• Canagold’s potential has been crippled by decades of business and financial mismanagement at the hands of Mr. Bradford Cooke and the incumbent Board.

• It’s time to end 28 years of hibernation and value destruction. It’s time for material change at the Board to improve governance and to realize the true potential of New Polaris for the benefit of all shareholders. Sun Valley’s highly experienced and independent director nominees will provide much-needed oversight and guidance to advance the project.

• Mr. Cooke has rejected financing offers at significant market premiums from Sun Valley, even though Canagold’s treasury is almost empty. Instead, Mr. Cooke has been pursuing a strategy that would encumber the project with a second royalty and has started a needless and costly proxy fight out of a selfish interest to maintain control of Canagold.

Sunvalley Company DMCC (“Sun Valley”), a strategic and long-term focused investor of Canagold Resources Ltd (TSX: CCM) (“Canagold” or the “Company”), today set the record straight in response to Canagold’s press release on June 16, 2022, and announced its slate of three independent directors for election at Canagold’s annual and special meeting on Tuesday, July 19, 2022 (the “Meeting”).

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Sun Valley has been investing in Canagold since November 20, 2020, and currently beneficially holds 17.61% of the Company’s shares. Sun Valley has been and will continue to be deeply committed to the Company’s success for the benefit of all shareholders. We believe that Canagold’s potential has been crippled by decades of business and financial mismanagement at the hands of Mr. Bradford Cooke and other members of the board of directors (the “Board”), who are harming the Company out of a self-interest to maintain control – all at the expense of shareholders. We are not alone as other shareholders share our beliefs and back this action.

Mr. Cooke Rejected Multiple Premium Financing Offers to Maintain Control of Canagold

Contrary to Canagold’s claim, on June 15, 2022, Sun Valley offered the Company CAD $7.6 million in equity at a 20% premium above market price or a 60% premium on a flow-through basis. The premium is highly favourable to Canagold’s shareholders as it reduces dilution and adds support for a higher price. It would also fund the Company through the 2022 drilling season and advance the feasibility study at New Polaris, a project that has gone almost nowhere in 28 years, and enable all shareholders to benefit from the Company’s true potential.

However, Canagold has rejected the funding, is refusing to discuss it further, and is protecting Mr. Cooke’s entrenchment in the Company. Rather than accepting the premium investment, Sun Valley has discovered that the Company has been pursuing a strategy that would encumber the project with a second royalty. It is important for shareholders to understand that Canagold already has a royalty on net profits at New Polaris. Adding another royalty on top of the existing royalty when the project is still in the early exploration stage would destroy shareholder value. Canagold has omitted its plans from its circular. While we did not want a proxy fight, we are outraged by these value-destroying plans and will fight to protect the future potential upside for all shareholders.

When challenged on this plan on April 28, 2022, Mr. Cooke responded that a royalty “was exclusively a management decision” and implied that the opinion of his shareholders did not matter. We believe that a second royalty would depress the share price further and make raising funds for the feasibility study and mine construction significantly more difficult and expensive.

Mr. Cooke and the Board have a fiduciary duty to the Company and its shareholders. Shareholders should question why Mr. Cooke is actively pursuing a path that damages shareholder value while allowing him to maintain control.

It’s also important for shareholders to know that, according to public disclosures, between April 24, 2021 and April 22, 2022, Mr. Cooke’s share position was reduced by 2.3 MILLION shares, 44% of his shareholding. However, on June 16, 2022 – just one day after our most recent offer for a premium financing – Mr. Cooke began purchasing Canagold shares once again.

Mr. Cooke’s Proxy Fight at the Expense of Shareholders

Instead of focusing on turning the Company around and taking the premium financing we offered to advance New Polaris, Mr. Cooke and the Board are wasting money by forcing a proxy fight at the expense of shareholders to further entrenchment.

In fact, we understand that contrary to the press release dated June 14, 2022, Canagold has already put the New Polaris drill campaign on hold – jeopardizing this year’s drilling season – to focus on a proxy fight they forced and we did not want.

Other Examples of Mr. Cooke and the Board’s Business and Financial Mismanagement

• As of March 28, 2022, Canagold had just US$824,000 of cash on hand. It is short on money, cannot finish the drilling required and is wasting valuable time this drilling season, nor can they begin the feasibility study.
• Since listing on the Toronto Stock Exchange in 1994, Canagold investors have suffered an unconscionable 98% destruction of shareholder value. If an investor had given Mr. Cooke $100 on Canagold’s IPO, they will have less than $2 today. Meanwhile, the same investment in gold would be worth over $460 today. Mr. Cooke’s track record of over 23,000% underperformance to gold is one of the worst ever in the junior mining industry.
• While shareholders have seen their investment plummet, between 1994 and 2021, Mr. Cooke was paid over C$2.6 million in cash, and to date, has been granted millions of options.
• Despite the Company’s dismal performance, the Board has increased the 2021 executive compensation packages, with increases ranging from 173% to 355%, all while shares plummetted by 50%.

