Mr. Yari Nieken reports

MARGARET LAKE DIAMONDS ENTERS IN TO DEFINITIVE AGREEMENT FOR REVERSE TAKE OVER OF EMERGING GOLDFIELDS AND ITS 80% INTEREST IN A PORTFOLIO OF THREE GOLD-SILVER PROJECTS WITH A COMBINED 43-101 COMPLIANT MEASURED, INDICATED, AND INFERRED RESOURCE OF 3.29 MILLION OUNCES AU AND 22.88 MILLION OUNCES AG

Margaret Lake Diamonds Inc. has entered into an amalgamation agreement dated Dec. 14, 2023, with Emerging Goldfields Resources Ltd., an arm's-length private company incorporated under the Business Corporations Act (Alberta) (ABCA), which sets forth the conditions of the proposed arm's-length reverse takeover transaction. In addition and in connection with the transaction, the parties have agreed to use their commercially reasonable efforts to cause Emerging to complete a private placement of units of Emerging.

Pursuant to the amalgamation agreement, the company and Emerging will amalgamate to complete the transaction in accordance with the policies of the TSX Venture Exchange. Upon completion of the transaction, the resulting issuer will be known as Emerging Goldfields Resources Ltd. (or such other name as the parties may agree) and the resulting issuer will carry on the business of Emerging. The transaction is subject to the receipt of all necessary regulatory approvals and shareholder approvals required by applicable corporate law, including the approval of the shareholders of Emerging and the corporation, as well as the satisfaction of conditions to closing as set out in the amalgamation agreement.

Overview of Emerging

Emerging is a private corporation incorporated on Aug. 5, 2020, under the ABCA carrying on business as a mineral exploration company focused on the acquisition, exploration and development of mineral properties in Armenia. Emerging, through its United Kingdom wholly owned subsidiary, Goldfields Holding Ltd., holds an 80-per-cent working interest in Armenian companies Vayk Gold LLC, Geghi Gold LLC and Copper Plus LLC.

Emerging's portfolio consists of three polymetallic gold-silver deposits in Armenia, all with significant growth potential and a gross combined National Instrument 43-101 resource (measured plus indicated plus inferred) of 3,292,591 ounces of gold and 22,888,200 ounces of silver, of which Emerging has an 80-per-cent interest, as outlined in an attached table.

Summary financial information for Emerging Goldfields Resources

An attached table shows the summary financial information for Emerging based on the unaudited management-prepared annual financial statements for Emerging for the year ended Dec. 31, 2022.

Capitalization of Margaret Lake

Each issued and outstanding common share the capital of Margaret Lake at the time of closing, will be exchanged into one common share of the resulting issuer (each a Newco common share) on a 1:1 basis, such that all of the issued and outstanding Margaret common shares will be exchanged for 4,741,230 Newco common shares and the outstanding warrants to purchase Margaret common shares shall each be exchanged for one replacement warrant (Newco warrant), exercisable on a 1:1 basis, so that all of the issued and outstanding Margaret shares will be exchanged for 4,741,230 Newco common shares and the outstanding Margaret warrants will be exchanged for 4,136,458 Newco warrants.

Capitalization of Emerging

Each issued and outstanding common shares in the capital of Emerging at the time of closing, will be exchanged into one Newco common share on a 1:1 basis and the outstanding warrants to purchase Emerging shares shall each be exchanged for one Newco warrant, exercisable on a 1:1 basis so that all of the issued and outstanding Emerging shares will be exchanged for 59.8 million Newco common shares, each outstanding Emerging warrant will be exchanged for 600,000 Newco warrants. Additionally, each issued and outstanding common share and warrant issued pursuant to the proposed private placement shall be exchanged into one Newco common share and one Newco warrant on a 1:1 basis. There are no shareholders that would be considered control persons for Emerging.

