SolidusGold to Acquire Northumberland Project From Newmont for US$20 Million

VANCOUVER, Sep. 15, 2016 - SolidusGold Inc. ("SolidusGold" or the "Company") (TSX VENTURE: SDC) is pleased to announce that the Company has entered into a definitive purchase agreement (the "Agreement") with Newmont USA Limited and certain of its affiliates ("Newmont") for the purchase by the Company of the Northumberland Project in Nevada for US$20 million.

SolidusGold will host a conference call on September 22, 2016, at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time for members of the investment community to discuss the acquisition. Dial-in details for the conference call can be found at the bottom of this press release.

The Company also announces that it has engaged Haywood Securities Inc. as agent to raise aggregate gross proceeds of up to C$40 million (the "Offering"), which will be used to fund the acquisition of the Northumberland Project, an initial work program on the property and for general working capital purposes. The Company has received indications of support from GF Capital, LLC and certain strategic investors who may subscribe for up to C$20 million worth of subscription receipts as part of the Offering. Certain insiders of the Company have also indicated that they will participate in the Offering.


Transaction Highlights

- Acquisition of a large-scale gold asset in a pro-mining jurisdiction with established infrastructure. The historically defined deposit areas are located wholly on patented private land and not subject to any royalty.

- Northumberland Project hosts significant known mineralization, including an historic resource estimate completed by Fronteer Gold Inc. (formerly Fronteer Development Group Inc., "Fronteer") (2008), which identified a resource deposit. Substantial drilling completed subsequent to this historical resource estimate has not yet been incorporated into an updated block model, and the mineralized area remains open to potential expansion.

- SolidusGold plans to initiate a two-pronged strategy: expanding and advancing the near-surface oxide gold mineralization amenable to heap leaching; plus exploration of deeper sulfide gold mineralization. Significant metallurgical work has been completed subsequent to the historical resource estimate.

- The transaction represents the creation of a new junior gold company, holding one of only a few remaining large-scale gold exploration assets in North America, and leverages the Company's significant experience in resource exploration and development.

Rick Van Nieuwenhuyse, Chairman and Interim CEO of SolidusGold, commented: "We are very pleased to have come to an agreement with Newmont to acquire the renowned Northumberland Project containing over 3 million ounces of historical gold resource. Subsequent to the historical resource estimate, approximately US$17.5 million has been spent advancing the Project. Based on our evaluation, our team sees excellent potential for further expansion. Due to continuous M&A activity, the availability of large-scale gold exploration assets in mining-friendly jurisdictions has become a rarity. SolidusGold looks forward to putting our team's expertise to work in Nevada."


The Northumberland Project

The Northumberland Project is a gold project located near the geographic center of Nevada in northern Nye County, approximately 250 miles southeast of Reno and 30 miles north of Kinross's Round Mountain Mine. The project area is comprised of approximately 24,000 acres (8,900ha) of unpatented lode claims and 3,885 acres (1,572ha) of patented (private) mining claims, mill site patents, and fee lands. Historic open-pit heap-leach mining activities were undertaken at the Northumberland Project from 1981 through 1990, with a historic production of approximately 231,000 oz Au and 486,000 oz Ag.

The Northumberland Project has a historical resource estimate as reported in the document titled 'Technical Report on the Northumberland Project, Nye County, Nevada, USA: Resources Update 2008, Amended August 8, 2008' prepared by Fronteer (the "Northumberland Report") with an effective date of August 8, 2008. All of the historical resources outlined in the Northumberland Report lie within the patented (private) land claims. The historical resource estimate for the Northumberland Project is as follows:


INDICATED
Cut-off Grade Gold Silver AuEq*
Resource Type Au g/t Au opt Tonnes g/t opt oz g/t opt oz oz
Open Pit Oxide 0.3 0.01 13,627,000 1.23 0.036 538,000 7.31 0.213 3,202,000 602,000
Open Pit Sulfide 1.0 0.03 22,575,000 2.32 0.068 1,687,000 8.01 0.234 5,815,000 1,803,000
Underground 2.5 0.07 316,000 3.35 0.098 34,000 4.43 0.129 45,000 35,000
TOTAL 36,518,000 1.92 0.06 2,259,000 7.72 0.23 9,062,000 2,440,000

INFERRED
Cut-off Grade Tonnes Gold Silver AuEq*
Resource Type
Au g/t Au opt g/t opt oz g/t opt oz oz
Open Pit Oxide 0.3 0.01 17,000 2.38 0.069 1,300 10.98 0.320 6,000 1,400
Open Pit Sulfide 1.0 0.03 1,335,000 2.59 0.075 111,000 7.69 0.224 330,000 118,000
Underground 2.5 0.07 5,574,000 3.70 0.108 664,000 5.95 0.174 1,067,000 685,000
TOTAL 6,926,000 3.49 0.10 776,300 6.30 0.18 1,403,000 804,400

* AuEq calculated at an Au:Ag ratio of 50:1, and assumes 100% recovery of both metals.


