence One to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete, and should not be relied upon. Trading in the securities of Florence One should be considered highly speculative. The TSX-V has not, in any way, passed upon the merits of the proposed transaction, and has neither approved nor disapproved the contents of this news release. About Cautivo Mining Inc. Cautivo Mining is a private Canadian company, the shares of which are owned by funds managed by Arias Capital Management, a private equity firm focused on critical materials in the metals sector. Cautivo Mining is the 100-per-cent owner of Cautivo Peru, a private gold-producing company operating in northern Peru, currently producing over 300 ounces of gold per month. Cautivo Peru controls a 31,288-hectare land package in a prospective gold-copper district in the region of Piura. Cautivo Peru maintains 35 commercial agreements with artisanal miners, securing a steady supply of ore and contributing to community-aligned economic development. Cautivo Peru's business has been recognized for its environmental stewardship and small-scale miner formalization efforts. About Florence One Capital Inc. Florence One is a capital pool company created under the policies of the TSX-V. Florence One has no active operations, and its sole objective is to identify and evaluate assets or businesses for a qualifying transaction. Additional details regarding the transaction will be provided in a comprehensive news release, and the management information circular or filing statement to be filed under Florence One's profile on SEDAR+. We seek Safe Harbor.