Toronto, Ontario--(Newsfile Corp. - July 17, 2024) - Florida Canyon Gold Inc. (TSXV: FCGV) ("FCGI", or the "Corporation") announced today that it has entered into a binding agreement to sell its interests in the San Agustin mine, El Castillo mine, La Colorada mine, Cerro del Gallo project and San Antonio project (collectively the "Mexican Business Unit") to Heliostar Metals Ltd. ("Heliostar") (the "Transaction").

The sale of the Mexican Business Unit is the result of the Corporation's previously announced review of strategic alternatives and consistent with the Corporation's stated objective to leverage the value of its portfolio of assets and manage risk.

At closing, Heliostar will pay cash consideration of US$5 million to the Corporation. In addition, the Corporation is entitled to cash generated by the Mexican Business Unit prior to July 11, 2024 and cash of US$5 million generated from operating cash flow after July 16, 2024, subject to a minimum of US$2 million of net working capital being left in the Mexican Business Unit on closing. The Transaction represents an important step in positioning the Corporation to explore alternatives to maximize shareholder value in connection with its Florida Canyon mine, which will be the primary asset of the Corporation after the sale of the Mexican Business Unit is completed.

As part of the Transaction, FCGI and Heliostar will enter into an agreement eliminating the outstanding contingent payments payable by Heliostar to FCGI pursuant to the agreement under which Heliostar previously acquired the Ana Paula project, as well as the conditional option payments on the San Antonio project. Post-closing, Heliostar will assume all responsibilities for the Mexican Business Unit, including reclamation.

The Transaction is expected to close in the third quarter of 2024 and is subject to certain closing conditions, including applicable regulatory approvals, the Mexican Business Unit having net working capital of at least US$2 million, as well as other customary closing conditions for a transaction of this nature.