UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_________________

FORM 1-A

REGULATION A OFFERING CIRCULAR
UNDER THE SECURITIES ACT OF 1933

_________________
CONTACT GOLD CORP.
(Exact name of Registrant as specified in its charter)

Registered Agent Solutions, Inc.
4625 West Nevso Drive, Suite 2
Las Vegas, NV 89103
(888) 705-7274
(Name, address and telephone number of
agent for service)

_________________
Copy to:

Kenneth G. Sam, Esq.
Dorsey & Whitney LLP
1400 Wewatta Street, Suite 400
Denver, CO 80202
(303) 629-3445

Preliminary Offering Circular
April 10, 2019
Subject to Completion

An Offering Statement pursuant to Regulation A relating to these securities has been filed with the United States Securities and Exchange Commission (the “SEC” or the “Commission”). Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the Offering Statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Offering Circular was filed.

• Shares of Common Stock

This offering circular (the “Offering Circular”) relates to the initial public offering in the United States of the common stock, par value US$0.001 per share (the “Common Stock” and collectively, the “Shares”) of Contact Gold Corp. (collectively, as the context requires, with its subsidiaries, “Contact Gold,” the “Company,” “we,” “our,” or “us”) at a fixed price of $• per share of Common Stock, with an aggregate amount of up to $•, in a “Tier 2 Offering” under Regulation A under the Securities Act of 1933, as amended (the “Offering”). This Offering is being conducted by our lead underwriter Raymond James Ltd., through its U.S. affiliate, Raymond James (USA) Ltd. (the “Lead Underwriter”), a registered broker-dealer and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), and Cormark Securities Inc., through its U.S. affiliate. Cormark Securities (USA) Limited (each, an “Underwriter” and together with the Lead Underwriter, the “Underwriters”). The Underwriters and other broker-dealers will receive compensation for sales of the securities offered hereby at a fixed commission rate of 6% of the gross proceeds of the Offering, except in respect of sales to certain purchasers, including certain current shareholders of Contact Gold mutually agreed to between Contact Gold and the Underwriters (the “President’s List”) where a commission rate of 3% of the gross proceeds of the Offering will be paid. See “Underwriting” in this Offering Circular. None of the Shares offered are being sold by present security holders of Contact Gold. Unless otherwise noted herein, references to “$” are to Canadian dollars and references to “US$” are to United States dollars. Throughout this Offering Circular we refer to the initial public offering in the United States as the initial public offering.

In connection with the Offering, Contact Gold is required to offer certain shareholders the right to acquire shares of Common Stock under the terms of the Governance and Investor Rights Agreement and Investor Rights Agreement. See “Contractual Obligations” in the MD&A. In connection with this right, Contact Gold may complete the concurrent private placement of up to • shares of Common Stock at the Offering price for aggregate gross proceeds of $• (the “Concurrent Private Placement”). The closing of the potential Concurrent Private Placement would be conditional on the completion of the Offering. No underwriting commission or fees are payable in connection with the Concurrent Private Placement. This Offering Circular does not qualify the distribution of the Common Stock issued under the Current Private Placement.

Contact Gold’s Shares began trading on the TSX Venture Exchange (“TSXV”) under the symbol “C” on June 15, 2017. On October 17, 2018, Contact Gold submitted an application for listing its Shares for quotation on the OTC Market Group’s OTCQX Market (“OTCQX”). The closing price of the Shares on April 9, 2019, being the last trading day before the date of this Offering Circular was $0.26 on the TSXV. The initial public offering price of this Offering is $• per Share. The number of Shares expected to be sold in this Offering is • for gross proceeds of $•.

In connection with the filing and qualification of the Offering Statement of Contact Gold on Form 1-A (the “Offering Statement”) of which this Offering Circular is a part with the Commission, we are filing a prospectus supplement dated April 9, 2019 to our Canadian short form base shelf prospectus dated October 24, 2018 (the “Canadian Prospectus”) with the securities regulatory authorities in each of the provinces and territories of Canada, other than Québec (the “Canadian Jurisdictions”), for the purposes of qualifying the Offering in Canada.

We expect to commence the sale of the Shares as of the date on which the Offering Statement of which this Offering Circular is a part is declared qualified by the SEC.

Each subscription order is anticipated to settle on the fifth business day (“T+5”) following the subscriber’s payment of the purchase price (corresponding to a subscription accepted by the Company).

⁽¹⁾The offering price was determined by arm’s length negotiation between Contact Gold and the Lead Underwriter with reference to, among other things, the prevailing market price of the Common Stock.
⁽²⁾This table depicts broker-dealer commissions of 6% of the gross offering proceeds and assumes no sales of Shares to persons on the President’s List. Please refer to the section entitled “Underwriting” beginning on page 99 of this Offering Circular for additional information regarding total Underwriter compensation. In addition, we have agreed to reimburse the Underwriters for their reasonable out-of-pocket expenses. Sales to purchasers of Shares on the President’s List will be subject to a 3% commission.
⁽³⁾Does not include estimated offering expenses including, without limitation, legal, accounting, auditing, escrow agent, transfer agent, other professional, printing, advertising, travel, marketing, blue-sky compliance and other expenses of this Offering. We estimate the total expenses of this Offering, excluding the Underwriters’ commissions and expenses, will be approximately $•.
⁽⁴⁾Assumes that the aggregate offering amount of $• is received by us and that no sales are made to persons on the President’s List.