The historic resource estimate does not include any subsequent drilling done by Fronteer and Newmont between 2008 and 2016. However, the Company understands that approximately ~18,600 meters were drilled and approximately US$17.5 million was expended over that period of time.

Details of the gold and silver historical resource estimate can be found in the Northumberland Report which is available on SEDAR. This resource is an historical estimate and a qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves. As a result the historical estimate is not being treated as a current mineral resource.


Transaction Terms

Under the terms of the Agreement, dated September 15, 2016, the Company will pay to Newmont a total of US$20 million upon closing. In addition to the purchase price, the Company has also agreed to replace Newmont's existing surety arrangements with the United States Forest Service and other state and federal governmental authorities. Newmont will retain a preferential right of first offer to process sulfide materials mined from the Northumberland Project in certain circumstances. The transaction is subject to customary closing conditions, including TSX Venture Exchange approval. The transaction is expected to close on or before November 30, 2016. The transaction is at arm-length.


Private Placement

The Company has concurrently entered into an agreement with Haywood Securities Inc. (the "Agent") whereby the Agent has agreed to offer for sale, on a commercially reasonable efforts agency basis, up to 114,285,800 subscription receipts at a price of C$0.35 per subscription receipt (the "Issue Price") for aggregate gross proceeds of up to C$40 million. In addition, the Company has granted the Agent an over-allotment option exercisable at any time up to two business days prior to the closing of the issuance of the subscription receipts to sell up to an additional 17,142,870 subscription receipts at the Issue Price which, if exercised in full, would result in additional gross proceeds to the Company of C$6 million. Each subscription receipt will, subject to completion of certain escrow release conditions, including the satisfaction or waiver of conditions precedent to the closing of the purchase of the Northumberland Project, be deemed to be converted into one common share in the capital of the Company for no additional consideration immediately prior to the closing of the purchase of the Northumberland Project by the Company. The closing of the issuance of the subscription receipts is expected to occur on October 20, 2016.

The Company has received indications of support from GF Capital, LLC and certain strategic investors who may subscribe for up to C$20 million worth of subscription receipts as part of the Offering.

Certain insiders of the Company have also indicated that they will participate in the Offering. Such participation would be considered to be a "related party transaction" as defined under Multilateral Instrument 61-101 ("MI 61-101"). The transaction will be exempt from the formal valuation and minority shareholder approval requirements under MI 61-101.

The net proceeds of the Offering will be used to fund the acquisition of the Northumberland Project, an initial work program on the property and for general working capital purposes.

The Company has agreed to pay a cash commission of 5% of the gross proceeds under the Offering and to issue such number of compensation subscription receipts as is equal to 2% of the subscription receipts issued to subscribers pursuant to the Offering, excluding president's list subscriptions. Upon the satisfaction of the escrow release conditions, each compensation subscription receipt will be automatically exchanged for one compensation option to acquire one common share at the Issue Price for 12 months.

The Offering is subject to customary conditions including approval of the TSX Venture Exchange. The subscription receipts and the common shares issued upon conversion of the subscription receipts will be subject to a hold period expiring four months and one day from the date of issuance.


Conference Call

SolidusGold will host a conference call on September 22, 2016, at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time for members of the investment community to discuss the acquisition. Dial-in details for the conference call are as follows:

Toll-Free: 1-877-394-5901 (North America)
Toll/Int'l: 1-416-548-6023
Conference ID: 7959114#
View Presentation Live: https://global.gotomeeting.com/join/332569240


Historical Resource Estimate

A qualified person has not done sufficient work to classify the historical estimate reported in the Northumberland Report as current mineral resources or mineral reserves and accordingly the Company is not treating it as a current estimate of mineral resources or reserves. However, the Company believes that the historical estimate is relevant and reliable, as it was prepared by a reputable mining company utilizing modern quality assurance program and quality control measures and drilling procedures. In order to upgrade or verify the historical estimate as current mineral resources the Company anticipates that it will need to perform confirmatory drilling, including twin holes and additional infill drilling, on both the oxide and sulfide portions of the mineralization. The historical resource uses the categories set out in sections 1.2 of National Instrument 43-101. There are no more recent estimates available to the Company. The historical estimate was not prepared by Newmont or Newmont Mining Corporation.

