Canagold Announces Filing of a Rights Offering Circular

November 7, 2022, Vancouver, B.C. – Canagold Resources Ltd. (“Canagold” or the “Company”) (TSX: CCM; OTC-QB: CRCUF; Frankfurt: CANA) announces that it has filed a rights offering circular (the “Circular”) and a rights offering notice (the “Notice”) with respect to Canagold’s offering of rights (the “Rights Offering”) to holders of common shares (“Common Shares”) of record as of the close of market on November 10, 2022 (the “Record Date”).

Pursuant to the Rights Offering, holders of Common Shares (“Shareholders”) on the Record Date will receive one (1) right (a “Right”) for each one (1) Common Share held.  Each two (2) Rights will entitle the holder to subscribe for one Common Share of upon payment of a subscription price of $0.175 per Common Share.  Canagold expects to raise $7,985,215 under the Rights Offering.

Sun Valley Investments AG (“Sun Valley”), an “insider” and “related party” (as such terms are defined under applicable securities laws) of the Company and the Company’s largest shareholder, has advised the Company that it intends to exercise, subject to relevant restrictions, all of its basic subscription privileges. The Company has also entered into a standby guaranty agreement with Sun Valley, pursuant to which Sun Valley has agreed to purchase all of the Common Shares issuable under the Rights Offering which remain unsubscribed under the basic subscription privilege and the additional subscription privilege (the “Standby Guaranty”). In August 2022, the Company obtained a bridge loan of $2,500,000 (the “Bridge Loan”) from Sun Valley as an advance payment for the Standby Guaranty. The Bridge Loan is unsecured, bearing interest at the rate of 5.5% per annum, is payable upon the earlier of (i) the completion of the Rights Offering, (ii) 12 months after the date of the Bridge Loan agreement and (iii) the termination of the Standby Guaranty.

The Rights will trade on the Toronto Stock Exchange under the symbol “CCM.RT” commencing on November 9, 2022 and will trade until 12:00 p.m. (Eastern time) on December 9, 2022. The rights will expire at 2:00 p.m. (Pacific time) on December 9, 2022 (the “Expiry Time”), after which time unexercised Rights will be void and of no value. Shareholders who fully exercise their Rights under the basic subscription privilege will be entitled to subscribe for additional Common Shares, if available as a result of unexercised Rights prior to the Expiry Time, subject to certain limitations as set out in the Circular. The Company expects to close the Rights Offering on or about December 13, 2022, but in any event no later than December 30, 2022.

The Rights will be offered to Shareholders resident in (i) all provinces and territories of Canada except Quebec, (ii) each state of the United States (excluding Arizona, Arkansas, California, Minnesota, Ohio, Utah and Wisconsin), and (iii) in all jurisdictions outside Canada and the United States excluding any jurisdiction that does not provide a prospectus exemption substantially similar to the exemption provided in Canada or that otherwise requires obtaining any approvals of a regulatory authority in such jurisdiction or the filing of any document by the Company in such jurisdiction in connection with the Rights Offering (collectively, the “Eligible Jurisdictions”).

Full details of the Rights Offering are set out in the Circular and the Notice, which are available on the Company’s profile on SEDAR at www.sedar.com or can be downloaded from the Company website. The Notice and accompanying Rights direct registration statements (the “Rights DRS”) will be mailed to registered Shareholders in the Eligible Jurisdictions as of the Record Date. To subscribe for Common Shares, registered Shareholders must mail the completed Rights DRS, together with applicable funds, to the Rights depositary and subscription agent, Computershare Investor Services, Inc., prior to the Expiry Time. Shareholders who hold their Common Shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary.

The proceeds of the Rights Offering are expected to be used to repay the Bridge Loan, to advance the Company’s properties and for working capital purposes. 

About Canagold

Canagold Resources Ltd. is a growth-oriented gold exploration company focused on advancing the New Polaris Project through feasibility and permitting. Canagold is also seeking to grow its assets base through future acquisitions of additional advanced projects. Canagold has access to a team of technical experts that can help unlock significant value for all Canagold shareholders.

On behalf of the Board of Directors

“Catalin Kilofliski”

Catalin Kilofliski

Chief Executive Officer

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