Gold Mountain Mining Corp. - M&A Activity 2020

FREEFORM CAPITAL PARTNERS INC. AND BAYSHORE MINERALS INCORPORATED ENTER INTO LETTER OF INTENT FOR QUALIFYING TRANSACTION

Not for distribution to United States news wire services or for dissemination in the United States.

Highlights:

Freeform Capital Partners Inc. announces that it has entered into an exclusive, non-binding letter of intent with Bayshore Minerals Incorporated, 100% owner of the past producing Elk Gold Project in British Columbia, Canada.
The Elk Gold Project is a high-grade gold project, previously owned by Equinox Gold Corp.
The mineral resource estimate at the Elk Gold Project, compiled in accordance with Canadian National Instrument 43-101, has been estimated as 2.699 Mt Measured and Indicated at 5.22g/t Au and 9.23g/t Ag for 454,000 AuEq ounces plus 0.454 Mt Inferred at 6.40g/t Au and 14.17g/t Ag for 95,000 AuEq ounces. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Metal equivalent grade is calculated by the formula: AuEq = ((Au_Cap41.80.96) + (Ag_Cap0.550.86))/(41.8*0.96).
A preliminary economic assessment on the Elk Gold Project that contemplates ramping up to steady-state production of 50,000 ounces per year resulting in a pre-tax NPV and post-tax NPV of $318 million and $191 million, respectively, using a discount rate of 5%. The life of mine strip ratio for the Elk Gold Project 34.9:1 and for the first three years of operations, Bayshore anticipates processing its mineralized material at a toll milling facility 67 km away. The PEA assumes processing mineralized material at the nearest facility. Other toll mills are 150, 240 and 260km’s respectively from the Elk Gold Project. Should Bayshore not be able to secure a toll milling contract with the closest facility, the economics of the Elk Gold Project may be materially impacted. The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA will be realized.
Metallurgical testing indicates high recoveries and product grades from the Elk Gold Project, including a historic 92% gold recovery with additional test work underway.
The Elk Gold Project provides exploration upside with near-term production optionality.

Vancouver, British Columbia– August 13, 2020 – Freeform Capital Partners Inc. (" Freeform ") (TSXV: FRM.P) announces that on August 5, 2020 it entered into an exclusive, non-binding letter of intent (the “ LOI ”) with Bayshore Minerals Incorporated (“ Bayshore ”). Bayshore is a BC-based gold/silver exploration and development company focusing on the development of at the Elk Gold Project (the “ Elk Gold Project ”), a past producing mine located 57 KM from Merritt in South Central British Columbia.

“Freeform’s board and management are pleased to deliver this opportunity to our shareholders. The Elk Gold Project has encouraging potential given its current resource, exploration upside and a path to 50,000 ounce per year production, all supported by a preliminary economic assessment. It is truly a unique opportunity, given the current climate in the precious metals space.” said Kevin Smith, Chief Executive Officer of Freeform.

“We are excited to combine the strengths of Freeform’s capital markets team with Bayshore’s mine development and operations experience. Bayshore continues to advance the development of the Elk Gold Project. Our geological contractor, HEG & Associates Exploration Services Inc., is currently on site reviewing Bayshore’s 127,069 meters of existing core samples and our library of pre-existing data. This

assessment will provide valuable information for an exploration program designed to expand our current resource and continue to develop the eight additional known mineralized zones.” said Ronald Woo, Chief Executive Officer of Bayshore.

A Preliminary Economic Assessment (the “ PEA ”) on the Elk Gold Project contemplates an initial 19,000 ounce per year project that ramps up to 50,000 ounces of annual production by Year 4. The pre and post tax NPV (5% discount rate) are $318M and $191M, respectively. The PEA, prepared on behalf of, and under the name of Freeform, will be filed Freeform’s SEDAR profile within 45 days of this announcement.

The following table summarizes the resource estimate at the Elk Gold Project used to support the PEA:

Classification	Tonnes	AuEq (g/t)	Au Capped g/t	Ag Capped g/t	AuEq (Oz)
Measured	385,000	6.25	6.18	6.20	76,000
Indicated	2,314,000	5.17	5.06	9.73	378,000
Measured + Indicated	2,699,000	5.33	5.22	9.23	454,000
Inferred	454,000	6.57	6.40	14.17	95,000

CIM definitions were followed for classification of Mineral Resources. Mineral Resources are not Mineral Reserves and have not demonstrated economic viability. The Resource Estimate is effective as of July 3, 2020.

The Resource Estimate includes both gold and silver assay. the formula used to combine the metals is: AuEq = ((Au_Cap41.80.96) + (Ag_Cap0.550.86))/(41.8*0.96)

Elk Gold Project Resource Estimate

The table below sets out the detailed results of the Mineral Resource estimate for Elk Gold Project. The effective date of the resource estimate is July 3, 2020 (the “ Resource Estimate ”).

