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Why Accept the Offer?

SolGold and the Offeror believe that the Offer is compelling and represents a superior alternative to continuing on the course set by the current board of directors and management of Cornerstone. The reasons SolGold, through the Offeror, is making the Offer, as detailed below, are equally sound reasons for accepting the Offer.

With significant investments from Newcrest Mining, BHP as well as the financing announced by Franco-Nevada, it is clear that, to date, the industry majors have elected to gain exposure to the Alpala Project through SolGold and not Cornerstone. SolGold believes that this outcome stems from the fact that industry majors are less interested in acquiring a minority, non-operating stake in an asset such as the Alpala Project. As such, SolGold sees substantial benefit to holders of Cornerstone Shares in consolidating the ownership of the Alpala Project into one entity, so that shareholders of both companies are best placed to benefit in a potential future transaction for control of the Alpala Project. In the event of no such potential future transaction, Cornerstone Shareholders risk being required to fund their share of development costs, which would be challenging for Cornerstone Shareholders under the current structure and agreement between SolGold and Cornerstone.

Additional details and support of the SolGold proposal are set out below.

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A. Strong balance sheet funds SolGold for the next 18 months, including to Completion of the Feasibility Study >

On May 11, 2020, SolGold announced that it had entered into a US$100 million binding Net Smelter Returns Financing Agreement("NSR Financing") with Franco-Nevada Corporation ("Franco-Nevada"), with an option to upsize the financing to US$150 million at SolGold’s election, with reference to the Cascabel license area forming the Alpala Project. Concurrently with the NSR Financing, SolGold and Franco-Nevada have also entered into a US$15 million secured Bridge Loan Agreement ("BLA") that as of this date is fully drawn down. Closing of the NSR Financing is subject to completion of a site visit as final confirmatory due diligence. SolGold and Franco-Nevada are coordinating preparations to undertake this site visit.

For proceeds to SolGold of US$100 million, Franco-Nevada will receive a perpetual 1% NSR interest from SolGold calculated with reference to Net Smelter Returns from the Cascabel licence area. The NSR Financing can be upsized within eight months from the date of the NSR Financing, at SolGold's election, for additional proceeds to SolGold of US$50 million, in exchange for an additional 0.5% NSR interest (in addition to the initial 1% NSR, creating an upsized NSR of 1.5%). The NSR Financing includes (i) a 50% buy-back option exercisable at SolGold's election for six years from closing at a price delivering Franco-Nevada a 12% internal rate of return and (ii) a NPV neutral option in favour of Franco-Nevada to convert the NSR interest into a gold-only NSR interest, available for six years from two years after operation start. The NSR Finacing includes conditional minimum annual royalty payments of US$10 million from 2028. Prior to that date, SolGold has no payment obligations and no financing costs are incurred. The NSR Financing also includes a NSR interest top-up mechanism in the event that the actual mine production (measured on a copper equivalent basis) is less than 85% of planned production.

On June 5, and June 8, 2020, SolGold announced the results of a private placing to institutional and private investors as well as members of the board of directors raising US$40.0 million in gross proceeds (the "June 2020 Private Placing").

The NSR Financing and the June 2020 Private Placing together raise up to US$190 million in gross proceeds before costs and will fund SolGold for the next 18 months, including through the anticipated Alpala Project Pre-Feasibility Study and Feasibility Study, all activities required to achieve the development decision (with the exception of the actual capital development costs) in addition to regional exploration costs and all overhead costs.

Immediately after the completion of the June 2020 Private Placing, SolGold had a cash balance of US$49 million, with the prospect of receiving a further US$135 million from Franco-Nevada within 8 months from the NSR Financing. SolGold’s balance sheet compares favourably to Cornerstone’s cash position at March 31, 2020 of just US$0.7 million with no further capital raises undertaken by Cornerstone since then.

This puts SolGold in a strong position to continue to drive forward the development of the Alpala Project and progress the assessment of its substantial and prospective regional exploration concessions across the rest of Ecuador.

B. Premium to Shareholders >

On January 31, 2019, SolGold announced its intention to make the Offer, which represented a premium of approximately 20% to the undisturbed closing price of Cornerstone Shares on the TSX-V on January 30, 2019. Since this time, Cornerstone Shares have traded at a discount to the implied value of the Offer Consideration for the significant majority of trading days.

