Gold Basin Resources Corporation Directors' Circular

20.10.2025  |  The Newswire

THE BOARD OF DIRECTORS IS RECOMMENDING THAT SHAREHOLDERS REJECT

THE UNSOLICITED OFFER BY CANEX Metals Inc. TO ACQUIRE ALL OF

THE ISSUED AND OUTSTANDING COMMON SHARES OF Gold Basin Resources Corp.

October 20 - Vancouver, British Columbia: Gold Basin Resources Corporation ("Gold Basin" or the "Company") is a reporting issuer or equivalent in the provinces of British Columbia, Alberta and Ontario, and files its continuous disclosure documents and other documents with the securities regulatory authorities of those provinces. Such documents are available through the SEDAR+ website at www.sedarplus.ca. The principal market for the trading of the common shares of Gold Basin (the "Gold Basin Shares") is the TSX Venture Exchange (the "TSX-V") where the Gold Basin Shares are listed under the symbol "GXX". Trading of the Gold Basin Shares is currently halted, and the Company is subject to a cease trade order imposed by the British Columbia Securities Commission on May 6, 2025.

NOTICE TO UNITED STATES SHAREHOLDERS

The tender offer referred to herein is made for the securities of a Canadian issuer and while the offer is subject to Canadian disclosure requirements, investors should be aware that these requirements are different from those of the United States.

The enforcement by investors of civil liabilities under the United States federal securities laws may be affected adversely by the fact that Gold Basin is incorporated under the laws of the Province of British Columbia, Canada and is located in Vancouver, British Columbia, Canada, that all of its directors are not United States residents and that all or a substantial portion of the assets of the Company and said persons may be located outside of that country.

1. DIRECTORS' CIRCULAR

This Directors' Circular (the "Circular") is issued by the board of directors (the "Board") of Gold Basin Resources Corporation ("Gold Basin" or the "Company") in connection with the offer (the "Offer") dated August 28, 2025 by CANEX Metals Inc. ("CANEX" or the "Offeror") to acquire all of the issued and outstanding common shares of Gold Basin (the "Gold Basin Shares") including any Gold Basin Shares that may become outstanding on the exercise, conversion or exchange of any convertible securities of the Company exercisable for or convertible into Gold Basin Shares if exercised, converted or exchanged in a sufficient time prior to the expiry time of the Offer, being 5:00 p.m. (Toronto time) on December 12, 2025 unless extended, accelerated or withdrawn by the Offeror (the "Expiry Time"). Pursuant to the Offer, each holder of Gold Basin Shares (a "Shareholder") whose Gold Basin Shares are taken up by the Offeror would be entitled to receive, in respect of his, her or its Gold Basin Shares, 0.592 of a common share in the capital of CANEX ("Offeror Shares"). The Offer will be open for acceptance until the Expiry Time.

Reference is made to the Offeror's take-over bid circular in connection with the Offer dated August 28, 2025 (the "Offer Circular") for additional details of the terms and conditions of the Offer.

2. DIRECTORS' REJECTION RECOMMENDATION

The Board consists of Messrs. Grant Duddle (Chair) and Charles Straw.

The Board, in consultation with its independent advisors, has carefully reviewed and considered the Offer, and does not consider the Offer to be in the best interests of Shareholders. For the reasons set out below under "REASONS FOR REJECTION RECOMMENDATION", the Board unanimously recommends that Shareholders REJECT AND DO NOT TENDER their Gold Basin Shares to the Offer. Any Shareholder who has already tendered his, her or its Gold Basin Shares to the Offer should WITHDRAW those Gold Basin Shares, in accordance with the procedures outlined in the Offer Circular under "The Offer - 8. Right to Withdraw Deposited Shares".

Shareholders should nevertheless consider the Offer carefully and come to their own decision to accept or reject the Offer. Shareholders who are in any doubt as to how to respond to the Offer should consult their investment dealer, lawyer or other advisor.

