Exploits Discovery's Strategic Divestiture and Reinvestment in Gold Growth Opportunities

Exploits Discovery Corp. has executed a strategic divestiture of its central Newfoundland mineral claims to New Found Gold (NFG) in 2025, marking a pivotal shift in its portfolio focus toward gold projects in Québec and Ontario. This move, which received overwhelming shareholder approval (99.51% in favor), underscores the company's commitment to capitalizing on district-scale gold exploration opportunities while generating immediate and long-term value for stakeholders. By divesting non-core assets and reinvesting in high-potential gold projects, Exploits has positioned itself to leverage both operational growth and royalty upside, creating a compelling case for shareholder value creation.

Strategic Divestiture: Unlocking Liquidity and Focusing on Core Assets

The sale of Exploits' Newfoundland claims to NFG included 2,821,556 common shares of NFG and a 1.0% net smelter returns (NSR) royalty on select claims, with an additional 725,543 shares contingent on resolving legal disputes over 360 mineral claims according to the terms. This transaction provided Exploits with approximately $13 million in pro forma cash and NFG shares, significantly strengthening its balance sheet. The proceeds now enable the company to accelerate exploration on its four cornerstone gold projects-Fenton, Wilson, Benoist, and Hawkins-which collectively host 680,000 ounces of historical gold resources.

The divestiture aligns with a broader industry trend of junior explorers streamlining operations to focus on high-impact projects. By exiting the Newfoundland jurisdiction, Exploits has reduced operational complexity and redirected capital to regions with established gold belts in Québec and Ontario, where geological potential and infrastructure are well-documented.

Reinvestment in Gold Projects: District-Scale Potential and Exploration Commitments

Exploits' reinvestment strategy centers on advancing its Québec and Ontario projects through joint ventures and option agreements. In Québec, the company has secured rights to the Fenton, Wilson, and Benoist properties via a partnership with Cartier Resources Inc., requiring $700,000 in cash, 4 million shares, and $4.75 million in exploration expenditures over four years for the Wilson property alone. Cartier retains a 2.0% NSR on these properties, which Exploits can repurchase, adding flexibility to its royalty structure.

In Ontario, the Hawkins Gold Project-a 60-kilometer district-scale asset-has become a focal point. Exploits' agreement with Pavey Ark Minerals Inc. mandates $1 million in cash, $1 million in shares, and $2.5 million in exploration spending over five years. The project's proximity to historical gold deposits and its underexplored nature suggest significant upside for resource growth.

These reinvestments are not merely speculative; they are grounded in systematic exploration strategies. For instance, drill results at the Fenton property included 356 grams per tonne gold over 0.6 meters, highlighting the potential for high-grade discoveries. Such results, if expanded, could justify further capital allocation and attract joint venture partners, amplifying shareholder returns.

Royalty Upside and NFG's Exploration Progress

The 1.0% NSR royalty from the Newfoundland divestiture introduces a critical revenue stream for Exploits, contingent on NFG's success in the region. NFG has already demonstrated exploration prowess, with recent drilling at its Queensway Gold Project intersecting 92.86 g/t Au over 19.0 meters. The acquired claims from Exploits expand NFG's footprint by 33%, adding 20 km of strike length along the Appleton Fault Zone-a structurally significant corridor for gold mineralization.

While NFG retains an option to repurchase 0.5% of the royalty for CDN$750,000 within three years, this provision could benefit Exploits if the company chooses to monetize part of its royalty stake at a premium. Moreover, the contingent shares tied to resolving legal disputes over 360 claims add an additional layer of upside, potentially increasing Exploits' NFG equity position without further capital outlay.

Shareholder Value Metrics and Market Position

Exploits' treasury value now exceeds its market capitalization, creating a discount to net asset value that offers downside protection for investors. This financial flexibility allows the company to fund exploration without diluting shareholders, a critical advantage in the capital-intensive mining sector. Additionally, the high-grade exploration potential of its core projects-particularly in Québec-positions Exploits to attract strategic partners or joint venture agreements, further accelerating value creation.

The company's strategic refocusing has also been endorsed by its investor base. The 99.51% shareholder approval rate for the Newfoundland divestiture reflects confidence in management's ability to prioritize projects with the highest growth potential. This alignment between corporate strategy and investor expectations is a rare but vital indicator of long-term value creation.

Conclusion: A Dual-Track Strategy for Shareholder Value

Exploits Discovery's strategic divestiture and reinvestment in gold projects exemplify a dual-track approach to value creation. By monetizing non-core assets and redirecting capital to high-potential gold belts in Québec and Ontario, the company has strengthened its balance sheet and positioned itself for discovery-driven growth. Simultaneously, the royalty stream from NFG's Newfoundland operations provides a passive revenue source that could appreciate as NFG advances its exploration programs.

For investors, Exploits represents a compelling case study in portfolio refocusing. The combination of district-scale exploration, royalty upside, and a treasury cushion offers a balanced risk-reward profile in a sector where operational execution and geological success are paramount. As NFG's drilling results and Exploits' exploration campaigns unfold, the company's ability to translate these assets into tangible shareholder value will be closely watched.