Additionally, for 2021, Mr. Cooke’s director fees increased a whopping 685% to $199,497 from $25,400 in 2020.

• Canagold’s Compensation Committee reviews the compensation of senior officers and management, and the Board provides approvals, without any formal objectives, criteria and analysis. Mr. Cooke sits on the Compensation Committee, contrary to good corporate governance practices.
• The Board has no skin in the game, with three of Canagold’s four directors holding a total of just 1% of the Company’s shares.
• Mr. Cooke has had multiple WITHHOLD recommendations from Institutional Shareholder Services Inc. (“ISS”), a leading and independent third-party proxy advisor (in 2004, 2005, 2006, 2011, 2012, 2013, 2019 and 2020).

On top of this laundry list of failures, now, at the 2022 Annual and Special Meeting, Canagold is asking shareholders approve an updated stock option plan to increase the maximum number of common shares available for issuance under the plan from 8,852,339 common shares to 17,311,919, representing 20% of the I/O as of June 6, 2022.

The revised stock option plan contains many problematic features that benefit the executives and the Board at the expense of shareholders. In fact, Canagold’s revised stock option plan contains two provisions that ISS believes warrants automatic opposition by shareholders. Sun Valley will vote AGAINST Canagold’s revised stock option plan.

Shareholders will have Real Leadership with Sun Valley’s Qualified, Independent and Diverse Nominees

Sun Valley’s nominees, who will be proposed at the Meeting, are Dr. Carmen Letton, Ms. Sofia Bianchi and Mr. Andrew Trow (each, a “Nominee” and together, the “Nominees”). These three nominees are highly experienced, respected industry leaders who will provide the much-needed independent oversight to put Canagold back on track. The proposed nominees will also bring diversity to the current all-male slate.

Dr. Carmen Letton

• Selected as one of the “100 Global Inspirational Women in Mining” in 2016 and 2018
• Mining engineer and mineral economist (PhD) with over 35 years of global mining exposure in the Americas, Australia, Asia, Europe and Africa
• Former Head of Resource Development Plan and Life Asset Plan (Asset Strategy Development) at Anglo American, and has held senior positions at BHP Billiton, Rio Tinto and Newmont
• Former non-executive director of Endeavour Mining Corporation plc and former non-executive director of Gold Fields Ltd.
• Diverse background in senior leadership roles in operations, business improvement, operational excellence and sustainable mining
• Extensive technical expertise in open pit and underground mines across multiple commodities and the many stages of asset development
• PhD Mineral Economics at University of Queensland and BEng (Mining)(Hons) at WA School of Mines, Kalgoorlie

Skills and Expertise: Strategy & Leadership, Metals & Mining, Operations and Business Improvement, Technical and Optimization, ESG – Corporate Governance and Integrated Sustainability.

Ms. Sofia Bianchi

• Most recently, Mr. Bianchi was the Chair of the Corporate Governance and Nominating Committee and a Member of the Audit, Technical and Remuneration Committees of Endeavour Mining Corporation
• Former Head of Special Situations and Member of the Investment Committee for Debt and Infrastructure at the UK government’s development finance institution: CDC Group plc
• Previously she was Head of Special Situations at BlueCrest Capital Management
• As Deputy Managing Director of the Emerging Africa Infrastructure Fund, she was a lead participant in establishing and running the fund, the first of its kind
• 13 years of board experience on multiple publicly listed and private companies
• Seasoned international finance professional with expertise in corporate governance, strategy and value creation
• Founding Partner of Atlante Capital Partners
• BA in Economics from the George Washington University and an MBA from The Wharton School

Mr. Andrew Trow

• Chartered Accountant with over 15 years of experience in financial and operational restructurings, fund management in special situations, private equity and debt
• Partner at Atlante Capital Partners
• Director at Insight Strategic Growth & Investment
• Former Investment Manager at BlueCrest Capital Management (UK) LLP, working extensively in managing financial and operational turn-arounds and sale processes across various sectors, with a focus on mining and energy
• Started his career at the Deloitte USA and South Africa offices
• BCom (Honors) in Chartered Accountancy from University of Port Elizabeth

Canagold’s False and Misleading Allegations Against Ms. Sofia Bianchi

In an attempt to further entrench themselves and to continue using Canagold as their personal property, Canagold falsely blames the bankruptcy of a TSX Venture Issuer on Ms. Bianchi.