Northumberland Report- Key assumptions, parameters and methods used to prepare the historical resource estimate:

The following disclosure is sourced directly from the Northumberland Report. Please see the Northumberland Report for the referenced tables and additional information.


Resource Classification

Gold resources were classified on the basis of: (i) geological confidence, (ii) the average distance of the model blocks to composite samples used in the estimate, and (ii) the minimum number of composites used to estimate the block grades (Table 17.16). The average distances are those measured in the unwrinkled block model, and correspond to approximately ¼ the variogram range for Measured, ½ the range for Indicated and the full range for inferred. In all cases the classified blocks lie at least partially within a defined mineral zone. In cases where a block was coded to both high and low grade domains, the classification parameters for the highest tonnage domain in the block were used.

No silver resources are classified as Measured due to the lack of time spent studying the geology of its occurrence, the high silver CV's, and the generalized nature of the estimation. Silver was not modeled independently of the gold, so that only silver lying within the limits of the modeled gold zones was estimated. Significant additional silver lies outside of the gold zones and therefore was not estimated. This is far from an optimum method of estimating silver grades and tons, but it does serve to provide some insight into the magnitude of the silver mineralization associated directly with the gold. There is a good possibility that when estimated properly, the grades and tons will change.

The Northumberland resource contains approximately 27 million tonnes at a grade of 1.77 g/t Au (0.05 opt), or approximately 1.5 million ounces Au, that was formerly assigned to the "Measured" category to reflect the high confidence levels in that portion of the resource. However, due to less rigorous sampling of the silver contained in these blocks, the silver grade estimates do not meet the requirements of a "Measured" classification and the combined gold-silver resource is here amended and re-classified as "Indicated". Fronteer is currently collecting the necessary information to upgrade the combined gold-silver resource to the "Measured" category.

The gold resources are tabulated using three gold-grade cut-offs that are applied to the block model on the basis of reasonably expected mining methods, metallurgical characteristics, and comparisons with similar mining operations in Nevada. A cut-off grade of 0.3 g/t Au (0.01 opt) is applied to blocks that can reasonably be considered to be available for potential open-pit extraction and heap-leach processing; all blocks above an elevation of 2,286 m (7,500 ft) with a cyanide extraction ratio of 50% or higher are deemed to be potentially mineable by open-pit methods and oxidized sufficiently to be amenable to heap leaching. The 2,286 m (7,500-ft) elevation limits blocks potentially available to open-pit mining. This elevation is supported by internal scoping-level economic studies undertaken by Jim Ashton, Senior Engineer, Fronteer. The 0.01 cut-off grade for oxide material is derived from comparable open-pit heap-leach operations in Nevada.

Two cut-off grades are used for sulfide material, which will likely require oxidation prior to cyanide leaching. The sulfide material is identified by cyanide extraction ratios less than 50%. Sulfide blocks that lie above 2,286 m (7,500 ft) can reasonably be considered available for potential open-pit extraction and are compiled using a cut-off grade of 1.0 g/t Au (0.03 opt). This cut-off was chosen with consideration given to the Fronteer internal economic analyses mentioned above. Blocks lying below 2,286 m (7,500 ft) will likely require more costly underground mining methods and are compiled using a cut-off grade of 2.5 g/t Au (0.07 opt).

The gold grades for each block represent the weighted average of the grades estimated for each of the mineral domains included in the block; they are not diluted to full blocks but rather to the mineralized zone only. Similarly, the tons of a block are derived from that portion of the block below surface topography and within the gold mineral domains. The silver resources are compiled from all gold resource blocks based on the gold cut-off grades discussed above; no silver cut-off is applied. The Indicated and Inferred gold and silver resources are summarized in Table 17.17. The gold resources at additional cut-offs are listed in Table 17.18.


Other Mineralization

In addition to the resources reported in Table 17.17, there are approximately 80 million tons grading 1.5 g/t Au (0.04 opt) at a cut-off of 0.3 g/t Au (0.01opt) [which] were estimated in the model but excluded from the resources. This additional gold mineralization is not currently considered to have reasonable prospects for economic extraction. The portion of this material that lies above 2,286 m (7,500 feet) warrants re-evaluation, if silver mineralization is properly modeled, which may lead to added value, or if positive changes are realized in such factors as commodity prices, operating-cost efficiencies, or metallurgical advances. In addition to the other gold mineralization described above, a significant amount of silver lies outside of the gold mineral domains and therefore was not estimated.