Classification	Tonnes	Au Equivalent (g/t)	Au Capped (g/t)	Ag Capped (g/t)	AuEq (Oz)
*Elk Gold Pit-Constrained Resources*
*Cutoff Au Eq 0.5g/t*
Measured	380,000	6.24	6.16	6.21	75,000
Indicated	2,111,00 0	4.80	4.70	8.47	319,000
Measured + Indicated	2,491,00 0	5.02	4.93	8.13	394,000
Inferred	259,000	4.58	4.46	9.57	37,000
*Elk Gold Underground Constrained Resources*
*Cutoff Au Eq 5.0g/t*
Measured	5,000	7.48	7.42	5.70	1,000
Indicated	203,000	9.03	8.76	22.84	59,000
Measured + Indicated	208,000	8.99	8.73	22.43	60,000
Inferred	195,000	9.21	8.97	20.27	58,000

Classification	Tonnes	Au Equivalent (g/t)	Au Capped (g/t)	Ag Capped (g/t)	AuEq (Oz)
*Elk Gold Total Resources*
*Cutoff Au Eq 5.0g/t*
Measured	385,000	6.25	6.18	6.20	76,000
Indicated	2,314,00 0	5.17	5.06	9.73	378,000
Measured + Indicated	2,699,00 0	5.33	5.22	9.23	454,000
Inferred	454,000	6.57	6.40	14.17	95,000

CIM definitions were followed for classification of Mineral Resources. Mineral Resources are not Mineral Reserves and have not demonstrated economic viability. Results are presented in situ and undiluted.

Mineral resources are reported at a cut-off grade of 0.5 g/t Au for pit-constrained resources and 5.0 g/t for underground resources. The number of tonnes was rounded to the nearest thousand and the number of ounces of gold to the nearest hundred. The Resource Estimate includes both gold and silver assay. the formula used to combine the metals is: AuEq = ((Au_Cap41.80.96) + (Ag_Cap0.550.86))/(41.8*0.96) The Resource Estimate is effective as of July 3, 2020.

Details relating to data verification, key assumptions and parameters and methods used for the Resource Estimate are provided below.

Elk Gold Project Preliminary Economic Assessment

Qualification and Assumptions

The following section sets out the qualifications and assumptions behind the economic analysis supporting the PEA. The PEA envisages a conventional open pit mining operation. The first three years of operation are planned at 70,000tpa (200tpd) and employ toll milling at existing mill facilities. Starting in Year 4 of the mine plan, the mine expands to a 324,000tpa (900tpd) mine with an on-site processing facility.

The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA will be realized.

Existing Infrastructure

The Elk Gold Project is a past producing mine with much of the required surface infrastructure still in place that is required to re-start operations. The site is serviced by the all-season, four-lane highway 5C from either Kelowna or Merritt. An existing forest service road provides access to proposed open pits. Surface water management infrastructure around the proposed open pit is already in place including collection ditches and sumps. The stockpile pad where material will be placed prior to being shipped off-site for processing is in place as well as the sample preparation plant which is required for sampling material from the mine for assay. A laydown area is already in place for mobile equipment maintenance, fuel storage and office facilities.

Pit Optimization

A pit optimization analysis was carried out using the Lerch-Grossman algorithm which is industry standard for assessing the ultimate pit limits for an open pit mine. The parameters used in the pit optimization are detailed in the table below.

Item	Unit	Value
Au Price	US$/oz	1,361
Au Recovery	%	92
Au Selling Cost	%	2
NSR Royalty	%	2
MiningCost	US$/t	2
Processing and G&A Cost	US$/t milled	32
Pit Slope Angles	Overall degrees	45
Mining Dilution	%	Internal
Mining Recovery	%	100
StripRatio(est.)	Waste(t): Ore(t)	34.9:1
Processing Rate	tpd	900

The pit shell with a revenue factor of 0.96 was selected as the ultimate pit for the PEA mine plan and it contained 2.39M tonnes of material above the cut-off grade and 86.3M tonnes of material below the cutoff grade for a strip ratio of 34.9 waste (t) : ore (t). The average gold grade in material above cut-off was 5.49g/t.

There is no capitalized pre-stripping considered in the mine plan as the resource starts at surface and it is anticipated that plant feed material will be released shortly after mine operations begin. The initial waste rock mining cost before the first plant feed is released is captured in the mine Working Capital of $5M. Waste rock material movement required to release the planned annual plant feed material is captured in the material movement schedule and the cost associated with stripping the waste material is captured in the $255M of operating costs of the life-of-mine.

