Steppe Gold Ltd. (TSX:STGO) entered into a letter of intent to acquire Anacortes Mining Corp. (TSXV:XYZ) for CAD 20.3 million on March 6, 2023. As part of consideration, Anacortes shareholders will receive 0.4532 of a Steppe Gold common share for each Anacortes common Share, which represents consideration of approximately CAD 0.48 per Anacortes common share. Steppe Gold Ltd. entered into an arrangement agreement to acquire Anacortes Mining Corp. on May 5, 2023. On the closing of the transaction, shareholders of Steppe Gold and Anacortes will own approximately 79% and 21% of the combined company, respectively, on a basic basis. From both parties, anyone will terminate the agreement will pay 5% of the total transaction value in the event of the termination of the agreement under certain circumstances to the other party. In addition, the Arrangement Agreement provides that, under certain circumstances, either party would be entitled to a CAD 1.1 million termination fee. Following completion of the transaction, the Steppe Common Shares will continue trading on the TSX and the Anacortes Common Shares will be de-listed from the TSXV.

The Anacortes board of directors have approved the agreement and unanimously recommends that Anacortes shareholders vote in favor of the transaction, following receipt of the unanimous recommendation of a special committee of independent directors of Anacortes. The board of directors of Steppe Gold have also unanimously approved the transaction. Further, pursuant to the agreement, Anacortes officers and directors holding approximately 22% of the Anacortes Common Shares entered into lock-up agreements with Steppe Gold. The transaction is subject to the execution of a definitive agreement, respective due diligence, the receipt of all necessary regulatory, conditional approval of the TSX having been obtained, including in respect of the listing and posting for trading of the Consideration Shares, conditional approval of the TSXV, third party and court approvals, holders of no more than 5% Anacortes' of Shares shall have exercised Dissent Rights, Anacortes shall have a minimum of CAD 250,000 in cash and obtaining at least 66 2/3% of shareholder approval of the transaction at a meeting of the Anacortes shareholders, which is expected to be held in Q2 2023. The special meeting of Anacortes' shareholders will be held on June 19, 2023. As on April 18, 2023, parties announced the extension of the binding letter of intent. The Extension Letter Agreement extends the exclusivity period between Steppe Gold and Anacortes in the Binding Agreement from April 17, 2023 to May 5, 2023, or such earlier or later time as Steppe Gold and Anacortes mutually agree, in order to provide more time for the parties to complete due diligence and enter into a definitive agreement. As of May 24, 2023, the TSX has given conditional approval to Steppe Gold and Anacortes for the arrangement. As of June 19, 2023, the transaction has been approved b the shareholders of Anacortes Mining Corp. The transaction closing is expected to occur on or about June 5, 2023. As of May 24, 2023, the arrangement is expected to be completed on or about June 22, 2023.

Steppe Gold's financial advisor is Maxit Capital LP and its legal counsel is Perry Feldman,Michael Boehm, Lori Bokenfohr, Gavin Cameron and Sarah Gingrich of Fasken Martineau DuMoulin LLP acted as legal advisor. Anacortes' financial advisors are Medalist Capital Ltd. and Trinity Advisors Corporation, and its legal counsel is Craig Hoskins of Clark Wilson LLP. Stifel Nicolaus Canada Inc. acted as financial advisor and fairness opinion provider to Special committee of Anacortes. TSX Trust Company acted as depositary to Anacortes. Computershare Investor Services Inc. acted as transfer agent and registrar to Anacortes Mining Corp.

Steppe Gold Ltd. (TSX:STGO) acquired Anacortes Mining Corp. (TSXV:XYZ) on June 28, 2023. As a result of the closing of the Arrangement, the Anacortes Common Shares are expected to be delisted from the TSX Venture Exchange at the close of trading on or about June 29, 2023.