Terms of the transaction

Pursuant to the amalgamation agreement, at the effective time of the amalgamation, a wholly owned subsidiary of Margaret Lake (Newco) will amalgamate with Emerging to form a new entity (Amalco). In connection with the completion of the amalgamation, all securities of Amalco will be exchanged for securities of the resulting issuer on a 1:1 basis (other than Emerging shares or Margaret common shares held by shareholders who exercise their dissent rights, if applicable), at a deemed price of 30 cents per share. Immediately after the completion of the transaction but prior to the completion of any private placements, the current shareholders of Margaret Lake will own approximately 4,741,230 resulting issuer common shares (7.35 per cent) and the holders of Emerging shares existing immediately prior to the transaction will own following the transaction approximately 59.8 million resulting issuer common shares (92.65 per cent).

Pursuant to the rules of the TSX-V, a halt in trading is expected to continue until the completion of the transaction. The completion of the transaction is also subject to several other conditions set out in the amalgamation agreement, including approval by the directors of the company and Emerging, satisfactory completion of due diligence, applicable regulatory approvals, and applicable shareholder approvals. The TSX-V may require some of the Newco common shares issued to the holders of the Emerging shares to be held in escrow pursuant to the requirements of the TSX-V. The resulting issuer will be a Tier 2 mining issuer on the TSX-V. Margaret Lake and Emerging each intend to hold an annual and special meeting of its shareholders to approve certain matters related to the transaction. Additional details regarding the annual and special meeting of the shareholders will be available in the management information circular that will to be delivered to shareholders of each company.

Emerging -- share capitalization and funds available

Upon completion of the transaction and assuming the proposed private placement (further details herein) is completed for aggregate gross proceeds of up to $1.5-million, it is anticipated that there will be an aggregate of 69,541,230 Emerging shares issued and outstanding.

The funds to be available to the resulting issuer upon the closing of the transaction are expected to be approximately $1.2-million (assuming the proposed private placement is completed for aggregate gross proceeds of $1.5-million), less costs of the transaction and the proposed private placements. These funds are anticipated to be used for exploration and development expenditures on Emerging properties, working capital and general corporate purposes. There are no proposed advances of funds from Margaret Lake to Emerging.

Sponsorship

Under the policies of the TSX-V, the parties to the transaction may be required to engage a sponsor for the transaction unless an exemption or waiver from this requirement can be obtained. Margaret Lake intends to apply to the TSX-V for a waiver from the sponsorship requirements for the transaction based upon the waivers available in TSX-V policies. There is no assurance that a waiver from this requirement can or will be obtained.

Proposed management and board of directors of resulting issuer

Concurrent with the completion of the transaction, it is expected that all directors and officers of Margaret Lake will resign and the directors and officers of the resulting issuer are expected to be as follows.

Parvez Tyab -- chief executive officer and director

Mr. Tyab has over 25 years experience in raising project finance, equity and debt for natural resource projects in the private and public markets. Mr. Tyab has an extensive record as a founder, developer and investor in early-stage natural resource companies in Africa, Asia and South America. As an investor, he has provided the initial seed capital and early-stage financing through direct investment for various companies.

Rodney Stevens, CFA -- vice-president, finance

Mr. Stevens is a chartered financial analyst charterholder with over a decade of experience in the capital markets, first as an investment analyst with Salman Partners Inc. and subsequently as a merchant and investment banker. While at Salman Partners, he became a top-rated analyst by StarMine on July 17, 2007, for the metals and mining industry. Mr. Stevens was also a portfolio manager registered with Wolverton Securities Ltd., and, over the course of his career, he has been instrumental in assisting in financings and merger and acquisition activities worth over $1-billion in transaction value.

Robert Schafer, PGeo -- independent director

Mr. Schafer has over 35 years of international experience in exploring and discovering mineral deposits (Hunter Dickinson, Kinross Gold, BHP Minerals, and founder and chief executive officer of Eagle Mines Management). Mr. Schafer has led teams to the grassroots discovery of mines in the Western United States and in Russia as well as developed strategies that led to brownfield discoveries in Western Canada and southern Africa. He has been a past president and board member of the Prospectors & Developers Association of Canada (PDAC), past president of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), and past president of the Mining and Metallurgical Society of America (MMSA recipient of the William Lawrence Saunders Gold Medal from the American Institute of Mining, Metallurgical and Petroleum Engineers (AIME) and the Daniel C. Jackling Award from SME (Society of Manufacturing Engineers) for career achievements, two of the highest mining recognitions in the United States.

