Canagold Resources Ltd. — Annual Report 2020

Apr 1, 2021

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ANNUAL INFORMATION FORM

(“AIF”)

of

CANAGOLD RESOURCES LTD.

(formerly, Canarc Resource Corp.)

(the “Company” or “Canagold” or “Canarc”)

Suite #810 – 625 Howe Street Vancouver, BC, Canada V6C 2T6

Phone: (604) 685-9700 Fax: (604) 685-9744

For the Year Ended December 31, 2020

Dated: March 30, 2021

TABLE OF CONTENTS

ITEM 1: PRELIMINARY NOTES ...................................................................................... 2 1.1 Date of Information .................................................................................... 2 1.2 Glossary of Terms ...................................................................................... 2 1.3 Conversion Table ....................................................................................... 2 1.4 Currency .................................................................................................... 3 ITEM 2: CORPORATE STRUCTURE ............................................................................... 3 2.1 Name, Address and Incorporation ............................................................... 3 2.2 Intercorporate Relationships ....................................................................... 3 ITEM 3: GENERAL DEVELOPMENT OF THE BUSINESS ........................................... 3 3.1 Three-Year History..................................................................................... 4 3.2 Significant Acquisitions ............................................................................. 8 ITEM 4: DESCRIPTION OF THE BUSINESS................................................................... 8 4.1 General Description .................................................................................... 8 4.2 Risk Factors Relating to the Company’s Business..................................... 10 4.3 Asset-backed Securities Outstanding ........................................................ 13 4.4 Material Mineral Projects ......................................................................... 13 4.5 Other Mineral Projects.............................................................................. 39 ITEM 5: DIVIDENDS ......................................................................................................... 41 5.1 Dividends ................................................................................................. 41 5.2 Dividend Policy ........................................................................................ 42 ITEM 6: DESCRIPTION OF CAPITAL STRUCTURE .................................................. 43 6.1 General Description of Capital Structure .................................................. 43 ITEM 7: MARKET FOR SECURITIES ............................................................................ 43 7.1 Trading Price and Volume ........................................................................ 43 7.2 Prior Sales ................................................................................................ 44 ITEM 8: ESCROWED SECURITIES................................................................................ 44 8.1 Escrowed Securities ................................................................................. 44 ITEM 9: DIRECTORS AND OFFICERS .......................................................................... 44 9.1 Name, Occupation and Security Holding .................................................. 44 9.2 Cease Trade Orders, Bankruptcies, Penalties or Sanctions ........................ 47 9.3 Conflicts of Interest .................................................................................. 48 ITEM 10: PROMOTERS.................................................................................................... 48 10.1 Promoters ............................................................................................... 48

ITEM 11: LEGAL PROCEEDINGS .................................................................................. 48	ITEM 11: LEGAL PROCEEDINGS .................................................................................. 48
	11.1 Legal Proceedings .................................................................................. 48
	11.2 Regulatory Actions ................................................................................. 49
ITEM 12: INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL
TRANSACTIONS ................................................................................................................... 49
	12.1 Interest of Management and Others in Material Transactions .................. 49
ITEM 13: TRANSFER AGENT AND REGISTRAR ........................................................ 49
	13.1 Transfer Agent and Registrar .................................................................. 49
ITEM 14: MATERIAL CONTRACTS .............................................................................. 49
	14.1 Material Contracts .................................................................................. 49
ITEM 15: INTERESTS OF EXPERTS .............................................................................. 50
	15.1 Names of Experts ................................................................................... 50
	15.2 Interests of Experts ................................................................................. 50
ITEM 16: ADDITIONAL INFORMATION ...................................................................... 51
	16.1 Additional Information ........................................................................... 51
	16.2 Audit Committee .................................................................................... 51
1.	Audit Committee Mandate .................................................................................i
2.	Committee Organization ....................................................................................i
	2.1 Composition & Independence ....................................................................i
	2.2 Financial Training & Financial Expert .......................................................i
	2.3 Financial Expert Duties ........................................................................... ii
	2.4 Annual Appointment and Removal .......................................................... ii
	2.5 Chairman and Secretary Appointment ..................................................... ii
	2.6 Compensation .......................................................................................... ii
3.	Meetings ............................................................................................................ ii
	3.1 Quarterly Meetings .................................................................................. ii
	3.2 Chairman Duties ...................................................................................... ii
	3.3 Third Party Attendees at Meetings ........................................................... ii
	3.4 Quorum & Majority Voting ..................................................................... ii
4.	Authority .......................................................................................................... iii
	4.1 Authority to Investigate & Require Disclosure ........................................ iii
	4.2 Authority to Engage Outside Advisers .................................................... iii
	4.3 Authority Over Company Auditors ......................................................... iii
5.	Annual Performance Evaluation ..................................................................... iii
6.	Specific Duties .................................................................................................. iii

7. Complaint Procedures ....................................................................................... v

8. Limitations on Committee’s Duties ................................................................... v

CAUTION – FORWARD LOOKING STATEMENTS

Certain of the statements made and information contained herein may contain forward-looking information within the meaning of applicable Canadian and United States securities laws.

Forward-looking statements or information relate to future events and future performance and include statements regarding the expectations and beliefs of management and include, but are not limited to, statements with respect to the estimation of mineral resources and reserves, the realization of mineral resources and reserve estimates, the timing and amount of estimated future production, the future acquisition of additional natural resource properties, capital costs, costs of production, capital expenditures, success of mining operations, environmental risks and other mining related matters. Often, but not always, forward-looking statements and forward-looking information can be identified by the use of words such as “plans”, “expects”, “potential”, “is expected”, “anticipated”, “is targeted”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements or information include, but are not limited to, statements or information with respect to known or unknown risks, uncertainties and other factors which may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such forwardlooking statements or information.

Forward-looking statements or information are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks and uncertainties relating to: general business and economic conditions; changes in commodity prices; the supply and demand for, deliveries of, and the level and volatility of prices of metals and minerals; changes in project parameters as development plans continue to be refined; the timing of the receipt and/or renewal of permits and other regulatory and governmental approvals for mining operations; labour and equipment costs; production and productivity levels; changes in credit market conditions and conditions in financial markets generally; the ability to obtain financing; the ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; the availability of qualified employees and contractors; the impact of changes in Canadian-U.S. dollar and other foreign exchange rates on costs and financial results; changes in engineering and construction timetables and capital costs; market competition; the accuracy of reserve and resource estimates (including, with respect to size, grade and recoverability) and the geological, operational and price assumptions on which these are based; changes in taxation rates; changes in environmental regulation; environmental compliance issues; other risks of the mining industry; and those factors discussed in the section entitled “Risk Factors” in this AIF. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that could cause results not to be as anticipated, estimated or intended. For more information on the Company and the risks and challenges of its business, investors should review the Company’s annual filings that are available at www.sedar.com.

The Company provides no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Any forward looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, changing circumstances, or otherwise.

1 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

ITEM 1: PRELIMINARY NOTES

1.1 Date of Information

All information in this AIF is as of March 30, 2021 unless otherwise indicated and the information contained herein is current as of such date, other than certain financial information which is current as of December 31, 2020, being the date of the Company’s most recently completed financial year end.

1.2 Glossary of Terms

Certain terms used throughout this AIF are defined below:

“affiliate”	A company is an affiliate of another company if (a) one of them is the
	subsidiary of the other, or (b) each of them is controlled by the same person or
	company.
“g/t” and “gpt”	Grams per metric tonne.
“grade”	The relative amount of valuable minerals contained in mineralization or ore.
“mineralization”	A natural aggregate of one or more valuable minerals.
“net profit interest” or “NPI”	A royalty based on net profits expressed as a specified percentage of the entire
royalty	proceeds received from a mine’s production less all capital, operating,
	administrative, transportation, smelting, refining, tax, insurance, interest and
	other costs.
“net smelter return” or “NSR”	A royalty based on net smelter returns expressed as a specified percentage of
royalty	the entire proceeds received from a mine’s gross mineral production, less
	certain limited costs including smelting, refining, transportation, and insurance
	costs.
“NI 43-101”	National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
“operator”	The party in a joint venture which carries out the operations of the joint venture.
“ounces”	Troy ounces.
“ton”	Short ton weighing 2,000 pounds or 907 kilograms.
“tonne”	Metric tonne weighing 2,205 pounds or 1,000 kilograms.

1.3 Conversion Table

In this AIF, a combination of Imperial and metric measures is used with respect to mineral properties located in Canada. Conversion rates from Imperial measure to metric and from metric to Imperial are provided below:

2 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Imperial Measure	Metric Unit	Metric Measure	Imperial Unit
2.47 acres 3.28 feet 0.62 miles 0.032 ounces (troy) 1.102 tons (short) 0.029 ounces (troy)/ton	1 hectare 1 metre 1 kilometre 1 gram 1 tonne 1 gram/tonne	0.4047 hectares 0.3048 metres 1.609 kilometres 31.1 grams 0.907 tonnes 34.28 grams/tonne	1 acre 1 foot 1 mile 1 ounce (troy) 1 ton 1 ounce (troy)/ton

1.4 Currency

Unless otherwise indicated, all dollar amounts are stated in United States dollars.

ITEM 2: CORPORATE STRUCTURE

2.1 Name, Address and Incorporation

The Company was incorporated under the laws of British Columbia on January 22, 1987 under the name “Canarc Resource Corp.” by registration of its Memorandum and Articles with the British Columbia Registrar of Companies. The Company was originally incorporated under the previous Company Act (British Columbia) and transitioned to the Business Corporations Act (British Columbia) in 2005; the Business Corporations Act (British Columbia) replaced the Company Act (British Columbia) on March 29, 2004. Effective December 3, 2020, the Company changed its name to Canagold Resources Ltd.

The Company is a reporting company in British Columbia, Ontario, Alberta, Saskatchewan and Nova Scotia, and became a reporting company under the United States Securities Exchange Act of 1934 upon filing its Form 20F registration statement dated October 9, 1990.

The Company’s address is as follows:

Head office: #810 – 625 Howe Street Vancouver, BC, Canada, V6C 2T6

Registered and records office: Maxis Law Corporation #910 – 800 West Pender Street Vancouver, BC, Canada, V6C 2V6

2.2 Intercorporate Relationships

The Company carries on its business, in part, through a number of subsidiaries, held either directly or indirectly, and which are wholly owned unless otherwise noted as follows:

New Polaris Gold Mines Ltd. (“New Polaris”) is a corporation formed through the amalgamation of 2820684 Canada Inc. (“2820684”), a former wholly-owned subsidiary of the Company which was incorporated under the Canada Business Corporation Act on May 13, 1992, and Suntac Minerals Inc. The Company owns 100% of its issued and outstanding shares.

AIM U.S. Holdings Corp. is a corporation duly incorporated in the State of Nevada, USA, on March 14, 2017. The Company owns 100% of its issued and outstanding shares.

American Innovative Minerals, LLC (“AIM”) is a limited liability company existing pursuant to the laws of Nevada, USA, on January 20, 2011. The Company owns 100% membership interest in AIM.

ITEM 3: GENERAL DEVELOPMENT OF THE BUSINESS

3

Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

3.1 Three-Year History

The Company commenced operations in 1987 and, since inception, has been engaged in the business of the evaluation, acquisition, exploration and, if warranted, development of precious metal properties. The Company currently owns or holds, directly or indirectly, interests in precious metal properties, as follows:

• New Polaris property (British Columbia, Canada),

• Windfall Hills properties (British Columbia, Canada),

• Fondaway property (Nevada, USA), and

• Corral Canyon property (Nevada, USA).

The New Polaris and Fondaway properties are considered as the material properties of the Company. The Company also has a portfolio of nine other smaller exploration properties in Nevada, one in Idaho and one in Montana.

Over the course of the past three years, the Company has been engaged in mineral exploration and development in North America with current mineral property interests in Canada and the USA. Events affecting the development of the Company’s business over the last three years are set out below and in Item 4.

Membership Interest Purchase Agreement with American Innovative Minerals, LLC

On March 20, 2017, Canagold closed the Membership Interest Purchase Agreement with AIM (the “Membership Agreement”) whereby the Company acquired 100% legal and beneficial interests in mineral properties located in Nevada, Idaho and Utah, USA, for a total cash purchase price of $2 million and honouring pre-existing NSRs.

Certain of the mineral properties are subject to royalties. For the Fondaway Canyon project, it bears both a 3% NSR and a 2% NSR. The 3% NSR has a buyout provision for an original amount of $600,000 which is subject to advance royalty payments of $35,000 per year by July 15[th] of each year until a gross total of $600,000 has been paid at which time the NSR is bought out. A balance of $425,000 with a fair value of $183,000 was outstanding upon the closing of the Membership Agreement is March 2017, and a remaining balance of $285,000 remains payable as at December 31, 2020. The 2% NSR has a buyout provision of either $2 million in cash or 19.99% interest of a public entity which owns AIM if AIM were to close an initial public offering of at least $5 million.

AIM owns 11 gold properties in Nevada that are subject to the Membership Agreement. Two of the properties (Fondaway Canyon and Dixie Comstock) contain historic gold resource estimates, and owns one gold property in Idaho, and has two royalty interests on other properties. These properties include the following:

• Fondaway Canyon is an advanced exploration stage gold property located in Churchill County, Nevada. The land package contains 136 unpatented lode claims. The property has a history of previous surface exploration and mining in the late 1980s and early 1990s. The Fondaway Canyon district consists of shear-zone style gold mineralization developed along 3.7 km of strike with a width of up to 900 m. Multiple exploration targets exist along major structural zones, and mineralization is locally concealed by alluvial cover.

• Dixie Comstock , also located in Churchill County, Nevada, consists of 26 unpatented lode claims. The property contains a range-front epithermal gold deposit with a non-43-101 compliant resource of 146,000 ounces of gold at 1.063 grams per tonne Au.

• Clear Trunk property is located in Pershing and Humboldt Counties, Nevada on 4500 acres of fee mineral and unpatented claims in the Sonoma Range, south of Winnemucca and near the Goldbanks gold deposit. The property contains gold-bearing epithermal quartz veins, mesothermal quartz veins with high-grade gold and copper-gold intrusion-hosted mineralization.

• Bull Run property is located in Elko County, Nevada on two large patented claim groups of 500 acres near the Jerritt Canyon gold district.

• Hot Springs Point property is located in Eureka County, Nevada on 160 acres of fee land on north end of the prolific Cortez Trend. Hecla Mining claims surround the project on three sides.

4 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

• Jarbidge property is located in Elko County, Nevada on 8 patented claims along the east end of major gold veins in the Jarbidge mining district.

• Lightning Tree property is located in Lemhi County, Idaho on 4 unpatented claims near the Musgrove gold deposit.

• Silver King property is located in Humboldt County, Nevada on 4 patented claims in the Iron Point mining district. Previous exploration focused on low grade gold values but the property was never been explored for silver.

• A&T property is located in Humboldt Co., Nevada on 2 patented claims on Winnemucca Mountain. The property contains gold-bearing veins in altered shale.

• Eimis property is located in Elko County, Nevada on one 20 acre patented claim adjacent to the Coleman Canyon gold deposit controlled by Arnevut Resources. Gold anomalies extend onto Eimis property.

• Silver Peak property is located in Esmeralda County, Nevada on 3 patented (57 acres) and 3 unpatented mining claims covering 50 acres. The property is adjacent to the Mineral Ridge mine controlled by Scorpio Gold Corporation.

In April 2017, a technical report was commissioned for the Fondaway project. Item 4.4 provides further details.

Silver King (Nevada, USA)

On October 25, 2018, Canagold entered into an option agreement with Brownstone Ventures (US) Inc., a subsidiary of Casino Gold Corp., (“Brownstone Ventures”) on Canagold’s wholly owned Silver King patented claim group located in Humboldt County, Nevada. Under the terms of the ten-year agreement, Canagold will receive annual payments of $12,000 plus an option exercise payment of $120,000. Upon exercise of the option, Canagold will retain a 2% NSR royalty on the property of which Brownstone Ventures will have the right to buy back one-half (1%) of the royalty for $1 million. The Silver King property is a non-core asset in Canagold’s Nevada property portfolio.

Fondaway Canyon and Dixie Comstock properties (Nevada, USA):

On October 16, 2019, Canagold signed a binding Letter Agreement with Getchell Gold Corp. (“Getchell”) which was later superseded by the Option Agreement for the Acquisition of Fondaway Canyon and Dixie Comstock Properties on January 3, 2020, whereby Getchell has an option for 4 years to acquire 100% of the Fondaway Canyon and Dixie Comstock properties located in Churchill County, Nevada (both subject to a 2% NSR) for $4 million in total compensation to Canagold, comprised of $2 million in cash and $2 million in shares of Getchell. The option includes minimum annual work commitments of $1.45 million on the properties. Getchell must also honor the pre-existing NSR and advance royalty commitments related to the properties, and grant Canagold a 2% NSR on the Fondaway Canyon and Dixie Comstock properties of which half (1%) can be bought for $1 million per property.

Lightning Tree (Idaho, USA)

In early July 2020, Canagold entered into a non-binding letter of intent for its Lightning Tree property located in Lemhi County, Idaho, with Ophir Gold Corp. (formerly, MinKap Resources Inc.) (“Ophir”), whereby Ophir shall acquire a 100% undivided interest in the property. On September 10, 2020, a definitive mineral property purchase agreement was executed. Over a three year period, Ophir shall pay to Canagold a total of CAD$137,500 in cash over a three year period and issue 2.5 million common shares and 2.5 million warrants over a two year period, and shall incur aggregate exploration expenditures of at least $4 million over a three year period. If Ophir fails to incur the exploration expenditure, the property reverts back to Canagold. Canagold will retain a 2.5% NSR of which a 1% NSR can be acquired by Ophir for CAD$1 million. If Ophir fails to file a NI 43-101 compliant resource on the Lightning Tree property within three years, the property will revert back to Canagold.

Lightning Tree property is located in Lemhi County, Idaho on 4 unpatented claims near the Musgrove gold deposit.

5

Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Confirmation and Agreement with Barrick Gold Inc. and Skeena Resources Ltd.

In December 2017, Canagold signed a Confirmation and Agreement with Barrick Gold Inc. (“Barrick”) and Skeena Resources Ltd. (“Skeena”) involving Canagold’s 33.3% carried interest in certain mining claims adjacent to the pastproducing Eskay Creek Gold mine located in northwest British Columbia, whereby Canagold will retain its 33.33% carried interest. Canagold and Barrick have respectively 33.33% and 66.67% interests in 6 claims and mining leases totaling 2323 hectares at Eskay Creek. Pursuant to an option agreement between Skeena and Barrick, Skeena has the right to earn Barrick’s 66.67% interest in the property which right had been exercised in October 2020. Canagold had written off the property in 2005.

Property Option Agreement with Silver Range Resources Ltd.

In November 2018, Canagold entered into a property option agreement with Silver Range Resources Ltd. (“Silver Range”) whereby Canagold has an option to earn a 100% undivided interests in the Hard Cash and Nigel properties by paying CAD$150,000 in cash and issuing 1.5 million common shares to Silver Range over a four year period. Upon Canagold’s exercise of the option, Silver Range will retain a 2% NSR of which a 1% NSR can be acquired for CAD$1 million. Silver Range shall also be entitled to receive $1 per Au oz of measured and indicated resource estimate and $1 per Au oz of proven or probable reserve estimate, payable in either cash or common shares of Canagold at Canagold’s election. Item 4.5.5 provides further details.

