Chesapeake Gold Completes Tatatila Project Sale to Mexican Gold Mining

• Chesapeake Gold completed the sale of its Tatatila gold-copper project in Veracruz, Mexico to Mexican Gold Mining Corp., closing the transaction announced on 1 October 2025.
• The company received 4,451,361 common shares of Mexican Gold, representing 14.99% ownership on an undiluted basis, marking its first securities holding in the buyer.
• A 1.5% net smelter return royalty on future production was included, with Mexican Gold holding an option to repurchase 0.5% for US$500,000 within ten years.
• The shares are subject to statutory hold period plus additional lock-up, with 25% released every six months starting one year after issuance, completing after 2.5 years.
• Chesapeake agreed to vote the shares according to Mexican Gold management instruction for 2.5 years following transaction close.

Chesapeake Gold Corp. (TSXV: CKG) is a Canadian mineral exploration company focused on the discovery and development of gold and silver deposits in North and Central America. The company's flagship asset is the Metates Project in Durango State, Mexico, which contains one of the largest undeveloped gold and silver deposits in the Americas.

Asset Divestiture Transaction Completion

Chesapeake Gold closed the sale of its Tatatila gold-copper project to Mexican Gold Mining Corp. pursuant to the definitive agreement announced on 1 October 2025. The Tatatila property is located in Veracruz, Mexico. The transaction converted the exploration asset into equity consideration and a royalty interest rather than cash proceeds.

Prior to closing, Chesapeake did not own any common shares or other securities of Mexican Gold. The transaction established a new investment position for Chesapeake in the acquiring company. Chesapeake no longer holds operational responsibility for the Tatatila project.

Chesapeake acquired the shares for investment purposes and will continue monitoring Mexican Gold's business, prospects, financial condition and capital requirements. The company may acquire additional securities or sell its position in the future depending on market conditions and other factors.

Share Consideration and Royalty Terms

The transaction provided Chesapeake with 4,451,361 common shares of Mexican Gold, representing 14.99% of outstanding shares on an undiluted basis. This ownership percentage remains below the 15% threshold that would trigger different regulatory requirements under Canadian securities law. The share consideration establishes Chesapeake as a substantial shareholder in Mexican Gold.

Chesapeake received a 1.5% net smelter return royalty on future production from Tatatila. A net smelter return royalty provides the holder with a percentage of revenue from metal sales after refining and transportation costs are deducted.

Mexican Gold has the right to repurchase 0.5% of the royalty for US$500,000 within ten years from the agreement date, which would reduce Chesapeake's royalty to 1.0%.

Lock-Up and Voting Arrangements

The consideration shares are subject to the statutory four-month-and-one-day hold period under Canadian securities regulations, commencing on the issuance date. An additional contractual lock-up restricts trading beyond the statutory period. Under the lock-up terms, 25% of the shares will be released on the one-year anniversary of issuance, with an additional 25% released every six months thereafter until all shares are released after 2.5 years.

The graduated release schedule controls the timing of when Chesapeake can trade the shares in the market. The lock-up applies in addition to the statutory hold period. Full liquidity of the position will not be available until 2.5 years from the issuance date.

Chesapeake agreed to vote the consideration shares in accordance with Mexican Gold management instruction for 2.5 years. This voting agreement applies for the same duration as the lock-up period. Chesapeake retains beneficial ownership and will receive any dividends or distributions, but management voting control transfers to Mexican Gold during this period.

Next Steps

Chesapeake will file an early warning report regarding the transaction on SEDAR+ as required under securities regulations. The filing will provide additional disclosure about the transaction and Chesapeake's investment intentions.

The company will continue to monitor Mexican Gold's business and may adjust its securities position based on market conditions, reformulation of plans or other relevant factors. As the lock-up period progresses, portions of the share position will become available for trading according to the release schedule outlined in the agreement.

‍