Ranchero Gold Corp. Completes RTO Transaction - Seite 2

An aggregate of 57,862,322 common shares of the Company were issued pursuant to the Transaction. Following the completion of the Transaction, the Company has an aggregate of approximately 65,737,322 common shares issued and outstanding. The CUSIP number of the common shares of the Company has been changed to 75189P109 and its ISIN has been changed to CA75189P1099.

Debt Settlement and Success Fee

As a condition to closing of the Transaction, the Company settled its debt of approximately C$35.5 million owing to Pala Investments Limited (“Pala”) through the conversion of approximately C$32.0 million of the outstanding indebtedness into an aggregate of 6,449,759 common shares of the Company, on a post-Consolidation basis, and Pala forgave the remaining indebtedness of approximately C$3.5 million pursuant to the terms of a debt settlement agreement between Pala and the Company.

As Pala was a control person of the Company prior to the Transaction, the debt settlement was a related party transaction pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company relied on the financial hardship exemptions from valuation and minority approval contained in sections 5.5(g) and 5.7(e) of MI 61-101. The debt settlement was unanimously approved by the board of directors of the Company. Prior to the debt settlement and Transaction, Pala owned 47.3% of the issued and outstanding shares of the Company, and following the debt settlement and Transaction, Pala owns approximately 11.6% of the issued and outstanding shares of the Company.

The Company also issued an aggregate of 510,154 common shares of the Company, on a post-Consolidation basis, to LACG Capital Inc. (“LACG”) in consideration for LACG’s assistance in introducing Ranchero to the Company.

The common shares of the Company issued to Pala and LACG are subject to a hold period expiring on February 8, 2022, and the shares issued to Pala are also subject to a TSXV Form 5D – Escrow Agreement.

Concurrent Financing

Ranchero previously completed a private placement of an aggregate of 9,561,613 subscription receipts, at a price of $0.55 per subscription receipt, to raise aggregate gross proceeds of $5,258,887 (the “Concurrent Financing”). Haywood Securities Inc. (the “Agent”) acted as the agent and bookrunner to locate purchasers in the Concurrent Financing on a best-efforts agency basis. Immediately prior to the closing of the Transaction, each subscription receipt issued in the Concurrent Financing was converted one common share of Ranchero, which was immediately exchanged for one common share of the Company pursuant to the Transaction. The gross proceeds of the Concurrent Financing less certain deductions and 50% of the cash fee payable to the Agent, applicable taxes and expenses of the Agent incurred in connection with the Concurrent Financing were released from escrow concurrently with the completion of the Transaction. The Company issued an aggregate of 319,093 broker warrants (the “Broker Warrants”) in exchange for the broker warrants that were previously issued by Ranchero to the Agent and the finders of the Concurrent Financing. Each Broker Warrant entitles the holder thereof to acquire one common share of the Company at an exercise price of $0.55 until October 7, 2023.