Elysee Development Corp. — Interim / Quarterly Report 2020

Jul 31, 2020

FORM 51-102F3 Material Change Report Section 7.1 of National Instrument 51-102 Continuous Disclosure Obligations

Item 1. Name and Address of Company

Elysee Development Corp. 2300-1066 West Hastings Street Vancouver, B.C. V6E 3X2

Item 2. Date of Material Change July 28, 2020

Item 3. News Release

The news release was disseminated on July 28, 2020 through the facilities of Newsfile and was SEDAR filed with the securities commissions of Alberta and British Columbia.

Item 4. Summary of Material Change

On July 28, 2020 Elysee Development Corp. announced its unaudited financial results for the three and six month periods ended June 30, 2020. All dollar amounts are in Canadian funds.

Highlights of the results for the three months ended June 30, 2020 (Q2 2020) include:

• Net income increased to $4,804,154 ($0.18 per share) in Q2 2020 from a loss of $4,424,627 ($0.16 per share) during the three months ended March 31, 2020 (Q1 2020);

• Net earnings for the six months ended June 30, 2020 were $379,527 ($0.01 per share) as compared to $703,064 ($0.03 per share) during the comparable period a year prior; and

• Net Asset Value per share remained stable at $0.56 per share at June 30, 2020, notwithstanding payment of a cash dividend of 2 cents per share in Q1 2020.

As at June 30,2020 the fair value of the company's investments in marketable securities was $10,256,245 as compared with $10,260,554 as at December 31, 2019. Cash and cash equivalents at June 30, 2020 totaled $1,723,804 as compared to $1,919,243 at December 31, 2019. The Company’s only debt was comprised of trade payables of $13,031 as of June 30, 2020.

To conserve cash that Elysee can deploy for investment purposes, ongoing monthly management and director’s fees were reduced as of April 1, 2020. The board of directors has also determined it would be prudent to forego the discretionary interim dividend at this time but remains committed to maintaining its annual dividend payment to shareholders at the end of year, subject to market conditions.

Item 5. Full Description of Material Change

On July 28, 2020 Elysee Development Corp. announced its unaudited financial results for the three and six month periods ended June 30, 2020. All dollar amounts are in Canadian funds.

Highlights of the results for the three months ended June 30, 2020 (Q2 2020) include:

• Net income increased to $4,804,154 ($0.18 per share) in Q2 2020 from a loss of $4,424,627 ($0.16 per share) during the three months ended March 31, 2020 (Q1 2020);

• Net earnings for the six months ended June 30, 2020 were $379,527 ($0.01 per share) as compared to $703,064 ($0.03 per share) during the comparable period a year prior; and

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• Net Asset Value per share remained stable at $0.56 per share at June 30, 2020, notwithstanding payment of a cash dividend of 2 cents per share in Q1 2020.

To conserve cash that Elysee can deploy for investment purposes, ongoing monthly management and director’s fees were reduced as of April 1, 2020. The board of directors has also determined it would be prudent to forego the discretionary interim dividend at this time but remains committed to maintaining its annual dividend payment to shareholders at the end of year, subject to market conditions.

As at June 30,2020 the fair value of the company's investments in marketable securities was $10,256,245 as compared with $10,260,554 as at December 31, 2019. Cash and cash equivalents at June 30, 2020 totaled $1,723,804 as compared to $1,919,243 at December 31, 2019. The Company’s only debt was comprised of trade payables of $13,031 as of June 30, 2020.

As of June 30, 2020 the most significant publicly traded investments held by Elysee were Kirkland Lake Gold Inc., Alexco Resource Corp., Gold Terra Resource Corp., Reyna Silver Corp. and Wesdome Gold Mines Ltd.

During the six-month period ended June 30, 2020 the Company repurchased 167,000 of its shares at a total cost of $54,350 pursuant to a Normal Course Issuer Bid that was renewed for another year on May 9, 2020. These shares were returned to treasury and cancelled. As of June 30, 2020 there were 26,895,613 shares outstanding.

On June 30, 2020 Elysee’s net asset value (“NAV”) was $0.56 per share. NAV is a non-GAAP (generally accepted accounting principles) measure calculated as the value of total assets less the value of total liabilities divided by the total number of common shares outstanding as at a specific date. For the purpose of this calculation, share purchase warrants held by Elysee were valued using the Black-Scholes model calculation, as reported in our annual and quarterly financial statements. The term NAV does not have any standardized meaning according to GAAP and therefore may not be comparable to similar measures presented by other companies. There is no comparable GAAP measure presented in Elysee’s financial statements and thus no applicable quantitative reconciliation for such non-GAAP financial measure. The Company believes that NAV can provide information useful to its shareholders in understanding its performance, and may assist in the evaluation of its business relative to that of its peers.

The audited Financial Statements and Management Discussion and Analysis are available for viewing on SEDAR and at www.elyseedevelopment.com.

Item 6. Reliance on subsection 7.1(2) or (3) of National Instrument 51-102 Item 7. Omitted Information N/A

N/A

Item 8.

Executive Officer

Guido Cloetens Telephone: (778) 373-1562 Item 9. Date of Report July 31, 2020

Caution Regarding Forward-Looking Statements

This news release contains certain forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from results contemplated by the forward-looking statements. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and should not place undue reliance on such forward-looking statements. The Company does not undertake to update any forward-looking statements, oral or written, made by itself or on its behalf, except as required by applicable law.