• It’s important for shareholders to have the facts:
• Ms. Bianchi, as Head of the Special Situations team at the UK's development institution (CDC Group, now called British International Investment), was a nominee of CDC on the company's board during a phase of deep financial and operational restructuring
• The issuer and each of its subsidiaries entered into a support agreement with its two largest shareholders
• The support agreement set out an agreement amongst the parties whereby a third-party sales process would be conducted
• If that sales process did not result in a more favourable transaction, the parties agreed to initiate a proceeding pursuant to Division I, Part III of the Bankruptcy and Insolvency Act (Canada)
• In November 2020, the company announced the closing of the transaction after all of its operations had been sold pursuant to the planned, agreed and announced restructuring transaction; the Canadian entity was subsequently declared bankrupt
• The agreement was made to ensure the survival of the business and to save several thousand jobs

In addition to our highly-qualified director nominees, Sun Valley and our nominees work with several Canadian advisors who have a wealth of mining experience, notably Mr. Gordon J. Bogden.

Mr. Bogden has over 40 years in mining exploration and development, mining finance, capital markets, strategy, mergers and acquisitions advisory, and private equity. He is a former investment banker at CIBC and at several financial institutions.

Mr. Bogden is also a former director of IAMGold, Orvana Minerals, Royal Gold, NexGen Energy, Volta Resources, Canplats Resources, and several other TSX-listed mining companies. He is also a founding member of the Advisory Council of the Development Partner Institute (DPI), a past Chairman of the Canada Mining Innovation Council (CMIC), past CEO and director of Alloycorp Mining Inc. Gordon is currently a Senior Advisor and Advisory Board Director at Origin Merchant Partners, Chairman of Black Loon Group, Chairman of Allegiant Gold, and Chairman of the Advisory Board of Tamarack Mining Services.

Mr. Bogden’s experience with the First Nations of the Taku River where New Polaris is located, would be of great value for the development of the project.

Enough is enough. It’s Time for Material Change. It’s Time for a New, Action-Focused Plan to Advance New Polaris

Sun Valley has offered premium financing for the benefit of all shareholders and has a clear plan to advance New Polaris. Our highly experienced, independent director nominees can provide the much-needed oversight and guidance to advance the project as fast as reasonably possible.

Our aim is to:

• Immediately tender the feasibility study and start it this year. We expect the feasibility study to take approximately 18 months to complete, but we expect it would provide sufficient data to define the design parameters needed for permitting to begin within six months.
• Initiate the permitting process in Q2 2023.
• Save this year’s drilling season and continue drilling in 2022/23 to increase the resource base with a view to move inferred mineral resources to indicated mineral resources.

We believe the feasibility study will result in a steadily increasing share price, and once the permitting is near completion, we expect that the shares will revalue dramatically.

The Choice is Clear:

Additional Information

Canagold announced it will hold its Meeting on Tuesday, July 19, 2022. Sun Valley anticipates that its nominees will be considered for election at the Meeting or any adjournment(s) or postponement(s) thereof. The information contained in this press release does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable Canadian securities laws. Company shareholders are not being asked at this time to execute a proxy in favour of the Nominees. In connection with the Meeting, Sun Valley will file an information circular in due course.

Information in Support of Public Broadcast Solicitation

Notwithstanding the foregoing, Sun Valley has voluntarily provided in this press release the disclosure required under section 9.2(4) of National Instrument 51-102 - Continuous Disclosure Obligations (NI 51-102) and has filed a document (the "Document") containing the disclosure required under section 9.2(6) of NI 51-102 in respect of the Nominees in accordance with corporate and securities laws applicable to public broadcast solicitations. The Document is available under the Company's profile on SEDAR at www.sedar.com. Sun Valley is relying on the exemption under sections 9.2(4) and 9.2(6) of National Instrument 51-102 – Continuous Disclosure Obligations.

Sun Valley is not requesting that Canagold shareholders submit a proxy at this time. Once Sun Valley has commenced a formal solicitation of proxies in connection with the Meeting, any solicitation made by Sun Valley in advance of the Meeting is, or will be, as applicable, made by Sun Valley and not by or on behalf of the management of Canagold.