Corral Canyon property (Nevada, USA)

In November 2018, Canagold staked 92 mining claims covering 742 hectares in Nevada, USA. Item 4.5.7 provides further details.

Property Option Agreement with Tasca Resources Ltd., et al.

In December 2018 and then as amended in June 2019, Canagold entered into a property option agreement jointly with Universal Copper Ltd. (formerly, Tasca Resources Ltd.) (“Universal”) and an individual whereby Canagold has an option to earn a 75% interest in the Princeton property by: incurring exploration expenditures of CAD$490,000 over a two year period; issuing 375,000 common shares to Universal by December 1, 2019 (issued); paying CAD$25,000 cash to Universal by March 16, 2021; and granting a 1% NSR to Universal which can be acquired for CAD$1 million and honoring a 2% NSR to the individual of which 1% NSR can be acquired for CAD$1 million.

In October 2020, Canagold assigned its interest in the property option agreement for the Princeton property to Damara Gold Corp. (“Damara”). Pursuant to the assignment, Damara issued 9.9% of its outstanding common shares to Canagold on closing of the assignment. Subject to the exercise of the option by December 31, 2021, Canagold’s aggregate ownership in the capital of Damara shall increase to 19.9%. Damara shall incur exploration expenditures of CAD$300,000 by December 31, 2020.

Item 4.5.6 provides further details.

Other Mineral Property

In December 2018, Canagold entered into a Memorandum of Understanding for an exploration and development project in South America whereby Canagold paid $10,000 in 2018 and another $10,000 is payable as a success fee to close on an acceptable agreement for such project. In October 2019, Canagold recovered $3,000 from its initial payment and wrote off the project.

Name Change and Share Consolidation

6 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Effective December 8, 2020, the Company changed its name from Canarc Resource Corp. to Canagold Resources Ltd. and consolidated its share capital on the basis of five pre consolidation common shares for one post share consolidation share.

Financings and Related Transactions

On July 23, 2019, Canagold closed a private placement for 4.75 million flow through common shares for gross proceeds of CAD$1.4 million; of these shares, 3.5 million were issued at a price of CAD$0.30 per share and 1.3 million shares at CAD$0.3125 per share. The fair value of the shares was CAD$0.30 per share, resulting in the recognition of a flow through premium liability of CAD$0.0125 per share for a total of CAD$16,000. Finder fees were comprised of CAD$91,400 in cash and 300,000 million warrants; each warrant is exercisable to acquire one non-flow through common share at an exercise price of CAD$0.30 per share until July 23, 2021.

In October and November 2020, Canagold closed a private placement in two tranches totalling 21 million units at a price of CAD$0.40 per unit for gross proceeds of CAD$8.4 million with each unit comprised of one common share and one-half of one common share purchase warrant; each whole warrant is exercisable to acquire one common share at an exercise price of CAD$0.65 per share for a period of two years. On October 7, 2020, Canagold closed the first tranche for 8 million units for gross proceeds of CAD$3.2 million. On November 12, 2020, Canagold closed the second tranche for 13 million units for gross proceeds of CAD$5.2 million; the second tranche received interested and disinterested shareholder approvals at Canagold’s special general meeting held on October 19, 2020. Finders fees included CAD$176,400 in cash and 385,200 warrants with the same terms as the underlying warrants in the private placement. If the closing market price of the common shares is at a price equal to or greater than CAD$1.00 for a period of 10 consecutive trading days on the Toronto Stock Exchange, Canagold will have the right to accelerate the expiry date of the warrants by giving written notice to the warrant holders that the warrants will expire on the date that is not less than 30 days from the date notice is provided by Canagold to the warrant holders.

Issuer Bids

In February 2017, Canagold received regulatory approval for a normal course issuer bid to acquire up to 2.2 million of its common shares representing approximately up to 5% of its issued and outstanding common shares at that time. The bid commenced on February 8, 2017 and terminated on February 7, 2018. The actual number of common shares purchased under the bid and the timing of any such purchases was at Canagold’s discretion. Purchases under the bid did not exceed 17,225 common shares per day. Canagold paid the prevailing market price at the time of purchase for all common shares purchased under the bid, and all common shares purchased by Canagold were returned to treasury and cancelled. For the year ended December 31, 2017, Canagold purchased 511,700 shares for CAD$213,700 with an average price of CAD$0.42 per share. Subsequent to December 31, 2017, a further 17,200 common shares were purchased for an aggregate of CAD$6,700 at an average price of CAD$0.39 per share, all of which were cancelled in February 2018.

In June 2018, Canagold received regulatory approval for a normal course issuer bid to acquire up to 2.2 million common shares of Canagold representing approximately up to 5% of its issued and outstanding common shares at that time. The bid was effective on June 21, 2018 and terminated on June 20, 2019. The actual number of common shares purchased under the bid and the timing of any such purchases were at Canagold’s discretion. Purchases under the bid shall not exceed 4,778 common shares per day. Canagold paid the prevailing market price at the time of purchase for all common shares purchased under the bid, and all common shares purchased by Canagold were cancelled. From June to December 2018, Canagold purchased 87,600 shares for CAD$20,595 with an average price of CAD$0.235 per share; no further shares were purchased in 2019 under its normal course issuer bid.

Forbearance Agreement

On February 12, 2018, Canagold entered into a Forbearance Agreement with a debtor in which the loan principal totaling $220,000, which was previously written off in 2014, will be repaid in full in 2018 as follows:

7 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Date	Principal (1)
February 14, 2018 June 30, 2018 September 30, 2018 December 31, 2018	25,000 $ 25,000 85,000 85,000
	220,000 $

• (1) Funds of $94,500 were received in 2018 with a balance of $59,500 received in January 2019, net of legal fees.

Directors and Officers

From January 2018 to May 2020, Mr. Jacob Margolis, PhD, was Vice President of Exploration for Canagold. In June 2020, Mr. Troy Gill was appointed Vice President of Exploration.

In June 2018, Mr. Bradford Cooke replaced Mr. Catalin Kilofliski as the Chief Executive Officer of Canagold. In October 2018, Mr. Scott Eldridge replaced Mr. Bradford Cooke as Chief Executive Officer of Canagold. Mr. Cooke continues to be the Chairman and a Director of Canagold, and Mr. Eldridge continues to be a Director.

At Canagold’s annual general meeting on June 29, 2018, Mr. Leonard Harris did not stand for re-election as Director and retired from the Board. Messrs. Bradford Cooke, Martin Burian and Deepak Malhotra were re-elected to the Board of Directors for the ensuing year. Messrs. Scott Eldridge and Kai Hoffmann were elected as Directors to the Board of Canagold.

In July 2020, Mr. Kai Hoffmann resigned from the Board and then in August 2020, Mr. Andrew Bowering was nominated to the Board of Canagold.

3.2 Significant Acquisitions

There were no significant acquisitions completed by Canagold during its most recently completed fiscal year ended December 31, 2020, other than those disclosed in Canagold’s continuous disclosure documents and regulatory and public filings and in this AIF.

ITEM 4: DESCRIPTION OF THE BUSINESS

4.1 General Description

The Business of the Company

The principal business of the Company is the evaluation, acquisition, exploration and development of natural resource properties of merit. The Company intends to seek and to acquire additional properties worthy of exploration and development.

The Company is a Canadian mineral exploration company which is engaged in the acquisition, exploration and development of precious metal properties. The Company owns or holds, directly or indirectly, interests in the following material projects:

• 100% ownership of the New Polaris property (British Columbia, Canada), and

• 100% ownership of the Fondaway property (Nevada, USA), subject to advance royalty commitments and to the property option agreement with Getchell.

8 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

The Company also holds interests in the non-material Windfall Hills and Eskay Creek properties, which are located in British Columbia and Corral Canyon property in Nevada, as well as a portfolio of nine other smaller exploration properties in Nevada, one in Idaho and one in Montana. The Eskay Creek property was written off in 2005 but the Company continues to have a 33.3% carried interest.

Details of the Company’s interests in various mineral properties are provided in Items 4.4 and 4.5.

The Company acquires properties by staking initial claims, negotiating for permits from government authorities, negotiating with holders of claims or permits, or acquiring companies with claims or permits. On these properties, the Company explores for minerals on its own or in joint ventures with others. Exploration for metals usually includes remote sensing, surface mapping and sampling, geophysical surveys and drilling. The Company is not limited to any particular metal or region, but the corporate focus is on precious metals.

Trends

The cumulative annual prices for gold per ounce for each of the previous three years were as follows:

	Annual Prices for Gold per ounce	Annual Prices for Gold per ounce	Annual Prices for Gold per ounce
	2018	2019	2020
Low	$1,178	$1,270	$1,474
High	$1,355	$1,546	$2,067
Cumulative Average	$1,268	$1,393	$1,770

On March 30, 2021, the price of gold per ounce closed at $1,684. As of March 30, 2021, the price of gold for 2021 reached a high of $1,943 per ounce on January 4, 2021, which suggests a trend of improving gold prices.

The Company continues to foresee favourable opportunities to finance the mineral exploration and development efforts on its properties and also to evaluate and to consider new acquisitions in the gold arena.

The Company has determined that the price of gold bullion continues to make gold exploration attractive and should facilitate opportunities for the advancement of its New Polaris property in British Columbia (Canada).

Specialized Skill and Knowledge

All aspects of the Company’s business require specialized skills and knowledge. Such skills and knowledge include the areas of geology, drilling, logistical planning, geophysics, metallurgy and mineral processing, implementation of exploration programs and corporate finance.

Management of the Company is composed of individuals who have expertise in the mineral industry and finance and are complemented by a strong board of directors. See “ Directors and Officers ”.

Competitive Conditions

Significant competition exists for natural resource acquisition opportunities. As a result of this competition, some of which is with large, well established mining companies with substantial capabilities and significant financial and technical resources, the Company may be unable to compete for, nor acquire rights to, and to exploit attractive mining properties on terms it considers acceptable. Accordingly, there can be no assurance that the Company will be able to acquire any interest in additional projects that would yield reserves or results for commercial mining operations.

Cycles

The mineral exploration and development business is subject to mineral price cycles. The marketability of minerals and mineral concentrates is also affected by worldwide economic cycles.

Economic Dependence

Unfavourable economic conditions may negatively impact the Company’s financial viability. Unfavourable economic conditions could also increase the Company’s financing costs, decrease net income or increase net loss, limit access to capital markets and negatively impact any of the availability of credit facilities to the Company.

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Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Environmental Protection

Environmental legislation is evolving in a manner such that standards, enforcement, fines and penalties for noncompliance are becoming stricter and can be foreboding. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The costs of compliance with changes in government regulations have the potential to reduce the profitability of future operations. To the best knowledge of the Company, it is in compliance with all environmental laws and regulations in effect in those countries where its properties are located.

Number of Employees

As of March 30, 2021, Canagold had four full-time and two part-time employees on staff.

Foreign Operations

The Fondaway Canyon property and Corral Canyon property are located in Nevada, USA. The Company is dependent on certain foreign operations through its two subsidiaries in the United States.

4.2 Risk Factors Relating to the Company’s Business

The Company’s ability to generate revenues and profits from its mineral property interests, or any other mineral property it may acquire, is dependent upon a number of factors, including, without limitation, the following:

Precious and Base Metal Price Fluctuations

The Company does not have any precious and base metal mining operations, but will likely need a joint venture partner to advance its New Polaris project, and seeks to acquire projects of merit including those which can be placed into production in a relatively short time frame. The profitability of any such operations in which the Company has an interest will be significantly affected by changes in the market prices of precious and base metals. Prices for precious and base metals fluctuate on a daily basis, have historically been subject to wide fluctuations and are affected by numerous factors beyond the control of the Company such as the level of interest rates, the rate of inflation, central bank transactions, world supply of precious and base metals, foreign currency exchange rates, international investments, monetary systems and political developments. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Company not receiving adequate returns on invested capital or the investments retaining their respective values. The value of the Company’s securities may be significantly affected by the market price of gold and other metals, which are cyclical and subject to substantial price fluctuations. The Company may also curtail or suspend some or all of its exploration or development activities on its mineral projects in response to lower gold or other metals prices.

Operating Hazards and Risks

Mining operations generally involve a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Hazards such as unusual or unexpected formations and other conditions can occur. Operations in which the Company has a direct or indirect interest will be subject to all the hazards and risks normally incidental to exploration, development and production of precious and base metals, any of which could result in work stoppages, damage to or destruction of mines and other producing facilities, damage to life and property, environmental damage and possible legal liability for any or all damages. The Company may become subject to liability for pollution, cave-ins or hazards against which it cannot insure or against which it may elect not to insure. Any compensation for such liabilities may have a material, adverse effect on the Company’s financial position.

Exploration and Development

There are no known reserves of commercial ore on the Company’s mineral property interests. Development of the Company’s mineral property interests will only follow upon obtaining satisfactory exploration results and / or adequate financing. Mineral exploration and development are speculative in nature and involve a high degree of risk and few properties which are explored are ultimately developed into producing mines. There is no assurance that the

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Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Company’s mineral exploration and development activities will result in any discoveries of reserves of commercial ore. The long-term profitability of the Company’s operations will be in part directly related to the cost and success of its exploration programs, which may be affected by a number of factors.

Substantial expenditures are required to establish resources and reserves through drilling and development and for mining and processing facilities and infrastructure. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that the funds required for development can be obtained on a timely basis.

The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond the Company’s control and which cannot be accurately foreseen or predicted, such as market fluctuations, the global marketing conditions for precious and base metals, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting minerals and environmental protection.

Calculation of Reserves and Resources and Precious Metal Recoveries

There is a degree of uncertainty attributable to the calculation of reserves and resources and their corresponding metal grades to be mined and recovered. Until reserves or resources are actually mined and processed, the quantities of mineralization and metal grades must be considered as estimates only.

Reclamation

There is a risk that monies allotted for land reclamation may not be sufficient to cover all risks, due to changes in the nature of the waste rock or tailings and/or revisions to government regulations. Therefore, additional funds or reclamation bonds or other forms of financial assurance may be required over the tenure of the project to cover potential risks. These additional costs may have material adverse impact on the financial condition and results of the Company.

Government Regulation

Operations, development and exploration on the Company’s mineral property interests are affected to varying degrees by government regulations relating to such matters as environmental protection, health, safety and labour, mining law reform, restrictions on production, price controls, tax increases, maintenance of claims, tenure, and expropriation of property. There is no assurance that future changes in such regulation, if any, will not adversely affect the Company’s operations.

The activities of the Company require licenses and permits from various governmental authorities. While the Company currently has been granted the requisite licenses and permits to enable it to carry on its existing business and operations, there can be no assurance that the Company will be able to obtain all the necessary licenses and permits which may be required to carry out exploration, development and mining operations for its projects.

Environmental Factors

All phases of the Company’s operations are subject to environmental regulation in the various jurisdictions in which it operates. Environmental legislation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. There is no assurance that future changes in environmental regulation, if any, will not adversely affect the Company’s operations. Environmental hazards may exist on the Company’s mineral property interests which are unknown to the Company at present which have been caused by previous or existing owners or operators of the properties.

Title to Assets

Although the Company may have title to certain properties in which it has a material interest, there is no guarantee that title to such properties will not be challenged or impugned. The Company has not conducted surveys of the claims in which it holds direct or indirect interests and, therefore, the precise area and location of such claims may be in doubt. The Company’s claims may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by unidentified or unknown defects.

11

Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Uncertainty of Funding

The Company’s current operations do not generate any positive cash flow and it is not anticipated that any positive cash flows will be generated in the near future. The Company has limited financial resources, and the mineral claims in which the Company has an interest require financial expenditures to be made by the Company. There can be no assurance that adequate funding will be available to the Company so as to exercise its option or to maintain its interests once those property options have been exercised.

Further exploration work and development of the properties in which the Company has an interest or option to acquire depend upon the Company’s ability to obtain financing through joint venturing of projects, debt financing or equity financing or other means. Failure to obtain financing on a timely basis could cause the Company to forfeit all or parts of its interests in mineral properties or reduce or terminate its operations.

Competition and Agreements with Other Parties

The mining industry is intensely competitive in all of its phases, and the Company competes with many companies possessing greater financial resources and technical facilities than itself. Competition in the mining business could adversely affect the Company’s ability to acquire suitable producing properties or prospects for mineral exploration in the future.

The Company may, in the future, be unable to meet its share of costs incurred under agreements to which it is a party and the Company may have its interest in the properties subject to such agreements reduced as a result. Furthermore, if other parties to such agreements do not meet their share of such costs, the Company may be unable to finance the cost required to complete recommended programs.

Current Global Financial Conditions are Difficult for Mining Companies

Current global financial conditions for mining companies have been affected by a prolonged decline in metals prices, including the price of gold. Access to public financing has been negatively impacted by the prolonged decline in precious metals prices, and the resulting decrease in the values of the securities of many mining companies. These factors may impact the ability of the Company to obtain equity or debt financing in the future on terms favourable to the Company, or at all. Additionally, these factors, as well as other related factors, may cause decreases in asset values that are deemed to be other than temporary, which may result in impairment losses. If such decreased levels of metals prices continue, the Company’s operations could be adversely impacted and the trading price of the Company’s securities may be adversely affected.

The Company Has a Lack of Operating History and Has no History of Earnings

The Company has no history of earnings. The Company has paid no cash dividends on its shares since incorporation and does not anticipate doing so in the foreseeable future. The only present source of funds available to the Company is through the sale of its equity shares or by way of debt facilities or from the disposition of marketable securities, if any. While the Company may generate additional working capital through the operation, development, sale or possible syndication of its mineral properties, there is no assurance that any such funds will be generated.

Shareholder Dilution

It is likely that additional capital required by the Company will be raised through the issuance of additional equity securities, resulting in dilution to the Company’s shareholders.

The Company is Dependent on Key Personnel and the Absence of Any of these Individuals could Result in a Significantly Negative Effect on the Company

The success of the Company and its ability to continue to carry on operations is dependent upon its ability to retain the services of certain key personnel. The loss of their services to the Company may have a material adverse effect on the Company. The Company does not presently have “key person” life insurance for any of its officers.

Currency Risk

12 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

The Company is exposed to currency fluctuations in the acquisition of foreign currencies. The Company holds balances in cash and accounts payable and accrued liabilities in foreign currencies and incurs expenses in foreign currencies, and is therefore exposed to gain or losses on foreign exchange.

Potential Conflicts of Interest

The directors and officers of the Company may serve as directors and/or officers of other public and private companies and may devote a portion of their time to manage other business interests. This may result in certain conflicts of interest. To the extent that such other companies may participate in ventures in which the Company is also participating, such directors and officers of the Company may have a conflict of interest in negotiating and reaching an agreement with respect to the extent of each company’s participation. The laws of British Columbia, Canada, require the directors and officers to act honestly, in good faith, and in the best interests of the Company and its shareholders. However, in conflict of interest situations, directors and officers of the Company may owe the same duty to another company and will need to balance the competing obligations and liabilities of their actions. There is no assurance that the needs of the Company will receive priority in all cases. From time to time, several companies may participate together in the acquisition, exploration and development of natural resource properties, thereby allowing these companies to: (i) participate in larger programs; (ii) acquire an interest in a greater number of programs; and (iii) reduce their financial exposure to any one program. A particular company may assign, at its cost, all or a portion of its interests in a particular program to another affiliated company due to the financial position of the Company making the assignment. In determining whether or not the Company will participate in a particular program and the interest therein to be acquired by it, it is expected that the directors and officers of the Company will primarily consider the degree of risk to which the Company may be exposed and its financial position at that time.

