KOR Corvis Gold Inc

Consolidated (North Bullfrog + Mother Lode) Annual Production Projections

Cash Flow Projections

The following two tables present annual cash flow projection models for the North Bullfrog and Mother Lode properties, respectively, as presented in the technical reports prepared for each of the North Bullfrog Property and the Mother Lode Property in accordance with NI 43-101. These cash flow projection models use commodity pricing for the Base Case model as reflected in the technical reports, which were US$1,500 per ounce gold and US$18.75 per ounce silver. For purposes of their respective financial analyses, Fort Capital Partners used Street consensus commodity pricing of US$1,600 per ounce gold and US$21 per ounce silver and BMO Capital Markets used Street consensus commodity pricing with a long-term price of US$1,600 per ounce gold and US$22.50 per ounce silver.

Commodity Pricing and Discount Rate Sensitivities

The cash flow projection models at both properties are sensitive to commodity pricing. A US$100 increase in gold price will result in approximately a 20% increase in NPV of the North Bullfrog property and a 30% increase in the Mother Lode property.

Both models are also sensitive to discount rates, with a 2.5% increase in discount rate resulting in approximately a US$62 million (14%) decrease in NPV of the North Bullfrog property and a US$61.5 million (20%) decrease in NPV of the Mother Lode property.

The following tables set forth NPV sensitivities over a range of gold prices and discount rates for each property.

Management Model – Operating and Cash Flow Profiles used by Fort Capital Partners

Production Profile – Payable Gold (koz Au) and AISC (US$/oz)

Levered Free Cash Flow & Capital Expenses

Management Model – Operating and Cash Flow Profiles used by BMO Capital Markets

Production and Cost Profile (K oz. Au Eq. / US$/oz Au Eq.)

Unlevered Free Cash Flow Profile (US$ M)

Management Model - Net Asset Value Per Share (NAVPS) Buildup

The section of the Circular entitled “SPECIAL FACTORS – Fort Capital Valuation and Opinion – Valuation Methodologies” is amended and supplemented as follows:

The disclosure on page 35 is amended and supplemented by adding the following table and paragraphs immediately after the table entitled “Mother Lode Financial Model Summary”:

The following consolidated detailed financial model summary combines the above financial model summaries and includes estimated corporate general and administrative costs beginning in 2021 and interest payments beginning in 2023 under “Operating Expenses” and debt repayment deductions beginning in 2023.

Consolidated Detailed Financial Model Summary

The section of the Circular entitled “SPECIAL FACTORS – Fort Capital Valuation and Opinion – Comparable Company Analysis Methodology” is amended and supplemented as follows:

The disclosure on page 38 is amended and supplemented by replacing the table entitled “Comparable Companies Selected” with the following table:

Comparable Companies Multiples and Metrics

Current Trading Multiples

The following chart shows the share price to NAV multiples for select “Junior” and “Intermediate” gold producers.

The section of the Circular entitled “SPECIAL FACTORS – Fort Capital Valuation and Opinion – Precedent Transaction Methodology” is amended and supplemented as follows:

The disclosure on page 40 is amended and supplemented by replacing the table entitled “Selected Precedents” with the following table:

Precedent Transactions

The section of the Circular entitled “SPECIAL FACTORS – Opinion of Financial Advisor to Corvus – September 12, 2021 Financial Presentation to the Corvus Board – Financial Analyses – Selected Public Companies Analysis” is amended and supplemented as follows:

The disclosure in the first sentence of the third paragraph on page 48 is amended and supplemented as follows:

The overall low to high estimated net asset value per share multiples and resources multiples observed for the selected companies were 0.15x to 0.96x (with a median of 0.40x) and US$5/ounce gold equivalent to US$128/ounce gold equivalent (with a median of US$40/ounce gold equivalent), respectively, as indicated below (individual multiples are referenced below for informational purposes):

The section of the Circular entitled “SPECIAL FACTORS – Opinion of Financial Advisor to Corvus – September 12, 2021 Financial Presentation to the Corvus Board – Financial Analyses – Selected Precedent Transactions Analysis” is amended and supplemented as follows:

The disclosure in the first sentence of the second paragraph on page 50 is amended and supplemented as follows:

The overall low to high estimated net asset value per share multiples observed for the selected transactions were 0.18x to 4.45x (with a median of 0.65x and 25^th and 75^th percentiles of 0.51x and 0.94x, respectively) and the overall low to high estimated resources multiples observed for the selected transactions were US$2/ounce gold equivalent to US$226/ounce gold equivalent (with a median of US$50/ounce gold equivalent and 25^th and 75^th percentiles of US$27/ounce gold equivalent and US$86/ounce gold equivalent, respectively), as indicated below (individual multiples are referenced below for informational purposes):

The section of the Circular entitled “SPECIAL FACTORS – Opinion of Financial Advisor to Corvus – September 12, 2021 Financial Presentation to the Corvus Board – Other Information” is amended and supplemented as follows:

The disclosure in the second bullet of the last paragraph on page 50 is amended and supplemented as follows:

Forward-Looking Statements

Certain statements and information contained herein are not based on historical facts and constitute “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of United States securities laws (collectively, “forward looking information”). Such forward-looking information includes estimates, forecasts and statements with respect to, among other things: financial projections and forecasts; statements relating to the business and future activities of Corvus and the Purchaser following consummation of the Arrangement including the assets, corporate and capital structure, capitalization, operations, business properties and personnel of Corvus; and our future business prospects. Forward-looking information is provided to help readers understand Corvus’ views of its short and longer term prospects, and can typically be identified by words and phrases about the future such as “outlook”, “may”, “estimates”, “intends”, “believes”, “plans”, “anticipates” and “expects”. Forward-looking information is not a promise or guarantee of future performance; it represents Corvus’ current views and actual results may differ materially from those in forward-looking information. Readers are cautioned that forward-looking information may not be appropriate for other purposes. Corvus assumes no obligation to update or revise forward-looking information contained herein, unless required to do so by securities laws. The forward-looking information contained herein is based on a number of assumptions which could prove to be significantly incorrect. Such assumptions include: assumptions regarding the ability of Corvus to receive, in a timely manner and on satisfactory terms, the necessary court, shareholder and regulatory approvals; and the ability of the parties to satisfy in a timely manner the conditions to the closing of the Arrangement. Although the Company’s management believes that the assumptions made and the expectations represented by such statements are reasonable, there can be no assurance that forward-looking information herein will prove to be accurate. Actual results and developments may differ materially from those expressed or implied by the forward-looking information contained herein and even if such actual results and developments are realized or substantially realized, there can be no assurance that they will have the expected consequences or effects. Factors which could cause actual results to differ materially from current expectations include: changes in the price of gold and silver; general business, economic, competitive, political, regulatory and social uncertainties; risks relating to increases in operating costs and related inflationary pressures; the risk factors otherwise described in the Circular; and the risks set forth under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended May 31, 2021 and the Quarterly Report on Form 10-Q for the period ended August 31, 2021. Readers are cautioned not to place undue reliance on forward-looking information due to the inherent uncertainty thereof.

Jeffrey A. Pontius (CPG 11044), a qualified person as defined by NI 43-101, has reviewed and approved the scientific and technical disclosure relating to the Mother Lode Property and the North Bullfrog Property contained herein. Mr. Pontius is not independent of Corvus, as he is the Chief Executive Officer, President and a director and holds Corvus common shares and Corvus options. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The preliminary economic assessments are preliminary in nature, and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessments will be realized. For additional information see the following: Technical Report and Preliminary Economic Assessment for Gravity Milling and Heap Leach Processing at the North Bullfrog Project dated November 21, 2020 with an effective date of October 7, 2020 and Technical Report and Preliminary Economic Assessment for BiOx Mill and Heap Leach Processing at the Mother Lode Project dated November 21, 2020 with an effective date of October 7, 2020, each of which is available under Corvus’ profile on SEDAR at www.sedar.com and EDGAR at www.sec.gov.

Additional Information about the Arrangement and Where to Find It

This Current Report on Form 8-K is not a substitute for the Circular, Schedule 13E-3 filed by Corvus and the AGA Group, as amended, or any other document that Corvus may file with the SEC, the Canadian securities regulators or send to the shareholders and optionholders in connection with the Arrangement. Corvus has filed the Circular under cover of Schedule 14A with the SEC on November 26, 2021 in connection with the Special Meeting to consider the Arrangement, which is supplemented by this Current Report on Form 8-K. Corvus commenced mailing of the Circular to shareholders and optionholders on or about December 3, 2021. Each of Corvus and the AGA Group will file materials relevant to the Arrangement with the SEC and on SEDAR. The materials filed, and to be filed, by Corvus will be made available to Corvus’ investors and securityholders at no expense to them and copies may be obtained free of charge on Corvus’ website at http://www.corvusgold.com/transactionproposal. In addition, all of those materials are and will be available at no charge on the SEC’s website at www.sec.gov and under the Corvus profile on SEDAR at www.sedar.com.

INVESTORS AND SECURITYHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE CIRCULAR AND OTHER MATERIALS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE TRANSACTION BECAUSE, THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT CORVUS, THE ARRANGEMENT, AND RELATED MATTERS.

Participants in the Solicitation

Corvus and its directors, executive officers, other members of its management and employees may be deemed to be participants in the solicitation of proxies of Corvus shareholders and optionholders in connection with the Arrangement under SEC rules and under Canadian requirements. Investors and securityholders may obtain more detailed information regarding the names, affiliations and interests of Corvus’ executive officers and directors in the solicitation by reading the Circular filed on November 26, 2021 with the SEC and on SEDAR, in connection with the Arrangement and in other relevant materials that will be filed with the SEC and the Canadian securities regulators when they become available. Information concerning the interests of Corvus’ participants in the solicitation, which may, in some cases, be different than those of the Corvus’ shareholders and optionholders generally, are set forth in the definitive Circular relating to the Arrangement. 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.