On June 29, 2020, the closing price of the Cornerstone Shares on the TSX-V was $3.19, the closing price of the SolGold Shares on the LSE was £0.210 and the closing price of the SolGold Shares on the TSX was $0.355. The Offer Consideration had a value of approximately $3.905 per Cornerstone Share, representing a premium of:

  • 22% to the closing price of the Cornerstone Shares as of the close of trading on June 29, 2020;
  • 66% to the volume weighted average price of the Cornerstone Shares over the last 90 trading days; and
  • 56% to the volume weighted average price of the Cornerstone Shares over the last 12 months.

The maximum premium implied by the Offer Consideration since SolGold's announcement on January 30, 2019 of its intention to make an offer, was 124% on May 13, 2020.

SolGold believes Cornerstone’s shares will continue to trade at an implied discount to SolGold for the following reasons:

  • SolGold is now fully funded for and is making progress towards the Alpala Pre-Feasibility and Feasibility Study, completion of which will trigger negative financial consequences for Cornerstone as described below under "E - Removal of Cornerstone’s Financing Obstacles at the Alpala Project";
  • a realization in the market that Cornerstone has limited rights and no influence over the direction of ENSA and the Alpala Project, and that its stake in ENSA is of limited long-term value for strategic investors;
  • continued appreciation of SolGold’s relative control premium over the Alpala Project as a result of its registered and beneficial ownership and managerial control thereof;
  • increased recognition of SolGold’s experienced and recognized management team in Ecuador with proven capabilities in identifying prospective mineral licences, discovering mineral deposits and progressing feasibility studies in a prompt, cost-effective manner;
  • continued appreciation of the value of SolGold’s 100% owned exploration assets across 75 granted, wholly owned licenses in Ecuador;
  • consistent progress by SolGold towards the Pre-Feasibility Study and Feasibility Study on the Alpala Project, the completion of which will trigger negative financial consequences for Cornerstone as described below under "E - Removal of Cornerstone’s Financing Obstacles at the Alpala Project"; and
  • favourable investor perception of SolGold’s proven ability to attract financing from a wide range of sources, including from some of the world’s largest mining companies, global institutional investors as well as development funding companies specialising in metal royalties and production streams.

SolGold believes that the strategic disadvantage facing Cornerstone and the material strategic benefits enjoyed by SolGold, including the possibility of its shareholders receiving a significant premium for control, whilst continuing to participate directly in the Alpala Project and the other Ecuadorian licences owned by SolGold, means than an alternative third party offer for Shareholders at the same or higher price than this Offer is unlikely.

C. Continued Participation in the Alpala Project through SolGold – the 100% Consolidated Operator >

The consolidation of 100% ownership of the Alpala Project into a single entity makes eminent sense for shareholders wishing to remain invested in the Alpala Project's expected development and will also provide shareholders of the combined entity a meaningful platform for input and control over the project. Cornerstone's current 15% interest in the Alpala Project is held through its ownership of ENSA equity, which carries no operational rights, no rights to representation or meaningful participation on the board of directors of ENSA, SolGold or any technical committee with oversight of any aspect of the Alpala Project, no ability to encumber or lend against the asset and no negative controls or off-take rights. Furthermore, SolGold is under no obligation, fiduciary or otherwise, to inform, share information, grant access, or align commercial objectives with Cornerstone. SolGold is an integrated development and exploration company, controlling or wholly owning the majority of its assets. In contrast, Cornerstone is a micro-cap holding company for small minority interests, with a passive management team that can play no role in the development of the Alpala Project, nor have an ability to exert any influence on the project. As such, value for Shareholders in the combined entity would immediately be unlocked through the simplification of the project structure in addition to removing duplicative overhead costs as a result of operating a single publicly-listed controlling entity.

If all Shareholders participate in the Offer then on completion of the Offer the Shareholders would hold a combined total 14% interest in SolGold.