Coronavirus

COVID-19 (the coronavirus) has threatened a slowdown in the global economy as well as caused volatility in the global financial markets. While the full impact of COVID-19 on the global economy is uncertain, rapid spread of COVID-19 may have an adverse effect on the Company's financing capabilities; COVID 19 could negatively impact planned exploration programs; economic recession from COVID-19 could negatively impact the Company’s ability to operate. The extent to which COVID-19 may impact the Company’s business will depend on future developments such as the geographic spread of the disease, the duration of the outbreak, travel restrictions and social distancing, business closures or business disruptions, and the effectiveness of actions taken in Canada, the United States and other countries to contain and treat the disease. Although it is not possible to reliably estimate the length or severity of these developments and their financial impact to the date of approval of these consolidated financial statements, the Company's stock price did have a 12 month low of CAD$0.15 during this period. Should the stock prices remain low for an extended period, this could have a further significant adverse impact on the Company's financial position and results of operations for future periods.

4.3 Asset-backed Securities Outstanding

Not applicable.

4.4 Material Mineral Projects

The New Polaris and Fondaway properties are considered the material properties of Canagold.

4.4.1 New Polaris Gold Project (British Columbia, Canada)

Introduction

Canagold has been reviewing various processes for treating concentrates to produce gold doré bars at the New Polaris mine site to improve the economics and to possibly reduce certain risks to developing the project.

13 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

In the first half of 2018, Canagold assessed pressure oxidation to treat the refractory concentrate and produce dore bars at the mine site. The autoclave study concluded that it would be uneconomic due to excessively high capital and operating costs. In the latter half of 2018, bench-scale testing of New Polaris gold concentrate using bio-oxidation treatment process was conducted. Metallurgical test using bio-oxidation treatment on flotation concentrate resulted in gold extractions up to 96%. Bio-oxidation testing of New Polaris concentrates dramatically increased the cyaniderecoverable gold from 8% for un-oxidized concentrate up to 96% on bio-oxidized material.

On March 4, 2019, Canagold announced the results of an updated NI 43-101 preliminary economic assessment study by Moose Mountain Technical Services (“Moose Mountain”) for the New Polaris gold project, titled “The New Polaris Gold Project, British Columbia, Canada – 2019 Preliminary Economic Assessment” and with an effective date of February 28, 2019 (the “New Polaris Preliminary Economic Report”), using flotation/bio-oxidation and CIL leaching process. The New Polaris Preliminary Economic Report is specifically incorporated by reference into this AIF and may be accessed on the Company’s SEDAR profile at www.sedar.com.

The following extract provides a summary of certain information from the New Polaris Preliminary Economic Assessment Report.

Extract of Selected Sections of the New Polaris Preliminary Economic Assessment Report

Property Description and Location

The New Polaris property consists of a group of 61 contiguous Crown grants, and one modified grid claim totaling, 1,196 ha (2,956 acres) located 96 km (60 miles) south of Atlin, BC and 64 km (40 miles) northeast of Juneau, Alaska. Located at approximately 133º37’W Longitude and 58º42’N Latitude, the deposit lies on the eastern flank of the Tulsequah River Valley.

The claims are 100% owned and held by New Polaris Gold Mines Ltd., a wholly owned subsidiary of Canarc, and subject to a 15% net profit interest held by Rembrandt Gold Mines Ltd. (“Rembrandt”), which Canarc has the right to reduce to 10% by issuing 150,000 shares to Rembrandt. Table 0.1 summarizes the claims and the locations are shown on

Figure 0.1 . Apart from the W.W.1 claim, the claims are Crown granted and are kept in good standing through annual tax payments. The W.W.1 is a modified grid claim. The claim has sufficient work filed on it to keep it in good standing until February 4, 2020. The Crown granted claims were legally surveyed in 1937.

The Polaris No. 1, Silver King No. 1, Silver King No. 5, Black Diamond, Lloyd and Ant Fraction Crown grants include the surface rights. Surface rights for the remainder of the property lie with the Crown, including the areas covered by the Co-Disposal Facility (the “CDF”) and access road to the CDF, and will need to be obtained from the Province of British Columbia.

Mining of the AB Vein system and to a lesser extent the Y and C veins was carried out during the 1930s to early 1950s. Much of the former infrastructure has been reclaimed. A $249,000 reclamation bond is in place and it is the opinion of Marc Sculte, P. Eng. (the “Author”) that this amount of funds adequately covers the cost of reclaiming the original mill site and infrastructure. Currently there is no legal or regulatory requirement to remove or treat the tailings on the property.

Prior to commencing further exploration on the property, a Notice of Work is required to be submitted to the Mining and Minerals Department of the BC Ministry of Energy, Mines and Petroleum Resources. Work can only commence once approval has been received.

Exploration work carried out in 2006 was covered by: Mines Act Permit MX-1-208 Approval #06-0100054-0808

Water rights will need to be acquired from the Province of British Columbia for sources of water for mining, processing and potable water during operations. Since a positive water balance prevails in the area, and plans include maximizing water recycling to minimize fresh water requirements, such approvals are generally granted, subject to acceptable conditions.

14 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

To the extent known, there are no other significant factors and risks that may affect access, title or right, or ability to perform proposed work on the New Polaris project.

Table 0.1 List of Claims

ClaimName	Lot No.	Folio No.			ClaimName	Lot No.	Folio No.
Polaris No. 1	6109	4472			Snow	3497	4545
Polaris No. 2	6140	5223			Snow No. 2	3495	5088
Polaris No. 3	6141	5223			Snow No. 3	3494	5495
Polaris No. 4	3498	4545			Snow No. 4	3499	5495
Polaris No. 5	6143	5223			Snow No. 5	6105	4472
Polaris No. 6	6144	5223			Snow No. 8	6107	4472
Polaris No. 7	6145	5223			Snow No. 7	3500	4472
Polaris No. 8	6146	5223			Snow No. 6	6106	4472
Polaris No. 9	6147	5223			Snow No. 9	6108	4472
Polaris No. 10	6148	5290			Black Diamond	3491	4472
Polaris No. 11	6149	5290			Black Diamond No. 3	6030	4944
Polaris No. 12 Fr	6150	5290			Blue Bird No. 1	5708	4545
Polaris No. 13 Fr	6151	5290			Blue Bird No. 2	5707	4545
Polaris No. 14	6152	5290			Lloyd	6035	5010
Polaris No. 15	6153	5290			Lloyd No. 2	6036	5010
Silver King No. 1	5489	4804			Rand No. 1	6039	5010
Silver King No. 2	5490	4804			Rand No. 2	6040	5010
Silver King No. 3	5493	4804			Minto No. 2	6033	4944
Silver King No. 4	5494	4804			Minto No. 3	6034	4944
Silver King No. 5	5491	4804			Jumbo No. 5	6031	4944
Silver King No. 6	5492	4804			Ready Bullion	6032	4944
Silver King No. 7	5495	4804			Roy	6042	5088
Silver King No. 8	5717	4545			Frances	6041	5010
Silver Queen No. 1	6026	4545			Eve Fraction	6170	5495
Silver Queen No. 2	6027	4545			Eve No. 1 Fraction	6171	5495
Silver Queen No. 3	6028	4944			P.T. Fraction	3493	5495
Silver Queen No. 4	6029	4944			Ant Fraction	3492	5088
Silver Strand No. 1	6037	5010			Atlin Fraction	3496	5088
Silver Strand No. 2	6038	5010			Powder Fraction	6043	5088
F.M. Fraction	6044	5088			Jay Fraction	6045	5088
Par Fraction	6154	5290

W.W.1 Tenure No. 353540 Issue date February 4, 1997. Expiry date: February 4, 2020.

15 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

==> picture [416 x 558] intentionally omitted <==

Figure 0.1 Claim Location Map

Accessibility, Climate, Local Resources, Infrastructure and Physiography

The New Polaris project area lies on the eastern flank of the steep, rugged, Coast Range Mountains, with elevations ranging from the sea level to 2,600 metres.

16 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Extensive recent glaciation was the dominant factor in topographic development. The Taku and Tulsequah Rivers are the most prominent topographic features: broad valleys bounded by steep mountains. Numerous tributary streams flow from valleys filled with glaciers. Most of the glaciers are fingers branching from the extensive Muir ice cap, lying to the northwest of the Taku River. The Tulsequah glacier, which terminates in the Tulsequah valley about 16 km north of the New Polaris mine site, is one of the largest glaciers in the immediate area.

Small aircraft provide site access from the nearest population centers in Atlin, BC, 100 km north of the property, or Juneau, Alaska, 60 km southwest of the property. A short airstrip for light aircraft exists on the property. The nearest roads in the area terminate 20 km due south of Atlin and 10 km southeast of Juneau. Shallow draft barges have been used in the past to access the site via the Taku River to transport bulk supplies and heavy equipment to site, as well as ship flotation concentration from site. The property can be operated year-round, however access would be difficult during break up and freeze up.

The climate is one of heavy rainfalls during the late summer and fall months, and comparatively heavy snowfall, interspersed with rain during the winter. The annual precipitation is approximately 1.5 m of which 0.7 m occurs as rainfall. The snow seldom accumulates to a depth greater than 1.5 m on the level. Winter temperatures are not severe and rarely fall below –15ºC. Summer temperatures, in July, average 10ºC with daytime temperatures reaching the high 20’s on occasion. The vegetation is typical of northern temperature rain forest, consisting primarily of fir, hemlock, spruce and cedar forest on the hillsides and aspen and alder groves in the river valley.

There is sufficient land available within the mineral tenure held by Canarc to install a process plant and certain related mine infrastructure. Surface rights for the areas covered by the CDF, and access road to the CDF, lie with the Crown and consent will need to be obtained from the Province of British Columbia.

History

From 1923 to 1925 the Big Bull and Tulsequah Chief properties were discovered along the east side of the Tulsequah River and opened up the Taku River district. In 1930, Noah A. Timmins Corporation optioned some of the claims that make up the New Polaris property and conducted trenching and diamond drilling in 1931. The trenching exposed several veins, of which 10 showed promising grades. A short exploration adit about 9 m long (30 feet) was also driven into the side of the hill and Timmins drilled 19 holes for a total of 1,615 m (5,297 feet) but was unable to correlate the intersections and elected to drop the option in September 1932.

H. Townsend and M.H. Gidel of the Anaconda Corporation examined the property in 1934, carefully mapping the showings. They concluded that commercial ore bodies existed even though these showed irregularity due to faulting. Samples were sent to Geo G Griswold in Butte, Montana, who obtained gold recoveries from flotation tests in the order of 88%.

D.C. Sharpstone then secured an option on the property on behalf of Edward C. Congdon and Associates of Duluth, Minnesota. Congdon conducted 236 m (775 feet) of underground exploration in the Alaska Juneau (“AJ”) tunnel and collared 26 m (85 feet) into the canyon adit. The Polaris-Taku Mining Company (“Polaris-Taku”) was then incorporated in 1936 to take over the property from Congdon. Polaris-Taku erected a 150-ton per day flotation mill in 1937 and mined underground continuously until it was closed down in April 1942. Mining operations resumed in April 1946 and continued until 1951 when the mine was closed due to high operating costs, a fixed gold price, and the sinking of a concentrate barge shipment during a storm in March 1951. Up to date, 231,604 oz. of gold was produced at a recovered grade of 0.3 oz/ton.

An Edwards Roaster and a cyanide plant to produce bullion were installed and tested in 1949 in order to improve recovery and reduce shipping cost of concentrates to the Tacoma smelter. The addition of the roaster helped improve milling economics, but its capacity was somewhat limited as it could treat only about 45% of the concentrates produced from the flotation plant. After closure, the mill was leased to Tulsequah Mines Ltd. (owned by Cominco) who modified it to process 600 tpd of massive sulphide polymetallic ore (containing gold, silver, copper, lead and zinc) from the Tulsequah Chief and Big Bull Mines. Tulsequah Mines Ltd. used the mill from 1953 to 1957.

Numalake Mines acquired the property in 1953, changed their name to New Taku Mines Ltd. (“New Taku”) and undertook rehabilitation work of the mine’s plant. A negative feasibility study in 1973 halted this work. New Taku changed its name to Rembrandt Gold Mines Ltd. in 1974. The property lay idle until Suntac Minerals Corp. (“Suntac”) optioned the property in 1988 and started surface exploration. Canarc merged with Suntac in 1992 and acquired a

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Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

100% interest from Rembrandt in 1994, subject to a 15% net profit interest, which Canarc can reduce to 10%. Canarc’s subsidiary, New Polaris Gold Mines Ltd. (formerly Golden Angus Mines Ltd.), currently operates the property.

Exploration restarted on the Property in 1988. During the period 1988 to the end of 2005, a total of 49,427 m (162,163 feet) in 220 holes were drilled on the AB, C and Y vein systems.

Initial efforts were confined to the lower elevations of the property due to limited availability of road building equipment and were designed to test the “Y” Vein system either down dip or along strike from old workings. Discovery of the "C" Vein system in 1989 resulted in a refocusing of efforts towards defining this Zone. Drilling during 1994 and 1995 has been designed to test the North Zone and the downward continuity of the “C” Zone. Drilling on the North Zone cut low-grade gold mineralization in a gently dipping shear zone. Drilling at 60 m (200 foot) centres showed the mineralization to be of limited extent and bounded down dip by a post mineralization fault. No additional drilling of the North Zone is warranted.

Diamond drilling from underground workings in 1996 was focused from the AJ level and targeted both the AB and Y vein systems. This work showed that the AB system did not continue to depth and appears at its south east end to bend from a south east strike to an easterly strike direction and become part of the C vein system. As there appears to be little potential for significant additional mineralization on the AB vein system, little exploration of the AB vein has been carried out since 1997.

Diamond drilling from underground workings in 1997, was focused from the AJ, Polaris and 150 levels and targeted the AB, Y, and C vein systems. Due to the location of the workings relative to the orientation of the veins, many of the holes were drilled sub parallel to the dip and strike of the veins. For this reason, since 1997 drilling has been carried out from surface to allow holes to test the veins obliquely to strike and dip.

Drilling to the end of 1997 identified the C vein system as having the most potential for extensive gold mineralization with gold grades and thicknesses comparable to that mined in the 1930s to early 1950s. Mineralization was encountered in drillholes over a 250 m by 300 m area, which remained open to depth. Although the mineralization appears to be continuous between drillholes, the spacing between vein pierce points was too great to give the confidence to calculate a resource. Drilling from 2003 to 2005 focused on closing the drillhole spacing in order to determine the continuity of the grade and thickness of the C vein system.

Drilling to the end of 1997 on the Y vein indicates they are relatively narrow and less continuous along strike than the C veins. Gold grades are comparable to the C vein and these veins have remaining potential for the discovery of additional gold mineralization at depth. Further drilling is required to prove the continuity, gold grades and thicknesses of the veins. The smaller size potential of the Y vein system makes it a second order priority for future drilling.

Drilling has also confirmed the existence of a new “North” Zone, which, although it appears to be low grade (5.6 g/t gold), has exhibited possible significant widths in the order of 6.5 m.

Geological Setting and Mineralization

Regional Geology

The New Polaris mine lies on the western edge of a large body of Upper Triassic Stuhini Group volcanic rocks, which has been intruded by a Jurassic-Cretaceous granodiorite body north of the mine. Older Triassic volcanic rocks and earlier sediments underlie the Stuhini volcanic rocks. The granodiorite is part of the Coast Plutonic Complex.

The structural trend in the area is northwest-southeast, paralleling major faults and folds to the east and intrusive alignment to the west. The Triassic volcanic rocks and older sedimentary rocks have been folded and sheared with the Stuhini Group rocks being deformed into broad to isoclinal, doubly plunging symmetrical folds with large amplitudes.

Property Geology

Canarc has carried out extensive mapping of the Polaris-Taku property since the early 1990’s. The gold deposit is hosted within an assemblage of mafic (basalt and andesite units) volcanic rocks altered to greenschist metamorphic facies. The orientation of these units is inconclusive because there are no marker beds in the sequence. It is thought

18 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

that the units are steeply dipping (70º to 80º) to the north based on the orientation of the limestone/basalt interface at the southern portion of the property.

A serpentinite unit is located to the northeast and appears to form the eastern extent of the mineralization. The age relationship is unclear, but it is assumed that the serpentinite is a later stage feature possibly associated with tectonism in the area.

The ‘vein’ zones are structurally controlled shear zones and are typified by silicification and carbonatization cross cutting actual quartz-carbonate veins. These zones have sharp contacts with the wall rock and form anastamosing ribbons and dilations. These zones have been deformed several times, which makes original textures difficult to determine. The zones are generally tabular in geometry forming en-echelon sheets within the more competent host lithologies.

All of the strata within the property have been subjected to compression, rotation and subsequent extension. The plunge of folds appears to be variable though generally shallow. Small-scale isoclinal folds strike north-northwesterly and plunge moderately to the north. Numerous faults are found on the property, the more significant of which are discussed below.

The possible extension of the Llewellyn fault continues south from the Chief Cross fault along mine grid coordinate 4400 East. Slightly north of Whitewater Creek it is offset to the west by an east-west fault, the 101 fault, to continue in a more southeast orientation of the opposite side of Whitewater Creek. This northwest-southeast orientation structure was named the Limestone Fault due to its bedding parallel attitude within a discontinuous limestone/marble horizon. It marks the southwest boundary of the “mine wedge”: the wedge-shaped package of rock within which all past production took place. The northern boundary of the “mine wedge” is further defined as mentioned above by the Whitewater Creek Schist Zone, a zone of schistose chlorite-amphibolite-serpentinite less than 100 m thick. A complex network of brittle faults is also found within this zone.

Three major faults, No. 2, No. 5, and an unnamed fault, lie within the mine wedge. The No.1 and No.5 faults strike northwest-southeast, dipping approximately 45º to the northeast, and are sub-parallel to the unnamed fault, which dips steeply to the southwest. The No.1 fault has reverse displacement of up to 30 m while the displacement of the No.5 fault is poorly defined. The southwest dipping, unnamed fault showed no displacement, as it apparently parallels the A-B vein system. The mined-out areas indicate the wedge shape, the predominant orientations and continuity of the zones, and the overall plunge of the system to the southeast. An early interpretation of the structure showed that various veins appear to meet and form “junction arcs” where both thickness and grade improve.

Exploration

The New Polaris property represents an advanced exploration project on a former gold producer. The early exploration work in the area located gold mineralization on surface and subsequent exploration led to mining of approximately 689,500 tonnes of material grading 10 g/t gold. More recent exploration work, since 1988, has been directed at gaining knowledge about the geology of the area and expanding the resource base of the mineralized zones.

Surface mapping, geochemistry and geophysics over the “mine wedge” were completed by Orequest in 1988. Surface mapping and geochemistry, on the “north grid”, were completed in 1993.

Underground exploration included the rehabilitation of the AJ level in 1988 and the rehabilitation of all the other levels, including the Polaris Portal, in 1996 and 1997. The underground rehabilitation also included a re-survey of the old workings so that the more recent surface work could be aligned with the old underground workings.

The procedures followed in the field and through the interpretation stage of exploration have been professional and are appropriate to the style of mineralization and current degree of geological knowledge and understanding of mineralization control.

Various crews under the supervision of professional geologists carried out the exploration work. It is considered that the reliability of the data obtained with exploration is very high.

