Mr. Brett Richards reports

PASOFINO GOLD TO BE ACQUIRED BY MANSA RESOURCES LIMITED

Pasofino Gold Ltd. has entered into a definitive arrangement agreement dated Jan. 26, 2026, with Mansa Resources Ltd. , whereby 1574136 B.C. Ltd., a wholly owned subsidiary of Mansa, has agreed to acquire all of the issued and outstanding common shares of the company not already owned by Mansa and its affiliates by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia), in an all-cash transaction for 90 Canadian cents per share.

The purchase price represents an aggregate fully diluted equity value for Pasofino of approximately $141.6-million (Canadian). Concurrently with the entering into of the arrangement agreement, the company and Mansa have entered into a promissory note, whereby Mansa has agreed to lend up to $10-million (U.S.) to the company at an interest rate of 12 per cent per annum, subject to certain acceleration events, and certain other customary terms and conditions described in the promissory note. The participation by Mansa in the issuance of the promissory note was undertaken to assist Pasofino with funding working capital requirements during the interim period.

Key highlights

To, among other things, consider and make a recommendation to the board of directors of Pasofino with respect to the transaction, the company formed a committee of independent directors, which was advised by independent legal and financial advisers. The transaction is unanimously supported by the special committee and the board. Following the receipt of financial and legal advice, and on the unanimous recommendation of the special committee, the board, with interested directors abstaining, unanimously determined that the transaction is in the best interests of Pasofino and unanimously recommends that securityholders vote in favour of the transaction.

The special committee, in making its unanimous determination to recommend approval of the transaction to the board, and the board, in making its unanimous decision to approve the transaction, considered, among other things, the following factors:

• Robust review of alternative transactions: In reviewing the transaction, the special committee and the board assessed the business, operations, assets, financial condition, operating results, regulatory risks and future prospects of the company and the relative benefits and risks of various alternatives reasonably available to the company, including the continued execution of the company's existing strategic plan. The transaction represents the most favourable alternative reasonably available to the company, as: (i) the purchase price offers a considerable premium to the market price for the shares (as further described below); (ii) prior sale processes, including the strategic review process announced in 2023 and terminated in early April, 2025, did not yield acceptable proposals from other parties; and (iii) as disclosed in a news release on Dec. 29, 2025, the company received a notice of default from the government of Liberia with respect to its mineral development agreement (MDA), significantly limiting the company's available strategic alternatives in the short and medium term, including its ability to execute its current strategic plan.
• Certainty of value and immediate liquidity. The all-cash consideration is subject to customary conditions and provides securityholders with certainty of value and immediate liquidity.
• Premium to market price: The purchase price of 90 Canadian cents per share represents a premium of approximately 23 per cent to the closing price of the shares on the TSX Venture Exchange as of Jan. 23, 2026, the last trading day prior to the public announcement of the transaction, a premium of approximately 47 per cent over the 20-trading day volume weighted average trading price of the shares as of such date and a premium of approximately 59 per cent over the 90-trading day volume weighted average trading price of the shares as of such date.
• Voting and support agreements: The transaction is supported by Mansa, which holds 76,809,047 shares (representing approximately 51 per cetn of the issued and outstanding shares). The transaction is also supported by other shareholders, including Pasofino's directors and senior executives, who, in aggregate, hold 39,957,811 shares (representing approximately 25 per cent of the issued and outstanding Shares), and all of whom have entered into agreements to vote all of their shares and other equity securities in favour of the transaction. Accordingly, the transaction has the support of approximately 76 per cent of Pasofino's shareholders.
• Fairness opinions: Stifel Canada has provided to the special committee an opinion to the effect that the consideration to be received by the holders of shares pursuant to the transaction is fair, from a financial point of view, to such shareholders, subject to the limitations, qualifications and assumptions set out in its opinion.
• Terms of the arrangement agreement: The terms of the arrangement agreement are the result of a comprehensive negotiation process with the oversight and participation of the special committee and the board and their respective advisers, which resulted in an agreement with terms and conditions that are reasonable in the judgment of the special committee and the board.
• Limited conditions to closing: The transaction is not subject to a financing condition and is otherwise subject to a limited number of customary closing conditions.
• Ability to respond to superior proposals: The terms and conditions of the arrangement agreement and the VSAs do not prevent the board, in the exercise of its fiduciary duties, from responding, prior to the meeting (as defined below), to certain unsolicited acquisition proposals that are more favourable, from a financial point of view, to the shareholders than the transaction, subject to compliance with certain terms and conditions and certain rights to match in favour of the purchaser.
• Termination fee and expense reimbursement: The termination fee payable by Pasofino of $1.70-million (Canadian) is reasonable in the view of the board and the special committee, and is only payable in customary and limited circumstances. Further, Mansa has agreed to reimburse the company for its expenses related to the transaction in an amount not to exceed $3.25-million (Canadian) in the event the arrangement agreement is terminated in certain circumstances.

