Sylla Gold Secures Loans for Exploration and Working Capital

Sylla Gold Corp. (TSXV: SYG) has announced that it has issued unsecured non-interest bearing promissory notes (the "Promissory Notes") in the aggregate of $97,500 (the "Principal Amount") to arm's length and non-arm's length creditors of the Company (collectively, the "Creditors"). The Promissory Notes are payable upon receipt of a demand notice by the holder and the Principal Amounts were used by the Company for general working capital purposes.

The issuance of the Promissory Notes constitutes a related party transaction within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") as certain Creditors are directors and/or officers of the Company. The Company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(b) and 5.7(1)(a) of MI 61-101, as the Company is not listed on a specified market and the Principal Amount of the Promissory Notes held by the insiders do not exceed 25% of the market capitalization of the Company in accordance with MI 61-101. The Company did not file a material change report more than 21 days before the issuance of the Promissory Notes as the Company wished to close on an expedited basis.

The Company's financial health is already in a precarious state, with negative shareholder equity of -$1.6M and total liabilities of $1.6M, which is significantly higher than its total assets of $29.2K. This means that the Company has a debt-to-equity ratio of -6.2%, indicating a high level of leverage. The loans may provide short-term relief for Sylla Gold's financial health, but they also increase the Company's leverage and expose it to long-term financial risks if it is unable to generate sufficient cash flow to repay the loans.

Sylla Gold's strategic objectives and growth plans are focused on the exploration, acquisition, and development of gold properties in West Africa. The Company's primary asset is the Niaouleni Gold Project, which consists of 4 permits covering 17,200 hectares located in the Koulikoro region of southwest Mali, West Africa. The Company has been actively exploring and drilling the Niaouleni Gold Project, with a total of 57 reverse circulation (RC) drill holes totalling 6,754 m completed as of September 16, 2022.

The expected use of funds from these loans aligns with Sylla Gold's strategic objectives and growth plans, as the Company has stated that the net proceeds raised under the Offering will be used for the exploration and advancement of the Company's Niaouleni Gold Project and for general corporate and working capital purposes. This indicates that the Company is utilizing the funds to support its ongoing exploration activities and to maintain its operations while it continues to develop its gold properties in West Africa.

In conclusion, the loans issued by Sylla Gold Corp. provide short-term relief for the Company's financial health, but they also increase the Company's leverage and expose it to long-term financial risks if it is unable to generate sufficient cash flow to repay the loans. The expected use of funds from these loans aligns with Sylla Gold's strategic objectives and growth plans, as the Company is utilizing the funds to support its ongoing exploration activities and to maintain its operations while it continues to develop its gold properties in West Africa.