3. REASONS FOR REJECTION RECOMMENDATION

The Board is recommending that Shareholders REJECT the Offer for the following reasons:

• The Board is of the view that the Company's existing course of business, including the continued development of the Gold Basin Project (as defined below), is in the best interests of the Company and Shareholders in the long-term.

• Technical due diligence of CANEX's Gold Range Project in Mohave County, Arizona (the "Gold Range Project") including a site visit by management and its advisors, was previously undertaken, and the Board believes that the potential for the discovery of a sizable oxide gold deposit on the Gold Range Project property is unlikely when compared to the potential of the Gold Basin Project. As such, the Board does not consider that the Gold Range Project has merit for future expenditure.

• The Board is deeply concerned about certain misrepresentations presented by the Offeror in the Offer Circular, which have been presented as reasons for Shareholders to tender to the Offer. The Company is in contact with the Offeror in respect of these misrepresentations, which are described in greater detail below under "ADDITIONAL INFORMATION AND CORRECTION OF MISLEADING STATEMENTS IN THE OFFER CIRCULAR".

• The Board is concerned with the excessive conditionality of the Offer, and is concerned that in light of such conditionality, it is not a bona fide, actionable proposal capable of proper consideration by Shareholders. For example:

  • The Offeror states that it cannot waive the CTO Revocation Condition (as defined in and described in the Offer Circular), but even this mandatory condition, as drafted, does not point to an objective determination - instead, it entails a nebulous requirement that the Offeror determine "in its reasonable judgment" that the terms and conditions revoking the Cease Trade Order (as defined below) won't make the bid "materially more costly".

  • There is a condition that 66?% of Gold Basin Shares, on a fully diluted basis, be tendered to the bid by the Expiry Time. This is well in excess of the statutory minimum of 50%, and is highly unlikely to be met, a fact known to the Offeror given its knowledge of the Shareholder base.

  • There is a condition that (in addition to tendering their Gold Basin Shares to the Offer) holders of at least 30% of the Gold Basin Shares shall have also entered into lock-up agreements by the Expiry Time. This appears to amount to an additional "walk right" for the Offeror, and it is unclear what additional benefits the lock-up agreements will provide.

  • There is a condition that the Offeror confirm "in its reasonable judgment" the use of proceeds and arm's length basis of the Charrua Capital Loan (as defined in the Circular), presumably necessitating action by the Offeror beyond reviewing what Gold Basin has publicly disclosed; this condition cannot feasibly be fulfilled, as the Company does not intend to, and has no obligation to, provide the Offeror with its internal documentation in order for the Offeror to make such a confirmation.

  • Finally, the Offeror conditions the Offer on the termination of the Helix Farm-In Agreement (as defined below). In the view of the Board, that is not a customary or commercially reasonable condition; instead, it appears to be a groundless attempt to force the Company to dismantle a duly executed and bona fide commercial arrangement as a prerequisite to providing Shareholders with any certainty that the Offer will be completed. The Company does not intend to terminate the Helix Farm?In Agreement, and there is no reasonable basis to compel it to do so.

Conditioning the Offer on events that the Offeror knows will not occur, or which are not likely to occur, renders the Offer difficult, if not impossible, to properly consider and suggests a tactical, rather than transactional, purpose. The Board is deeply concerned that the Offeror's unrealistic, vague and highly subjective conditions serve to benefit only the Offeror at the expense of Shareholders. The Offer appears to be a mere option that the Offeror could choose to exercise should it so desire upon expiry - an option which can be otherwise discarded for virtually any reason it chooses - being, as it appears to be, premised on conditions that are plainly not bona fide. These conditions also appear to undermine the statutory requirement that the Gold Basin Shares be taken up under an offer where the terms and conditions have been satisfied.

In light of the foregoing, the Board unanimously recommends that Shareholders REJECT AND DO NOT TENDER their Gold Basin Shares to the Offer. Any Shareholder who has already tendered his, her or its Gold Basin Shares to the Offer should WITHDRAW those Gold Basin Shares, in accordance with the procedures outlined in the Offer Circular under "The Offer - 8. Right to Withdraw Deposited Shares".