Detailed Mine Design and Pit Phasing

A detailed mine design was developed for the ultimate pit limits. The pit design was developing according to the pit design guidelines in the Health, Safety and Reclamation Code for Mines in BC. The ultimate pit design demonstrated that the material volumes from the ultimate pit shell were achievable when accounting for pit access ramps and slope configurations.

Interior pit phases were developed using optimized pit shells which used lower gold prices and therefore only targeted higher value areas of the deposit. Targeting higher value areas of the deposit allows for the operation to increase revenue and reduce costs early in the mine life which can improve the discounted cash flow and net present value of the project.

Rock Storage Facility Design

Rock below the cut-off grade of the operation will be stockpiled in a rock storage facility which has been designed west of the open pit. The facility is designed on a gentle sloping area within an existing forestry cut-block to minimize impact on in-tact ecosystems. The facility is designed in 20m lifts with 37° faces.

The overall slope of the facility is 26° and the total capacity is 84M tonnes assuming a loose density of 1.8t/m[3] .

Mine Schedule

The mine is scheduled to release 70,000tpa of plant feed for Years 1 to 3. In Year 4, the mine is planned to expand to 324,000tpa and to establish a 900tpd processing plant on site. The material movement that is proposed in the PEA is presented in the table below.

		Total	Jan '21	Jan '22	Jan '23	Jan '24	Jan '25	Jan '26	Jan '27	Jan '28	Jan '29	Jan '30
Calendar Days	(#)	3,652	365	365	365	366	365	365	365	366	365	365
Mineralize d material Mined	dmt (000's)	2,397	70	70	70	324	324	324	324	324	324	243
Waste Mined	dmt (000's)	83,617	2,056	1,940	2,358	3,003	4,041	13,749	14,126	17,075	16,492	8,777
Au	(g/t)	5.26	11.36	7.23	7.38	5.47	4.97	5.24	5.61	5.11	3.85	4.04
Ag	(g/t)	8.77	10.45	6.13	7.04	6.32	7.57	9.21	11.58	10.93	7.86	8.43
S	(%)	0.71	0.81	0.08	0.10	0.70	0.45	0.70	0.99	0.78	0.83	0.82
Strip Ratio	(w:o)	34.9	29.4	27.7	33.7	9.3	12.5	42.4	43.6	52.7	50.9	36.1
Au Mined	oz (000's)	406	25.6	16.3	16.6	57.0	51.9	54.7	58.5	53.3	40.1	31.6
Au Recovered	oz (000's)	373	23.5	15.0	15.3	52.4	47.7	50.3	53.8	49.1	36.9	29.1
Ag Mined	oz (000's)	677	23.5	13.8	15.9	65.9	78.9	96.0	120.7	113.9	81.9	66.0
Ag Recovered	oz (000's)	609	21.2	12.4	14.3	59.3	71.0	86.4	108.6	102.5	73.7	59.4

Mine Development Schedule

Year 1

The first year of mining includes two months of site preparation. The current year activities include developing the new water settling pond below the Wash Rock Storage Facility (“WRSF”), and associated collection ditches. It also includes stripping organic material, topsoil, and till from the initial footprint of the WRSF and open pit Phase 0. It also includes mobilizing the initial fleet of mobile equipment, modular office facilities, and explosives storage.

The remainder of Year 1 will be the initial year of mining production, including 70,000 tonnes of mineralized material shipped to the toll milling facility.

Years 2 and 3

The mine will continue to mine the initial phases of the open pit and ship 70,000 tpa of mineralized material to the toll milling facility. The mine will also initiate an Environmental Assessment process which is required to expand mine production in subsequent years, as well as apply for a mine permit amendment for the expanded mining rate. In Year 3 it is anticipated that construction will take place to build a 900 tpd mill on site.

Years 4 to 10

The mining rate will increase to 324,000 tpa of plant feed for the 900 tpd mill on site. Tailings material will be dewatered and comingled with non-mineralized rock in the WRSF, removing the requirement to construct a tailings storage facility. The mining rate will gradually increase over the mine life as the required strip ratio also increases.

Year 11

The final year of production mining will also include the initiation of major reclamation activities. The mine will prepare ahead of time for the ultimate reclamation and closure of the facility.

Year 12

Major mine site reclamation activities will be completed.

Major Mining Equipment

The production mining equipment will include conventional blasthole drills, excavators and rock haul trucks. The fleet required for the first three years of mining is limited due to the small scale of the operation at that period of time. The maximum fleet size over the life of mine is presented in the table below.

