MegumaGold Corp. (CNSX:NSAU) entered into a letter agreement to acquire remaining 90.7% stake in Osprey Gold Development Ltd. (TSXV:OS) for CAD 3.3 million on March 19, 2020. MegumaGold Corp. entered into definitive agreement to acquire remaining 90.7% stake in Osprey Gold Development Ltd. million on June 6, 2020. Each shareholder of Osprey will receive such number of common shares of MegumaGold as is equal to the product of the number of Osprey shares held by such shareholder at an exchange ratio which equals one MegumaGold share per two Osprey shares outstanding. It is anticipated that 36.7 million shares of MegumaGold will be issued as consideration, along with incentive stock options and warrants entitling Osprey shareholders to acquire a further 16.3 million common shares of MegumaGold. For every share 2 shares of Osprey one MegumaGold share will be issued. Based on the foregoing and assuming no outstanding common shares or warrants of Osprey are exercised prior to closing, the resulting issuer from the transaction will have 139.5 million shares issued and outstanding, of which former shareholders of Osprey will hold approximately 26.3% stake. The definitive agreement will provide that unexercised Osprey options and share purchase warrants will be assumed by MegumaGold and will remain outstanding for their full term, and following the closing date of the transaction, shall be to the exchange ratio of the transaction. Following the completion of the Arrangement, the Combined Company will continue the current operations of Meguma and Osprey under the name “MegumaGold Corp.” Upon closing the transaction, Osprey Gold will become wholly owned subsidiary of Meguma and will be delisted from the TSXV. The resulting issuer is expected to be listed for trading on the CSE. Cooper Quinn, President and Jeffrey Wilson, Chief Executive Officer and Director of Osprey will resign. Osprey shall pay a break fee equal to the sum of the amount of the Loan then outstanding multiplied by 2 and CAD 0.25 million.

Osprey will have the right to appoint two members to the Board of Directors of the resulting issuer, with the total number of members of such Board of Directors to be initially set at five, and shall contribute management personnel to the resulting issuer. The transaction is subject to conditions, including due diligence by each party, completion of definitive documentation, approval by Boards of Directors of each party, approval of two thirds of the votes cast by the holders of Osprey's common shares present in person or represented by all at a special meeting (including any minority approval required by Multilateral Instrument 61-101, obtaining all governmental, regulatory, TSX Venture Exchange (TSXV), Canadian Securities Exchange (CSE), Supreme Court of British Columbia and other third-party approvals. The transaction is not subject to MegumaGold shareholders approval. Osprey being reasonably satisfied that Meguma will complete a private placement for minimum aggregate gross proceeds of CAD 1 million. Dissent Rights shall have been exercised in respect of no more than 5% of the issued and outstanding Osprey Shares. The directors of Osprey have fixed July 20, 2020 as the Record Date. The Osprey Board recommends that Osprey Shareholders vote FOR the Arrangement Resolution. As on August 14, 2020, the Osprey Board unanimously recommends that Osprey Shareholders vote for the Arrangement Resolution. As of September 4, 2020, Osprey shareholders approved the transaction. On July 16, 2020, Osprey provided written notice to Meguma electing to extend the Outside Date to September 30, 2020. As per filing on August 10, 2020, the transaction is expected to close in early September 2020. As of September 4, 2020, the transaction is expected to close on or about September 14, 2020.

Richard W. Evans of RwE Growth Partners, Inc. acted as fairness opinion provider for Osprey Special Committee. Lyndsay Schooley of Farris LLP acted as legal advisor for Osprey. TSX Trust Company acted as registrar and transfer agent for the Osprey. Davidson & Company LLP acted as an accountant for Osprey. National Securities Administrators Ltd acted as transfer agent for Meguma. Brian O'Neill of O'Neill Law LLP acted as legal advisor for Meguma. Dale Matheson Carr-Hilton Labonte LLP acted as an accountant for Meguma.