CKG Chesapeake Gold Corp

Alderley Edge Investments Ltd. (“Alderley Edge”), a private investment company, announces that it, together with certain other vendors (collectively, the “Vendors”), has entered into a share purchase agreement dated as of December 9, 2020 (the “Share Purchase Agreement”) with Chesapeake Gold Corp. (“Chesapeake”) for the purchase by Chesapeake from the Vendors of all of the issued and outstanding shares of Alderley Gold Corp., a private company whose assets include certain sulphide leaching technology held under license. Upon the completion of the purchase and sale of the Alderley Gold Corp. shares, Chesapeake will issue from treasury an aggregate of 10,000,000 common shares to the Vendors, of which 7,400,000 common shares (the “Consideration Shares”) will be issued to Alderley Edge. The transaction is expected to be completed on or about December 18, 2020 (the “Closing Date”).

The Consideration Shares will be issued into escrow, with release based on time and milestone conditions over seven years as follows, as well as upon certain other events including a change of control of Chesapeake (collectively, the “Escrow Release Provisions”):

1. 5% released on each of the first four anniversaries of the Closing Date;
2. 10% released on the earlier of (i) date of a positive feasibility study prepared on a material property owned or operated by Chesapeake or any of its affiliates, and (ii) the fifth anniversary of the Closing Date;
3. 30% released on the earlier of (i) duly certified commencement of construction of a mine on any such material property, and (ii) the sixth anniversary of the Closing Date; and
4. 40% released on the earlier of (i) duly certified commencement of commercial production on any such material property, and (ii) the seventh anniversary of the Closing Date.

On the Closing Date, Alan Pangbourne, who is a joint actor of Alderley Edge, will become the Chief Executive Officer and a director of Chesapeake. Chesapeake has granted Mr. Pangbourne 1 million stock options (the “Options”), subject to vesting conditions, in connection with his employment at an exercise price of $4.56 per common share.

Based on the number of outstanding Chesapeake common shares as of the date of the Share Purchase Agreement, and taking into account the anticipated issuance to the other Vendors of an additional 2,600,000 Chesapeake common shares on the Closing Date (which are also subject to the Escrow Release Provisions), and assuming no further issuances of Chesapeake common shares prior to such time, the 7,400,000 Consideration Shares will, upon issuance, represent 11.3% of the outstanding Chesapeake common shares on an undiluted basis, and the common shares subject to the Options will represent an additional 1.5% of the outstanding common shares on a partially-diluted basis (accounting for the exercise of the Options). Prior to the date of the Share Purchase Agreement, neither Alderley Edge nor Mr. Pangbourne owned or controlled any common shares or other securities of Chesapeake.

Alderley Edge is acquiring (subject to the Escrow Release Provisions) its interest in the Consideration Shares for long term investment purposes and will continue to monitor the business, prospects, financial condition and potential capital requirements of Chesapeake. Mr. Pangbourne is acquiring his Options in connection with his employment by Chesapeake. Depending on its evaluation of these and other factors, Alderley Edge and Mr. Pangbourne may from time to time in the future increase or decrease their direct or indirect ownership, control or direction over the common shares or other securities of Chesapeake through market transactions, private agreements, dilution through third party subscriptions from treasury, further option grants or option exercises, or otherwise.

For further information, including a copy of the corresponding report filed with Canadian securities regulators, contact:

Alan PangbourneAlderley Edge Investments Ltd.c/o Chesapeake Gold Corp.#201 – 1512 Yew StreetVancouver, British Columbia V6K 3E4 Tel: +1 604 731 1094