MegumaGold Corp. and Osprey Gold Development Ltd. announced that they have entered into a letter agreement (the "Agreement") pursuant to which MegumaGold would acquire 100% of the issued and outstanding shares of Osprey via a business combination (the "Transaction"). The proposed Transaction would provide shareholders of both companies with: a natural district consolidation of Osprey's properties including the Goldenville and Caribou projects, and MegumaGold's extensive exploration land position; continued and increased exposure to Nova Scotia's Meguma terrane; strengthened balance sheet; opportunities for operational and exploration synergies; and significantly strengthened management and leadership team through complimentary skillsets.

Management of both companies believe that the combination of Osprey's Goldenville and Caribou projects, with MegumaGold's developing gold projects and district-scale exploration potential will create a combined entity that will be the leader in advanced exploration and regional development of the Meguma gold district. Details of the Proposed Transaction: MegumaGold will acquire all of the issued and outstanding shares of Osprey. Each shareholder of Osprey will receive such number of common shares of MegumaGold (the "Meguma Shares") as is equal to the product of the number of Osprey Shares held by such shareholder at an exchange ratio which equals one (1) Meguma Share per two (2) Osprey Shares outstanding at the closing of the Transaction.

The definitive agreement will provide that unexercised Osprey options and share purchase warrants will be assumed by MegumaGold and will: (i) remain outstanding for their full term, and (ii) following the closing date of the Transaction, entitle the holder thereof to acquire MegumaGold Shares in lieu of Osprey Shares, in such number and at such exercise price as shall be adjusted based on the exchange ratio inherent in the Transaction, and otherwise on the same terms and conditions as existed prior to the Transaction. Osprey will have the right to appoint 2 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 5. Osprey shall contribute management personnel to the resulting issuer. MegumaGold currently has 102,780,640 outstanding shares and 31,364,506 shares reserved for issuance under incentive stock options and warrants.

As of today's date, without inclusion of including any of MegumaGold's current shareholdings in Osprey, it is anticipated an aggregate of 36,671,166 common shares of MegumaGold are anticipated to be issued to Osprey shareholders, along with incentive stock options and warrants entitling Osprey shareholders to acquire a further 13,921,068 common shares of MegumaGold. 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 139,451,806 shares issued and outstanding, of which former shareholders of Osprey will hold approximately 26.3% of the issued and outstanding common shares of the resulting issuer (27.4% of the common shares of the resulting issuer on a fully diluted basis). The Transaction is subject to a number of conditions, including due diligence by each party, completion of definitive documentation, approval by Boards of Directors of each party, obtaining any necessary shareholder approvals (including any minority approval required by Multilateral Instrument 61-101, if applicable, obtaining all governmental, regulatory, TSX Venture Exchange ("TSXV"), Canadian Securities Exchange (the "CSE"), and other third-party approvals which are necessary in order to allow the parties to complete the Transaction.

The precise form of the Transaction will be determined following further advice and consultation with the parties' respective legal and tax advisors. The Transaction cannot close until all of these conditions are met. There can be no assurance that the Transaction will be completed as proposed, or at all.