Galleon Gold closes 3$ million with Sprott who may want more

Galleon Gold Corp. has closed a first tranche of its previously announced private placement for C$3,196,440. Eric Sprott, through 2176423 Ontario Ltd., a corporation that is beneficially owned by him, acquired 20,000,000 Units for an aggregate amount of C$1,000,000. Prior to the Offering, Mr. Sprott beneficially owned and controlled 71,248,950 shares of the Company. As a result of the private placement, Mr. Sprott now beneficially owns and controls 91,248,950 Common Shares and 10,000,000 Warrants of the Company representing approximately 28.8% of the issued and outstanding Common Shares of the Company on a non-diluted basis and approximately 30.9% of the issued and outstanding Common Shares on a partially diluted basis.

The Units were acquired by Sprott for investment purposes. Mr. Sprott has a long-term view of the investment and may acquire additional securities of Galleon Gold including on the open market or through private acquisitions or sell securities of Galleon Gold including on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other relevant factors.

Each Unit consists of one common share in the capital of the Company and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant shall entitle the holder to acquire an additional common share at a price of C$0.075 for a period of 24 months following the closing of the Offering.

Each FT Unit consists of one common share in the capital of the Company which qualifies as a "flow-through share" as defined in subsection 66(15) of the Income Tax Act (Canada) (the "FT Units Shares") and one-half of one common share purchase warrant (each whole warrant, a "FT Unit Warrant"). Each FT Unit Warrant shall entitle the holder to acquire an additional common share at a price of C$0.075 for a period of 24 months following the closing of the Offering.

A copy of Sprott's early warning report will appear on Galleon Gold Profile on SEDAR and may also be obtained by calling Mr. Sprott's office at (416) 945-3294 (200 Bay Street, Suite 2600, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J1).

Red Cloud Securities Inc. was acting as finder in connection with the Offering and received a cash commission equal to 6% of the subscribed amount on certain orders under the Offering. In addition, the Company issued to the finder non-transferable finder's warrants, (each a "Finders Warrant") equal to 7% of the Units and FT Units sold on certain orders under the Offering. Each Finder's Warrant is exercisable to purchase one Common Share at a price of $0.05 for a period of 24 months from the issue date.

The Company may complete one or more additional tranches of the Offering. The net proceeds from the sale of the Units will be used for exploration and general working capital purposes. The proceeds from the sale of FT Units will be used to incur "Canadian exploration expenses" and will qualify as "flow-through mining expenditures" (the "Qualifying Expenditures"), as defined in subsection 127(9) of the Income Tax Act (Canada). The Company intends to renounce the Qualifying Expenditures to subscribers of FT Units for the fiscal year ended December 31, 2020.

Certain insiders, directors and officers of the Company subscribed for an aggregate of 3,640,000 Units and 463,650 FT Units under the Offering on the same terms as arm's length investors. The participation of the insiders, directors and officers in the Offering constitutes a "related party transaction" for the purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is exempt from the requirements to obtain a formal evaluation or minority shareholder approval in connection with the insider participation in reliance on sections 5.5 (a) and 5.7 (1) (a) of MI 61-101, as neither the fair market value of the securities issued, nor the fair market value of the consideration for the securities issued exceeds 25% of the Company's market capitalization as calculated in accordance with MI 61-101. The Company did not file a material change report containing all of the disclosure required by MI-61-101 more than 21 days before the expected closing date of the Offering as the aforementioned insider participation had not been confirmed at that time and the Company wished to close the Offering as expeditiously as possible.

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