4. RECENT DEVELOPMENTS WITH RESPECT TO GOLD BASIN

The Board is not aware of any material developments in the affairs of Gold Basin since the date of its last filed unaudited financial statements dated September 30, 2024, other than as follows:

• OnFebruary 26, 2025, the Company announced that (a) the Option Agreement on the New Pass Property in Nevada has been terminated; (b) Mr. Stephen Pearce joined the Board and replaced Mr. Mark Lotz as Chief Financial Officer and Corporate Secretary; and (c) Mr. Colin Smith resigned as Chief Executive Officer, and Mr. Straw was appointed as Interim Chief Executive Officer.

• OnApril 28, 2025, the Company announced that it had entered into a binding farm-in agreement (the Helix Farm-In Agreement") with Helix Resources Ltd. ("Helix") whereby Helix can earn a minority interest of up to 40% in the Gold Basin gold oxide project (the "Gold Basin Project"). Pursuant to the Helix Farm-In Agreement, Gold Basin will retain a minimum of 60% of the Gold Basin Project and remain as the operator. Helix will spend up to A$3 million over 2 years with the first A$1 million earning an initial 20% of the Gold Basin Project, with each additional A$1 million earning a further 10%, up to a maximum of 40%. Helix can elect to directly pay outstanding unpaid exploration costs as part of the earn-in. In addition, Helix and Gold Basin will establish a Joint Venture Committee comprising two members appointed by each, with Gold Basin appointing the Chairman of the Committee. Finally, Helix will also acquire a 1% net smelter royalty over the Gold Basin Project through the issuance of 150 million Helix shares, which are subject to escrow restrictions.

• On May 1, 2025, Anthony Balic resigned from the Board.

• OnMay 6,2025,theBritish Columbia Securities Commission issued a cease trade order against the Company for a failure to file certain continuous disclosure documents (the Cease Trade Order"). A halt in trading of the Gold Basin Shares was imposed by the Canadian Investment Regulatory Organization the next day.

• The Company's auditor, Manning Elliott LLP, resigned on June 28, 2025.

• CANEX obtained a partial revocation order of the cease trade order on August 18, 2025 for purposes of making the Offer, and trading in the Gold Basin Shares remains halted

• The Company's transfer agent, TSX Trust Company, resigned on August 21, 2025.

• Mr. Pearce resigned as a director and Chief Financial Officer and Corporate Secretary of the Company on September 25, 2025.

Except as may be disclosed in this Circular, there are no agreements entered into by Gold Basin in response to the Offer or any negotiation that is currently being undertaken by Gold Basin or is under way in response to the Offer that relates to or would result in:

(a) an extraordinary transaction such as a merger or reorganization involving Gold Basin or any subsidiary of Gold Basin;

(b) a purchase, sale or transfer of a material amount of assets by Gold Basin or any subsidiary of Gold Basin;

(c) a competing take-over bid;

(d) an issuer bid or tender offer for or other acquisition of securities by Gold Basin; or

(e) any material change in the present capitalization or dividend policy of Gold Basin.

5. CORRECTION OF MISLEADING STATEMENTS IN THE OFFER CIRCULAR

The Offer Circular contains numerous inaccuracies and misrepresentations in respect of the affairs of Gold Basin, and frames such inaccuracies and misrepresentations as reasons for Shareholders to tender to the Offer. These include misrepresentations related to the White Hills farm-in agreement and associated private mineral claims and leases (the "White Hills Project"), as well as misrepresentations related to the Helix Farm-In Agreement.

