MONTE DO CARMO

OPTION AND LOAN AGREEMENTS WITH SUBSIDIARY OF HOCHSCHILD MINING PLC FOR THE SALE OF THE MONTE DO CARMO GOLD PROJECT FOR TOTAL CONSIDERATION OF US$60 MILLION (C$80 MILLION)

Proposed Transaction expected to strengthen balance sheet and addresses lack of funding available to development projects in the junior mining sector

Company will be well-positioned to sustain production rates and drive future growth via its operating Minera Don Nicolas gold mine in Argentina and completing a feasibility study at its Mont Sorcier iron development project in Quebec capable of producing 67% DRI grade iron concentrates

Transaction Highlights:

US$15 million 10% interest-bearing secured loan (“Signing Loan”) entered into effective on the date of news announcement (March 4, 2024), advanced in cash as follows:
US$7 million advanced by the Purchaser on the date of this announcement;
US$1 million to be advanced 60 days after the date of the First Advance; and
US$8 million to be advanced within two days following the mailing to Cerrado shareholders of the management information circular to be prepared in connection with the meeting of Cerrado shareholders at which management would seek the Cerrado Shareholder Approval.

Upon obtaining the Cerrado Shareholder Approval, the Signing Loan shall be deemed to be repaid in full by Cerrado and the amount of the Signing Loan shall be applied as part of the Consideration (as defined below).
US$10 million in cash, payable within 5 days of the date on which the Purchaser gives written notice of its exercise of the Option to Cerrado, or by March (16), 2025.
US$20 million which together with the Signing Loan and the Second Payment, the (“Consideration”) in cash payable upon either: (i) if necessary, the approval of the Proposed Transaction by Hochschild shareholders, which is to occur no later than June 30, 2025; or (ii) if Hochschild shareholder approval is not required, by no later than March 30, 2025.

In addition, Amarillo will make the following additional payments following the acquisition of the Project:
US$10 million in cash payable within 14 days of the second anniversary of the date on which Cerrado shareholders approve the Proposed Transaction (the “Second Anniversary Payment”); and
US$5 million in cash payable within 14 days of the earlier of: (i) the commencement of commercial production from the Project; and (ii) March 31, 2027 (the “Production Payment”).