Quantus Resources Corp. and KAPA Capital Inc. Announces Closing of Qualifying Transaction

May 19, 2022

KAPA Gold Inc. (TSX-V: KAPA.P) (“ KAPA”) is pleased to announce that it has successfully completed its previously announced "Qualifying Transaction", as defined by Policy 2.4 of the TSX Venture Exchange (the "Exchange") with Quantus Resources Corp. (“Quantus”) (see KAPA press releases dated May 6, 2020, September 24, 2020, and February 14, 2022). In connection with the Qualifying Transaction KAPA changed its name from KAPA Capital Inc. to KAPA Gold Inc.

The Qualifying Transaction

KAPA and Quantus entered into an amended and restated acquisition agreement and an amended and restated arrangement agreement (the “Agreements”) both dated for reference September 22, 2020 and amended effective April 11, 2022, pursuant to which KAPA has agreed to acquire all of the issued and outstanding common shares of Quantus (the “Qualifying Transaction”). The Qualifying Transaction is effected by way of a court approved plan of arrangement under the Business Corporations Act (British Columbia) and KAPA will acquire 100% of the outstanding common shares of Quantus by issuing to each shareholder of Quantus one (1) common share in the capital of KAPA in exchange for one (1) Quantus common share held by such shareholder. All convertible securities of Quantus are converted into convertible securities of KAPA without modification to the exercise price or term. Following the closing of the Qualifying Transaction, KAPA own 100% of Quantus’ outstanding common shares. A total of 50,447,473 KAPA shares are issued to the shareholders of Quantus at a deemed price of $0.25 per KAPA share.

The Qualifying Transaction was premised on the following conditions: (i) the filing of the draft completed Exchange Form 3B2 (Information Required in a Filing Statement for the Qualifying Transaction); (ii) public filing of the NI 43-101F1 Report on the Blackhawk Property; (iii) public court filing of a fairness opinion; (iv) conditional approval of the Exchange in respect of the Arrangement Agreement; (v) the completion of a non-brokered unit private placement by Quantus; (vi) the payment of 750,000 common shares of Quantus to the beneficial owners of Blackhawk Rising; and (vii) settlement of $29,869.86 of debt convertible into 298,699 Quantus common shares. The aggregate number of issued and outstanding KAPA common shares upon completion of the proposed Qualifying Transaction is expected to be 55,560,744.

There was no sponsor retained in connection with the Qualifying Transaction and Quantus received a waiver from the sponsorship requirements.

The Arrangement Agreement was approval by the Supreme Court of British Columbia on April 29, 2022.

The Private Placement

Concurrently with completion of the Qualifying Transaction, Quantus closed its private placement concurrent financing for gross proceeds of $2,811,300. Quantus raised $2,811,300 in gross proceeds through the issuance of 11,245,200 units (each, a "Unit") at a price of $0.25 per Unit where each Unit comprises one common share and one–half of one share purchase warrant, with each whole warrant exercisable to purchase one common share at the price of $0.40 for a period of 24 months from two years from the date of issuance (the “Concurrent Financing”).

Under the private placement concurrent financing, Quantus paid aggregate cash finder's fees of $21,000 and issued an aggregate of 84,000 finder's warrants exercisable for one Quantus’ share for two years at a price of $0.40 per share. Further finder’s fees are not expected to be paid in connection with the Qualifying Transaction.

Escrowed Securities

Pursuant to the terms of an Exchange Tier 2 Value Security Escrow Agreement among KAPA, Computershare Investor Services Inc. (as escrow agent) and certain KAPA shareholders, an aggregate of 5,613,187 KAPA shares have been placed in escrow.

Directors and Officers

Following closing of the Qualifying Transaction, the directors and officers of KAPA are:

• David K. Paxton, CEO and Director
• George E. Nicholson, Director
• Alexander P. Tsakumis, Director
• Vivian Katsuris, Director
• Darren Prins, CFO
• Anjula Trikala, Corporate Secretary

Post Arrangement Initial Operation

KAPA will immediately initiate the proposed Phase One exploration program.

Road and adit rehabilitation will be undertaken for safe access and to facilitate the mapping and sampling program. The entire site will be compiled into a GIS database of all recent and available exploration data.

Ground geophysics survey by magnetics and VLF-EM geophysics will be determined following mapping alteration studies. . A picketed grid would be established over the southeastern one third of the property which is inferred skarn replacement mineralization.

For the carbonate-hosted epithermal gold-silver deposit types, the program would be focused from the Cliff- Santa Fe zones southeastward to delineate the various thrusts. The skarn mineralization is inferred to be located near the southeastern end of the property. The entire southeastern portion of the property requires geological mapping-mineral deposit investigation to provide additional data to the skarn and carbonate-hosted deposit type.

Detailed rock sampling of exposed hematized thrusts and all accessible adits followed by major oxide and trace element geochemistry to define alteration signatures in mineralized thrusts and prioritize thrust panels.

The Patented underground workings in the historic Blackhawk Mine and surrounding areas will be investigated. The Blackhawk property consists of seven patented lode mineral claims and one patented mill site claim totalling 126.267 acres (51.098 hectares) and 179 contiguous Federal (Bureau of Land Management) lode mineral claims totalling 3698.14 acres (1496.62 hectares). The underground mapping will be undertaken in the patented mine, once safe access has been achieved. A cutting-edge detailed underground survey will be undertaken, to establish the extend of the previous workings and to enable QAQC documentation. If KAPA’s geologists consider an underground channel sample program would be meaningful, we will initiate immediately

George Nicholson, P. Geo., a qualified person under NI 43-101 has reviewed, accepted responsibility therefor and approved the foregoing geotechnical disclosure.

On behalf of the Board of Directors of KAPA Gold Inc.

“David K. Paxton”

David K. Paxton

CEO and Director

About KAPA Gold Inc.

Suite 1400 – 1199 West Hastings St., Vancouver, BC V6E 3T5, Phone number, +1 604 374 1702 Web address: www.kapagold.com.

Forward Looking Statements

Certain of the statements made and information contained herein may contain forward- looking information within the meaning of applicable Canadian securities laws. Forward-looking information includes, but is not limited to, information concerning the Company's intentions with respect to the development of its mineral properties. Forward-looking information is based on the views, opinions, intentions and estimates of management at the date the information is made, and is based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated or projected in the forward-looking information (including the actions of other parties who have agreed to do certain things and the approval of certain regulatory bodies). Many of these assumptions are based on factors and events that are not within the control of the Company and there is no assurance they will prove to be correct. There can be no assurance that forwardlooking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by applicable securities laws, or to comment on analyses, expectations or statements made by third parties in respect of the Company, its financial or operating results or its securities. The reader is cautioned not to place undue reliance on forwardlooking information. We seek safe harbour.