Transaction and meeting details

The transaction is to be completed by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia), is a non-arm's-length transaction and will constitute a business combination for purposes of Multilateral Instrument 61, Protection of Minority Securityholders in Special Transactions. The transaction will require the approval of: (i) at least two-thirds of the votes cast by the shareholders of the company; (ii) at least two-thirds of the votes cast by the securityholders of the company (being the holders of shares, company options and company warrants), voting together as a single class; and (iii) a simple majority of the votes cast on such resolution by shareholders present in person or represented by proxy at the meeting excluding votes attached to the shares held by the parent and any other persons described in items (a) through (d) of Section 8.1(2) of MI 61-101. In addition to shareholder, securityholder and court approvals, completion of the transaction is subject to applicable regulatory approvals and to other customary conditions. The transaction is expected to close in the first quarter of 2026.

In addition to the cash consideration of the transaction: (i) each in-the-money company option, whether vested or unvested, will be deemed to be vested and disposed of to the company in consideration for a cash payment equal to the amount by which the purchase price exceeds the exercise price payable under such option; and (ii) each in-the-money company warrant shall be deemed to be disposed of to the company in consideration for a cash payment equal to the amount by which the purchase price exceeds the exercise price payable under such company warrant. All out-of-the-money company options and warrants will be cancelled without any payment therefor. The arrangement agreement includes customary non-solicitation provisions, which are subject to customary fiduciary out provisions that entitle the company to terminate the arrangement agreement and accept a superior proposal subject to the purchaser's matching rights.

Pasofino expects to hold a special meeting of securityholders to consider the transaction in March, 2026, and to mail the management information circular for the meeting in February, 2026. Further information regarding the terms of the arrangement agreement, the background to the transaction, the rationale for the recommendations made by the special committee and the board, and how securityholders can participate in and vote at the meeting will be provided in the management information circular for the meeting, which will also be filed on SEDAR+. Securityholders are urged to read these and other relevant materials when they become available.

Upon closing of the transaction, the purchaser intends to cause the shares to be delisted from the TSX-V and to cause the company to submit an application to cease to be a reporting issuer under applicable Canadian securities laws.

The foregoing summary is qualified in its entirety by the provisions of the arrangement agreement and promissory note, copies of which, together with the VSAs, will be filed on SEDAR+.

Advisers

Stifel Canada is acting as independent financial adviser to the special committee. Fasken Martineau DuMoulin LLP is acting as legal adviser to the company. Stikeman Elliott LLP is acting as legal adviser to the special committee.

About Pasofino Gold Ltd.

Pasofino Gold is a Canadian-based mineral exploration company listed on the TSX-V.

Pasofino, through its wholly owned subsidiary, owns 100 per cent of the Dugbe gold project (prior to the issuance of the government of Liberia's 10-per-cent carried interest).

We seek Safe Harbor.