D. The Elimination of Cornerstone's Restrictive Debt-Carry Constraints >

Cornerstone's pro rata share of costs leading up to the completion of a Feasibility Study at the Alpala Project (anticipated to be a total of US$52.0 million) is currently being debt-carried by SolGold. As of March 31, 2020, SolGold had incurred US$30.3million on behalf of Cornerstone relating to the Alpala Project. The eventual repayment of this debt creates a large, and potentially restrictive, liability for Shareholders upon the completion of a Feasibility Study, which would be avoided if Shareholders accept the Offer. Under the current structure, Cornerstone must repay SolGold out of the Alpala Project cash flows, on a 90% preferential basis, until Cornerstone's carried costs are repaid in full. As a result, Shareholders will only have access to 10% of the Alpala Project cash flows that they would otherwise be entitled to by virtue of their 15% interest (or 1.5% of the Alpala Project cash flows) unless and until that debt has been repaid. By accepting the Offer, however, Shareholders will receive SolGold Shares or Exchangeable Shares, giving them a direct interest (or a right to a direct interest) in an entity with a right to share in 100% of the Alpala Project's free cash flows. Such cash flows would commence from the start of production at the project, and with no further liability by Cornerstone to repay its share of the lead-up expenditures back to SolGold.

E. Removal of Cornerstone's Financing Obstacles at the Alpala Project >

Under the current structure, after completion of a Feasibility Study at the Alpala Project, if Cornerstone wishes to maintain its 15% interest in ENSA it will be required to fund its pro rata share of development expenditures at a minimum of 10% of the required capital on an ongoing basis during the highly capital-intensive construction phase of the project. SolGold expects Cornerstone will face significant obstacles in financing such contributions particularly with the current capital expenditure estimate of US$2.6-2.8 billion implying Cornerstone will be required to secure up to US$390-420 million of financing. This represents greater than 5 times Cornerstone’s current market capitalization. In the current market this is considered a challenging task for a micro-cap holding company. Should Cornerstone attempt to maintain its 15% ownership, Cornerstone is unlikely able to arrange debt financing, a royalty, a metal stream or any other similar structure due to a prohibition on granting security over its 15% economic interest in the Alpala Project, which is Cornerstone's only material project. SolGold believes that Cornerstone will also face significant challenges in arranging equity financing, since third parties are likely to be discouraged from participating in any such financing due to the lack of data room access and availability to conduct due diligence, project control and influence as noted above. To the extent Cornerstone is able to arrange such equity financing, SolGold expects it will be highly dilutive to existing Shareholders given Cornerstone’s market capitalisation of just US$76 million ($103 million) against its likely required funding of US$390-420 million. SolGold believes holders of Cornerstone Shares should be greatly concerned about the extent to which the completion of such dilutive equity financings will limit the upside in Cornerstone Shares. Additionally, under its agreement with SolGold, Cornerstone cannot sell its interest in the Alpala Project without SolGold's consent, which may be withheld in SolGold's absolute discretion, and even then, SolGold has a pre-emptive right to purchase such interest itself. In the event of failure to fund its pro rata share of development expenditures and if Cornerstone's interest drops below 10%, SolGold may exercise its right at any time to convert Cornerstone’s remaining interest in the Alpala Project into a 0.5% net smelter return which SolGold may acquire at anytime for total consideration of only US$3.5 million.

By accepting the Offer, Shareholders can remove all of the financing obstacles above and safeguard their investment.

F. Additional Upside of Other Highly Prospective SolGold Licences >

Beyond the Alpala Project, SolGold holds through 4 wholly-owned subsidiaries, 75 additional 100%-owned licences in Ecuador that are highly prospective, and which have yet to have their full potential value assessed. Of these 75 concessions, SolGold has identified 13 priority targets – the most advanced of which are La Hueca, Porvenir, Rio Amarillo, Cisne Victoria, Cisne Loja, Blanca, Sharug, Chical and Timbara – which show a strong probability of being added to SolGold's project pipeline. Shareholders accepting the Offer will gain exposure to the upside of these projects, as summarized below:

