Canagold Announces Closing of Fully Subscribed Rights Offering

Vancouver, B.C. – December 16, 2022 - Canagold Resources Ltd. (TSX: CCM, OTC-QB: CRCUF, Frankfurt: CANA) (the “Company” or “Canagold”), is pleased to announce the Company has closed its previously announced rights offering which expired on December 9, 2022 (the “Rights Offering”). At closing, Canagold issued 25,277,221 common shares of the Company (the “Shares”) to rightsholders at a price of $0.175 per Share for total gross proceeds of $4,423,514 and an additional 20,352,577 Shares to Sun Valley Investments AG (“Sun Valley”) pursuant to Canagold’s Rights Offering Standby Guaranty Agreement, dated October 28, 2022 with Sun Valley.

The Company received subscriptions from existing shareholders for 21,249,413 Shares pursuant to the basic subscription privilege and 4,027,808 Shares pursuant to the additional subscription privilege, representing a 55% subscription rate.

“I’m very pleased with the strength of support that we’ve received from our shareholders in respect of this rights offering,” said Catalin Kilofliski, Canagold’s CEO. “This demonstrates a significant vote of confidence in Canagold’s new management team, our strategy and the plans we have in place to advance New Polaris through feasibility and permitting.”

In addition, Canagold has issued 20,352,577 Shares to Sun Valley, which are additional to the Shares acquired by Sun Valley under its basic subscription privilege and the additional subscription privilege. From the gross proceeds to be received from Sun Valley totalling $3,561,701, the Company has deducted a total of $2,546,336 to pay back and terminate the $2.5M loan provided by Sun Valley in August 2022 plus accrued interest, and a total of $178,085 in fees pursuant to the Guaranty Agreement.

Prior to the rights and standby guarantee exercise, Sun Valley held 22,990,371 shares in the capital of Canagold, which are equal to 25.19% of the issued and outstanding shares of the Company.

Following the rights and standby guarantee exercise, Sun Valley holds 54,838,133 shares in the capital of the Company, which are equal to 40.06% of the issued and outstanding shares of Canagold.

The total number of issued and outstanding common shares of the Company upon completion of the Rights Offering will be 136,889,394.

To the knowledge of Canagold, after reasonable inquiry, directors, officers, employees and insiders of the Company, excluding Sun Valley, exercised subscription privileges, including subscription privileges associated with additional rights acquired in the market, and purchased approximately 50,000 Shares under the Rights Offering, representing total subscription proceeds of approximately $8,750. To the knowledge of the Company, after reasonable inquiry, no person became a new shareholder holding more than 10% of the Shares upon closing of the Rights Offering.

The participation in the Rights Offering by certain “related parties” of the Company, namely, directors, officers and 10% shareholders of Company, constitutes a “related party transaction,” as such terms are defined by Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company is relying on an exemption from the formal valuation and minority approval requirements of MI 61-101 as the fair market value of the participation in the Rights Offering and stand-by commitment by Sun Valley does not exceed 25% of the market capitalization of the Company.

There were no selling fees or commissions paid in connection with the Rights Offering distribution. The net proceeds of the Rights Offering will be used in the manner disclosed in the rights offering circular of the Company dated November 4, 2022, a copy of which is available on the Company’s SEDAR profile at www.sedar.com.

About Sun Valley

Sun Valley is a private equity firm focussed on the precious metals industry with portfolio companies and branch offices in the Americas, Europe and Asia. Sun Valley seeks to invest in sustainable development projects and operations with growth potential, low cash costs of production, or the operating flexibility to insulate against volatility in the commodity markets.

Disclaimer

The information contained or referenced herein is for information purposes only in order to provide the views of Sun Valley and the matters which Sun Valley believes to be of concern to shareholders described herein. The information is not tailored to specific investment objectives, the financial situations, suitability, or particular need of any specific person(s) who may receive the information, and should not be taken as advice in considering the merits of any investment decision. The views expressed herein represent the views and opinions of Sun Valley, whose opinions may change at any time and which are based on analyses of Sun Valley and its advisors.

Contacts

Sun Valley:

Daniel Henao

Partner / VP Business Development

Phone: 6042607046

Email: dhenao@sunvalleyinv.com