Equipment Type	No. of Units
250 mm dia. Rotary, Crawler Drill	2
5 m3Front Shovel	1
10 m3Front Shovel	2
136-ton Haul Truck	9
D10-class 17.3 ft blade	2
834H-class 15.2 ft blade	1
16H-class Grader	1
90-ton Water Truck	1

Mineral Processing

Toll milling will be employed over the first three years of the mine operations. There are a number of toll milling options within 260km of the Elk Gold Project and Bayshore is in active discussion will toll milling facilities which have expressed interest in and have the appropriate flow sheet and capacity for receiving and processing material from the Elk Gold Project.

Starting in Year 4 of the mine plan, there will be a 900tpd processing facility on site. The proposed flowsheet of the 900tpd facility is illustrated below and includes primary and secondary crushing, grinding, gravity concentration and bulk sulphide rougher and cleaner flotation to produce a gold-sulphide concentrate.

==> picture [588 x 278] intentionally omitted <==

Infrastructure

The infrastructure required for Years 1 to 3 of the mine plan is limited to a modular office facility, fuel storage, explosive storage and a pad for vehicle maintenance which will be constructed with run-of-mine rock. Initial power supply requirements are limited to generators already owned by Bayshore and potable water will be delivered to site by a local supplier. Sewage from on-site facilities will be collected by a contractor for disposal. Mine emergency response will have a dedicated vehicle equipped to response to any incidents in the operation. Upon expansion of the mine in Year 4, infrastructure will expand to include warehouse space and increased power generation and water supply to support the mineral processing facility.

Environmental Studies, Permitting and Social or Community Impact

Bayshore has completed numerous environmental baseline studies which were completed to support the application for a 200tpd mining permit in May 2020. That permitting process in ongoing and is expected to be finalized in Q4. Bayshore anticipates that it will require an Environmental Assessment Certificate and Mine Permit Amendment before the operation can expand to 900tpd.

As a part of ongoing project development, exploration activities and permitting processes, Bayshore has been engaged with numerous First Nation Bands and Associations. The Elk Gold Project is located in the traditional territory of the Nlaka’pamux and Syilx Nations.

Economic Analysis

Mine Operating Costs

The mine operating cost is assumed to be an owner-operated fleet of leased mining equipment. The cost of leasing is included in the operating cost. The operating cost was built from first principles as well as Antonio Loschiavo, P.Eng. and the Qualified Person who prepared the economics, using experience with similar sized operations. Unless otherwise stated, all costs are presented in Canadian dollars. The mining operation cost is broken down by activity in the table below:

Open Pit Mine Operating Unit Cost	LOM Cost ($ million)	Unit Cost ($/t mined)	Unit Cost ($/t processed)
Drilling	19.3	0.24	8.5
Blasting	38.3	0.46	16.4
Loading	43.7	0.52	18.7
Hauling1	108.4	1.28	46.1
Roads/Dumps/Support Equipment	22.2	0.26	9.3
General Mine/Maintenance	3.5	0.04	1.5
Supervision & Technical	19.9	0.23	8.3
Total Open Pit Operating Cost	255.4	3.03	108.6

These are haulage costs for hauling plant feed and waste material out of the pit.

The processing unit costs for the years when a toll mill is being employed are based on the known costs of the available toll mills in the area and with a profit margin applied for the mill operator.

Highway Haulage Costs

Haulage costs associated with toll milling for the first three years are estimated to be $7.37/tonnes for Years 1 to 3 and are captured in the Elk Gold Project Economics. The highway haulage cost is based on a haulage distance of 67 kilometers to a local toll mill. Bayshore is in advanced discussions with this mill and processing at this mill formed part of its application to amend its mine permit to allow small scale operations. The Qualified Person responsible for economics believes this to be reasonable within the context of the Elk Gold Project.

Mineral Process Operating Costs

Haulage costs associated with toll milling for the first three years are estimated to be $7.37/tonnes. When the 900tpd mill is commissioned in Year 4 of the mine plan, the operating cost is estimated to be $21.03/t milled. A breakdown of the operating cost is presented in the table below.

Expense Item	$/t of Process Feed
Labour	9.18
Power	5.22
Consumables & Supplies	1.78
Contingency (30%)	4.85
Total	21.03

General and Administrative costs were developed on an annual basis and include costs for administrative staff, supplies and mine rescue training and equipment. The total general and administrative cost is estimated to be $1.6M per year which equates to $4.96/t milled.

Mine Capital Costs

The Elk Gold Project is a past producing mine with existing infrastructure on site. The existing infrastructure, toll milling in Years 1 to 3 and a rental leasing of the production mining equipment meaning that there is no pre-production capital cost for such equipment. Capital cost of $6.9M will be allocated in Year 1 of operations. The initial capital includes modular office facilities, fuel storage, explosives storage, ancillary mobile equipment and establishing surface water management features for the rock storage facility. The rental of the mining equipment is considered a management decision to reduce overall capital and improve the economics of the Elk Gold Project. Since it is a life-of-mine rental lease equipment agreement there will be no residual purchase at the end of the lease and the costs are allocated to the annual operating expenditures and not capital expenditures.