Jeff Ratcliffe -- chief financial officer and director

Mr. Ratcliffe has over 14 years experience working with private and public companies. Mr. Ratcliffe was previously chief financial officer of a Canadian energy company operating in the United States as well as a controller for an African-based energy producer.

Dale Burstall -- corporate secretary

Mr. Burstall practises in the area of commercial law with an emphasis on securities law. Mr. Burstall's practice includes all aspects of securities law from both the perspective of an issuer or an underwriter, including initial public offerings, secondary financing, and mergers and acquisitions; all dealings with regulators, including stock exchanges and securities commissions; and corporate governance. He also practises in business and corporate commercial law, including shareholder agreements and managing shareholder disputes. Mr. Burstall is a director or secretary of several issuers, both listed and private. Mr. Burstall is also a director or trustee of charitable organizations. In addition, Mr. Burstall has in the past and continues to sit on certain advisory committees of the exchange.

Proposed private placement

Pursuant to the transaction, the parties have agreed to use their commercially reasonable efforts to cause Emerging to complete the proposed private placement at a price per unit of 30 cents to raise gross proceeds of up to $1.5-million or such other amount as the parties may agree to. The parties may engage an agent or syndicate of agents for the proposed private placement. A commission may be paid to the agents or to individual registrants (including selling group members) in accordance with applicable securities laws. The agents may also be granted broker warrants of the number of units sold by the agents (including selling group members) in the proposed private placement, with each broker warrant entitling the holder thereof to purchase one common share of the resulting issuer at a price equal to the price paid per unit. Further particulars of the proposed private placement will be disseminated in a news release to be issued upon finalization of its terms. It is intended that the net proceeds from the proposed private placement will be used for used for working capital and general corporate purposes and exploration and development expenditures on the Emerging properties.

Each unit is expected to have a subscription price of 30 cents per unit and is expected to comprise one common share in the capital of Emerging and one common share purchase warrant of Emerging. Each Emerging warrant entitles the holder thereof to purchase one Emerging share at a price of 60 cents per Emerging share expiring three years from the completion of a going-public transaction. In the event that Emerging has not completed a going-public transaction within four months following the closing date, the subscriber shall have the right to be issued by Emerging, and Emerging shall issue to the subscriber, for no additional consideration from the subscriber, such number of additional Emerging shares as is equal to 10 per cent of the number of Emerging shares comprising the units purchased by and issued to the subscriber pursuant to the subscribers subscription agreement at the closing time.

Finders' fees

Finders' fees are to be paid on the completion of the transaction to Fortress Financial Corp. (an arm's-length party) or its assignees in the amount of $897,000 in connection with the closing of the transaction, which shall be paid solely through the issuance of 2.99 million resulting issuer shares. The finders' fees remain subject to the approval of the TSX-V.

Resulting issuer

Immediately following the completion of the transaction, the resulting issuer is expected to change its name to Emerging Goldfields Resources Inc., and the resulting issuer will be a mining issuer under the policies of the TSX-V.

Information circular

In connection with the transaction and pursuant to exchange requirements, Margaret Lake will file an information circular on SEDAR+, which will contain details regarding the transaction, the business combination, the proposed private placement, Margaret Lake, Emerging and the resulting issuer.

Completion of the proposed transaction is subject to a number of conditions precedent, including, but not limited to: (i) shareholder approval of the amalgamation from both Margaret Lake and Emerging shareholders; (i) acceptance by the exchange and receipt of other applicable regulatory approvals; and (ii) completion of the private placement. There can be no assurance that the transaction will be completed as proposed or at all.

In the event any of the conditions set forth above are not completed or the transaction does not proceed, the corporation will notify shareholders. Trading in the common shares of the corporation will remain halted and is not expected to resume trading until the transaction is completed or until the exchange receives the requisite documentation to resume trading.

We seek Safe Harbor.