Karus Gold Corp. signed a non-binding Letter of Intent to acquire Kenadyr Metals Corp. (TSXV:KEN) for CAD 17.7 million in a reverse merger transaction on November 14, 2022. Karus Gold Corp. entered into definitive agreement to acquire Kenadyr Metals Corp. (TSXV:KEN) in a reverse merger transaction on December 28, 2022. Under the transaction, Kenadyr Metals Corp. will acquire 100% of Karus Gold Corp. by way of a business combination transaction, via a Kenadyr issuance of common shares consisting of 0.43 post consolidation Kenadyr Shares per Karus Share. Prior to the closing of the transaction, Kenadyr will complete a consolidation of Kenadyr common shares on the basis of one (1) post-consolidation Kenadyr Common Share for every ten (10) pre-consolidation Kenadyr common shares. It is intended that the current shareholders of Karus will receive an aggregate of approximately 39,091,346 Kenadyr Common Shares on a post-consolidation basis. The proposed transaction values Karus at CAD 19.7 million (including certain payables settled in Kenadyr common shares), using a CAD 0.50 per common share price, post-consolidation, of Kenadyr. Upon completion of the transaction, certain members of Kenadyr management will settle accrued salary payments and loans in Kenadyr common shares. Also, certain outstanding payables to third parties will be settled in Kenadyr common shares. To settle approximately CAD 500,000 of debt, accrued salary payments and third-party payables, a total of 1,000,000 post-consolidation Kenadyr common shares would be issued, subject to TSXV approval. In connection with the transaction, Kenadyr will complete a private placement for gross proceeds of a minimum CAD 2,000,000 at an effective price of CAD 0.50 per Kenadyr common share post-consolidation, or such other price as determined by Kenadyr and Karus.

It is anticipated that the transaction will be completed as a plan of arrangement under the laws of British Columbia. The resulting issuer will be Kenadyr Metals Corp., a Tier 2 TSXV-listed company in the mining sector. The combined company will trade on TSX-V and OTC exchanges following closing. The new Kenadyr Board and Management will consist of Stuart ?Tookie? Angus, proposed Chairman and director; Tim McCutcheon, proposed Chief Executive Officer and director; Scott Trebilcock, David Whittle, Yulia Chekunaeva as proposed directors; Michael Tucker, proposed Chief Operating Officer and Head Geologist; Kevin Ma, proposed Chief Financial Officer, and Yee Lun ?Emmery? Wang, proposed Corporate Secretary. The proposed transaction is subject to the parties entering into a binding definitive agreement, which will include customary closing conditions including approval of the Karus and Kenadyr shareholders (as applicable), court and regulatory approval, the TSX Venture Exchange and third party, TSXV shall have conditionally approved the listing and posting for trading on the TSXV of the Consideration Shares, holders of no more than 5% of the Karus Shares shall have exercised Dissent Rights and other customary closing conditions. The transaction is also contingent on Kenadyr completing a minimum CAD 2 million financing and other customary approvals. The transaction has been approved unanimously buy the Board of Directors of Karus and by the Board of Director of Kendyr. The Agreement includes customary termination rights for both Kenadyr and Karus in the event that the Proposed Transaction is not completed by March 31, 2023 and as of March 31, 2023, such date has passed, the Agreement remains in force and the parties are continuing to work together to complete the Proposed Transaction.

Denise Nawata of Farris LLP acted as legal advisor to Karus. Mark Neighbor of McMillan LLP acted as legal advisor to Kenadyr. It is currently anticipated that the transaction will close on or before the end of Q1 2023.