The mine capital costs for initial operations (Year 1) and the mine expansion (Year 3) are included in the table below.

Item	Initial Capital ($ ‘000s)	Expansion Capital ($ ‘000s)	Total Cost ($ ‘000s)
Modular Office/Dry Facilities	100	50	150
Fuel Storage/Pumps	100	100	200
Explosives Magazines	40	75	115
Surface Water Management	250	300	550
RMSF Topsoil Salvage	100	250	350
Open Pit Topsoil Salvage	150	100	250
Access Road Resurfacing	20	-	20
AncillaryMobile Equipment	1,100	1,350	2,450
Initial Pit Dewatering	85	-	85
WorkingCapital	5,000	-	5,000
Total Mine Capital	6,945	2,225	9,170

Mineral Processing Capital Costs

In Year 3 of the mine plan, the mine will expand to 324,00tpa (900tpd) and will construct a processing facility on site. The capital cost of the purchase and construction of the mineral processing facility are estimated to be $23.8 million. The tailings material is anticipated to be dewatered and co-mingled with rock in the Rock Storage facility and no capital has been included for a tailings storage facility.

The capital cost to construct the mineral processing facility in Year 3 of the mine plan is broken down in the table below.

Item	Cost ($ million)
Direct Costs	11.6
Field/Construction Costs	4.1

Item	Cost ($ million)
EPCM	5.0
Working Capital	1.5
Contingency @ 25% of the Total Constructed Cost	1.6
Total	23.8

Owner’s costs

In addition to the operating and capital costs set out above, there are $13.5M in owners cost, payable over the next three years.

Item	Cost($,000)
Property payment	$9,0001
Reclamation Bond	$575
Technical Studies	$530
Environmental Studies	$150
Corporate costs	$450
Permitting	$2,500
Security	$300

Property payments are payable in three equal annual installments of $3,000,000 beginning in May 2021 $3,000,000.

The tables below further summarizes the basis for the PEA and the qualifications and assumptions made by the qualified person who prepared the economic analysis:

Base Case: $1,600/oz long-termgoldprice and an exchange rate of 1.35(CAD$/US$)	Base Case: $1,600/oz long-termgoldprice and an exchange rate of 1.35(CAD$/US$)
Gold Price	Long-term US$1,600
Exchange Rate	1.35
NPV@5% Pre-tax	$318 million
Netpresent value(NPV 5%)After-tax	$191 million
Year 1 owner’s costs	$4.5 million
Year 1 capital costs	$6.9 million
Expansion owner’s costs(Year 2-3)	$9.0 million
Expansion capital cost(Year 2-3)	$26.1 million
After taxpaybackperiod	6 months
All in sustainingcosts(AISC) per ouncegold	US$735 / troyounce
PEA life of mine(LOM)	10years
LOM metalproductiongold equivalent ounces	405,515 oz

Base Case: $1,600/oz long-termgoldprice and an exchange rate of 1.35(CAD$/US$)	Base Case: $1,600/oz long-termgoldprice and an exchange rate of 1.35(CAD$/US$)
LOM metal recoveredgold equivalent ounces	373,074 oz
LOM averagegold headgrade	5.26g/t
LOM average silver headgrade	8.78g/t

IRR Note: There is no pre-production capital for the Elk Gold Project. All capital costs of approximately $6.9M, are captured in Year 1 of operations, which results in a positive cashflow of $22.2M. To calculate the IRR, NPV is set to zero. Since there is no negative cashflow that precedes the positive cashflow, IRR is not calculable.

Additional PEA Parameters:
Gold Recovery	92%
Silver Recovery	90%
Gold Payable	97%
Silver Payable	90%
Gold TC/RC	$6.00/oz
Silver TC/RC	$0.50/oz
NSR Royalty	2%

Readers are cautioned that the PEA uses inferred mineral resources which are considered too speculative geologically to have economic value assigned to them. There is no guarantee that inferred resources will be converted to indicated or measured resources in the future.

PEA Sensitivities

The table below sets out a sensitivity analysis showing the effect the price of gold has on the Elk Gold Project’s net present value (“ NPV ”). The bold line shows the PEA’s base case.