Contact Gold has granted the Underwriters an over-allotment option (the “Over-Allotment Option”), exercisable in whole or in part, at any time and from time to time, in the sole discretion of the Underwriters, for a period of 30 days from and including the closing of the Offering, to purchase up to an additional amount of Shares equal to 15% of the Shares sold pursuant to the Offering, being •Shares (the “Over-Allotment Shares”) to cover over-allotments, if any, and for market stabilization purposes. A purchaser who acquires Over-Allotment Shares issuable on the exercise of the Over-Allotment Option, forming part of the Underwriters’ over-allocation position, acquires such Over-Allotment Shares under this Offering Circular regardless of whether the over-allocation position is ultimately filled through the exercise of the Over-Allotment Option or secondary market purchases. If the Over-Allotment Option is exercised in full, the total “Price to the Public”, “Underwriting Commissions” and “Proceeds, Before Expenses to the Company” will be approximately $•, $• and $•, respectively, assuming no sales to persons on the President’s List. See “Underwriting” and the table below:

These securities are speculative and involve a high degree of risk. You should purchase Shares only if you can afford the complete loss of your investment. See “Risk Factors” beginning on page 8, to read about the risks you should consider before buying Shares.

We are an “emerging growth company” as that term is defined in Section 2(a)(19) of the Securities Act of 1933, as amended (the “Securities Act”) and used in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and as such, we have elected to take advantage of certain reduced public company reporting requirements for this Offering Circular and future filings. See “Risk Factors” and “Offering Circular Summary – Implications of Being an “Emerging Growth Company.” This Offering Circular follows the disclosure format of Part I of Form S-1 pursuant to the general instructions of Part II(a)(1)(ii) of Form 1-A.

No sale may be made to you in this Offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

An investment in the Shares is subject to certain risks and should be made only by persons or entities able to bear the risk of and to withstand the total loss of their investment. Prospective investors should carefully consider and review the RISK FACTORS beginning on page 8.

THE COMMISSION, DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

Raymond James (USA) Ltd.
Cormark Securities (USA) Limited

The date of this Offering Circular is __________, 2019.

TABLE OF CONTENTS

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Industry and Market Data and Forecasts

The market data and certain other statistical information used throughout this Offering Circular are based on independent industry publications, government publications and other published independent sources. Although we believe these third-party sources are reliable as of their respective dates, neither we nor the Underwriters have independently verified the accuracy or completeness of this information. Some data is also based on our good faith estimates. The market data used in this Offering Circular involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Certain data is also based on our good faith estimates, which are derived from management’s knowledge of the industry and independent sources. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, which could cause results to differ materially from those expressed in the estimates made by the independent parties and by us. While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the headings “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” in this Offering Circular.

The high, low and closing rates for United States dollars in terms of the Canadian dollar for each of the three years in the period ended December 31, 2018, as quoted by the Bank of Canada, were as follows:

⁽¹⁾As a result of changes by the Bank of Canada, for 2018 and 2017, the high, low and closing rates are the Bank of Canada average daily rates. For 2016, the rates are the Bank of Canada noon spot rates.

On April 9, 2019, the daily rate for United States dollars in terms of the Canadian dollar, as quoted by the Bank of Canada, was US$1.00 = $0.7510.

Financial Information

The financial statements of the Company are presented in Canadian dollars and such financial statements are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Unless otherwise indicated, any other financial information included or incorporated by reference in this Offering Circular has been prepared in accordance with U.S. GAAP. Financial information filed on Contact Gold’s System for Electronic Document Analysis and Retrieval (“SEDAR”) profile and incorporated by reference in the Canadian Prospectus has been prepared in accordance with International Financial Reporting Standards (“IFRS”). U.S. GAAP differs in certain material respects from IFRS. As a result, certain financial information included or incorporated by reference in this Offering Circular may not be comparable to financial information reported by the Company at www.sedar.com and incorporated by reference in the Canadian Prospectus. This Offering Circular does not include any explanation of the principal differences or any reconciliation between IFRS and U.S. GAAP.

Technical Information

Concurrent with the filing of the Offering Statement of which this Offering Circular is a part, we filed a short form prospectus supplement dated April 9, 2019 to the Canadian short form base shelf prospectus dated October 24, 2018 with the securities regulatory authorities in the Canadian Jurisdictions for the purposes of qualifying the Offering in Canada.

Pony Creek is an early stage exploration property and does not contain any mineral resources as defined by Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). There has been insufficient exploration to define a mineral resource estimate at the Pony Creek property (“Pony Creek” or the “Pony Creek Project”). Additional information about Pony Creek is contained in this Offering Circular and in the Technical Report (as defined below), and can be viewed under Contact Gold’s issuer profile on SEDAR at www.sedar.com.