Sun Valley intends to solicit proxies in accordance with all applicable securities and corporate law requirements and, in connection therewith, intends to provide a form of proxy in due course that includes the names of the Sun Valley nominees to shareholders of Canagold. Upon commencement of a formal solicitation, proxies may be solicited by Sun Valley pursuant to an information circular sent to shareholders after which solicitations may be made by or on behalf of Sun Valley, by mail, telephone, fax, email or other electronic means as well as by newspaper or other media advertising, and in person by directors, officers and employees of Sun Valley, who will not be specifically remunerated therefore. Sun Valley may also solicit proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable corporate and securities laws, conveyed by way of public broadcast, including through press releases, speeches or publications, and by any other manner permitted under applicable Canadian laws. Sun Valley may engage the services of one or more agents and authorize other persons to assist in soliciting proxies on behalf of Sun Valley.

Sun Valley has retained Kingsdale Advisors (“Kingsdale”) as its strategic advisor and to assist Sun Valley in the solicitation of proxies. Sun Valley will pay Kingsdale fees currently estimated at up to C$100,000. All costs incurred for any solicitation are being borne by Sun Valley. While Sun Valley may be entitled to seek reimbursement under applicable law, Sun Valley will not seek reimbursement from Canagold for fees incurred in connection with a successful reconstitution of the Board.

Kingsdale’s responsibilities will principally include advising Sun Valley on governance best practices, where applicable, liaising with proxy advisory firms, developing and implementing shareholder communication and engagement strategies, and advising with respect to meeting and proxy protocol.

Once the Sun Valley has commenced a formal solicitation of proxies in connection with the Meeting, a registered shareholder of Canagold that gives a proxy may revoke it: (a) by completing and signing a valid proxy bearing a later date than the proxy being revoked and returning the newly completed and signed proxy in accordance with the instructions contained in the form of proxy; (b) by depositing an instrument in writing executed by the shareholder or by the shareholder’s attorney authorized in writing, as the case may be: (i) at the registered office of Canagold at any time up to and including the last business day preceding the day of the Meeting at which the proxy is to be used, or (ii) with the chairman of the Meeting on the day of the Meeting; or (c) in any other manner permitted by law. A non-registered holder of common shares of Canagold will be entitled to revoke a form of proxy or voting instruction form given to an intermediary at any time by written notice to the intermediary in accordance with the instructions given to the non-registered holder by its intermediary.

Canagold’s registered office address is 625 Howe Street, Suite 810, Vancouver, British Columbia, Canada, V6C 2T6.

Sun Valley will file this press release containing the information required by Form 51‐102F5 – Information Circular in respect of its proposed nominees. A copy of this Sun Valley press release may be obtained on Canagold’s SEDAR profile at www.sedar.com.

To the knowledge of Sun Valley, neither Sun Valley, nor any of its directors or officers, or any associates or affiliates of the foregoing, nor any of the Sun Valley Nominees or their respective associates or affiliates has: (a) any material interest, direct or indirect, in any transaction since the commencement of the Company’s most recently completed financial year or in any proposed transaction which has materially affected or would materially affect the Company or any of its subsidiaries; or (b) any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the Meeting, other than nominating the Nominees for election as a director at the Meeting, in the case of Sun Valley, and standing for election as a director in the case of each Nominee.

Advisors

Kingsdale Advisors is acting as strategic shareholder and communications advisor to Sun Valley. Wildeboer Dellelce LLP and Crawley Mackewn Brush LLP are acting as legal counsel to Sun Valley.

About Sun Valley

Sun Valley is a private equity firm focussed on the precious metals industry with portfolio companies and branch offices in the Americas, Europe and Asia. Sun Valley seeks to invest in sustainable development projects and operations with growth potential, low cash costs of production, or the operating flexibility to insulate against volatility in the commodity markets.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking information within the meaning of applicable securities laws. In general, forward-looking information refers to disclosure about future conditions, courses of action, and events. All statements contained in this press release that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the use of any of the words “anticipates”, “believes”, “expects”, “intends”, “plans”, “will”, “would”, and similar expressions are intended to identify forward-looking statements. These statements are based on current expectations of Sun Valley and currently available information. Forward-looking statements are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict, and are based upon assumptions as to future events that may not prove to be accurate. Sun Valley undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable securities legislation.

Disclaimer

The information contained or referenced herein is for information purposes only in order to provide the views of Sun Valley and the matters which Sun Valley believes to be of concern to shareholders described herein. The information is not tailored to specific investment objections, the financial situations, suitability, or particular need of any specific person(s) who may receive the information, and should not be taken as advice in considering the merits of any investment decision. The views expressed herein represent the views and opinions of Sun Valley, whose opinions may change at any time and which are based on analyses of Sun Valley and its advisors.

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