  • The La Hueca project is in the south of Ecuador within the eastern Jurassic Belt which also contains Lundin Gold's Fruta del Norte epithermal gold deposit (14 Moz gold), the Mirador copper-gold porphyry deposit (3 Mt copper, currently being developed by Chinese consortium CRCC-Tongguan) and the Santa Barbara gold-copper porphyry deposit (8 Moz gold, contained within Lumina Gold's Condor project). The project area covers approximately 92km2 on 3 concessions and hosts 6 identified porphyry centres. Geological mapping, stream sediment sampling and rock chip samples, including a sample containing 13.8% copper, have shown the presence of a quartz vein network containing several minerals characteristic of copper-gold porphyries such as chalcopyrite, bornite and molybdenite. SolGold is preparing to drill test the most promising target, the La Hueca 6 anomoly.
  • The Porvenir project is also hosted in the Jurassic belt in southern Ecuador and covers approximately 136 km2 on 4 concessions. A stream sediment sampling program initially delineated two geochemical anomalies within a larger 6.0km x 5.5km stream anomaly. These anomalous zones are known as the Derrumbo and Bartolo prospects. Detailed follow up mapping and rock chip sampling continue to locate additional mineralised outcrops at both the Bortolo and Derrumbo target, with rock chips grading up to 8.7% copper. Subsequent extended rock-saw channel sampling along exposed outcrops yielded 147m at 0.64% CuEq (0.43 g/t Au and 0.37% Cu) including 82m at 0.96% CuEq (0.71 g/t Au and 0.55% Cu). The main prospective target area at Derrumbo, Target 15, has been defined over an area of 1.5km x 1.0km and will be drill tested in the third quarter of 2020.
  • The Blanca project and tenements are in Ecuador's Northern Eocene Belt, 8km north-west of the Cascabel concession. Sampling has identified several gold-rich epithermal quartz veins known as the Cielito vein which extends over approximately 5km. Rock chips from the Cielito vein average over 80 g/t Au with the highest grade sample returing 617 g/t Au. The eastern part of this vein system lies within the area of mutual interest with Cornerstone, but there has been no significant work on the extension into the area of mutual interest. The Blanca project also hosts a silicified topographic dome which contains widespread gold mineralization outcropping over an area of approximately 500m x 500m.
  • The Cisne Loja project is located in the Miocence porphyry belt of southern Ecuador and covers approximately 147km2 in 3 concessions. SolGold has identified two high priority prospects within the Cisne Loja project: the Cuenca Loma gold prospect, where epithermal quartz veins up to 15 g/t Au outcrop over an area of 2km x 1km, and the Celen porphyry copper gold project, where rock chips up to 4.32% Cu and 4.5 g/t Au have been discovered over a 2km x 1km soil copper-gold-molydedum anomaly.
  • The Chical project is located approximately 15km NE of Cascabel on the Eocene belt of Northern Ecuador and covers approximately 144km2 in three concessions. SolGold has identified mulitiple targets at Chical including Espinosa, where a 1.5km x 1.0km soil anomaly has been defined and rock chip samples have returned up to 7 g/t Au and at the Pascal and La Esperanza prospects where large copper gold anomalies have been defined with rock chips returning up to 1 % copper, 0.4 g/t gold and 886 ppm molybdenum.
  • The Rio Amarillo project is located approximately 35km SE of Cascabel on the Eocene belt of Northern Ecuador and covers approximately 123km2 in three concessions. High priority targets within Rio Amarillo include a 2.5km x 2.2km lithocap with widespread gold and copper anomalism and distal quartz veins with rock chip samples grading up to 11 g/t gold.
  • The Sharug project is located in the Miocene belt of southern Ecuador and comprises one concession of 26km2. SolGold has identified two targets within the concession: a gold project in the north of the concession where epithermal quartz vein samples have been defined over an area of 1.4km x 1.0km and yielded results up to 39.6 g/t gold, and a porphyry copper gold project in the south of the concession at Santa Martha where soil copper gold and molybdenum geochemistry, airborne magnetics and geological mapping have defined a target area of 1km x 1km.
  • The Timbara project is located within the eastern Jurassic Belt in the south of Ecuador on the Timbara concessions. Initial stage geochemical sampling and reconnaissance mapping has located promising mineralised outcrops containing chalcopyrite and traces of bornite. A rock chip sample from a bornite-rich vein returned best results of 28.89% Cu. These veins are believed to be a continuation of the porphyry corridor identified at SolGold's La Hueca project described above.
  • The Cisne Victoria project is located in south eastern Ecuador, on the El Cisne concessions. The project consists of an epithermal zone of alteration and mineralisation indicative of the presence of a large porphyry system. Best sampling results have returned 7m at 2.29% copper, 0.73 g/t gold and 8.83 g/t silver.