Block Model

A 3D block model was created using Gemcom software to capture all of the relevant data for resource estimation. Block codes were assigned for each grade envelope in each deposit along with the percentage of each domain falling within the block. Each block was assigned a gold and silver grade, a density, oxidation indicator, and an extraction ratio, according to the estimation process and modeling described below. Block model dimensions are given in Table 17.11. A separate unwrinkled block model was created for each layer at an arbitrary elevation below the actual deposit to capture the grade estimates. The unwrinkled block model dimensions were chosen to mimic the original block model in the X and Y directions, but with half the vertical thickness to account for the reduced uniform thickness of 100 ft. The unwrinkled block dimensions are: 25 feet in the X direction, 40 feet in the Y direction and 10 feet in the Z direction.


Grade Estimation

Gold grades were estimated using Ordinary Kriging in a single pass for each of the unwrinkled block model layers. Each block was assigned a high grade value and a low grade value using only those composites coded from each respective domain. The estimation parameters for the samples used in the grade estimates are given in Table 17.12. These parameters were derived from the variography for each separate domain and represent approximately 90% of the full range defined by each respective variogram model. Silver grades were estimated in a single pass by Inverse Distance Squared weighting in the unwrinkled block models, using the same search parameters as those used for gold. All grade estimates in the unwrinkled block models were back-transformed into real space and used to update the real space block model. A single back-transformed grade value was used to populate each block with a nearest neighbour interpolation.


Density and Oxidation Modeling

Specific gravity ("SG") measurements of mineralized Northumberland material were made by WSMC using the immersion method and the Marcy direct-reading pulp-density scale. For the immersion method, selected samples of core were cleaned with a brush and sprayed with a thin lacquer (Krylon) to prevent the samples from absorbing water during the test (Lanier, 1992b). Hip chain string was used to suspend the samples, which were weighed suspended in air and in tap water. Bulk specific gravity was then calculated using the following equation:

SG = A / (A - B)
where: A = weight in air; and B = weight in water

A comparison was made of 30 Marcy measurements with determinations on the same samples using the immersion method. The Marcy and immersion method measurements averaged 2.59 and 2.61, respectively (Lanier, 1997). In addition to the WSMC data, Core Laboratories, Inc. of Dallas, Texas determined the SG of 19 samples for Cyprus.

A total of 295 SG, or tonnage factor ("TF"), measurements collected from mineralized Northumberland samples were used to determine densities. The SG results vary principally by lithology and oxidation. Since a lithologic model of Northumberland has not been created, average TF's were estimated for each deposit based on the percentage of each lithology in the deposit. Lithologic codes of all samples assigned to gold domains were used to estimate the relative amounts of mineralized dolostone, limestone, siltstone/silty limestone, jasperoid, hornfels, and intrusions in each deposit (Table 17.13). The average TF values for each of the lithologies were then weight-averaged to determine the 'unfactored' TF for each deposit. These values were increased by a 2% factor in oxidized rocks and 1% in unoxidized rocks in order to account for unmeasured void spaces, such as open fractures (Table 17.14).

In order to assign the tonnage factors to the blocks, an oxidation model was estimated using the oxidized ("2"), mixed ("1"), and unoxidized ("0") codes in the drill sample database. Oxidation trends within the deposits mimic the stratigraphy. Drill hole geologic codes were therefore contoured to create a digital surface representing the base of the Roberts Mountains Formation. The relative vertical distance of the blocks to the Roberts Mountains surface were calculated and stored in the block model. The block model was then used to code the relative vertical distance to the 10-ft oxidation composites. These procedures normalize true elevations of the composites and blocks to the Roberts Mountains surface, effectively flattening the undulating stratigraphy for the purposes of the oxidation estimation.

The oxide code was interpolated using the inverse-distance-cubed method that recognized the relative distances stored in the composites as the elevation values. Each geologic area was interpolated separately with unique search parameters. The search ellipses were highly anisotropic, with relatively long axes in the horizontal directions and short minor axes in the vertical direction in order to honor the stratigraphic control. The lengths of the major and semi-major axes of the search ellipses ranged from 550ft in geologic area 1 to 440ft in areas 4 and 5, while the minor axes used ranges of 35ft to 50ft. A minor amount of blocks were not estimated in the Zanzibar deposit. These blocks were set to zero (unoxidized).

The oxide codes were interpolated to assign blocks oxidation codes to the first decimal place. All blocks greater than or equal to 1.5 were assigned oxidized tonnage factors, while the remaining blocks were assigned unoxidized tonnage factors.


