BTQ AND SONORA PROVIDE TRANSACTION UPDATE

/NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./ 

VANCOUVER, BC, Dec. 6, 2022 /CNW/ - Sonora Gold & Silver Corp. (TSXV: SOC) (the "Company" or "Sonora") wishes to provide an update to its previously announced transaction with BTQ AG ("BTQ") (the "Transaction"). 

Update on Sonora Financing

The Company is pleased to announce that it has closed three tranches of its subscription receipt ("Subscription Receipts") financing previously announced December 31, 2021 (the "Sonora Financing") and has issued 18,001,250 Subscription Receipts for aggregate gross proceeds of $7,200,500. The gross proceeds are being held in escrow by an escrow agent in accordance with the terms of an escrow agreement (the "Escrow Agreement") between the Company and the escrow agent and will be released to the Company upon satisfaction of the Escrow Release Conditions (as described below). Upon satisfaction of the Escrow Release Conditions, and subject to certain adjustments, each Subscription Receipt will, for no additional consideration, automatically be converted, without further action on the part of the Subscription Receipt holders, into one (1) common share of the Company, as constituted following the completion by the Company of the consolidation of its common shares on a ten (10) for one (1) basis. In connection with the closing of the Sonora Financing, the Company will pay an aggregate of $93,175 in cash and issue 232,936 warrants to certain finders.

Transaction Update

The Company and BTQ are continuing to work together to complete the requisite filings and submissions required to obtain acceptance from a recognized exchange of the Transaction and have completed an initial filing with the NEO Exchange Inc. (the "NEO"). The Company and BTQ anticipate providing all materials required by the NEO in connection with the transfer of the listing of the common shares of the Company to the NEO in the first quarter 2023.

The Company, BTQ and certain shareholders of BTQ have also entered into amending agreements to the share exchange agreement entered into among the Company, BTQ and certain shareholders of BTQ (the "Share Exchange Agreement"), extending the outside date for the completion of the Transaction to February 28, 2023.

Corporate Update – BTQ

BTQ is happy to announce that the company has received government approval for the establishment of a branch office in Taiwan. While BTQ initially set up a representative office in 2021, its Taipei operations have grown considerably since then, and the transition to a branch office structure is the logical next step for the company. BTQ now has an office in the heart of Taipei's Zhongzheng district, and registering as a branch office of the parent company has expanded the scope of available business activities. By setting up a branch office in Taipei, BTQ has deepened its commitment to building next generation encryption technology within Taiwan's world-class semiconductor ecosystem, with an ever-growing IP portfolio generated by Taiwan's market leaders in the field of post-quantum cryptography. With additional offices in Liechtenstein and collaborations with high-level research institutions including Taiwan's ITRI, BTQ is now poised to take the lead in bringing quantum secure technology to the global market.

In addition to securing our branch office, BTQ has been co-organizing the PQC Standardization and Migration Workshop collocated with the Asiacrypt 2022 conference in Taipei. This workshop will feature world-class speakers from the National Institute of Standards and Technology of the United States, Samsung, NXP Semiconductors and other top research institutes regarding the developments and integration of post-quantum cryptography in digital infrastructure. Dr. Po-Chun Kuo, BTQ's CTO will be presenting the theory behind PQScale, BTQ's post-quantum scaling solution for blockchains and similar applications based on its proprietary aggregate signature technology. In addition, Dr. Chen-Mou Cheng will be showcasing Keelung, BTQ's compiler and domain-specific language embedded in Haskell, capable of significantly accelerating the development of zero-knowledge cryptography applications across a wide variety of scenarios. Dr. Chen-Mou Cheng will also be speaking at the Hon Hai Technology Group (Foxconn) NExT Forum on Quantum Computing, dedicated to quantum communication technology and its applications. It will cover topics including quantum communication theory, quantum hardware implementation, quantum key distribution, and post-quantum cryptography.

Trading of the Company Shares

Trading in the common shares of the Company has been halted in connection with the announcement of the proposed Transaction. The Company expects that trading will remain halted pending closing of the Transaction, subject to the earlier resumption upon acceptance of the Transaction by a recognized exchange, the filing of required materials and, among other things, the completion of the Sonora Financing which will follow the completion or waiver of certain escrow release conditions thereof (the "Escrow Release Conditions"), which include the satisfaction and/or waiver of the conditions to the Transaction. If the Escrow Release Conditions are satisfied or waived prior to the outside date for the Transaction, as such date may be amended by the Company and BTQ (the "Escrow Deadline"), the proceeds from the Sonora Financing, including those proceeds raised in additional tranches, if any, will be released to the Company.

ON BEHALF OF THE BOARD OF DIRECTORS

Ken Churchill
President & CEO, Director

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

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, as amended (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.

Completion of the Transaction is subject to a number of conditions precedent, including but not limited to, the approval of a recognized exchange, receipt of necessary shareholder approvals and the completion of the Consolidation and the Sonora Financing (as such terms are defined in the news release of the Company dated December 31, 2021). Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular or other disclosure document to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. The TSXV has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.

Forward Looking Information

Certain statements herein contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include but are not limited to statements or information with respect to: the business plans of the Company, BTQ and the company resulting from the completion of the Transaction ("Resulting Company"); the terms and conditions of the Sonora Financing; the anticipated listing date of the common shares of the Company on the NEO; and the terms and conditions of the Transaction, including receipt of stock exchange and shareholder approval. Forward-looking statements or information often can be identified by the use of words such as "anticipate", "intend", "expect", "plan" or "may" and the variations of these words are intended to identify forward-looking statements and information.

The Company and BTQ have made numerous assumptions including among other things, assumptions about general business and economic conditions, the development of post-quantum algorithms and quantum vulnerabilities, and anticipated costs and expenditures of the Transaction. The foregoing list of assumptions is not exhaustive.

Although management of the Company and BTQ believe that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that forward-looking statements or information herein will prove to be accurate. Forward-looking statements and information are based on assumptions and involve known and unknown risks which may cause actual results to be materially different from any future results, expressed or implied, by such forward-looking statements or information. These factors include: risks relating to the Sonora Financing and the availability of financing for the Resulting Company; risks relating to the receipt of all requisite approvals for the Transaction, including the approval of shareholders and the stock exchange; risks associated with the anticipated listing date of the common shares of the Company on the NEO; risks associated with the business of BTQ given its limited operating history; business and economic conditions in the cryptocurrency and post-quantum computing industries generally, including the economic conditions surrounding the bankruptcy filing of FTX on or about November 11, 2022; the supply and demand for labour and cryptocurrencies; changes in cryptocurrency prices; unanticipated events related to cryptocurrency regulatory and licensing matters and environmental matters; changes in general economic conditions or conditions in the financial markets; changes in laws (including regulations respecting cryptocurrencies); risks related to the direct and indirect impact of COVID-19 including, but not limited to, its impact on general economic conditions, the ability to obtain financing as required, and causing potential delays to research and development activities; and other risk factors as detailed from time to time. The Company and BTQ do not undertake to update any forward-looking information, except in accordance with applicable securities laws.

SOURCE Sonora Gold & Silver Corp.

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