Misrepresentations Related to the White Hills Project

It is claimed in the Offer Circular that the acquisition of the White Hills Project by Helix occurred while the Company was "faced with strong shareholder support for a transaction with CANEX". That claim is false and misleading. The sale of the White Hills Project was announced on March 28, 2025, while the unsolicited "offer" by Mayfair Acquisition Corp. ("Mayfair") to acquire Gold Basin (the "Mayfair Offer") was announced just days earlier on March 20, 2025. Of note, the Mayfair Offer was not the formal commencement of a takeover bid - instead, it was merely an announcement of a nascent and vague intention to potentially launch such a bid at an unspecified point in the future. By Mayfair's own admission, no takeover bid would have been made without receipt of lock-up agreements from 30% of the Shareholders as well as 30% of the shareholders of CANEX, which were evidently not in hand, particularly given that as of CANEX's latest disclosure, only ~26% of the Shareholders are locked up under the Offer.

The Board cautions Shareholders that it is, at best, highly dubious to assert that the Mayfair Offer, or any other highly conditional event that preceded the Mayfair Offer, caused Messrs. Straw or Calvin Heron to effect the sale of the White Hills Project, within days of the Mayfair Offer being announced, in order to appropriate a corporate opportunity of the Company. On the contrary, commercially reasonable negotiations related to the sale of the White Hills Project had been ongoing for months prior to the Mayfair Offer, and such negotiations were entirely unrelated to the operations of the Company. In addition, the White Hills Project grounds lie outside the Company's oxide gold project area, a fact known to CANEX as its representatives are former directors of the Company, and therefore amounting to the advancement by CANEX of a deliberately misleading premise. The White Hills Project cannot reasonably be considered a corporate opportunity of the Company at all - instead, it is an earn-in joint venture that was entered into years ago between parties unrelated to Gold Basin, and on which Centric Minerals Management (USA) Inc. has spent a significant sum on exploration expenditure to further the provisions of the earn-in.

Misrepresentations Related to the Helix Farm-In Agreement

With respect to the Helix Farm-In Agreement, it is claimed in the Circular, among other things, that "[b]y conveying a material asset of the Company to a related party in the face of a take-over bid, the Helix Transaction also clearly constitutes an improper defensive tactic in contravention of National Policy 62-202 - Take-Over Bids - Defensive Tactics". That conclusion is flawed for numerous reasons.

First, the Helix Farm-In Agreement was properly considered by the directors of both of Gold Basin and Helix. Indeed, Board discussions, negotiations and resolutions were undertaken before any takeover bid could reasonably have been considered imminent. Therefore, the execution of the Helix Farm-In Agreement did not occur "in the face of" a take-over bid. Second, the implication by CANEX that Helix is not a bona fide purchaser for value is entirely without merit. Mr. Michael Povey is not an insider of the Company, and has not been so since October 25, 2024. The Helix Farm-In Agreement was negotiated entirely at arm's length and in a commercially reasonable manner in order to advance the Company's exploration efforts, consistent with the best interests of all Shareholders. Finally, as described above under "Misrepresentations Related to the White Hills Project", the Mayfair Offer was not even a take-over bid. Its existence at the time of the conclusion of the Helix Transaction (being April 28, 2025 - i.e., being over a month since the Mayfair Offer was announced without any formal action having been taken by Mayfair), had no impact whatsoever on the Company's views of the merits of the Helix Transaction for Shareholders, despite CANEX's assertions to the contrary.

6. ADDITIONAL INFORMATION

Change of Control

In the event that the Offer were to be completed, it is expected that it would constitute a "Change of Control Event" as defined in the consulting agreement between Gold Basin and Mr. Straw dated January 1, 2021 (the "Consulting Agreement"). If, during the period beginning one month before the Change of Control Event and ending on the first anniversary thereof, the Consulting Agreement is: (i) terminated by Gold Basin other than for cause or due to an automatic termination event, or (ii) terminated by Mr. Straw on at least 30 days' notice, then Gold Basin would be required to pay Mr. Straw any unpaid fees to the effective date of termination and, subject to Mr. Straw's resignation from all officer and director positions and the exchange of mutual full and final releases (including receipt of a duly executed release in a form satisfactory to Gold Basin, acting reasonably), would be required to pay a lump sum equal to 12 months of fees within 10 business days after receipt of such release. The foregoing summary is subject to the full terms of the Consulting Agreement, which is available for review on the Company's profile on SEDAR+ at www.sedarplus.ca.