Metallurgical Modeling

Portions of the Northumberland gold-silver mineralization are amenable to direct cyanidation, while other portions require metallurgical treatment that includes oxidation prior to cyanidation (see Section 16). Due to the significant difference in costs involved in the recovery of gold and silver from these two styles of mineralization, unique grade cut-offs are necessary for the purposes of resource reporting. A generalized metallurgical model was therefore developed to define both the mineralization that is amenable to direct cyanidation and the mineralization that requires oxidation prior to cyanidation. These types of mineralization were identified on the basis of gold cyanide extraction ratios, which are defined as the ratios of cyanide leach assays to original fire assays expressed in percent. The metallurgical modeling, therefore, has been completed solely for the purposes of tabulating the Mineral Resources at appropriate cut-offs. Additional work, including the possible development of a new metallurgical model, would need to be completed prior to taking these resources to reserves.

Variography performed on gold cyanide extraction ratio data indicated maximum ranges of about 700 to 800ft in both global and directional variograms, with most of the relationship between samples accounted for at a range of 550ft.

Cyanide extraction ratios were estimated by the inverse-distance-cubed ("ID3") method using the parameters in Table 17.15. Relative elevations of the 10-ft composites to the Roberts Mountains surface were used in a similar fashion as the oxidation estimation described above. Cyanide extraction ratios derived from gold assays of less than 0.005 oz Au/ton were not used in the composites, as these low assay values can lead to spuriously high cyanide extractions and otherwise rather meaningless ratios. Only cyanide extraction ratios within the mineral domains were composited.

Approximately 90% of the blocks were estimated by the inverse-distance interpolation. The equation of a best-fit line derived from the relationship between cyanide extraction ratios and logged oxidation code was applied to the interpolated oxidation codes to calculate the cyanide extraction ratios for the unestimated blocks. The data used to derive the best-fit line were constrained to samples that: (1) have a minimum fire assay value of 0.01 oz Au/ton; (2) lie within the gold mineral domains; and (3) have a maximum extraction ratio of 115%.

The minimum fire assay limit is imposed in order to remove many of the spurious extraction ratios well in excess of 100% and otherwise meaningless ratios, which are common at grades of less than 0.01 oz Au/ton. Only data lying within the mineral domains were used in the estimation. While the best fit line reflects the expected positive relationship between increasing oxidation and increasing extraction values, the correlation is not strong (correlation coefficient = 0.49). This is partially due to the subjectivity associated with various loggers assigning codes of 1, 2, and 3 in the description of oxidation state. The interpolated extraction ratios were capped at 100%.


Qualified Person

Rick Van Nieuwenhuyse, Chairman of the Board and Interim Chief Executive Officer of the Company, is a Qualified Person for the purposes of National Instrument 43-101 and has reviewed and approved the information of a scientific and technical nature contained in this news release. Mr. Van Nieuwenhuyse has reviewed, but has not verified, the Northumberland Report.

For more information please email info@solidusau.com.


Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward-Looking Statements: This news release includes certain forward-looking statements and forward-looking information (together, "forward-looking statements"). All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the acquisition of the Northumberland Project, the Offering, other future plans and objectives of the Company and potential mineralization on the Northumberland Project are forward-looking statements. There can be no assurance that such statements will prove to be accurate and actual results and future events may vary from those anticipated in such statements. Important risk factors that could cause actual results to differ materially from the Company's plans or expectations include failure to obtain TSX Venture Exchange acceptance of the acquisition of the Northumberland Project and the Offering (together, the "Transaction"), failure to remove conditions to completion of the Transaction, failure to raise sufficient funds on the proposed terms or at all and risks associated with mineral exploration, including the risk that actual results of exploration will be different from those expected by management and the risk that potential mineralization will not be upgraded or verified, and the other risks disclosed in this news release. The forward-looking statements in this news release were developed based on the assumptions and expectations of management, including that TSX Venture Exchange acceptance for the Transaction will be obtained, conditions will be satisfied, required fundraising will be completed, the other assumptions disclosed in this news release and that the risks described above will not materialize. There can be no assurance that the Transaction will complete. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as otherwise required by applicable securities legislation.

This news release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction, including the United States. The securities referenced in this press release have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, a "U.S. person," as such term is defined in Regulation S under the U.S. Securities Act, unless an exemption from such registration requirements is available.

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Contact Information

SolidusGold Inc.
Rick Van Nieuwenhuyse
Chairman of the Board and Interim Chief Executive Officer
Email: info@solidusau.com