Hochschild Mining plc (LSE:HOC) executed a letter of intent to acquire Amarillo Gold Corporation (TSXV:AGC) from Baccarat Trade Investments Ltd., 2176423 Ontario Ltd., Eric Sprott and others on August 18, 2021. Hochschild Mining plc entered into a definitive agreement to acquire Amarillo Gold Corporation from Baccarat Trade Investments Ltd., 2176423 Ontario Ltd., Eric Sprott and others on November 29, 2021. Pursuant to the Arrangement, each share of Amarillo will be exchanged for cash consideration of CAD 0.40 and one share of a new Brazil-focused exploration company, Lavras Gold Corp. (“Lavras SpinCo”), based in Toronto, Ontario. The total transaction value is approximately CAD 164.5 million, excluding Lavras SpinCo's asset value and CAD 10 million of cash. Pursuant to the transaction, Hochschild will acquire a 100% interest in Amarillo's flagship Posse gold project ("Posse") located in Goiás State, Brazil. On completion of the arrangement, Amarillo shareholders will own 100% of Lavras SpinCo, and Hochschild will own 100% of Amarillo. The transaction will be funded from Hochschild's current cash balance and/or undrawn credit facility. A termination fee of CAD 5 million is payable by Amarillo to Hochschild in the event that the arrangement is not completed or is terminated by Amarillo or Hochschild in certain circumstances. Hochschild has agreed to pay a termination fee of CAD 2.5 million to Amarillo if Hochschild terminates the definitive agreement in certain circumstances.

The transaction is subject to shareholder approval of Amarillo, receipt of all required regulatory and TSXV approvals, receipt of approval of Supreme Court of British Columbia, receipt of approval from the shareholders of Hochschild, holders of not more than 5% of the issued and outstanding shares shall have validly exercised Dissent Rights in respect of the arrangement and have not withdrawn such exercise as of the effective date, Amarillo shall have provided Hochschild with evidence satisfactory to Hochschild, acting reasonably, of the completion of the Pre-Acquisition Reorganizations set out in Section 4.9(1) of the Amarillo Disclosure Letter, and the absence of material adverse changes respecting Amarillo. The Board of Directors of Amarillo has unanimously approved the transaction and unanimously recommends that Amarillo Shareholders vote for the arrangement. As of February 24, 2022, Amarillo reminds shareholders of proxy cutoff in connection with its special meeting to be held on March 1, 2022, to approve acquisition. All the directors and senior officers of Amarillo and the two largest shareholders of Amarillo, Baccarat Trade Investments Limited and 2176423 Ontario Ltd., collectively owning approximately 44% of the issued and outstanding Amarillo shares, have entered into support agreements with Hochschild, in each case pursuant to which they have, agreed, among other things, to vote all of their Amarillo Shares in favour of the arrangement resolution. On January 27, 2022, Amarillo obtained the Interim Order providing for the calling and holding of the meeting and other procedural matters. The Board of Directors of Amarillo constituted an independent committee of non-management directors to reach its conclusions and formulating its recommendation. The transaction has been approved by the shareholders of Amarillo on March 1, 2022. As of March 7, 2022, Amarillo Gold received final approval from the Supreme Court of British Columbia for its sale to Hochschild Mining. As of March 22, 2022, Hochschild Mining shareholders approved the transaction. Completion is expected to occur in the first quarter of 2022. As of February 3, 2022, the transaction is expected to close around the end of March 2022. Closing of the Arrangement is expected to occur around the end of March or early April 2022. As of March 30, 2022, the transaction is expected to close on April 1, 2022.

Mackie Research Capital Corporation acted as financial advisor to Amarillo and the Special Committee and provided its opinion to the Amarillo Board and the Special Committee. Hochschild Mining has engaged Stikeman Elliott LLP as its Canadian legal counsel, Pinheiro Neto Advogados as its Brazilian legal counsel, and Linklaters LLP as its UK legal counsel in connection with the transaction. Alan Hutchison, Alain Fournier and Colena Der of Osler, Hoskin & Harcourt LLP and Irwin Lowy LLP acted as legal counsel to special committee of Amarillo in connection with the transaction. Computershare Investor Services Inc. acted as transfer agent and depositary in relation to the arrangement, to Amarillo. Marcus Jackson, Ryan Latinovich, Hugh Samson and Scott Redwood of RBC Europe Limited acted as financial advisors to Hochschild Mining plc.

Hochschild Mining plc (LSE:HOC) completed the acquisition of Amarillo Gold Corporation (TSXV:AGC) from Baccarat Trade Investments Ltd., 2176423 Ontario Ltd., Eric Sprott and others for approximately CAD154.4 million on April 1, 2022. 2176423 Ontario Ltd. sold 17.7% stake in Amarillo Gold. Amarillo is now a wholly owned subsidiary of Hochschild. It is anticipated that Amarillo will be de-listed from the TSX Venture Exchange and will apply to cease to be a reporting issuer. Conditional listing approval for the Lavras Gold Shares has been received from the TSXV. Upon satisfaction of the listing conditions of the TSXV, Lavras Gold Shares are expected to trade on the TSXV under the symbol “LGC”. Lavras Gold Corp. (TSXV: LGC) will to open trading on the Toronto Stock Exchange on Monday, June 6, 2022. The consideration paid for the transaction amounted to approximately CAD154.4 million.