Drilling

19 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Diamond drill programs were carried out on the New Polaris project when the project was reactivated in 1988 until 2006. Initially, the drilling focused on the down dip and along strike extensions of the Y veins. This work showed that the Y veins, while good grade were narrow and less continuous than the AB vein system. It also showed that the Y vein system is comprised of about 12 separate veins all of which are narrow and of short strike length.

In 1990, drilling shifted to the area beneath the lowest most C vein stopes. This drilling found that the vein system continued to depth and that gold grades in the 0.30 to 0.45 oz/ton range over an average true thickness of 3 m were present. From 1991 to 1993 most of the drillholes tested the C veins with fewer drilled on the Y vein system.

In 1994, the North Zone was discovered and was tested with a total of 30 drillholes during the 1994 and 1995 period. Although thicknesses of the North Zone are up to 6.7 m, the grades are relatively low compared to the C vein (less than 0.2 oz/ton). This combined with the limited extent due to structural termination of the zone by a fault resulted in a decision to terminate exploration of the North Zone.

Encouraging drill results from the C veins and to a lesser extent from the Y vein system led to further drilling on these two vein systems. Drilling on the C vein showed the veins to be open to depth and to have gold grades that ranged from 0.2 to 0.6 oz/ton over true thicknesses of 3 m. The increased interest in the C vein system was due to its greater continuity and thickness compared to the Y vein. The narrow width and lesser continuity of the Y vein system made it a secondary exploration target.

In 1996 and 1997 the Y, C and AB veins were explored from underground. The plan was to closely test the upper portions of the Y, C and AB veins in order to allow calculation of a resource that might form the basis for resumption of mining. The results of the underground drilling program were mixed. The underground workings were for the most part driven along the vein structures with few crosscuts from which holes could be drilled to cut the down dip and along strike extension of the veins. As a result, except for those holes that tested the area immediately below the workings, most cut the veins at shallow angles. The very shallow angles that in places approach parallel to the vein make the use of these intersections inappropriate for a resource calculation. Despite the number of holes drilled during 1996 and 1997, the work did little to expand the extent of the mineralization in the AB, C or Y vein systems. The work did confirm that the mineralized shoots in the lower most stopes on the Y and C veins were open to depth.

Drilling restarted on the property in 2003 with the objective of testing the extent of the C vein mineralization. Godfrey Walton, P. Geo., at the request of Canarc, undertook a review of the New Polaris project and recommended additional drilling in order to test the continuity of the “C” vein zone mineralization at depth below the lower most mine workings. To this end, limited drill programs were carried in 2003 to 2005 to target the “C” vein extensions below the existing mine workings.

The results of the 2003 to 2005 drilling of the C vein system confirmed the continuity of gold mineralization and the vein structure between the earlier drilled holes. As can be seen in the sections below, drill results show the C vein system to be an arc-like structure oriented east-west in the west swinging to a northeastern strike in the east. The change in strike occurs across the No.1 fault. To the east of the No.1 fault, the vein splays into two or more branches. The dip of the vein system is to the south and southeast and has an average dip of about 50º, although east of the No.1 fault the vein appears to flatten and thicken in a simoid-like feature. The exact nature of the apparent flattening of the vein’s dip is not clear and requires additional drilling to be resolved.

The thickness of the C veins varies from 0.30 m to a maximum of 15.2 m. The thicker parts of the vein occur to the east of the No. 1 fault where the dip of the vein flattens due to an apparent folding of the vein.

Depending upon the angle of intersection, the true thickness of the core length of the vein material ranges from 100% to about 70%. The average core length thickness of the intersections is approximately 4.5 m and the average grade is 14.4 g/t (0.4 oz/ton) gold. The estimated average true thickness of the vein is 3.0 m.

All of the holes in this period were drilled from surface and intersected a similar geologic sequence. From the collar, the holes penetrated from 15.2 m to 79.2 m of overburden followed by inter-layered ash and lapilli tuff, volcanic wacke, and foliated andesite. The C vein system crosscuts the strike of the volcanic and volcaniclastic rocks at steep angles.

Sample Preparation, Analyses and Security

Sample Method and Approach

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Drilling of the vein was done by wire line diamond drills using NQ-size rods. Drill collar locations were surveyed in by total station surveying method. Drilling azimuth and dip were set using a Brunton compass and inclinometer. Routine downhole measurements of azimuth and dip were not done on the three holes drilled in 2003 and prior. In 2004, three different downhole survey systems were tried before settling on a Reflex system. The Reflex system was also used in 2005. The downhole surveying was operated by the Hytech drill crew. This information was input to a GEMCOM program to plot the location of the collar and the pierce point of the veins.

Core recovery was very good and ranged from the low 90% to nearly 100% and is a fair sampling of the mineralization at the point where the drillhole pierced the vein.

Mineralization results suggest that there is little nugget effect and gold values even over short intervals rarely exceed 1 oz/ton. Out of 4,700 samples with greater than 0.03 oz/ton gold collected from core and the underground workings, only 185 samples had a value greater than 1 oz/ton, the highest being 3.69 oz/ton. For this reason, no cutting of assays has been done in calculating composites nor are there many cases where a composite sample is carried by a single assay.

Determining intervals of core for sampling was done by the geologist during logging of the core. The mineralized vein structures were marked out. Selections of core intervals for sampling were based in the presence of veining and sulphide mineralization, particularly arsenopyrite. Within the defined vein structure sample intervals ranged from 0.3 m to 1.5 m. Divisions were based on intensity of mineralization and veining. Sampling of the core over several metres on either side of the mineralized vein structures was also done to the point where hydrothermal alteration disappeared. No sampling of core from the unaltered rock was done.

The core was logged and stored in the camp. Access to the core was only available to the geologists and the core sampler. The core was brought from the drill to the logging facility by the geologist at the end of each shift. The core was geologically logged, recoveries calculated, and samples marked out in intervals of 0.5 to 1.0 m. The core was handed to the sample cutter who cut it with a diamond saw. Each sample was individually wrapped in plastic bags for shipment. The sample intervals were easily identified and correlate well with the drill logs.

Core logging, sample layout, cutting and bagging procedures were observed by Morris during the site visit. The procedures for sample preparation, analysis and security procedures follow accepted engineering standards and the quality of gold analytical data collected by Canarc is sufficiently reliable to support mineral resource estimation.

2006 Program Sampling

The 2006 QA/QC program was similar to the previous programs in that samples were collected by employees of Canarc on site and shipped to ALS Chemex laboratoty in Vancouver. For quality control and quality assurance, core samples were regularly mixed with blanks, duplicates, and standards. The program in the field was run in an efficient and proper manner following accepted engineering standards.

Blank samples represent material from the old mine, which is known to have a very low gold value. In total 56 blank samples were assayed.

Data Verification

R.J. Morris visited the property during 22–23 August 2006. The final drilling program on the property was more than 70% complete, with approximately 17,700 m of the 24,500 m of core drilled. At the time of the site visit core logging procedures from the 2006 program were examined, a general overview of the property was completed, including selected drill sites, historic core, an underground tour, and the condition of existing project infrastructure.

While on the property, the Author examined underground workings to confirm the nature of mineralization, dimensions and extent of the vein system. The Author also viewed a selection of core from key holes drilled from the early 1990’s to the end of 2006 and compared his observations with those documented in the drill logs. In both the case of the underground workings and the core, the Author found that his observations confirmed what was recorded in logs and sections. The Author also confirmed that core had been properly cut and stored.

The core logging facility was clean and orderly. The system of check assaying is adequate. The only issue that the Author has with the system is the use of quartered core for the duplicate samples. The sample size difference between

21 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

the quartered and half core may account in part for the high relative difference between the original sample and the duplicate. In the future, resubmission of pulps on a blind basis should be carried to help separate variance cause by analysis from that due to sample size or bias cutting of the core.

In addition to the site visit, a detailed review of the database was completed. Forty-one drillholes were selected from the C vein area, and the drill logs and assay sheets were compared with the database. Only minor differences were observed between the hard copy material and the database. As well, the input of the database into the geology and resource modeling software was also checked.

The quality control systems in place prior to the 2003 program are poorly documented and seem to follow the norms of that time period. Of concern is the manner in which the collar locations of drillholes were determined. Most of the holes were located using Brunton compass and chaining. Also, the down hole surveying was not consistently done. As a result, the exact location of the vein intersections is not as certain as those from the 2003 to 2005 program. Some re-drilling of older holes is recommended, especially where there are discrepancies with respect to the vein location between the recently drilled holes and those drilled in the 1990’s.

The procedures used in the development of the database follow accepted engineering standards. There is confidence that selected drillholes have error-free data and such data may be used to support mineral resource estimates.

Mineral Resource Estimates

Introduction

The mineral resource estimate for the New Polaris project have been updated with revised estimates by Sue Bird, P. Eng of the Moose Mountain Technical Services (“MMTS”) in accordance with updated Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards (“CIM 2014”). Updated CIM standards have resulted in changes to the classification based on QA/QC. There are changes to the resource tonnage and grade based on updated prices, recoveries and additional factors to control the “reasonable prospects of eventual economic extraction”, including a minimum mining width and an applied underground shape confirming the mineral resource estimate.

Resource

The mineral resource estimate for the New Polaris deposit is summarized in Table 4.2. The resource has been summarized at various cutoff grades with the base case Au grade cutoff of 4 g/t highlighted. At each cutoff the total material within a potential confining mining shape is reported. Therefore, a separate mining shape has been created for each cutoff in the table.

The base case cutoff grade of 4g/t Au is based on the following economic considerations: gold price of US$1,300/oz, exchange rate of 0.77 US$:CAD$; Payable gold % of 99.9%, Offsite refining costs of US$7/oz, mining costs of CAD$65.20/t, process costs of CAD$62.70/t, general and administration (“G&A”) costs of CAD$37, sustaining capital costs of CAD$19.83/t, and a 90.5% process recovery.

The “reasonable prospects for eventual economic extraction” confining shape also considers a minimum mining width of 2 m, and removes shapes considered too small and separated from the primary mining volumes. Previous underground mining has been accounted for by using stope and development solids to code a percent of the block outside of the mined out shapes.

MMTS is not aware of any known environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the mineral resource estimate.

The effective date of this mineral resource estimate is February 28, 2019.

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Table 4.2 Summary of Indicated and Inferred Total Resource

	Indicated	Indicated
	In situ	In situ Grades
Confining Shape Tt Gd (/t A)	Tonnage	AU	Au
arge rae - g u	(Ktonnes)	(g/t)	(koz.)
2.0 3.0	1,880 1,798	10.0 10.4	605 599
4.0	1,687	10.8	586
5.0 6.0 7.0 8.0 9.0	1,556 1,403 1,260 1,105 947	11.3 12.0 12.6 13.3 14.1	567 540 509 472 428
	Inferred
	In situ	In situ Grades
Confining Shape Tt Gd (/t A)	Tonnage	AU	Au
arge rae - g u	(Ktonnes)	(g/t)	(koz.)
2.0 3.0	1,639 1,582	9.5 9.8	502 497
4.0	1,483	10.2	485
5.0 6.0 7.0 8.0 9.0	1,351 1,223 942 753 653	10.7 11.2 12.5 13.8 14.6	464 441 380 334 306

Notes for mineral resource estimate:

• A mineral resource is a concentration or occurrence of solid material of economic interest in the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.

• Mineral resources that are not mineral reserves do not have demonstrated economic viability.

• Mineral resources in the above table are reported within a confining underground shape targeting mineralization over 4.0 g/t. The 4.0 g/t target includes the following considerations: gold price of US$1,300/oz, exchange rate of 0.77 US$:CAD$; Payable gold % of 99.9%, Offsite refining costs of US$7/oz, mining costs of CAD$65.20/t, process costs of CAD$62.70/t, G&A costs of CAD$37, sustaining capital costs of CAD$19.83/t, and a 90.5% process recovery.

• An “Indicated Mineral Resource” is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation.

• An “Inferred Mineral Resource” is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

• Factors that may affect the estimates include: metal price assumptions, changes in interpretations of mineralization geometry and continuity of mineralization zones, changes to kriging assumptions, metallurgical recovery assumptions, operating cost assumptions, confidence in the modifying factors, including assumptions that surface rights to allow mining infrastructure to be constructed will be forthcoming, delays or other issues in reaching agreements with local or regulatory authorities and stakeholders, and changes in land tenure requirements or in permitting requirement.

Database and Assumptions of the mineral resource estimate

The database for the New Polaris resource estimate consists of 1,056 diamond drill holes with a total of 11,590 sample intervals assayed for Au. Table 4.3 summarizes the break-down of drillholes and assays from the total, to those used

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in the resource estimation. Six veins have been modelled, with Vein 5 split into two domains for modelling due to changing orientation.

Only data since 1988 has been used to estimate the Au grade because previous data is historic, and no information is available on the drilling year, owner, or sampling security and analysis.

Table 4.3 Summary of Assay Data in the New Polaris Project Area

Source	Drillholes	Total Length (m)	Au Assay Intervals above Zero	Au Assay Length (m)	Percent Assayed and above Zero
Project Total Block Model Total Within block model and Since 1988 Domain Total Domain Total since 1988	1056 709 286 173 143	106,458.6 85,546.0 73,898.1 50,704.0 47,042.4	11,590 9,645 7,895 1,357 1,287	11,850.7 8,481 8,393.2 1,101.7 1,033.2	11% 10% 11% 2% 2%

A summary of assay intervals and length for the 6 modelled veins is shown in Table 4.3. Two additional veins (3 and 4) have been interpreted geologically but have not been considered in the resource estimate due to lack of drilling for these domains.

Table 4.4 Summary of Assay Data within the Domains used for Resource Estimation

Vein	Domain	Au Assay Intervals above Zero	Au Assay Length (m)
1 (CHIE) 2 (CLOE) 5 (CWM) 6 (GEO6) 7 (Y19) 8 (Y20)	11 21 51 and 52 61 71 81	183 402 429 168 77 29	141.1 315.3 343.5 158.0 54.6 20.7

There is QA/QC available only for drilling done in 2006. Therefore, to validate the data from 1988 through 2005, the assay statistics have been compared to the 2006 data. Figure 4.3 shows and cumulative probability plots of the Au grade distribution by year, indicating no obvious bias in the drilling data since 1988. Data prior to 1988 shows a higher grade distribution. This may be due to areas drilled, as the higher grade areas, which are now mined out, were drilled in these earlier years. However, the data prior to 1988 has not been used since it could not be validated.

Mining Method

Introduction

The potentially mineable resources at the New Polaris deposit will be extracted using a combination of longhole stoping (“LH”) and conventional cut and fill (“CCAF”) underground mining methods, with paste backfill being used. The proposed mine plan will reach a target production rate of 750 tpd over a total mine life of 8.7 years. LH stoping will account for about 58% of total production, CCAF will account for about 18% and ore development will account for the remaining 24%.

The New Polaris deposit will be accessed from the surface from a single decline, and all mineralized material and waste rock will be trucked out of the mine via this decline. This decline will also act as a fresh air intake along with a new raise-bored ventilation raise. The New Polaris shaft will act as the only exhaust airway.

A subset of both Indicated and Inferred Mineral Resources are included in the mine production plan. Inferred Mineral Resources are considered too speculative geologically to have economic considerations applied to them to be categorized as mineral reserves, and there is no certainty that the Inferred Mineral Resources will be upgraded to a higher resource category.

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The confining stope shapes utilized in the mine plan targets mineral resources above a 6 g/t gold grade. Mineral resources within the Y veins have not been included in the mine plan. Mineral resources above Level 1 (-140 m elevation) in the C veins have not been included in the mine plan.

Mining Methods

LH will be used in the steeper areas of the zone whilst CCAF will be utilized in the shallow dipping (less than 55°) and thinner areas. The CCAF stopes are generally located at the extremities of the LH stoping areas.

The mineralized zone has been divided into nine vertical levels 50 metres apart. On each level an undercut drift has been driven through the mineralized material and a footwall extraction drift accessing the undercut via drawpoints, has been driven in the footwall waste. Each level represents a single longitudinal LH stope, which is further divided vertically into three vertical stoping blocks by driving through the mineralized zone to its extremities. The CCAF stopes are only accessed by the undercut drifts but service and muck raises are driven from one extraction level up to the next.

Project Infrastructure

The following section discusses the project infrastructure planned for the New Polaris project, including the overall site development, site services, surface mobile equipment, buildings and facilities, and the CDF. Plans for the PEA are conceptual in nature. Quantities and dimensions listed below are provided to give an understanding of the scope of what has been included in the proposed cost estimates. The reader is cautioned that as further engineering is completed on the New Polaris project the plans listed below could be significantly altered.

Overall Site Development

General Site Work

The New Polaris site is a re-development of the former mine and town site of the past producing Polaris Taku mine, which operated on and off between 1937 and 1951. General site preparations include clearing of previously developed ground and overgrowth to accommodate the expansion of the existing exploration site to include all required infrastructure for the operation of the New Polaris mine.

Airstrip Improvements

The existing New Polaris airstrip is too small to accommodate aircrafts appropriately sized for the mine during full operations. The airstrip will be realigned to extend it by 280 m up to a total length of 860 m. The airstrip will also be widened from 50 m to 60 m. This will provide sufficient length and width to accommodate a DHC-5 Buffalo, or similar aircrafts capable of carrying up to 40 passengers, or a mixture of passengers and cargo. This is the maximum length attainable without re-routing existing creeks/drainages or relocating the entire airstrip.

The airstrip realignment will require clearing and grubbing to prep the airstrip alignment. An assumed 50 cm compacted gravel base course will provide the running surface of the airstrip. The airstrip will require year-round maintenance to ensure that the runway surface meets the specifications of charter airline services operating on the airstrip. This entails grading and periodic placement of additional gravel as required, as well as snow clearing during winter months.

Roads and Access

The existing site road network has not been actively maintained since the last mine closure in 1951 and is therefore assumed to be in varying states of disrepair, subject to overgrowth, road wash outs, and other seasonal/environmental effects.

While some minor upgrading and maintenance has been completed in order to facilitate recent exploration at the site, it is assumed that in order to bring the site up to full operational levels, it will require a combination of new road works as well as upgrading of existing road networks. Where possible the new road network will utilize existing alignments to reduce costs and environmental footprints.

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Road to Barge Landing

The most significant road building and upgrading activity is to re-establish a haul road between the mine site and the proposed barge landing in order to facilitate transport of material goods and consumables into the site during the barging season.

The haul road is approximately 10 km in length, with 2.5 km requiring balanced cut/fill road building running south from the site along the hillside above the Tulsequah River. The remaining 7.5 km follows a similar alignment to the original haul road, running southeast between the west bank of the Tulsequah river and the Flannigan Slough. The haul road will be 4.5 m in width, allowing for single lane traffic with an allowance for shoulders. Pull outs will be placed at intervals to allow passing of two-way traffic appropriate to the level of service of the road. Radio control of the road will also be required.

Road building and upgrading activities include clearing and grubbing, as well as trimming back overgrowth where required. A minimum 25 cm of road course gravel (locally sourced) will be used for the running width of the haul road. This minimum increases to 50 cm for sections running along the edge of the Flannigan Slough. Five culverts and one steel bridge will be required to cross drainages along the 10 km haul road.

Road to CDF

A haul road between the mine site and the CDF to facilitate transport of waste rock and tailings will be constructed.

The haul road is approximately 2 km in length, requiring balanced cut/fill road building. The haul road will be 4.5 m in width, allowing for single lane traffic with an allowance for shoulders. Pull outs will be placed at intervals to allow passing of two-way traffic appropriate to the level of service of the road. Radio control of the road will also be required.