Gold Price	Pre-tax NPV (5%) ($,000)	Post-tax NPV (5%) ($,000)
2200	543.2	325.2
2000	468.2	280.4
1800	393.3	235.7
1600	318.3	190.9
1400	243.3	144.9
1200	168.2	97.1

Summary of Proposed Transaction

The LOI sets out the proposed terms of a transaction whereby Freeform will acquire all of the issued and outstanding common shares of Bayshore by way of a three-cornered amalgamation (the “ Proposed Transaction ”). The LOI contemplates shareholders in Bayshore receiving one Freeform Share for every two and a half Bayshore shares held (the “ Consideration Shares ”). The precise terms of the Proposed Transaction will be incorporated into a definitive agreement (the “ Definitive Agreement ”) to be negotiated between Freeform and Bayshore. The parties have agreed to negotiate in good faith to reach the Definitive Agreement on or before September 30, 2020 (the “ Exclusivity Period ”). The Exclusivity Period provides both parties the opportunity to conduct legal, technical, and financial due diligence and negotiate the terms of the Definitive Agreement.

The Proposed Transaction is also conditional upon Freeform completing a financing to raise a minimum of $4,000,000 (the “ Freeform Financing ”). The terms of the Freeform Financing are expected to be finalized concurrently with the Definitive Agreement. The Resulting Issuer anticipates using the proceeds from the Freeform Financing to execute phase 1 of its exploration program, make a property payment to Equinox Gold Inc. and for general working capital purposes.

The completion of the Proposed Transaction is subject to the satisfaction of various other conditions, including but not limited to: (i) approval of the Proposed Transaction by the Bayshore shareholders; (ii) the satisfactory completion of due diligence by both parties; (iii) the receipt of all requisite consents, waivers and approvals for the Proposed Transaction, including the approval of the TSX Venture; and (iv) the absence of any material adverse change in the business, affairs or operations of either party.

Freeform cautions investors that entering into the LOI does not constitute an “Agreement in Principle” as defined in TSX Venture Exchange Policy 2.4 – Capital Pool Companies (“ Policy 2.4 ”) given that there are material terms to the Proposed Transaction that remain outstanding such as the terms of the Freeform Financing, the composition of the management and the board and the satisfactory completion of initial due diligence by both parties.

Upon entering into the Definitive Agreement, Freeform will disseminate a more comprehensive news release that will contain all the disclosure required under section 12.2 of Policy 2.4 (the “ Qualifying Transaction Press Release ”). It is expected that Freeform (following closing of the Proposed Transaction, referred to as the “ Resulting Issuer ”) will be listed as a Tier 2 Mining Issuer. The Proposed Transaction will be completed pursuant to, and in strict accordance with, corporate law requirements and available exemptions under applicable securities legislation. It is anticipated that the Consideration Shares will be subject to certain resale restrictions.

The Proposed Transaction is an arm’s length transaction and therefore will not require shareholder approval under Policy 2.4.

Directors Officers and Insiders

Following closing it is expected that the Resulting Issuer’s board and management team will be made up of directors and officers from both Bayshore and Freeform. Freeform and Bayshore are currently evaluating the best mix of individuals to ensure a mix of proper capital markets and operational experience. The directors, officers and insiders of the Resulting Issuer will be finalized concurrently with entering into the Definitive Agreement and will be set out in the Qualifying Transaction Press Release.

Sponsorship

The Exchange requires sponsorship of a Qualifying Transaction unless an exemption is available. The Company intends to apply for a waiver from the sponsorship requirements given the history of the Elk Gold Project and the strength of the Resulting Issuer’s board and management. There is no assurance that the Company will be able to obtain such a waiver.

Finder’s Fees

It is not anticipated that any finder’s fees will be paid in connection with the Proposed Transaction. Freeform may pay finder’s fees in connection with the Freeform Financing.

Mineral Resource Estimate Assumptions

Data Verification

The data that forms the basis for the Resource Estimate was verified by the Qualified Persons preparing the PEA using industry standard methods. Drill hole collar locations were confirmed with independent

surveyors’ using high precision GPS equipment. Analytical accuracy and precision are monitored using commercial standards, blanks, re-analysis of both coarse rejects and pulps, and re-analysis of 5% of pulps at an alternate laboratory. A review of all data inputs to the drilling database, both historical and recent, has allowed a sufficient level of confidence to include the drill database in the Mineral Resource estimate.

Key Assumptions and Parameters and Methods Used to Estimate Resources

Exploration Information

The Resource Estimate is based on data from 1,053 drill holes, of which 933 intersect one of the 14 modelled mineralized zones. There are a total of 17,253 gold and silver assays in the data set of which 4,204 were contained within the modelled zones. The number of composites is greater than the number of assays because the compositing process incorporated unsampled intervals into the composite population. The table below sets out the material drill hole and assay statistics used to support the Resource Estimate.