(See "The Alpala Project" in Section 3 of the Circular for a full summary of the mineral resource and mineral reserve estimates for SolGold). The foregoing summary has been reviewed and approved by Jason Ward, (CP) B.Sc. Geol., Exploration Manager Global of SolGold, who is a "qualified person" under NI 43-101.

G. Enhanced Market Profile, Increased Liquidity, Lower Cost of Capital and More Financing Options >

By accepting the Offer, Shareholders will receive SolGold Shares, or, in the case of certain Shareholders subject to tax in Canada who so elect, Exchangeable Shares (which are intended to be the economic equivalent of SolGold Shares). The existing SolGold Shares are listed and traded on the TSX and the Main Market of the LSE, representing a broad and diversified group of investors and capital. Moreover, the market capitalization of the combined entity is initially expected to be in approximately US$620 million, prior to the potential for a significant re-rating. All of which should provide a greater capital markets presence and broader analyst coverage and liquidity. Taken together SolGold has the potential to reduce its cost of capital and will have expanded financing options. Securities listed on the TSX and LSE, particularly securities of issuers with larger market capitalizations, generally trade with less volatility than issuers listed on the TSX-V like Cornerstone.

H. Experienced Board and Management >

SolGold's experienced board of directors and award-winning management team have a strong record of value creation and stewardship of investors' capital. SolGold made its first entry into Ecuador in 2012 with the acquisition of a 20% stake in ENSA, at which time its market capitalization was approximately US$20 million. In February 2014, SolGold completed the terms of the earn-in to increase its ENSA ownership to 85% and, by the end of that month, its market capitalization increased to approximately US$120 million. In September 2016, SolGold recommenced its drilling programme and once the first results became public, SolGold's market capitalization increased to approximately US$190 million. Since then, SolGold has completed three Mineral Resource estimates, the most recent of which was announced on April 7, 2020 with 9.9 Mt contained copper, 21.7 Moz gold, and 92.2 Moz silver in the Measured and Indicated categories lifting the market capitalization to approximately US$535 million as of the date of this Offer.

Overall, SolGold's successful exploration and effective leadership drastically improved the valuation of ENSA, with the Alpala Project and SolGold management being the primary driver of value for both Cornerstone and SolGold shareholders. By tendering to the Offer and becoming SolGold shareholders, Shareholders will receive the benefit of this proven, value creating-team who have discovered and delineated a large scale, world-class copper-gold-silver porphyry deposit at the Alpala Project. A successful Offer would allow the elimination of needless and duplicative corporate overheads, general and administrative expenses and deliver demonstratable ongoing value add for all Shareholders.

I. Tax Efficient Transaction Structure >

The Exchangeable Shares that may be issued in connection with this Offer enable, to the extent practical, permissible and applicable, Shareholders otherwise subject to tax in Canada to elect to claim a full or partial tax deferral (rollover) under the Income Tax Act (Canada), as amended, (the "Tax Act"), as described in the sections entitled "Certain Information Concerning ExchangeCo and the Exchangeable Shares" in Section 11 of the Circular and "Certain Canadian Federal Income Tax Considerations" in Section 25 of the Circular. The Exchangeable Shares, by virtue of the redemption and exchange rights attaching to them and the provisions of the Support Agreement described in Section 11 of the Circular, are intended to provide the holders with economic rights that are, as nearly as practicable, equivalent to those of a SolGold Share.

J. Potential for Downward Share Price Impact if the Offer is Not Accepted >

The Offer represents a premium to the market price of Cornerstone Shares and provides Shareholders with an offer capable of acceptance. If the Offer is not successful and no competing transaction is made, SolGold believes the trading price of Cornerstone Shares may decline to pre-Offer levels or lower due to:

  • the material financing disadvantages of Cornerstone under its agreement with SolGold described above;
  • Cornerstone's minority interest in the Alpala Project, which does not attract a premium, and may in fact attract a discount;
  • perceived transaction risk due to Cornerstone’s inability to consummate a business combination with its ‘natural’ partner in ENSA, SolGold;
  • the unsubstantial and early stage nature of its remaining assets (other than the SolGold Shares held by Cornerstone); and
  • the apparent absence of other premium bids.

