Calibre Mining to acquire Marathon Gold for C$0.84 per share

Calibre Mining Corp. (CXBMF) and Marathon Gold Corporation (MGDPF) are pleased to announce that the Parties have entered into a definitive arrangement agreement whereby Calibre will acquire all of the issued and outstanding common shares of Marathon pursuant to a court-approved plan of arrangement. The Transaction will create an Americas-focused, high-margin, high-growth, mid-tier gold producer with estimated average annual gold production of approximately 500 koz during 2025 – 2026E. The combined company will have a strong balance sheet with a combined cash balance of $148 million and significant free cash flow generated from Calibre’s existing mines. This financial strength is expected to facilitate the seamless construction of the Valentine Gold Project and a continuous flow of exciting discovery and resource-building drill results from Nicaragua, Nevada and Newfoundland & Labrador. In connection with the Transaction, Calibre has agreed to purchase on a non-brokered private placement basis 66,666,667 common shares of Marathon at C$0.60 per share for gross proceeds of C$40 million representing a 14.2% equity interest in Marathon on an issued and outstanding basis; closing is expected to be completed on November 14, 2023 and is not contingent on closing of the Transaction. Pursuant to the Transaction, Marathon shareholders will receive 0.6164 of a Calibre common share for each Marathon common share held. The Consideration implies a value of C$0.84 per Marathon common share and gross Transaction equity value consideration of C$345 million on a fully diluted in-the-money basis. This represents a premium of 32% based on spot and 61% based on Calibre’s and Marathon’s 20-day VWAP as at November 10, 2023. Existing shareholders of Calibre and Marathon will own approximately 66% and 34% of the combined company, respectively. Marathon will also be entitled to nominate one member to the board of directors of Calibre. In connection with the Transaction, Calibre agreed to purchase 66,666,667 common shares of Marathon at C$0.60 per share for gross proceeds of C$40 million pursuant to the Concurrent Private Placement, representing a 14.2% equity interest in Marathon on an issued and outstanding basis. Closing of the Concurrent Private Placement is expected to be completed on November 14, 2023 and is not contingent on closing of the Transaction. The Transaction will be completed pursuant to a court-approved plan of arrangement under the Canada Business Corporations Act. The Transaction will be subject to the approval of at least 66- 2/3% of the votes cast by Marathon shareholders at a special meeting of Marathon shareholders and a simple majority of disinterested shareholders The issuance of common shares by Calibre as the Consideration in connection with the Transaction is subject to the approval of a majority of the votes cast by the shareholders of Calibre at a special meeting of Calibre shareholders. In addition to shareholder approvals, the Transaction is also subject to the receipt of certain regulatory, court and Toronto Stock Exchange approvals and other closing conditions customary in transactions of this nature. The Arrangement Agreement includes, among other things, a non-solicitation covenant on the part of Marathon (subject to customary fiduciary out provisions) and a right for Calibre to match any competing offer that constitutes a superior proposal. Under certain circumstances, Calibre would be entitled to a C$17.5 million termination fee and Marathon would be entitled to a C$17.5 million reverse termination fee. Officers and directors of Calibre, along with B2Gold Corp., which hold approximately 27% of the outstanding Calibre common shares, have entered into voting support agreements pursuant to which they have agreed, among other things, to vote their Calibre common shares in favour of the Transaction. Officers and directors of Marathon which hold approximately 0.9% of the outstanding Marathon common shares, have entered into voting support agreements pursuant to which they have agreed, among other things, to vote their Marathon common shares in favour of the Transaction. Sprott Private Resource Lending II (Collector-2), LP and Sprott Resource Lending Corp. have provided a conditional waiver of certain provisions of, and defaults and events of default arising under, the amended and restated credit agreement dated January 24, 2023 between Marathon, as borrower, and Sprott relevant to or arising as a result of the Transaction. Such waivers are subject to and conditional upon the satisfaction of certain conditions prior to closing of the Transaction. Full details of the Transaction will be included in the respective management information circulars of Calibre and Marathon, expected to be mailed to shareholders in mid-December 2023. Both shareholders’ meetings and closing of the Transaction are expected in January 2024.