The Board is not aware of any material fact or other matter concerning the securities of Gold Basin that has not been disclosed herein, or disclosed in the Offer Circular, or that has not been generally disclosed, that would reasonably be expected to affect the decision of the holders of Gold Basin Shares to accept or reject the Offer.

7. OWNERSHIP OF COMPANY SECURITIES BY ITS DIRECTORS, OFFICERS AND INSIDERS GOLD BASIN SHARES HELD BY DIRECTORS, OFFICERS AND INSIDERS

None of the directors or officers of Gold Basin, or to the knowledge of Gold Basin, any associate or affiliate of the directors, officers or

other insiders of Gold Basin, any associate or affiliate of Gold Basin, any insider of Gold Basin other than its directors or officers, or any person acting jointly in or concert with Gold Basin beneficially owns or exercises control or direction over any Gold Basin Shares, except as outlined in the table directly below. In addition, no Gold Basin Shares have been traded within the 6-month period preceding the date of this Circular by any such persons. Such persons have not accepted, and do not intend to accept, the Offer.

STOCK OPTIONS AND OTHER CONVERTIBLE SECURITIES HELD BY DIRECTORS, OFFICERS AND INSIDERS

During the two-year period preceding the date of this Circular, the stock options for Gold Basin Shares listed in the table below were issued to the current directors, officers or insiders of Gold Basin named therein. No other securities convertible into or exercisable for Gold Basin Shares were issued to the current directors, officers or insiders of Gold Basin within the two-year period preceding the date of this Circular.

8. HOLDINGS OF OFFEROR SECURITIES BY GOLD BASIN OR ITS DIRECTORS, OFFICERS AND OTHER INSIDERS

To the knowledge of Gold Basin after reasonable inquiry, as at the date of this Circular, no securities of the Offeror are held by Gold Basin, the directors or officers of Gold Basin, or by any associate or affiliate of Gold Basin or any such insider of Gold Basin, or by any person or company who beneficially owns, directly or indirectly, or exercises control or direction over, more than 10% of any class of equity securities of Gold Basin, or by any person or company acting jointly or in concert with Gold Basin.

9. RELATIONSHIP BETWEEN OFFEROR AND DIRECTORS AND OFFICERS OF GOLD BASIN

No current officers or directors of Gold Basin are also directors or officers of the Offeror or any subsidiary of the Offeror. In addition, no director or officer of Gold Basin and their associates and, to Gold Basin's knowledge after reasonable enquiry, any person who owns more than 10% of any class of equity securities of Gold Basin for the time being outstanding has any interest in any material transaction to which the Offeror is a party.

10. STATUTORY RIGHTS OF ACTION

Securities legislation in the provinces and territories of Canada provides security holders of Gold Basin with, in addition to any other rights they may have at law, one or more rights of rescission, price revision or to damages, if there is a misrepresentation in a circular or notice that is required to be delivered to those security holders. However, such rights must be exercised within prescribed time limits. Security holders should refer to the applicable provisions of the securities legislation of their province or territory for particulars of those rights or consult a lawyer.

11. APPROVAL OF DIRECTORS' CIRCULAR

The contents of this Circular have been approved, and delivery thereof has been authorized, by the Board.

12. CERTIFICATE

Dated: October 16, 2025

The foregoing contains no untrue statement of a material fact and does not omit to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made.

On Behalf of the Board of Directors

This is an important document that requires your careful review and consideration. Enquiries concerning the information contained in this document should be directed to Gold Basin Resources Corporation, Attention: Charles Straw, Interim Chief Executive Officer, President and Director at charles@goldbasincorp.com.

Copyright (c) 2025 TheNewswire - All rights reserved.