Chesapeake Gold Secures $10 Million Equity Financing

• Chesapeake Gold Corp. has entered into a bought deal agreement for $10 million at $4.20 per unit, with each unit consisting of one common share and one-half warrant.
• Red Cloud Securities Inc. acts as lead underwriter and sole bookrunner for the offering syndicate.
• Proceeds are allocated to the company's proprietary oxidative leach technology, the Metates project, the Lucy project, and working capital.
• The underwriters hold a 15% over-allotment option exercisable within 30 days of closing.
• Full warrants are exercisable at $5.65 per share for 36 months following the closing date.

Chesapeake Gold Corp. (TSXV:CKG) is a mineral development company whose principal asset is the Metates project in Durango State, Mexico. Metates hosts 16.77 million ounces of gold at 0.57 grams per tonne and 423.2 million ounces of silver at 14.3 grams per tonne in measured and indicated resources, with additional inferred resources of 2.13 million ounces of gold and 59.0 million ounces of silver. The company also holds the Lucy project and is developing proprietary oxidative leach technology for sulphide ore processing.

$10.0 Million Bought Deal Financing Structure and Terms

Chesapeake has agreed to issue 2,380,953 units at $4.20 per unit for gross proceeds of $10,000,002.60 through a bought deal arrangement with a syndicate of underwriters led by Red Cloud Securities Inc. In a bought deal, underwriters commit to purchasing the entire offering before reselling to investors.

Each unit comprises one common share and one-half of one warrant. Two half-warrants combine to form one full warrant, which entitles the holder to purchase one common share at $5.65 at any time within 36 months of the closing date. The warrant exercise price represents a 34.5% premium to the unit offering price.

The transaction is structured under the company's existing short form base shelf prospectus dated February 23, 2024. Chesapeake will file a prospectus supplement with securities regulators in Canadian provinces and territories except Quebec. The offering may also be sold in the United States on a private placement basis and in other jurisdictions outside Canada and the United States where permitted.

Intended Use of Proceeds for Technology and Project Advancement

The company has stated it intends to use net proceeds to advance its proprietary oxidative leach technology, the Metates project, the Lucy project, and for general working capital. The oxidative leach technology is designed for processing sulphide ores.

The Metates project contains 16.77 million ounces of gold at 0.57 grams per tonne and 423.2 million ounces of silver at 14.3 grams per tonne within 921.2 million tonnes in the measured and indicated category. An additional 2.13 million ounces of gold at 0.47 grams per tonne and 59.0 million ounces of silver at 13.2 grams per tonne sit within 139.5 million tonnes in the inferred category, according to the technical report dated January 13, 2023.

No specific allocation percentages among the three stated uses have been disclosed in the announcement. The general working capital component provides operational flexibility for corporate activities and administrative requirements.

Underwriting Syndicate and Over-Allotment Option Details

Red Cloud Securities Inc. serves as lead underwriter and sole bookrunner, heading a syndicate of underwriters for the transaction. The syndicate structure distributes the offering across multiple firms.

The underwriters have received an over-allotment option to purchase up to 15% of the base offering, representing up to 357,142 additional units at $4.20 per unit. This option is exercisable in whole or in part for 30 days following the closing date and may be used to cover over-allotments and for market stabilisation purposes. If fully exercised, the over-allotment would add approximately $1.5 million to gross proceeds.

Closing is scheduled for January 27, 2026, subject to receipt of necessary regulatory approvals, including approval from the TSX Venture Exchange, and the execution of an underwriting agreement between the company and the underwriters. 

Next Steps

The offering is expected to close on January 27, 2026, subject to regulatory approvals. Following closing, the company will begin deploying proceeds towards its oxidative leach technology development, the Metates project, the Lucy project, and working capital requirements. The transaction requires approval from the TSX Venture Exchange before completion.

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