Road building and upgrading activities include clearing and grubbing, as well as trimming back overgrowth where required. A minimum 25 cm of road course gravel (locally sourced) will be used for the running width of the haul road. One 25 m culvert will be required to cross drainages along the haul road.

Barge Landing and Dock

The barge landing will be located at the west side of mouth of the Tulsequah River, where it flows into the Taku River. The barge landing will be constructed from wood and steel piles, backed with rock fill gabion baskets and earth fill to create a level platform along the river edge capable of docking up to two barges simultaneously. The barge landing facility will also include a small office trailer, genset, diesel fuel day tank, temporary storage area, and container handler and/or mobile crane.

Environmental Studies, Permitting and Social or Community Impact

Environmental

Aquatic/Terrestrial

Several environmental baseline studies have been initiated and either completed or suspended in 1997, 2007 and again in 2015, however more work is required to meet regulatory requirements. It is possible that a large portion of the dataset will need to be refreshed to reflect current conditions. These include:

• Water quality and quantity (surface and ground)

• Risk Assessment Items for Terrestrial and Aquatic Resources (vegetation, sediment, invertebrates, periphyton, soils etc.)

• Air Quality/Meteorology/Climate

Fish and fish habitat have been characterized in the project area several times beginning in 1997. Spawning and rearing habitat that supports both sea-run and freshwater salmonid species including chinook, coho, pink, and sockeye salmon. The mainstem Tulsequah River has been shown to afford poor fisheries values due to low water temperatures and lack of in-stream cover typical of glacial runoff systems. Based on observations, Whitewater Creek in the project area contains fish rearing and spawning habitat superior to the Tulsequah River and therefore remains critical habitat

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necessary for sustaining populations. Knowing this, for a project to be deemed acceptable to government and other stakeholders, future development will have to carefully consider the streams and the riparian habitat which encompasses them.

Critical components of impact mitigation include management plans for land, water, air, wildlife, fisheries and groundwater. The project will be designed to minimize environmental impacts during the construction and operating phases of the mine and to minimize any long-term environmental impacts. Future work will incorporate and advance the results of all previously completed aquatic, hydrogeology and terrestrial work on site.

Geochemistry

Canarc retained URS Canada Inc. to assess the acid rock drainage and metal leaching potential of major rock units anticipated to be exposed. Studies were completed by static testing conducted on 27 “fresh” rock drill core samples, collected from sections of the C vein, and flotation testing was conducted on 5 test tailings samples. A criterion of 2.0 weight % sulphide sulphur has been developed to distinguish between non-acid generating and potentially acid generating materials. For waste rock, sampling indicated, generally, that the rock is non-acid generating in nature, due to high carbonate content. It should be noted there were some localized areas that showed some potential for acid generation. For tailings, based on static testing of 5 samples, tailings are not expected to be acid generating. This was indicated by sulphide sulphur content being typically less than 0.3% and the corresponding carbonate content being greater than 3.5%.

Total metals analysis and leachate extraction test results for hanging wall rock, vein rock and footwall rock indicate a high potential for leaching of arsenic and antimony. Results found in tailings had similarly elevated concentrations. Further studies, although only in draft form at the time of this writing, showed these occurred in low concentrations to the point where it was speculated these lithologies are considered to have low metal leaching potential. More studies, including kinetic testing (humidity cell) are required to further characterize waste rock, tailings and effluent leaching and acid rock drainage potential.

Tailings are planned to be disposed of in both underground and surface facilities. Tailings on surface will be thickened and disposed of in a facility that does not store water. Underground disposal will be directed to old workings to minimize the total surface disturbance footprint.

Ore Recovery

The processing of ore will include a typical mill feed system closed off to the environment. It is also important to note that the introduction of bio-leach of concentrates on-site to produce doré bars, is proposed. The use of cyanide, as proposed, to leach metals from rock is a process generally acceptable in BC provided the facility is completely closed off from the environment and the facility meets rigorous environmental standards and practices including transport, handling, storage and deconstruction of the chemical.

Reclamation/Closure

The reclamation of the mine site, its associated infrastructure and any post mining effluent treatment is a requirement of the Mines Act (British Columbia), and accordingly will require a detailed plan and reclamation bond. The reclamation plan and bonding process will require regulatory and First Nations’ input and approval prior to the start of the mining and processing operations.

Much of the design and projected costs will be a result of planned future studies. An allowance of $5M has been included for closure, including removal of all equipment and supplies and reclamation of the site. This estimate reflects professional experience based on examples of similarly sized, remote projects.

Regulatory Framework

The New Polaris project will be subject to approvals under the British Columbia Environmental Assessment Office (“BCEAO”) and the Canadian Environmental Assessment Act (Canada) (“CEAA”) as its production threshold exceeds certain requirements for mining activities permittable under those processes. Additional authorizations and input may also be required from United States authorities as the New Polaris project area drains into US waters. Concerns over water quality and overall ecosystem health will likely drive the discussion from an environmental approval standpoint.

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Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Other requirements of provincial and federal acts and regulations may also apply, depending upon final design components.

It is possible and desirable to harmonize the required processes. The application process can be developed to meet the requirements of the Canada-British Columbia Environmental Assessment Delegation Agreement which delegates the federal screening level environmental assessment and preparation of the screening report to the BCEAO, therefore meeting the requirements of both the BCEAA and the CEAA. The intent of the agreement processes is to allow for parallel activities to be conducted, securing all necessary permits and approvals in the most time and cost-effective manner.

Provincial Processes

The Environmental Assessment Act (British Columbia) (“BCEAA”) works with First Nations, government agencies and the public to ensure major projects are developed in a sustainable manner. The environmental assessment (“EA”) process examines major projects for potentially adverse environmental, economic, social, health and heritage effects that may occur during the lifecycle of these projects.

The BCEAA process is a two-step process that leads to the issuance of an Environmental Assessment Certificate (“EAC”), the necessary prerequisite for other approvals. There are two stages to the B.C.’s EA review process: preapplication and application review. During pre-application, the focus is on developing project-specific EA procedures, scope of issues, and information requirements that describe what is to be contained in an application for EA certification. During the application review stage, the focus is on the adequacy of the information provided and the significance of potential impacts and permits.

A thorough and complete EA application must provide a wide range of detailed information on a project and its potential effects. The BCEAO ensures that, in advance of applying for an EAC, a proponent develops an acceptable outline of the EA application through Application Information Requirements (“AIR”) (formerly “Terms of Reference”), which describes the range of data, analyses and reporting the EA application will contain. It is anticipated that a full range of assessments including environmental, social, economic, heritage and health assessments will be required. The assessment of potential effects on First Nations is also required.

The process of pre-application, application, review and approval may take up to 3 years or more; depending upon technical complexity, consultation requirements, and the significance of potential impacts.

Once issued, the EA certificate remains in effect for the life of the project, unless suspended or cancelled by the Minister of Environment for non-compliance with the BCEAA.

The estimated time to secure all necessary provincial approvals for the New Polaris project to proceed is 1 – 1.5 years from an acceptable Project Description.

A significant aspect of permit application for the New Polaris project will include the need for an acceptable mine and reclamation plan, an environmental management system, a sediment control and water and waste management plan, and a mine abandonment plan. Other specific environmental plans may include fish habitat mitigation, wildlife habitat mitigation, special waste management, and others. Cost and time for major environmental plans are not included as the scope of their requirements have not been fully developed.

Federal Processes

Federal environmental assessments must be conducted prior to a project proceeding if: a federal authority is the proponent of the project, federal money is involved, the project involves land in which a federal authority has an interest, or some aspect of the project requires federal approval or authorization.

Federal assessments will likely focus on areas of particular interest to the federal authorities such as species at risk, effects of accidents and malfunctions, effects of the environment on the project, effects of the project on the capacity of renewable resources, cumulative effects, and First Nations engagement and consultation.

The New Polaris project proponents should be diligent in considering mine plan alternatives and details that do not require federal approvals triggering the full CEAA process. Federal permits and approvals may still be required.

28 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

It is not unreasonable to expect approvals will be received for the New Polaris project based upon acceptance of respective management plans and commitments.

Socio-Economic

The project is located within the land claim and traditional territory of the Taku River Tlingit First Nation (“TRTFN”).

No formal agreements are in place with the TRTFN. Discussions have taken place in previous years but no agreements have been completed. It is expected that the project will enhance employment opportunities for the people of the TRTFN during the construction, operation and closure of the New Polaris project. Operational training as well as trades training opportunities will also be made available for the members of the TRTFN on a preferential basis. A number of other benefits will accrue to Atlin through funding of social events, scholarships for higher education, and community enhancement programs.

During the exploration phase of the project a high percentage of employees have been from Atlin and the surrounding area. It is the intention of Canarc to continue to operate in a fashion that ensures the local community and its citizens continue to benefit from the construction and operation of the mine.

The sourcing of qualified and experienced underground miners, process personnel, and tradesmen is a concern, particularly with the current labour shortages in Western Canada. Canarc will continue to source appropriate personnel as the project advances.

Since access to the site for major supplies will use shallow barges up the Taku River it is likely that a large number of supplies may be purchased in Juneau. Supplies not available in Juneau will be purchased in Southern BC, Canada or the United States and shipped to site through Seattle and Juneau. Barging will done using independent contractors who have the required equipment and the necessary experience with this type of service. The major items needed for the operation will be diesel fuel, ground support supplies, mill reagents & supplies, explosives and a variety of components for equipment maintenance.

The current plan is based on a fly-in fly-out rotation and an onsite camp. Air transportation will be used for transporting employees and perishable items or small items needed to sustain the operation. As other projects in the area are developed the opportunity may arise to use access and infrastructure developed for those other projects.

Continued work in negotiations with First Nations, labour force planning, and the impact on local infrastructure is recommended.

It is not unreasonable to expect support from local communities contingent upon the New Polaris project proponents developing acceptable plans for mitigation and final reclamation of project impacts.

Capital and Operating Costs

Capital Cost Estimate

Capital cost estimates are derived from a combination of MMTS experience in similar projects and consultation with contractors and equipment suppliers. The estimated capital cost breakdown is shown in Table 4.5 below.

All dollar amounts are expressed in Q1 2019 Canadian dollars, unless specified otherwise.

The accuracy range of the capital cost estimate is +/- 30%.

Table 4.5 The New Polaris Project Capital Cost Estimate

Area	Capital Estimate
Overall Site	$12,800,000
Mining	$20,000,000
Process Plant	$39,750,000
Co-Disposal Facility	$6,820,000

29 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Site Services	$4,250,000
Surface Mobile Fleet	$2,500,000
Buildings and Facilities	$8,400,000
Total Direct Costs	$94,520,000
Total Indirect Costs	$25,200,000
Contingency (20%)	$23,940,000
Total	$143,660,000

Sustaining capital is estimated as $56.4 million over the LOM, comprised of extensions to underground development, mobile equipment purchases, CDF construction, water treatment expenses and a nominal allowance for infrastructure maintenance and upgrades.

The capital costs include delivery to the site and assembly but do not include the following:

• Force majeure

• schedule delays such as those caused by

• major scope changes

• unidentified ground conditions

• labour disputes

• environmental permitting activities

• abnormally adverse weather conditions

• cost of financing (including interests incurred during construction)

• GST

• royalties

• cost of this study

• sunk costs for exploration, technical studies, and permitting.

Operating Cost Estimate

Operating costs are estimated based on a combination of MMTS experience in similar projects and consultation with contractors and equipment suppliers. The estimated operating costs are shown in Table 4.6.

All dollar amounts are expressed in Q1 2019 Canadian dollars, unless specified otherwise.

The accuracy range of the capital cost estimate is +/- 30 %.

Table 4.6 The New Polaris Project Operating Cost Estimate

Area	Operating Estimate	Units
Mining	$65.25	$/t milled
Processing	$62.70	$/t milled
G&A	$37.00	$/t milled
Total	$164.95	$/t milled

Economic Analysis

All dollar amounts in this analysis are expressed in Q1 2019 Canadian dollars, unless specified otherwise.

The economic evaluation of the New Polaris project includes one year of construction and 8.7-years of mining and milling. The valuation date on which the net present value (“NPV”) and internal rate of return (“IRR”) are measured is the date construction commences in Year -1. Corporate sunk costs to that point in time, including costs for exploration, technical studies, and permitting, are not included in cash flow; except when determining the project’s royalty estimate. The IRR assumes 100% equity financing.

30 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

The net profit royalties associated with Rembrandt have been accounted for in the cashflow by assuming that 150,000 Canarc shares will be issued to Rembrandt in advance of operations.

A simplified tax regime has been incorporated to estimate federal, provincial and other taxes. the simplified tax regime does not consider the benefits of capital cost allowance, Canadian development expense, Canadian exploration expense, cumulative tax credit accounts and cumulative expenditures accounts.

The basis of the project economic analysis is summarized in Table 4.7.

Table 4.7 Inputs for Economic Analysis

Parameter	Value	Units
Gold Price	$1,300	US$/oz
CurrencyExchange Rate	1.30	US$:CAD$
Gold Payable	99.9%
Gold Offsite Costs*	$7	$/oz
Royalty**	10%
Gold Process Recovery	90.5%
MiningCost***	$65.25	$/t milled
ProcessingCosts	$62.70	$/t milled
General & Administration Costs	$37.00	$/t milled
Federal income tax rate	15%
BC Provincial income tax rate	11%

* Offsite costs cover refining charges, doré transport, and insurance costs.

** It is anticipated that Rembrandt NSR obligations will be lowered to 10% in advance of commercial production.

*** Variable annual mining costs based on scheduled underground production, LOM average of $65.25/t.

The preliminary economic assessment is based on resources, not reserves. Resources are considered too geologically speculative to have economic considerations applied to them, so the project does not yet have proven economic viability.

Table 4.8 below summarizes the results of the economic analysis for the New Polaris project, both the pre-tax and post-tax results are shown.

Table 4.8 Summary of Economic Analysis

	Value	Units
Mill Feed	2,306,000	t
Au Grade	10.3	g/t
Au Produced	693,000	oz.
Initial Capital	144	$M
SustainingCapital	56	$M
Cash Cost	433	US$/oz
AISC	510	US$/oz
Net Cash Flow	554	$M

31 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Pre-Tax
NPV,5%	385	$M
IRR	47%	%
Payback	2.3	Years
Post-Tax
NPV,5%	280	$M
IRR	38%	%
Payback	2.7	Years

Cautionary Statement

The results of the economic analyses discussed in this section represent forward looking information as defined under Canadian securities law. The results depend on inputs that are subject to several known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those presented here.

Information that is forward-looking includes:

• Mineral resource and mineral reserve estimates;

• Assumed commodity prices and exchange rates;

• Mine production plans;

• Projected recovery rates;

• Sustaining and operating cost estimates;

• Assumptions as to closure costs and closure requirements; and

• Assumptions as to environmental, permitting and social risks.

Additional risks to the forward-looking information include:

• Changes to costs of production from what is assumed;

• Unrecognized environmental risks;

• Unanticipated reclamation expenses;

• Unexpected variations in quantity of mineralized material, grade, or recovery rates;

• Geotechnical and hydrogeological considerations during mining being different from what was assumed;

• Failure of plant, equipment, or processes to operate as anticipated; and

• Accidents, labour disputes and other risks of the mining industry.

The results of the Preliminary Economic Assessment are:

PEA Production	2,306,000 tonnes (subset of mineral resource)	2,306,000 tonnes (subset of mineral resource)	2,306,000 tonnes (subset of mineral resource)
Production Rate	750 tonnes per day
Production Grade	10.3 grams per tonne
Recoveries	90.5% gold into doré
Average Output	80,000 oz gold per year
Mine life	8.7 years
The base case financial parameters are:
Gold Price		US$ 1300 per oz
Exchange Rate		US$ 1.00=CAD$ 1.30
Capital Cost		$143.7 million
Cash Cost All-in-Sustaining Costs		US$ 433 per oz US$ 510 per oz
Cash Flow (LOM)	Pre-Tax After Tax $554.0 million $414.4 million
Net Present Value (NPV)

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Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

NPV (5%)	$384.8 million $280.4 million	$384.8 million $280.4 million	$384.8 million $280.4 million
		Pre-Tax	After Tax
Internal Rate of Return		47.2%	37.7%
Payback Period		2.3 years	2.7 years

Readers are cautioned that the effective date of New Polaris Preliminary Economic Report is on February 28, 2019 (the “Effective Date”). Accordingly, the economic analysis contained in the New Polaris Preliminary Economic Report is based on commodity prices, costs, sales, revenue, and other assumptions and projections that may significantly change from the Effective Date, including a gold price of US$1,300 per oz, CAD$/US$ foreign exchange rate of 0.77, and cash costs of US$433 per oz. Readers should not place undue reliance on the economic analysis contained in the New Polaris Preliminary Economic Report because Canagold cannot give any assurance that the assumptions underlying the report remain current.

The Qualified Person (“QP”) pursuant to NI 43-101 for the New Polaris Preliminary Economic Report is Marc Schulte, P. Eng.

In September 2020, Canagold was granted a multi year exploration permit to conduct exploration work on the property. Site preparation and refurbishment have been completed to facilitate environmental baseline study and infill drilling required to advance to a feasibility study. The camp and infrastructure will accommodate a 20 person field crew to facilitate further environmental, drilling and related activities. Canagold has initiated twelve months of continuous environmental baseline studies which are required for an Environmental Assessment Certificate application and which is a critical first step in advancing the project through the BC mine permitting process.

For 2021, Canagold is planning a 47-hole, 24,000 meter infill drilling program to upgrade the Inferred Resources to an Indicated Resource category for inclusion in a future feasibility study.

4.4.2 Fondaway Canyon Project (Nevada, USA)

The information in this section has been derived from and is based on the assumptions, qualifications and procedures set out in the Technical Report titled “Technical Report for the Fondaway Canyon Project” (the “Fondaway Technical Report”) dated April 3, 2017, that was prepared by Techbase International Ltd. (“Techbase”). Messrs. Michael Norred, SME-RM, and Simon Henderson, MSc, MAusImm CP, are the QPs for the Fondaway Technical Report.

The following extract is the executive summary from the Fondaway Technical Report. The following summary does not purport to be a complete summary of the Fondaway Canyon Project and is qualified in its entirety with reference to the full text of the Fondaway Technical Report. Readers should read this summary in conjunction with the Fondaway Technical Report. The Fondaway Technical Report has an effective date of April 3, 2017, and the following extract is subject to any updated information elsewhere in this AIF, and in particular is subject to any subsequent events or information contained under “Exploration at the Fondaway Canyon Project Subsequent to the Fondaway Technical Report”.

The Fondaway Technical Report is specifically incorporated by reference into this AIF and may be accessed on the Company’s SEDAR profile at www.sedar.com. Defined terms and abbreviations used herein and not otherwise defined shall have the meanings ascribed to such terms in the Fondaway Technical Report.

Summary

Canarc Resource Corp. (Canarc) acquired the Fondaway Canyon Project and a portfolio of ten other mineral projects from American Innovative Minerals, LLC (AIM) in March, 2017. Canarc commissioned Techbase International Ltd to provide this report on the current status and a current Resources estimate for the Fondaway Canyon project.

Property Description and Location

33 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

The Fondaway Canyon property includes 136 contiguous, unpatented mining claims, covering approximately 2,220 acres (898 ha), on land administered by the U.S. Bureau of Land Management (BLM) in Churchill County, approximately 43 miles (69 km) northeast of Fallon, Nevada. The claim group is on the western flank of the Stillwater Range.