Zone	Assays	Composites
Vein 1000	48	121
Vein 1100	132	270
Vein 1200	134	251
Vein 1300	2,594	5,007
Vein 1400	492	866
Vein 1500	77	125
Vein 1700	27	63
Vein 2200	33	67
Vein 2400	63	113
Vein 2450	6	9
Vein 2500	487	759
Vein 2500	8	24
Vein 2600	49	118
Vein 2700	54	97
Total	4,204	7,890

Estimation Methodology and Parameters

The Resource Estimate is constrained by 14 wireframes for each of the modelled mineralized zone. The wireframes were built using the 0.5gpt composite cut-off grade.

Variography was carried out on the 1300, 1400 and 2500 veins which were the zones with sufficient samples to produce meaningful variograms. Because of similarity in orientation, variographic values for the 1300 vein were applied to the 1000, 1200, 1500 and 2200 veins. Similarily the variographic values for the 2500

vein were applied to the 1700, 2300, 2400, 2450, 2550, 2600 and 2700. The table below shows the continuity of mineralization required to support the Resource Estimate.

Name	Type	Sill	Range	Range	Range	Azimuth (°)	Dip (°)	Spin (°)
			Long	Median	Short
V1300_Au	Nugget	0.59	0	0	0	0	0	0
V1300_Au	Spherical	0.37	25	10	4	38	-66	0
V1300_Au	Spherical	0.05	1,000	535	38	180	72	0
V1400_Au	Nugget	0.28	0	0	0	0	0	0
V1400_Au	Spherical	0.65	220	29	3	223	35	0
V1400_Au	Spherical	0.07	1,000	147	2	302	61	0
V2500_Au	Nugget	0.82	0	0	0	0	0	0
V2500_Au	Spherical	0.15	464	210	2	113	12	0
V2500_Au	Spherical	0.03	749	249	34	283	45	0

Search ellipses were developed for each zone based on the drill hole spacing and orientation of the zone. Due to the variability of the strike and dip in the 1100, 1200 and 1300 zones, dynamic ellipses were used. The table below shows search ellipses used to support the resource estimate.

Name	Azimuth (°)	Dip (°)	Spin (°)	Major (m)	Median (m)	Minor (m)
V2700	160	-55	0	50	50	75
V2600	170	-55	0	60	40	20
V2550	170	-60	0	35	50	20
V2500	80	0	45	75	50	50
V2450	170	-55	0	50	25	10
V2400	170	-45	0	75	50	25
V2200	170	-20	0	50	40	25
V1700	170	-60	0	50	35	25
V1500	80	0	30	50	75	25
V1400	90	0	30	75	50	50
V1200	85	0	30	75	50	25
V1300	90	0	45	75	50	50
V1100	85	0	30	75	50	50
V1000	85	0	30	75	50	50

Gold and silver grades were interpolated into a single block model in a single pass. For a grade to be interpolated into a block it was necessary that a minimum of two and a maximum of eight composites be located within the volume of the search ellipse. A maximum of one composite per drill hole was allowed to ensure the geological continuity was demonstrated by requiring that each block was informed by a minimum of two drill holes.

Metal Equivalency

The Resource Estimate includes both gold and silver assay values and the combined value is expressed as a gold equivalency. The formula by which the two metals are combined is:

**AuEq = ((Au_Cap41.80.96) + (Ag_Cap0.550.86))/(41.8*0.96)**

The table below provides the metal equivalency calculation parameters.

Parameter	Unit	Value
Gold Grade	g/t	Variable
Silver Grade	g/t	Variable
Gold Price	US$/oz	1300.00
Gold Price	US$/g	41.80
Silver Price	US$/oz	17.00
Silver Price	US$/g	0.55
Recoveryof Gold	%	0.96
Recoveryof Silver	%	0.86

Mineral Resource Classification

Mineral resources were classified as Measured, Indicated or Inferred according to the criteria set out in the table below.

Classification on Category	Composites	Composites	Composites	Azimuth (°)	Dip (°)	Spin (°)	Major (m)	Median (m)	Minor (m)
	Min.	Max.	Max./Holes
Measured	8	8	1	0	0	0	25	25	25
Indicated	4	8	1	0	0	0	50	50	50
Inferred	2	8	1	0	0	0	75	75	75

Only material in the 1300 vein was allowed to be classified as measured because that is the only zone that has been explored from underground and has provided three-dimensional exposures of the mineralization as well as close-spaced testing by underground drilling.

Reasonable Prospect of Economic Extraction

The open pit portion of the resource estimate was constrained by an economic pit shell using the parameters described in the table below.