If Shareholders do not accept the Offer, it is the view of SolGold that:

  • SolGold will continue to trade at a premium to Cornerstone on the basis of
    • its 85% ownership of the Alpala Project;
    • the discount Cornerstone suffers due to its minority economic position in the Alpala Project; and
    • the inability of Cornerstone to control, or even influence, operations at the Alpala Project;
  • Cornerstone's shareholding of SolGold will continue to be diluted and lose strategic relevance as SolGold's capital structure expands through new value adding share issuances;
  • As SolGold approaches completion of the Feasibility Study on the Alpala Project, the risks to Cornerstone of not being able to finance the US$390-420 million of capital contributions required to maintain its 15% interest and the risk that SolGold could acquire the entire equity interest of Cornerstone in ENSA for just US$3.5 million should Cornerstone's equity interest drop below 10% which would trigger this right;
  • The share price of Cornerstone may fall if the Offer is not accepted or is withdrawn as SolGold believes there is a very limited scope for a superior proposal to emerge;
  • Shareholders would not be able to participate in the upside offered by SolGold's unique operational capabilities in Ecuador and highly competent, efficient and award-winning management team;
  • Shareholders would not be able to participate in the upside offered by SolGold's 75 other granted concessions covering 13 wholly-owned priority targets capable of becoming economic copper-gold porphyries. In particular, they would not participate in the emerging La Hueca, Porvenir, Rio Amarillo, Cisne Victoria, Cisne Loja, Blanca, Sharug, Chical and Timbara and other targets; and
  • Shareholders would not enjoy the market attention being focused on SolGold as exemplified by the premium investments made by Newcrest, BHP, Franco-Nevada and BlackRock, the world's largest mining equity investor.

The information on and accessible through this website and videos and advertisements prepared by SolGold Canadian ExchangeCO Corp. (“ExchangeCO” or the “Offeror”), a wholly owned subsidiary of SolGold plc (“SolGold”) that have linked you to this website (collectively, the “Information”) relates to an exchange offer commenced by SolGold for all the outstanding shares of Cornerstone Capital Resources Inc. (“Cornerstone”). Please read the important notices below.



Except as provided in the next sentence, the Information does not constitute an offer to buy or sell, or an invitation or a solicitation of an offer to buy or sell any securities of Cornerstone or SolGold. The Offer is made exclusively by means of, and subject to the terms and conditions set out in, the Offer to Purchase and Circular, dated June 30, 2020, as amended from time to time, and the related Letter of Transmittal and Notice of Guaranteed Delivery. While the Offer will be made to all holders of Cornerstone shares, the Offer will not be made or directed to, nor will deposits of shares be accepted from or on behalf of, holders of shares in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with the laws of such jurisdiction. However, SolGold may, in its sole discretion, take such action as it may deem necessary to extend the Offer to holders of Cornerstone shares in any such jurisdiction.




This news release contains certain forward-looking information (referred to herein as "forward-looking statements") under the provisions of applicable Canadian securities laws. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "plan", "scheduled", "intend", "objective", "continuous", "ongoing", "estimate", "expect", "may", "will", "project", "should", or similar words suggesting future events, circumstances or outcomes. In particular, this news release contains forward-looking information concerning:

(i) the Offer, various terms of the Offer and the anticipated timing of commencement of the Offer;

(ii) expectations with respect to benefits that may be achieved upon a combination of the businesses of SolGold and Cornerstone;

(iii) reasons for holders of Cornerstone Shares to accept the Offer;

(iv) expectations with respect to the combined entity;

(v) the completion of any compulsory acquisition or subsequent acquisition transaction for shares not deposited through the Offer (either one of a "Second Step Transaction"); and

(vi) the fulfillment of the reaming condition precedents needed to access the funding provided by Franco-Nevada Corp. ("Franco-Nevada"), pursuant to the NSR financing agreement between Franco-Nevada and SolGold.

Forward-looking statements are based upon the opinions and expectations of management of SolGold as at the effective date of such statements and, in some cases, information supplied by third parties. Although SolGold believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions and that information received from third parties is reliable, it can give no assurance that those expectations will prove to have been correct.