Figure 2: Fondaway Canyon Location

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The claims are currently controlled by Canarc under a Mining Lease/Purchase Agreement with the owner, Richard Fisk. Production from the properties is subject to NSR royalties of 3% to Richard Fisk, and 2% to Hale Capital, for a total of 5%. Each of these royalties can be bought out.

The Fondaway Canyon property is surrounded on three sides by the Stillwater Wilderness Study Area (WSA). The WSA boundary overlaps portions of some claims. The WSA has been recommended as non-wilderness by the BLM, but its status is pending final action by the US Congress.

History

The Fondaway Canyon property was originally staked by the George Fisk and his son Richard (the Fisks) in 1956 for tungsten. The property has been optioned, leased, sub-leased, and joint-ventured by a series of mining companies, including Occidental Minerals, Tundra Gold Mines Ltd, New Beginnings Resource Corp, Homestake Mining Company, Mill Creek Mining, Tenneco Minerals, Consolidated Granby, Stillwater Gold, Agnico Eagle, Royal Standard Minerals, American Innovative Minerals, and Aorere Resources Limited.

The earliest mine production by the Fisks was approximately 10,000 tons of tungsten ore, recovering 200,000 pounds of tungsten trioxide (WO3). Fisk Mining later used a vat leaching process to recover 2,500 ounces of gold from 25,000 tons of ore.

In 1989 and 1990, Tenneco Minerals operated an open pit mine with cyanide heap leach processing that recovered 5,402 ounces of gold from 186,000 tons of ore.

Geologic Setting and Mineralization

34 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

At Fondaway Canyon, gold mineralization is localized along over 2 miles of en echelon, east-northeast trending and steeply south dipping structures developed within fine grained Triassic carbonaceous siliciclastic sedimentary rocks and Jurassic limestone, cut by Tertiary dikes.

Exploration

The previous operators of the Fondaway Canyon Project conducted numerous exploration programs. In addition to drilling, exploration has included extensive surface sampling, underground channel sampling, geological mapping, and geophysical surveys.

Drilling

Many exploration holes were drilled by the various mining companies between 1980 and 2002, including Core, Reverse Circulation, and Air-track holes. The Fondaway Canyon database currently contains validated records for 591 holes totaling 161,043 feet (49,086m) of drilling.

Drilling in 2002 by Nevada Contact Inc (NCI) intersected the mineralized zone at greater depths than previous drilling in the Half Moon and Paperweight veins, and also intersected mineralization below the pediment at the west end of the property, confirming this as a new prospective exploration target.

Mineral Processing and Metallurgical testing

Historical metallurgical testing and operating experience have shown that the oxide mineralized materials at Fondaway Canyon are readily leachable. The metallurgical response of the sulfide mineralized materials have been problematic, however testing results showed recoveries of up to 95% can be achieved by using an oxidizing pre-treatment followed by CIL leach. A multi-stage flotation process also yielded satisfactory laboratory results with flotation results of 93 to 95% being achieved.

The 2016 metallurgical testing provided confidence that the mineralized material tested to date can be treated appropriately to concentrate 79-85% of the gold in less than 10% weight percent via flotation processes. Test results indicate that additional gold might be recovered by incorporating a gravity circuit, and also through treatment of the tails with conventional cyanidation methods. Further testing is needed to find the most cost-effective process for future mining.

Mineral Resource Estimates

Resource estimates have been included in technical reports by previous authors. The resource statements from each report have been examined by the Author, and were found to be in general agreement, in particular as to the total contained gold. None of the previous estimates included the 2002 drilling, which tested the down-dip extension of the mineralized veins.

A new resource estimate was completed in 2016 by Techbase International (the 2016 mineral resource estimates). This new estimate incorporated the 2002 drilling, which had not been used for previous estimates. The 2016 estimate included the vein hosted, potentially underground mineable sulfide mineralization. No estimate was made of the shallow, oxide mineralization.

35 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Table 2: 2016 Mineral Resource Estimates

Estimated Resources Summary	Estimated Resources Summary	Estimated Resources Summary	Estimated Resources Summary	Estimated Resources Summary	Estimated Resources Summary	Estimated Resources Summary
Resource Category	Tons 6 Au opt Ounces oz-Au 3			Tonnes 6 Au g/t Ounces oz-Au 3
Indicated	2,260,000	0.180	409,000	2,050,000	6.18	409,000
Inferred	3,600,000	0.19	660,000	3,200,000	6.4	660,000
1CIM Definition Standards were followed for the Mineral Resource estimates.
2Mineral Resources were estimated using the polygonal modeling method.
3Rounding differences may occur.
4For the purpose of the resource estimation, no grade capping was applied.
5Metal price for the Mineral Resource estimates was $1,225 per ounce Au, the trailing three- year average on December 31,2016.
6The minimum reporting cutoff was 0.10 opt Au (3.43 g/t), over a minimum horizontal width of 6 ft(1.8m).
7A specific gravity of 2.56 (specific volume of 12.5 ft3/ton) was used to convert volume to
8Mineral Resources were estimated from the surface to approximately 1,000 ft (305m)
9Mineral Resources are classified as Indicated and Inferred based on drill hole location, interpretedgeologic continuityandqualityof data.
10Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. There is no certainty that all or any part of the Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration.

The Mineral Resource was estimated for each vein using polygonal estimation on drill intercepts projected onto a vertical long-section parallel to the average strike direction of that vein. Techbase Version 2015 software was used to perform the estimation.

Polygonal estimation was chosen by the Author as a robust method for estimating the global mineral resources at Fondaway Canyon, considering both the nature of the deposit and the currently available data. The multiple, subparallel veins and splays in the mineralized system introduce the risk of mis-correlation without further drilling and interpretation. The majority of the historical drilling data was RC, without downhole surveys, introducing uncertainty as to position and true thickness.

The polygonal methodology applied for this estimate is less sensitive than other methods to these risks. Polygonal estimation was also used for all of the historical resource estimates, including the previous, NI 43-101 compliant technical report (Strachan, 2003), making it possible to directly compare the results.

Interpretation and Conclusions

Interpretation

At Fondaway Canyon, gold Mineralization is localized along over 2 miles of en echelon, east-northeast trending and steeply south dipping structures developed within fine grained Triassic carbonaceous siliciclastic sedimentary rocks and Jurassic limestone, cut by Tertiary dikes.

To date, resources have been estimated for 12 named veins. The bulk of the current resources are hosted by the Paperweight, Half-moon, and Colorado zones, with the remainder in parallel veins or splays of the major veins. The most persistent vein strike length is 3,700 feet on the combined Paperweight – Hamburger Hill zones, and the down-

36

Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

dip extent of the gold mineralization is greater than 1,000 feet based on the drilling by NCI. Vein width is commonly 5 - 20 feet.

Opportunities

The geologic interpretation and modeling for the 2016 mineral resource estimates have identified opportunities to increase the confidence and continuity in existing structures both along strike and at depth. Several additional adjacent and oblique structures coincident with surface gold anomalies also have high prospectivity, and have not been drill tested to date.

All of the estimated Resources in this report relate to the high grade, sulfide vein mineralization in the eastern half of the project area. Much work remains to integrate the western portion of the project area, which has a correspondingly sparse and predominantly shallow drill history, along a 1 mile corridor to the South Mouth zone, the area of previous surface mining. This corridor has detailed rock and soil geochemistry, with several areas of highly anomalous gold geochemistry suggesting continuity of gold mineralization through this zone.

The South Mouth zone, where mining excavated the shallow oxide mineralization, has not been explored sufficiently to quantify the down dip extension of the sulfide mineralization to depth. The 2002 NCI drilling intercepted mineralized zones with two holes drilled in the pediment west of the South Mouth pit. These results should be followed up with additional drilling to determine if a bulk tonnage, disseminated gold deposit exists in that area, or if there are potentially offset extensions of the Fondaway Canyon vein systems associated with mineralization at the South Mouth pit.

Metallurgy

There is significant metallurgical testing completed recently and historically (including sizeable underground bulk sampling). Historical test results included using an oxidizing pre-treatment, followed by CIL leaching, which yielded gold recoveries of 86 to 95%. Other historical tests used a two-product flotation circuit, producing a carbon concentrate, then a sulfide concentrate, followed by CIL leaching of the flotation tails, producing combined total recoveries from 93 to 95%.

The 2016 metallurgical testing provided confidence that the mineralized material tested to date can be treated appropriately to concentrate 79-85% of the gold in less than 10% weight percent via flotation processes. Test results indicate that additional gold might be recovered by incorporating a gravity circuit, and also through treatment of the tails with conventional cyanidation methods. Further testing is recommended to find the most cost-effective process for future mining.

Conclusion

The Fondaway Canyon Project is a well-explored mineral deposit, with significant potential at depth and along strike of the identified mineralized systems. Some of that potential has not been realized due to multiple changes in management over the life of the project, and to operational uncertainties because of its proximity to the adjacent Stillwater WSA. The available data from the various sources has not been well-integrated, and consequently much of it has not been exploited for maximum exploration success.

Based on the mineral resource estimates, the opportunities for additional discovery, and the encouraging metallurgical results, it is the Authors’ opinion that the project has the potential to develop into a profitable mining operation.

[End of extract]

Exploration at the Fondaway Canyon Project Subsequent to the Fondaway Technical Report

In the second quarter of 2017, Canarc completed 92 surface rock chip sampling and mapping program on the Fondaway Canyon project which returned several high grade gold values. In the fourth quarter of 2017, Canarc completed an initial 7-hole, 2500-meter core-drilling program at the Fondaway Canyon project. All seven holes intersected gold mineralization with the following drilling highlights:

37

Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

• 65.4 meters (m) grading 2.83 grams per tonne (gpt) Au (including 10.20 gpt Au over 1.4 m, 7.69 gpt Au over 9.8 m and 7.70 gpt Au over 3.7 m) in hole FC17-3

• 62.9 m grading 1.77 gpt Au (including 4.39 gpt Au over 3.5 m, 4.48 gpt Au over 3.2 m and 6.15 gpt Au over 3.0 m) in hole FC17-2

• 30.1 m grading 1.45 gpt Au and 6.1 m grading 3.74 gpt Au (including 0.6 m grading 14.20 gpt Au) in hole FC171

• 24.4 meters (m) grading 1.80 grams per tonne (gpt) Au including 6.35 gpt Au over 0.9 m, 5.58 gpt Au over 1.6 m and 6.96 gpt Au over 1.3 m in hole FC17-4

• 12.8 m grading 3.48 gpt Au including 5.97 gpt Au over 6.1 m (contains 13.50 gpt Au over 0.6 m) in hole FC175

• 8.3 m grading 2.83 gpt Au including 5.91 gpt Au over 3.7 m in hole FC17-4

• 5.2 m grading 2.06 gpt Au including 5.99 gpt Au over 1.2 m in hole FC17-7

• • 4.0 m grading 4.19 gpt Au including 13.40 gpt Au over 0.9m in hole FC17-5

The above potential quantity and grade is conceptual in nature, as there has been insufficient exploration to define a mineral resource and that it is uncertain if further exploration will result in the target being delineated as a mineral resource.

In 2018, Canagold completed 3D modelling of the Fondaway Canyon deposit and identified drill targets for the next stage of diamond drilling. Surface mapping and sampling program on the property and trenching in the Reed Pit continue to better define possible high-grade gold mineralization and to refine targets for the next phase of exploration drilling.

Further details of the drilling program for the Fondaway Canyon project can be found on the following news releases on Canagold’s SEDAR profile:

• News release dated December 5, 2017 which is titled, “ Canarc Intersects Significant Gold Mineralization in First Three Drill Holes at Fondaway Canyon Project in Nevada, Including 2.83 Grams per Tonne Gold over 65.4 Meters ”; and

• News release dated January 16, 2018 which is titled, “ Canarc Continues to Intersect High-Grade Gold at Fondaway Canyon, Nevada, Including 3.24 Grams per Tonne Gold over 12.8 Meters ”.

Fondaway Canyon and Dixie Comstock properties (Nevada, USA):

On October 16, 2019, Canagold signed a binding Letter Agreement with Getchell which was later superseded by the Option Agreement for the Acquisition of Fondaway Canyon and Dixie Comstock Properties on January 3, 2020, whereby Getchell has an option for 4 years to acquire 100% of the Fondaway Canyon and Dixie Comstock properties located in Churchill County, Nevada (both subject to a 2% NSR) for $4 million in total compensation to Canagold, comprised of $2 million in cash and $2 million in shares of Getchell. The option includes minimum annual work commitments of $1.45 million on the properties. Getchell must also honor the pre-existing NSR and advance royalty commitments related to the properties, and grant Canagold a 2% NSR on the Fondaway Canyon and Dixie Comstock properties of which half (1%) can be bought for $1 million per property.

Getchell completed a six hole, 1,996 metre diamond drill program in 2020. Further details of the drilling program by Getchell for the Fondaway Canyon project are provided in Canagold’s news releases:

• News Release dated January 27, 2021 and titled, “ Canagold Optionee Getchell Gold Corp. Reports Broad HighGrade Gold Drill Intercepts at Fondaway Canyon, Nevada ”; and

• News Release dated February 10, 2021 and titled, “ Canagold Optionee Getchell Gold Extends Gold Mineralization Zones at Fondaway Canyon Project, Nevada ”.

Dr. Jacob Margolis, formerly a consultant to Canagold as Vice-President (Exploration), was a QP as defined by National Instrument 43-101, had approved the technical information from the drilling program for the Fondaway Canyon project.

38 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

4.5 Other Mineral Projects

The following mineral projects are not considered material properties of the Company.

4.5.1 Windfall Hills Property (British Columbia, Canada)

In April 2013, Canagold acquired 100% undivided interests in two adjacent gold properties (Uduk Lake and Dunn properties) located in British Columbia. The Uduk Lake properties are subject to a 1.5% NSR production royalty that can be purchased for CAD$1 million and another 3% NSR production royalty. The Dunn properties are subject to a 2% NSR royalty which can be reduced to 1% NSR royalty for $500,000.

The Windfall Hills gold project is located 65 km south of Burns Lake, readily accessible by gravel logging roads and a lake ferry crossing in the summer-time, or by charter aircraft year-round. The project consists of the Atna properties, comprised of 2 mineral claims totalling 959 hectares and the Dunn properties, comprised of 8 mineral claims totalling 2820 hectares.

From 2016 to 2018, Canagold completed a broader exploration program which included reconnaissance stream sediment sampling, soil sampling, machine trenching and ground and airborne geophysical surveys to detect new gold-silver anomalies on the property and to better delineate the known epithermal stock-work gold-silver mineralization and define drill targets.

In the third quarter of 2020, Canagold completed a Phase 2 diamond drill program. Six drill holes were completed for a total of 1,500 meters of core over an area of 30 hectares designed to follow up from gold-silver mineralization intersected in the 2014 Phase 1 drill holes. Further analysis of the structural and lithological controls on mineralization are needed to determine the next steps for the Windfall Hills property. Canagold may seek a partner to advance the project.

Further details of the drilling program for the Windfall Hills project can be found on the following news release on Canagold’s SEDAR profile:

• News Release dated October 21, 2020 and titled, “ Canarc Announces Results of its Special General Meeting of Shareholders Approving Upsized Financing Totaling CAD$8.4 Million ”.

4.5.4 Silver King (Nevada, USA)

In October 2018, Canagold entered into a property option agreement for its Silver King property with Brownstone whereby Brownstone has an option to earn a 100% undivided interest by paying $240,000 in cash over a 10 year period with early option exercise payment of $120,000. Canagold will retain a 2% NSR of which a 1% NSR can be acquired by Brownstone for $1 million.

The Silver King property is located in Humboldt County, Nevada on 4 patented claims near Golconda Summit. Previous exploration focused on low grade gold values but the property was never been explored for silver.

4.5.5 Hard Cash and Nigel (Nunavut, Canada)

In November 2018, Canagold entered into a property option agreement with Silver Range whereby Canagold had an option to earn a 100% undivided interests in the Hard Cash and Nigel properties by paying CAD$150,000 in cash and issuing 1.5 million common shares to Silver Range over a four year period. Silver Range retains a 2% NSR of which a 1% NSR can be acquired for CAD$1 million. Silver Range shall also be entitled to receive $1 per Au oz of measured and indicated resource estimate and $1 per Au oz of proven or probable reserve estimate, payable in either cash or common shares of Canagold at Canagold’s election.

Hard Cash is located 400 km west of Arviat, Nunavut on the shores of Ennadai Lake. There is an all-weather gravel strip at Ennadai Lake Lodge, 25 km south-southwest of the property and local access is by float plane or helicopter. Nigel is located 15 km west of Hard Cash. Hard Cash is underlain by the Ennadai Greenstone Belt of the Churchill Province. Gold mineralization at Hard Cash and Nigel occurs in high grade quartz veins and lower grade shear zones

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Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

hosted by basal mafic volcanics overlain by felsic volcanics metamorphosed to upper greenschist/lower amphibolite facies and intruded by granite.

Canagold’s consulting geologist visited the property in September 2018 and collected samples in quartz vein float and outcrop at and near the Swamp showing. In January 2019, Canagold completed a 970 line-km airborne magnetic and radiometric survey over the 2,090 hectare Hard Cash property. In June 2019, geophysical modelling and interpretation were completed, followed by geological and structural interpretation. In July 2019, Canagold completed a districtscale soil survey (approximately 500 samples), geologic mapping and rock-chip sampling (approximately 100 samples). The results of the 2019 work programs clarified the broad geological and structural controls on gold mineralization and identified and prioritized drill targets.

In the third quarter of 2020, the Company completed a Phase 1, 7-hole 1,000 meter reverse circulation (“RC”) drill program on the priority targets at the Swamp and Dryland showings. The results of the RC drilling confirmed a significant strike length to the previously identified gold mineralization of at least 1.5km. However the grades and widths of mineralized intervals were not indicative of a significantly mineralized system. Based on this outcome, the Company has taken the decision not to proceed further with the option agreement with Silver Range at Hard Cash and Nigel properties, and accordingly wrote off its interests in 2020.

Further details of the drilling program for the Hard Cash project can be found on the following news release on Canagold’s SEDAR profile:

• News Release dated November 17, 2020 and titled, “ Canarc Reviews Exploration Results, Terminates Option Agreement on Hard Cash and Nigel Properties in Nunavut ”.

4.5.6 Princeton Property (British Columbia, Canada)

In December 2018 and then as amended in June 2019, Canagold entered into a property option agreement jointly with Universal and an individual whereby Canagold has an option to earn a 75% interest in the Princeton property by: incurring exploration expenditures of CAD$490,000 over a two year period; issuing 375,000 common shares to Universal by December 1, 2019 (issued); paying CAD$25,000 cash to Universal by March 16, 2021; granting a 1% NSR to Universal which can be acquired for CAD$1 million; and honoring a 2% NSR to the individual of which 1% NSR can be acquired for CAD$1 million.

In October 2020, Canagold assigned its interest in the property option agreement for the Princeton property to Damara. Pursuant to the assignment, Damara issued 9.9% of its outstanding common shares to Canagold on closing of the assignment in 2020. Subject to the exercise of the option by December 31, 2021, Canagold’s aggregate ownership in the capital of Damara shall increase to 19.9%. Damara shall incur exploration expenditures of CAD$300,000 by December 31, 2020. The completion of the assignment is to subject to certain conditions, including Damara receiving the approval of the TSX Venture Exchange.