Parameter	Unit	Value
Gold	US$/oz	1,361
Gold	US$/g	43.76
Exchange Rate	US$:C$	0.74
Production Rate	t/d	900

Parameter	Unit	Value
MiningCost	$/t material	2.70
Processing + G&A + Trucking Costs	$/t mineralized material	26.00
RecoveryAu	%	92
NSR	%	2
SellingCost	%	2
Pit Slope	degrees	50

Legal, Political and Environmental risks

There are no known environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the mineral resource estimate.

Exploration Potential

The table below sets out the potential for Bayshore to add resources at the Elk Gold Project:

Zone	Tonnes	Grade(g/t)	Contained Au(Oz)
Siwash North	338,000 – 1,013,000	5.0 – 10.0	54,000 – 326,000
Gold Creek Zone	405,000–1,215,000	1.8–3.6	23,000–141,000
Lake Zone	405,000 – 1,215,000	1.3 – 2.6	17,000 – 102,000
South Zone	405,000 – 1,215,000	0.9 – 1.8	12,000 – 70,000
TOTAL	1,553,000 – 4,658,000	2.13 – 4.26	106,000 – 638,000

The size and concentration of exploration targets was determined based on the existing 3D drill hole data for each zone along with the structural similarities of each zone to the known Siwash North resource estimate.

Exploration targets are conceptual in nature, there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the targets being delineated as a mineral resource.

Metallurgical Testwork

A variety of metallurgical test programs have been carried out on mineralized material from the Elk Gold project since 1990. These programs have assessed a variety of flowsheets including whole mineralized material leaching, gravity concentration and sulphide flotation. This PEA envisages a flowsheet of gravity concentration followed by bulk sulfide flotation creating a high grade gold concentrate. The overall anticipated gold recovery is 92% with a concentrate grade of 114gpt au. Additional metallurgical test work is underway to refine the required grind size and metallurgical performance at the planned head grades.

Qualified Person

The foregoing technical information was approved by Grant Carlson, P.Eng., a Qualified Person, as defined under National Instrument 43-101 and the Chief Operating Officer for Bayshore.

The Preliminary Economic Assessment was prepared by the following Qualified Persons each of whom are independent of Bayshore and Freeform as defined under National Instrument 43-101:

The technical information relating to the PEA economics were prepared by Antonio Loschiavo P. Eng (AKF Mining Services Inc. and also responsible for the overall preparation of the PEA), and a Qualified Person as such term is defined under National Instrument 43-101 who is independent of both Bayshore and Freeform.

The technical information relating to the metallurgical test work was prepared by Kelly McLeod P.Eng (KMet Consultants Inc.), and a Qualified Person as such term is defined under National Instrument 43-101 who is independent of both Bayshore and Freeform.

The technical information relating to the resource estimate was prepared by Greg Mosher P. Geo (Global Mineral Resource Services) and a Qualified Person as such term is defined under National Instrument 43101 who is independent of both Bayshore and Freeform.

About Freeform

Freeform is a capital pool company governed by the policies of the TSX Venture Exchange. Freeform’s sole business is the identification and evaluation of assets or business with a view to completing a Qualifying Transaction with a company operating in the precious metals sector.

Additional Information

The Qualifying Transaction Press Release with further particulars relating to the Proposed Transaction, including further particulars of the Resulting Issuer, the Freeform Financing and the Resulting Issuer director, officer and insiders will follow in accordance with Policy 2.4. In addition, a summary of Bayshore’s financial information will be included in a subsequent press release.

All information contained in this press release with respect to Freeform and Bayshore was supplied, for inclusion herein, by the respective parties and each party and its directors and officers have relied on the other party for any information.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

Neither the TSX Venture Exchange nor its Regulation Services Provided (as that term is defined in the Policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information, please contact:

Kevin Smith, Chief Executive Officer [email protected] 604.309.6340

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this release are forward-looking statements which reflect the expectations of management, such as the size of the proposed offering. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future and include entering into a Definitive Agreement, completing the Proposed Transaction, economically extracting mineralized material from the Elk Gold Project as contemplated in the PEA, increasing the current resource or entering into production at the Elk Gold Project. Such

statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements including the risk that Bayshore and Freeform are unable to agree to the terms of a Definitive Agreement or that the assumptions behind the PEA will continue to be reasonable. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management’s current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect such as the successful completion of due diligence, the ability of Freeform to close the Freeform Financing, the ability of the Resulting Issuer to raise further capital, the Resulting Issuer obtaining all necessary permits to enter into production (including the receipt of a mine permit for a 200 tpd operation in Q4), the commodity prices being such that production at the Elk Gold Project is economical and the continued reasonableness of the assumptions set out in the PEA. Except as required by law, Freeform does not assume any obligation to release publicly any revisions to forward-looking information contained in this press release to reflect events or circumstances after the date hereof.

This news release does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful, including any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933 (the “1933 Act”) or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.