Forward-looking statements are subject to certain risks and uncertainties that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements.


In addition to any specific risk factors noted above in the body of this news release, these risks and uncertainties include, but are not limited to, such things as changes in general economic conditions in Canada, the United States, Ecuador and elsewhere, changes in operating conditions, the volatility of prices for minerals, metals and other commodities, commodity supply and demand, fluctuations in currency and interest rates, availability of financial resources or third-party financing, availability of equipment, materials and personnel, defaults by counterparties under commercial arrangements to which SolGold (or any of its subsidiaries) is a party, an inability to procure regulatory approvals in a timely manner or on terms satisfactory to SolGold, and new laws and regulations (domestic and foreign). Risks relating specifically to SolGold's ability to realize perceived benefits from the proposed combination of SolGold and Cornerstone include SolGold's inability to successfully integrate the operations of SolGold and Cornerstone following completion of the Offer, SolGold's inability to complete a Second Step Transaction, the timing and condition precedents needed to be fulfilled by SolGold to access the funding pursuant to the NSR financing agreement between SolGold and Franco-Nevada, and SolGold's inability to negotiate early termination of redundant Cornerstone contracts on terms reasonably satisfactory to SolGold following completion of the Offer. Additional risks to which SolGold is exposed in the conduct of its business are set out under the heading "Risk Factors" of SolGold's Annual Information Form (dated September 16, 2019) for the year ended June 30, 2019, and under the heading "Financial Instruments and Related Risks" of SolGold's Management's Discussion and Analysis (dated August 15, 2019) in respect of the year ended June 30, 2019, both of which have been filed with various securities regulatory authorities in Canada and are available (under SolGold's profile) through the SEDAR website at


Accordingly, readers should not place undue reliance upon the forward-looking statements contained in this news release and such forward-looking statements should not be interpreted or regarded as guarantees of future outcomes.


Forward-looking information respecting the Offer, various terms of the Offer and the anticipated timing of commencement of the Offer, including the time period of the Offer and optional extension period afforded to the Offeror under applicable Canadian securities laws, is based upon various assumptions and factors, including publicly reported financial information concerning Cornerstone, publicly reported information concerning the number of outstanding common shares of Cornerstone and the number of options and other convertible or exchangeable rights and securities granted by Cornerstone (entitling holders thereof to acquire common shares of Cornerstone), advice from professional advisors with respect to statutorily mandated time frames for various applications and steps/events associated with the Offer, that Cornerstone has made full and accurate disclosure of all material information concerning Cornerstone in accordance with applicable Canadian securities laws (including disclosure of all material contracts and existing and potential contingent liabilities) and that there have been no material changes in the business, affairs, capital, prospects or assets of Cornerstone since March 31, 2020, except for the material change described in the material change report filed on April 13, 2020 on SEDAR under Cornerstone's issuer profile. Forward-looking information concerning possible synergies and efficiencies that may be achieved upon a combination of the businesses of SolGold and Cornerstone and other benefits of a combination of the businesses of SolGold and Cornerstone is based upon various assumptions and factors, including (in addition to assumptions and factors noted above in the body of this news release), financial information of Cornerstone available through publicly filed documents and SolGold's general industry knowledge and experience.


The forward-looking statements contained in this news release are made as of the date hereof and SolGold does not undertake any obligation to update or to revise any of the included forward-looking statements, except as required by applicable securities laws in force in Canada. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.


Market Abuse Regulation (MAR) Disclosure


Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of the Regulation (EU) No 596/2014 until the release of this announcement.


Cautionary Statement Regarding Cornerstone Information


Cornerstone has not reviewed this news release and has not confirmed the accuracy and completeness of the Cornerstone information contained herein. Neither SolGold, nor any of the officers or directors of SolGold, assumes any responsibility for the accuracy or completeness of such Cornerstone information or any failure by Cornerstone to disclose events or facts that may have occurred, or which may affect the significance or accuracy of any such Cornerstone information, but which are unknown to SolGold. SolGold has no means of verifying the accuracy or completeness of any of the Cornerstone information contained in this news release or whether there has been a failure by Cornerstone to disclose events or facts that may have occurred or may affect the significance or accuracy of any such information.