The Princeton gold property consists of 22 mineral claims over 14,650 hectares located 35 kilometers (km) south of Princeton, British Columbia, and is readily accessible by road. The property contains quartz veins with high grade gold (> 10 g/t) hosted in Triassic Nicola Group metasedimentary and metavolcanic rocks intruded by undated granitic dikes and stocks.

In 2018, Canagold completed a 2,350 line-kilometer aeromagnetic survey on the property to assist in its geologic evaluation. The survey covered about 16 km by 10 km, extending well beyond the known area of gold vein mineralization. In July 2019, Canagold reviewed the results of the survey and the results were used to delineate geologic units, including intrusive rocks, and to clarify the broad geologic setting and structural fabric of the area that helped identify and prioritize exploration targets.

In July 2019, Canagold commenced an exploration program of general prospecting, mapping, sampling and trenching of existing gold vein prospects, as well as evaluating whether additional geophysical methods might be utilized to detect buried veins. The program included a machine trenching program in the area of the main gold vein prospect. The trenching was to test a much broader area than was trenched in late 2018 and was to attempt to trace the previouslytrenched main vein along strike as well as explore for adjacent veins, particular in areas of mineralized float.

40 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

4.5.7 Corral Canyon property (Nevada, USA)

In 2018, Canagold staked 92 mining claims covering 742 hectares in Nevada, USA.

Corral Canyon property lies 35 km west of the town of McDermitt in Humboldt County along the western flank of the McDermitt caldera complex, an area of volcanic rocks that hosts significant lithium and uranium mineralization in addition to gold. It contains volcanic-hosted, epithermal, disseminated and vein gold mineralization evidenced by previous drilling.

In the first half of fiscal 2019, Canagold had completed detailed geologic mapping, a district-scale soil sampling program, rock-chip sampling, re-logging of previous core holes and an analysis of historical geophysical data in an effort to identify drill targets to expand on the known gold mineralization. In the third quarter of 2019, four high priority targets were identified on the property. In November 2019, a five hole, 1600 meter drilling program was completed.

Canagold is seeking a partner to drill along strike and to depth at priority targets on the property.

4.5.8 Lightning Tree (Idaho, USA)

In early July 2020, Canagold entered into a non-binding letter of intent for its Lightning Tree property located in Lemhi County, Idaho, with Ophir Gold Corp. (formerly, MinKap Resources Inc.) (“Ophir”), whereby Ophir shall acquire a 100% undivided interest in the property. On September 10, 2020, a definitive mineral property purchase agreement was executed. Over a three year period, Ophir shall pay to Canagold a total of CAD$137,500 in cash over a three year period and issue 2.5 million common shares and 2.5 million warrants over a two year period, and shall incur aggregate exploration expenditures of at least $4 million over a three year period. If Ophir fails to incur the exploration expenditure, the property reverts back to Canagold. Canagold will retain a 2.5% NSR of which a 1% NSR can be acquired by Ophir for CAD$1 million. If Ophir fails to file a NI 43-101 compliant resource on the Lightning Tree property within three years, the property will revert back to Canagold.

Lightning Tree property is located in Lemhi County, Idaho on 4 unpatented claims near the Musgrove gold deposit.

4.5.9 Other Mineral Property

In December 2018, Canagold entered into a Memorandum of Understanding for an exploration and development project in South America whereby Canagold paid $10,000 in 2018 and another $10,000 is payable as a success fee to close on an acceptable agreement for such project. In October 2019, Canagold recovered $3,000 from its initial payment and wrote off the project.

Dr. Jacob Margolis was the qualified person, as defined by National Instrument 43-101, and had approved the technical information from the drilling programs for the Fondaway and Corral Canyon projects. Dr. Margolis was formerly engaged as a consultant to the Company as Vice-President (Exploration) at that time. Garry Biles, PEng, President and Chief Operating Officer of the Company, was the qualified person, as defined by National Instrument 43-101, and had approved the technical information from the drilling programs for the Fondaway Canyon, Windfall Hills and Hard Cash projects.

ITEM 5: DIVIDENDS

5.1 Dividends

To date and including each of the three most recently completed fiscal years ended December 31, 2020, the Company has not paid any cash dividends on its common shares nor does it intend to pay any cash dividends on its shares in the immediate future. Cash dividends will, in all probability, only be paid in the event the Company successfully brings one of its mineral property interests into production. The Company has no present intention of paying cash dividends

41

Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

on its common shares as it anticipates that all available funds will be invested to finance further acquisition, exploration and development of its mineral properties.

5.2 Dividend Policy

The Company’s dividend policy is as follows:

1. Payment of Dividends Subject to Special Rights

The provisions of this section are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

2. Declaration of Dividends

Subject to the Business Corporations Act (British Columbia), the directors may from time to time declare and authorize payment of such dividends as they may deem advisable.

3. No Notice Required

The directors need not give notice to any shareholder of any declaration under these sections.

4. Record Date

The directors may set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5 p.m. on the date on which the directors pass the resolution declaring the dividend.

5. Manner of Paying Dividend

A resolution declaring a dividend may direct payment of the dividend wholly or partly by the distribution of specific assets or of fully paid shares or of bonds, debentures or other securities of the Company, or in any one or more of those ways.

6. Settlement of Difficulties

If any difficulty arises in regard to a distribution, the directors may settle the difficulty as they deem advisable, and, in particular, may:

• (1) set the value for distribution of specific assets;

• (2) determine that cash payments in substitution for all or any part of the specific assets to which any shareholders are entitled may be made to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and

• (3) vest any such specific assets in trustees for the persons entitled to the dividend.

7. When Dividend Payable

Any dividend may be made payable on such date as is fixed by the directors.

8. Dividends to be Paid in Accordance with Number of Shares

All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

9. Receipt by Joint Shareholders

If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of the share.

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Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

10. Dividend Bears No Interest

No dividend bears interest against the Company.

11. Fractional Dividends

If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.

12. Payment of Dividends

Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed to the address of the shareholder, or in the case of joint shareholders, to the address of the joint shareholder who is first named on the central securities register, or to the person and to the address the shareholder or joint shareholders may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plus the amount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on presentation or the amount of tax so deducted is not paid to the appropriate taxing authority.

13. Capitalization of Surplus

Notwithstanding anything contained in the Company’s articles, the directors may from time to time capitalize any surplus of the Company and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the surplus or any part of the surplus.

ITEM 6: DESCRIPTION OF CAPITAL STRUCTURE

6.1 General Description of Capital Structure

The Company is authorized to issue an unlimited number of common shares without par value.

All common shares of the Company rank equally as to dividends, voting powers and participation in assets and in all other respects. Each share carries one vote per share at meetings of the shareholders of the Company. There are no indentures or agreements limiting the payment of dividends and there are no conversion rights, special liquidation rights, pre-emptive rights or subscription rights attached to the common shares. The shares presently issued are not subject to any calls or assessments.

Effective December 8, 2020, the Company consolidated its share capital on the basis of five pre consolidation common shares for one post share consolidation share.

ITEM 7: MARKET FOR SECURITIES

7.1 Trading Price and Volume

The Company’s common shares are traded on the TSX under the symbol “CCM”.

The following table provides the high and low prices and volume for the Company’s shares for the periods indicated as traded on the TSX:

(Stated in terms of Canadian dollars)

43 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Month	High(CAD$)	Low(CAD$)	Volume
2020
January	$0.30	$0.25	238,140
February	$0.30	$0.25	272,040
March	$0.30	$0.15	351,900
April	$0.40	$0.20	489,380
May	$0.50	$0.25	1,416,360
June	$0.55	$0.35	1,418,560
July	$0.75	$0.50	2,329,320
August	$0.70	$0.50	2,315,880
September	$0.90	$0.60	2,104,520
October	$0.70	$0.55	1,699,900
November	$0.85	$0.60	2,380,420
December	$0.95	$0.66	1,855,460
2021
January	$0.86	$0.58	1,856,300
February	$0.73	$0.53	1,752,100
March 1 to 30	$0.58	$0.40	2,591,800

7.2 Prior Sales

Stock Options

In fiscal 2020, Canagold granted the following stock options to directors, officers, employees and/or consultants:

Date of Grant Expiry Date Exercise Price (CAD$) June 29, 2020 June 29, 2025 $0.50 August 19, 2020 August 19, 2025 $0.55 Total Number of Stock Options granted during 2020		Number of Stock Options Granted Vesting Provisions 760,000 25% vest on grant date and 25% vest every 6 months thereafter. 80,000 25% vest on grant date and 25% vest every 6 months thereafter. 840,000

ITEM 8: ESCROWED SECURITIES

8.1 Escrowed Securities

The Company does not have any escrowed securities.

ITEM 9: DIRECTORS AND OFFICERS

9.1 Name, Occupation and Security Holding

44 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

The following are the full names, province/state and country of residence, and their respective positions with the Company and their principal occupations within the preceding five years for all of the directors and officers of the Company:

Name and Ordinary Residence(1)	Principal Occupation or Employment during the past five years(1) (2)	Period as a Director of the Company	Approximate number and percentage of voting securities beneficially owned, directly or indirectly or over which direction or control is exercised (as of March 30, 2021)(8)
Bradford J. Cooke(6), (7) Chairman and Director BC, Canada	Chairman and Director (since Jan. 22, 1987) and CEO (from Jan. 22, 1987 to Jan. 13, 2014, and from June 29, 2018 to Oct. 17, 2018) of Canagold Resources Ltd.; CEO and a Director of Endeavour Silver Corp. (since July 2002)	Since January 22, 1987	5,259,916 (7.47%)
Martin Burian(3),(5),(7) Director BC, Canada	Managing Director of RCI Capital Group (since Jan. 2018); Chief Financial Officer (part time) of Heffel Fine Art Auction House (since April 2016); Chief Financial Officer of ML Gold Ltd. (formerly, Cap-Ex Iron Ore Ltd. (from July 2013 to May 2017); Director and Chief Financial Officer of Tinkerine Studio Ltd. (from Feb. 2014 to Feb. 2016); Managing Director of Investment Banking for Haywood Securities Inc. (from Nov. 2010 to May 2013)	Since November 1, 2013	100,000 (0.14%)
Deepak Malhotra(3),(4),(6) Director Colorado, USA	President of Pro Solv Consulting, LLC (since July 2018); President of Resource Development Inc. (from June 1993 to July 2018)	Since June 29, 2015	143,333 (0.20%)

45 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Name and Ordinary Residence(1)	Principal Occupation or Employment during the past five years(1) (2)	Period as a Director of the Company	Approximate number and percentage of voting securities beneficially owned, directly or indirectly or over which direction or control is exercised (as of March 30, 2021)(8)
Andrew Bowering(3),(4),(5) Director BC, Canada	Director (since April 2019), CEO (from April 2019 to June 2020) and Executive Vice President (since June 2020) of Prime Mining Corp; President and CEO (since 1992) of Bowering Projects, a mineral exploration and consulting firm; President (until 2020) of Sunrise Drilling Ltd., a North American-based mineral exploration drilling company.	Since August 18, 2020	700,000 (0.99%)
Scott Eldridge Director and Chief Executive Officer BC, Canada	Chief Executive Officer of Canagold Resources Ltd. (since Oct. 17, 2018); Director (since June 26, 2017) and CFO of Arctic Star Exploration Corp. (from June 26, 2017 to Oct. 23, 2018); CFO of Amarillo Gold Corporation (from Oct 8, 2014 to Nov. 4, 2017); President and CEO of Euroscandic International Group (from October 2008 to October 2017)	Since June 29, 2018	616,500 (0.88%)
Garry Biles President and Chief Operating Officer BC, Canada	President and Chief Operating Officer of Canagold Resources Corp. (since March 2007); General Manager for Glencairn Gold Corp. from April 2005 to January 2007	Officer only	275,552 (0.39%)
Troy Gill Vice-President, Exploration BC, Canada	Vice-President, Exploration, of Canagold Resources Ltd. (since June 2020); Exploration Manager of Sanatana Resources Inc. (from June 2008 to November 2019)	Officer only	Nil (0%)

46 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Name and Ordinary Residence(1)	Principal Occupation or Employment during the past five years(1) (2)	Period as a Director of the Company	Approximate number and percentage of voting securities beneficially owned, directly or indirectly or over which direction or control is exercised (as of March 30, 2021)(8)
Philip Yee Chief Financial Officer, Vice-President, Finance and Corporate Secretary BC, Canada	Chief Financial Officer, VP- Finance, Corporate Secretary, and/or Controller of Canagold Resources Ltd. (from May 2003 to Present); Chief Financial Officer and VP Finance of Aztec Minerals Corp. (from July 2016 to Present); Director, Chief Financial Officer and VP-Finance of Caza Gold Corp. (from November 2007 to March 2017)	Officer only	47,800 (0.07%)

• (1) The information as to residence and principal occupation during the past five years is not within the knowledge of the Company and has been furnished by the respective directors and officers.

• (2) Unless otherwise stated above, each of the above-named nominees has held the principal occupation or employment indicated for at least five years.

• (3) Member of Audit Committee.

• (4) Member of Compensation Committee.

• (5) Member of Nomination Committee.

• (6) Member of Technical, Environmental, Social and Safety.

• (7) Member of Investment Committee. (8) As of March 30, 2021, Canagold had 70,386,123 shares issued and outstanding.

At the Company’s annual general meeting on June 29, 2020, Messrs. Bradford Cooke, Martin Burian, Scott Eldridge, Kai Hoffmann and Deepak Malhotra were re-elected to the Board of Directors for the ensuing year. Mr. Kai Hoffmann resigned from the Board in July 2020, and Mr. Andrew Bowering was nominated to the Board in August 2020.

As at March 30, 2021, 7,143,101 common shares of Canagold were beneficially owned, directly or indirectly, by the directors and executives, as a group, representing 10.1% of Canagold’s issued and outstanding voting securities (70,386,123 common shares).

9.2 Cease Trade Orders, Bankruptcies, Penalties or Sanctions

No director or executive officer of the Company is, as at the date of this AIF, or was within 10 years before the date of this AIF, a director, chief executive officer or chief financial officer of any company (including the Company), that:

• (a) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days, that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer; or

• (b) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days, that was issued after the director or executive officer ceased to be a director, chief executive officer or chief

47 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

No director or executive officer of the Company, no shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company, and no personal holding companies of aforesaid director, executive officer, or shareholder of the Company:

• (a) is, as at the date of this AIF, or has been within the 10 years before the date of this AIF, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or

• (b) has, within 10 years before the date of this AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.

No director or executive officer of the Company, no shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company, and no personal holding companies of aforesaid director, executive officer, or shareholder of the Company has been subject to:

• (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or

• (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

9.3 Conflicts of Interest

Certain directors and officers of the Company are and may continue to be involved in the mining and mineral exploration industry through their direct and indirect participation in corporations, partnerships or joint ventures which are potential competitors. Situations may arise in connection with potential acquisitions and investments where the other interests of these directors and officers may conflict with the interests of the Company. As required by law, each of the directors of the Company is required to act honestly, in good faith and in the best interests of the Company. Any conflicts which arise shall be disclosed by the directors and officers in accordance with the Business Corporations Act (British Columbia) and they will govern themselves in respect thereof to the best of their ability with the obligations imposed on them by law.

ITEM 10: PROMOTERS

10.1 Promoters

Within the two most recently completed financial years ended December 31, 2020 and up to the date of this AIF, the Company does not have nor employed any person or company acting or performing as a promoter for the Company.

ITEM 11: LEGAL PROCEEDINGS

11.1 Legal Proceedings

During the most recently completed financial year and as at the date of this AIF, there are no known legal proceedings to which the Company is a party or which any of its property is the subject or any such proceedings known to the Company to be contemplated.

48 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

11.2 Regulatory Actions

During the most recently completed financial year and as at the date of this AIF, there are no known penalties or sanctions imposed against the Company by a court relating to securities legislation or by a securities regulatory authority, or any settlement agreements entered into by the Company before a court relating to securities legislation or with a securities regulatory authority. The Company is not aware of any material penalties or sanctions imposed by a court or regulatory body against the Company.

ITEM 12: INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

12.1 Interest of Management and Others in Material Transactions

Except as noted in this AIF, within the three most recently completed financial years ended December 31, 2020 and up to the date of this AIF, none of the following:

• (a) director or executive officer of the Company;

• (b) a person or company that is direct or indirect beneficial owner of, or who exercises control or direction over, more than 10% of any class or series of outstanding voting securities of the Company; and

• (c) an associate or affiliate of any of the persons or companies referred to in the above paragraphs (a) or (b),

has any material interest, direct or indirect, in any transaction that has materially affected or is reasonably expected to materially affect the Company to the best of the Company’s knowledge.

2176423 Ontario Ltd., a company controlled by Mr. Eric Sprott, has a 10.14% interest in the outstanding voting securirites of Canagold. Mr. Sprott does not exert control over Canagold nor over its Board of Directors nor has any nominees appointed to its Board of Directors, is not actively involved in the operations of Canagold, and does not have any material interest, directly or indirectly, in any transaction that has materially affected or will materially affect Canagold, to the best of Canagold’s knowledge, except as disclosed in this AIF.

ITEM 13: TRANSFER AGENT AND REGISTRAR

13.1 Transfer Agent and Registrar

The Company’s transfer agent and registrar is:

Computershare Investor Services Inc. 3rd Floor, 510 Burrard Street Vancouver, BC, Canada, V6C 3B9

ITEM 14: MATERIAL CONTRACTS

14.1 Material Contracts

There are no other contracts, other than those herein disclosed in this AIF and other than those entered into in the ordinary course of the Company’s business, that are material to the Company and which were entered into from January 1, 2021 to March 30, 2021, in the most recently completed fiscal year ended December 31, 2020 or before the most recently completed financial year, but is still in effect as of the date of this AIF.

Canagold’s material contracts comprise the following:

49 Canagold Resources Ltd.

(formerly, Canarc Resource Corp.)

• a. Confirmation and Agreement in December 2017 with Barrick and Skeena for the Eskay Creek property. For more information, see “General Development of The Business – Three-Year History”.

• b. Property option agreement in October 2018 with Brownstone, pursuant to which Brownstone has an option to earn up to a 100% interest in Canagold’s Silver King property. For more information, see “General Development of The Business – Three-Year History”.

• c. Property option agreement in December 2018, as amended in June 2019, with Universal, pursuant to which Canagold has an option to earn up to a 75% interest in the Princeton property. In October 2020, Canagold assigned its option interest in the property to Damara. For more information, see “General Development of The Business – Three-Year History”.

• d. Binding letter agreement in October 2019 which was superseded by a property option agreement in January 2020 with Getchell, pursuant to which Getchell has an option to acquire 100% interest in the Fondaway Canyon and Dixie Comstock properties. For more information, see “General Development of The Business – Three-Year History”.

• e. Definitive mineral property purchase agreement in September 2020 with Ophir, pursuant to which Ophir has acquired a 100% interest in Canagold’s Lightning Tree property. For more information, see “General Development of The Business – Three-Year History”.

ITEM 15: INTERESTS OF EXPERTS

The following are names of persons or companies that have prepared or certified a report, valuation, statement or opinion described or included in a filing, or referred to in a filing, made under NI 51-102 Continuous Disclosure Obligations by the Company during, or relating to, the Company’s most recently completed financial year end and whose profession or business gives authority to the report, valuation, statement or opinion made by the person or company.

15.1 Names of Experts

Messrs. Michael Norred, SME-RM, and Simon Henderson, MSc, MAusImm CP, of Techbase International Ltd., are the independent QPs as defined by NI 43-101 and prepared the Technical Report referred to in this document, titled “ Technical Report for the Fondaway Canyon Project ”, which was dated April 3, 2017. The report was prepared by Techbase International Ltd.

The QP pursuant to NI 43-101 for the New Polaris Preliminary Economic Report dated February 28, 2019 is Marc Schulte, P. Eng. Canagold filed the New Polaris Preliminary Economic Report to its SEDAR profile at www.sedar.com by April 17, 2019.

Dr. Jacob Margolis was the qualified person, as defined by National Instrument 43-101, and had approved the technical information from the drilling programs for the Fondaway and Corral Canyon projects. Dr. Margolis was formerly engaged as a consultant to the Company as Vice-President (Exploration) at that time. Garry Biles, PEng, President and Chief Operating Officer of the Company, was the qualified person, as defined by National Instrument 43-101, and had approved the technical information from the drilling programs for the Windfall Hills and Hard Cash projects.

Smythe LLP provided a report of independent registered public accounting firm dated March 30, 2021 in respect of the Company’s audited consolidated financial statements for the financial year ended December 31, 2020.

15.2 Interests of Experts

Smythe LLP is independent within the meaning of the code of professional conduct of the Chartered Professional Accountants of British Columbia.

50 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

To the best of the Company’s knowledge, the experts named above, and any designated professionals of the experts named above, do not hold and have not received, any registered or beneficial interest, direct or indirect, in any securities or other property of the Company or of one of the Company’s associates or affiliates when that expert prepared their respective reports, valuations, or statements of opinion, nor will such persons receive any registered or beneficial interest, direct or indirect, in any securities or other property of the Company in connection with the preparation of their respective reports, valuations, or statements of opinion. Additionally, each of the experts named above, and their respective designated professionals, holds less than 1% of the Company’s outstanding securities.

ITEM 16: ADDITIONAL INFORMATION

16.1 Additional Information

Additional information relating to the Company are as follows:

• (a) may be found on SEDAR at www.sedar.com;

• (b) additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of the Company’s securities and securities authorized for issuance under equity compensation plans is contained in the Company’s Information Circular pertaining to its most recent Annual General Meeting of security holders that involves the election of directors; and

• (c) is also provided in the Company’s financial statements and management discussion and analysis for its most recently completed financial year ended December 31, 2020.

16.2 Audit Committee

1. The Audit Committee’s Charter

National Instrument 52-110 Audit Committees (“NI 52-110”) requires that every issuer disclose certain information concerning the constitution of its audit committee and its relationship with its independent auditor, as set forth below. The text of the Audit Committee Charter is attached hereto as Schedule “A”.

2. Composition of the Audit Committee

The Company’s audit committee is comprised of three directors, as set forth below:

Martin Burian Deepak Malhotra Andrew Bowering

As defined in NI 52-110, Martin Burian, Deepak Malhotra and Andrew Bowering are “independent”. The Company therefore meets the requirement of NI 52-110 that all audit committee members be independent.

All of the members of the audit committee are financially literate as defined in NI 52-110.

3. Relevant Education and Experience

Martin Burian – Mr. Burian is a Chartered Professional Accountant and Chartered Business Valuator with over twenty-five years of investment banking experience. He has a wealth of knowledge and expertise in corporate finance and advisory services, including mergers and acquisition in mineral exploration and mining. He is currently Managing Director of RCI Capital Group; the CFO (part time) of Heffel Fine Art Auction House; and a director of Elysee Development Corp., Nanalysis Scientific Corp. and Assure Holdings Corp. From February 2014 to February 2016, Mr. Burian was CFO and a director of Tinkerine Studio Ltd. Mr. Burian was Managing Director of Investment Banking at Haywood Securities Inc. from 2010 until mid-2013, prior to which he served as President of Bolder Investment Partners from 2009 until its merger with Haywood Securities in 2010. Mr. Burian obtained his CPA and

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Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

CBV designations while at KPMG, and obtained his Bachelor of Commerce from the University of British Columbia in 1986.

Deepak Malhotra – Mr. Malhotra holds a PhD in mineral economics and is a metallurgical engineer and mineral economist with over 40 years of experience. He has a wealth of knowledge and experience in metallurgical research, process development for new mineral properties, plant troubleshooting, plant audits, detailed engineering and overall business management. He has worked for over 50 gold projects throughout the world. Mr. Malhorta was previously President of Resource Development Inc., a mining consulting services company. He is currently a director of Cardero Resource Corp.

Andrew Bowering – Mr. Bowering is a venture capitalist with over 30 years knowledge and experience in mineral exploration and development. He is currently a Director and Executive Vice President of Prime Mining Corp. Mr. Bowering is founder and/or operator of TSX Venture Exchange, Toronto Stock Exchange and American Stock Exchange including Caldera Environmental, Pinnacle Mines, ATW Gold, Cap-Ex Iron Ore, Millennial Lithium, and American Lithium Corp.

4. Reliance on Certain Exemptions

At no time since the commencement of the Company’s most recently completed financial year has the Company relied on the following exemptions from NI 52-110:

• (a) the exemption in section 2.4. De Minimis Non-audit Services;

• (b) the exemption in section 3.2 Initial Public Offerings;

• (c) the exemption in section 3.4 Events Outside Control of Member;

• (d) the exemption in section 3.5 Death, Disability or Resignation of Audit Committee Member; or

• (e) an exemption from NI 52-110, in whole or part granted under Section 8 Exemptions

5. Reliance on the Exemption in Subsection 3.3(2) or Section 3.6

At no time since the commencement of the Company’s most recently completed financial year, has the Company relied on the exemption in subsection 3.3(2), Controlled Companies, or section 3.6, Temporary Exemption for Limited and Exceptional Circumstances of NI 52-110.

6. Reliance on Section 3.8

At no time since the commencement of the Company’s most recently completed financial year, has the Company relied on the exemption in section 3.8, Acquisition of Financial Literacy of NI 52-110 .

7. Audit Committee Oversight

At no time since the commencement of the Company’s most recently completed financial year, has a recommendation of the Committee to nominate or compensate an external auditor not been adopted by the Board or Directors.

8. Pre-Approval Policies and Procedures

The audit committee has not adopted specific policies and procedures for the engagement of non-audit services. Subject to the requirements of NI 52-110, the engagement of non-audit services is considered by the Company’s Board of Directors and, where applicable, by the audit committee, on a case-by-case basis.

9. External Auditor Service Fees (By Category)

Set forth below are details of certain service fees paid to the Company’s external auditor in each of the last two fiscal years for audit services:

52 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

Financial Year End	Audit Fees(1)	Audit Related Fees (2)	Tax Fees(3)	All Other Fees(4)
December 31, 2019	CAD$35,000	$Nil	CAD$3,500	Nil
December 31, 2020	CAD$38,000	$Nil	CAD$2,000	Nil

• (1) The aggregate fees billed by the Company’s external auditor.

• (2) The aggregate fees billed in each of the last two fiscal years for assurance and related services by the Company’s external auditor that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit Fees”.

• (3) The aggregate fees billed in each of the last two fiscal years for professional services rendered by the Company’s external auditor for tax compliance, tax advice and tax planning.

• (4) The aggregate fees billed in each of the last two fiscal years for products and services provided by the Company’s external auditor, other than the services reported under clauses 1, 2 and 3 above.

53 Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

SCHEDULE “A”

CANAGOLD RESOURCES LTD. (the "Company")

AUDIT COMMITTEE CHARTER

1.	Audit Committee Mandate ............................................................................................................. i
2.	Committee Organization ................................................................................................................ i
	2.1 Composition & Independence ........................................................................... i
	2.2 Financial Training & Financial Expert .............................................................. i
	2.3 Financial Expert Duties ................................................................................... ii
	2.4 Annual Appointment and Removal .................................................................. ii
	2.5 Chairman and Secretary Appointment .............................................................. ii
	2.7 Compensation ................................................................................................. ii
3.	Meetings ........................................................................................................................................ ii
	3.1 Quarterly Meetings .......................................................................................... ii
	3.2 Chairman Duties .............................................................................................. ii
	3.3 Third Party Attendees at Meetings ................................................................... ii
	3.4 Quorum & Majority Voting ............................................................................. ii
4.	Authority ...................................................................................................................................... iii
	4.1 Authority to Investigate & Require Disclosure ................................................ iii
	4.2 Authority to Engage Outside Advisers ............................................................ iii
	4.3 Authority Over Company Auditors ................................................................. iii
5.	Annual Performance Evaluation.................................................................................................. iii
6.	Specific Duties .............................................................................................................................. iii
7.	Complaint Procedures ................................................................................................................... v
8.	Limitations on Committee’s Duties ............................................................................................... v

1. AUDIT COMMITTEE MANDATE

The Audit Committee (the “Committee”) will assist the Board of Directors (the “Board”) of Canagold Resources Ltd. (the “Company”) in fulfilling its oversight responsibilities. The Committee will review the financial reporting process, the system of internal control and management of financial risks, the audit process, and the Company's process for monitoring compliance with laws and regulations and its own code of business conduct as more fully described below. In performing its duties, the Committee will maintain effective working relationships with the Board of directors, management, and the external auditors and monitor the independence of those auditors. To perform his or her role effectively, each Committee member will obtain an understanding of the responsibilities of Committee membership as well as the Company’s business, operations and risks.

2. COMMITTEE ORGANIZATION

2.1 Composition & Independence

The Committee will be comprised of three (3) or more members (each, a “Member”) of the Board as determined by the Board, ALL of whom shall satisfy the “independence” requirement of National Instrument 52-110 Audit Committees or any successor policy.

2.2 Financial Training & Financial Expert

Each Member will either be “financially literate”, as defined in National Instrument 52-110 Audit Committees or any successor policy, or shall become financially literate within a reasonable period of time after his or her appointment to the Committee. Each Member will have an understanding of the accounting principles used by the Company to prepare its financial statements. At least one Member (the “Financial Expert”) will be engaged in the active supervision of the persons engaged in the preparation, audit, analysis or evaluation of certain types of financial statements.

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2.3 Financial Expert Duties

The designation or identification of a Member as the Financial Expert shall not impose on such Member any duties, obligations or liabilities that are greater than the duties, obligations and liabilities imposed on any other member of the Committee or the Board.

2.4 Annual Appointment and Removal

The Board will appoint annually, at the organizational meeting of the full board on the recommendation of the Nominating / Corporate Governance Committee, if any, the Members. The Board may at any time fill any vacancy in the Committee from members among the Board.

A Member shall be automatically removed without further action of the Board if the Member resigns, ceases to be a director of the Company, or is found by the Board to no longer be an independent director as required by this Charter. Members may be otherwise removed or replaced by a vote of the Board upon recommendation of the Nominating Committee on / Corporate Governance Committee.

2.5 Chairman and Secretary Appointment

The Board will appoint one Member as the Chairman and one Member as the Secretary of the Committee. The Secretary of the Committee will keep minutes of all meetings of the Committee, including all resolutions passed by the Committee.

2.6 Compensation

No Member shall receive directly or indirectly, any compensation, advisory or other compensation fee from the Company or an affiliate of the Company other than director fees for service as a director.

3. MEETINGS

3.1 Quarterly Meetings

The Committee is to meet at least four (4) times annually, each time the Company proposes to issue a press release with its quarterly or annual earnings information and as many additional times as the Committee deems necessary. Members will endeavor to be present at all meetings either in person or by telephone. As necessary or desirable, but in any case at least quarterly, the Committee shall meet with members of management and, if required external auditors, to discuss the financial reporting and any matter that the Committee or management deems necessary. Members must be given at least three days’ notice of each meeting, unless all Members are present and waive notice, or if those absent waive notice before or after a meeting.

3.2 Chairman Duties

The Chairman in consultation with other Members, the Company’s independent auditors and the appropriate officers of the Company, will be responsible for calling meetings of the Committee, establishing the agenda and chairing the conduct of the meeting. In the absence of the Chairman, the other Members may appoint one of their number as chair of the meeting. The Committee may also take any action permitted hereunder by unanimous written consent. The Chairman or his or her delegate will report to the Board following each meeting of the Committee.

3.3 Third Party Attendees at Meetings

The Committee may request any officer or employee of the Company or the Company’s outside legal counsel or independent auditors to attend a meeting of the Committee or to meet with any members of, or consult to, the Committee.

3.4 Quorum & Majority Voting

Except as otherwise provided by this Charter or applicable laws or regulations, as amended from time to time:

ii Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

• (a) A majority of the Members, either present in person or by means of remote communication, or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the Committee, and

• (b) All actions of the Committee shall be by affirmative vote of a majority of those Members so determined to be present or represented by proxy.

4. AUTHORITY

4.1 Authority to Investigate & Require Disclosure

Subject to the prior approval of the Board, the Committee is granted the authority to investigate and require such information and explanation from the Company’s management, as it considers reasonably necessary, any matter or activity involving financial accounting, financial reporting, financial risk, and the internal controls of the Company. In addition, the Committee has the authority to require the Company’s management to promptly inform the Committee and the external auditor of any material misstatement or error in the financial statements following the discovery of such instance.

4.2 Authority to Engage Outside Advisers

The Committee has the authority to engage independent counsel and other advisors as it deems necessary to carry out its duties and to set and pay the compensation for any advisors employed by the Committee.

4.3 Authority Over Company Auditors

In recognition of the fact that the independent auditors are ultimately accountable to the Committee, the Committee shall have the authority and responsibility to nominate for shareholder approval, evaluate, and where appropriate, replace the independent auditors and shall approve all audit engagement fees and terms and all non-audit engagements with the independent auditors. The Committee shall consult with management but shall not delegate these responsibilities.

5. ANNUAL PERFORMANCE EVALUATION

The Committee will conduct and review with the Board an annual evaluation of the Committee’s performance with respect to the requirements of this Charter. The evaluation should set forth the goals and objectives of the Committee for the upcoming year.

6. SPECIFIC DUTIES

In carrying out its oversight responsibilities, the Committee will:

• (a) Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.

• (b) Review with the Company’s management and, as necessary, its external auditors and recommend to the Board the Company’s quarterly and annual financial statements and management discussion and analysis that is to be provided to shareholders, stakeholders and the appropriate regulatory authorities, including any financial statement contained in a prospectus, information circular, registration statement or other similar document.

• (c) Review the Company’s management annual and interim earnings press release before any public disclosure.

• (d) Recommend to the Board the external auditors to be nominated for the purposes of preparing or issuing an audit report or performing other audit’s review or attest services and the compensation to be paid to the external auditors. The external auditors shall report directly to the Committee.

• (e) The Committee will annually review the qualifications, expertise and resources and the overall performance of external auditor and, if necessary, recommend to the Board the termination of the external auditor (and its affiliates), in accordance with the applicable securities laws.

• (f) Review with management the scope and general extent of the external auditors’ annual audit. The Committee’s review should include an explanation from the external auditors of the factors considered in determining the audit scope, including major risk factors. The external auditors should confirm to the Committee whether or not any limitations have been placed upon the scope or nature of their audit procedures.

iii Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

• (g) Be directly responsible for the oversight of the work of the external auditors, including the resolution of disagreements between management of the Company and the external auditors.

• (h) Review with the Company’s management and external auditors the Company’s accounting and financial reporting controls. Obtain annually in writing from the external auditors their observations, if any, on significant weaknesses in internal controls as noted in the course of the auditor’s work.

• (i) Evaluate the adequacy and effectiveness of management’s system of internal controls over the accounting and financial reporting system within the Company and ensure that the external auditors discuss with the Committee any event or matter which suggests the possibility of fraud, illegal acts or deficiencies in internal controls.

• (j) The Committee is to meet at least once annually, with the independent auditors, separately, without any management representatives present for the purpose of oversight of accounting and financial practices and procedures.

• (k) Review with the Company’s management and external auditors significant accounting and reporting principles, practices and procedures applied by the Company in preparing its financial statements. Discuss with the external auditors their judgment about the quality of the accounting principles used in financial reporting.

• (l) Inquire as to the independence of the external auditors and obtain from the external auditors, at least annually, a formal written statement delineating all relationships between the Company and the external auditors and the compensation paid to the external auditors.

• (m) At the completion of the annual audit, review with management and the external auditors the following:

• i. The annual financial statements and related notes and financial information to be included in the Company’s annual report to shareholders.

• ii. Results of the audit of the financial statements and the related report thereon and, if applicable, a report on changes during the year in accounting principles and their application.

• iii. Significant changes to the audit plan, if any, and any serious disputes or difficulties with management encountered during the audit. Inquire about the cooperation received by the external auditors during the audit, including all requested records, data and information.

• iv. Inquire of the external auditors whether there have been any material disagreements with management, which, if not satisfactorily resolved, would cause them to issue a not standard report on the Company’s financial statements.

• (n) Meet with management, to discuss any relevant significant recommendations that the external auditors may have, particularly those characterized as “material” or “serious”. Typically, such recommendations will be presented by the external auditors in the form of a Letter of Comments and Recommendations to the Committee. The Committee should review responses of management to the Letter of Comments and Recommendations from external auditors and receive follow-up reports on action taken concerning the aforementioned recommendations.

• (o) Have the sole authority to review in advance, and grant any appropriate pre-approvals, of all non-audit services to be provided by the independent auditors and, in connection therewith, to approve all fees and other terms of engagement. The Committee shall also review and approve disclosures required to be included in periodic reports filed with securities regulators with respect to non-audit services performed by external auditors.

• (p) Be satisfied that adequate procedures are in place for the review of the Company’s disclosure of financial information extracted or derived from the Company’s financial statements, and periodically assess the adequacy of those procedures.

• (q) Ensure that the management of the Company has designed, implemented, and is maintaining an effective system of internal financial controls.

• (r) Review and approve the Company’s hiring of partners, employees and former partners and employees of the present and past auditors.

• (s) Review with management and the external auditors the methods used to establish and monitor the Company’s policies with respect to unethical or illegal activities by the Company employees that may have a material impact in the financial statements.

• (t) The Committee will conduct an appropriate review of all proposed related party transactions to identify potential conflict of interest and disclosure situations. The Committee shall submit the related party transaction to the Board of Directors for approval by a majority of independent directors, excluding any director who is the subject of a related transaction, and implementation of appropriate action to protect the Company from potential conflicts of interest.

• (u) The Committee will, if required, prepare a report for the inclusion on the Company’s proxy statement for its annual meeting of stockholders describing the Committee’s structure, its Members and their experience and education. The report will address all issues then required by the rules of the regulatory authorities.

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Canagold Resources Ltd. (formerly, Canarc Resource Corp.)

• (v) Review and approve the Company’s interim financial statements and related Management’s Discussion & Analysis (“MD&A”), including the impact of unusual items and changes in accounting principles and estimates.

• (w) Review the Company’s compliance with regulatory and statutory requirements as they relate to financial statements, tax matters, and disclosure of financial information.

• (x) Report regularly to the Board on the fulfillment of its duties and responsibilities.

7. COMPLAINT PROCEDURES

The Committee shall establish procedures for:

• (a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters;

• (b) the confidentiality, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters;

• (c) ensuring that significant findings and recommendations made by management and the external auditor are received and discussed on a timely basis;

• (d) the review of policies and procedures in effect for considering officers’ expenses and perquisites; and (e) the performance of other oversight functions as requested by the Board.

The Committee must periodically review such procedures to ensure they are effective and ensure compliance by the Company with such procedures.

8. LIMITATIONS ON COMMITTEE’S DUTIES

While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. These are the responsibility of management and the independent auditor. Nor is it the duty of the Committee to assure compliance with the laws and regulations.

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