There are no other recent estimates or data available to Contact Gold as at the date of this Offering Circular and a detailed exploration program is required to be conducted by Contact Gold in order to verify or treat the historical estimate as a current mineral resource.

Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates – The disclosure in this Offering Circular may use mineral resource classification terms that comply with reporting standards and securities laws in Canada, and mineral resource estimates that are made in accordance with NI 43-101, which differ from the requirements of United States securities laws.

The terms “mineral resource,” “measured mineral resource,” “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended; however, these terms are not defined terms under SEC Industry Guide 7, as currently in effect and as set forth by the SEC, and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that all or any part of a mineral deposit in these categories will ever be converted into reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities laws and regulations, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures. In addition, the terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance with NI 43-101 and the CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ from the definitions in Industry Guide 7. Under SEC Industry Guide 7 standards, as currently in effect, a “final” or “bankable” feasibility study is required to report reserves; the three-year historical average price, to the extent possible, is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. Consequently, information regarding mineralization contained in this Offering Circular is not comparable to similar information that would generally be disclosed by U.S. companies in accordance with the rules of the SEC, as currently in effect.

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Drill intercepts in this Offering Circular in the section entitled “Business” under the header “Recent Developments”, were calculated using a minimum thickness of 3.05 metres averaging 0.14 ppm gold and allowing inclusion of up to 4.57 metres of material averaging less than 0.14 ppm gold for low grade intervals and higher-grade intervals were calculated using a minimum thickness of 3.05 metres averaging 1.00 ppm gold and allowing inclusion of up to 4.57 metres of assays averaging less than 1.00 ppm gold. True width of drilled mineralization is unknown, but owing to the apparent flat lying nature of mineralization, is estimated to generally be at least 70% of drilled thickness. Quality assurance / quality control consists of regular insertion of certified reference standards, blanks, and duplicates. All failures are followed up with additional investigation whenever such an event occurs. Multi element geochemical assays are completed on composites using the MEMS 61 method. All assays are completed at ALS Chemex; an ISO 17025:2005 accredited lab. Check assays are being assayed for gold by Bureau Veritas.

Technical Report Summary – The scientific and technical data about Pony Creek contained in this Offering Circular, is supported by and, has been reproduced from a technical report prepared in accordance with NI 43-101, entitled “NI 43-101 Technical Report, Pony Creek Gold Project, Elko County, Nevada, United States of America” dated October 22, 2018 (effective date: October 16, 2018) (the “Technical Report”). The Technical Report was prepared for Contact Gold, by Vance Spalding, C.P.G., Vice President of Exploration of Contact Gold, who is a “qualified person” under NI 43-101, and can be viewed under Contact Gold’s issuer profile on SEDAR at www.sedar.com. The disclosure in this Offering Circular derived from the Technical Report has been prepared with the consent of Mr. Spalding.

The Technical Report is subject to certain assumptions, qualifications and procedures described therein. Reference should be made to the full text of the Technical Report, which has been filed with the applicable Canadian securities regulatory authorities pursuant to NI 43-101 and is available for review under Contact Gold’s issuer profile on SEDAR at www.sedar.com. The Technical Report is not and shall not be deemed to be incorporated by reference in this Offering Circular.

Additional Information

You should rely only on the information contained in this Offering Circular. Information filed on Contact Gold’s SEDAR profile at www.sedar.com is available for informational purposes and does not constitute part of this Offering Circular. We have not authorized anyone to provide you with additional information or information different from that contained in this Offering Circular filed with the SEC. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are offering to sell, and seeking offers to buy, the Shares only in jurisdictions where offers and sales are permitted. The information contained in this Offering Circular is accurate only as of the date of this document, regardless of the time of delivery of this Offering Circular or any sale of the Shares. Our business, financial condition, results of operations, and prospects may have changed since the date hereof.

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OFFERING CIRCULAR SUMMARY

This summary highlights information contained elsewhere in this Offering Circular and does not contain all of the information that may be important to you. You should read this entire Offering Circular carefully, including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical financial statements and related notes included elsewhere in this Offering Circular. In this Offering Circular, unless otherwise noted, the terms “the Company,” “we,” “us,” and “our” refer to Contact Gold Corp. The information presented in this Offering Circular assumes (i) an initial public offering price of $• per share and (ii) unless otherwise indicated, that the Underwriters do not exercise the Over-Allotment Option to purchase additional Common Stock.

Except for the statements of historical fact contained herein, the information presented in this Offering Circular constitutes “forward-looking statements” within the meaning of Canadian and United States securities and other laws, Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “aims”, “anticipates”, “will”, “projects”, or “believes” or variations (including negative variations) of such words and phrases, or statements that certain actions, events, results or conditions “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. By their very nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Company’s control

Forward looking statements are based on the opinions and estimates of management as of the date such statements are made and are based on various assumptions such as future business and property integrations remaining successful; favourable and stable general macroeconomic conditions, securities markets, spot and forward prices of gold, silver, base metals and certain other commodities, currency markets (such as the $ to US$ exchange rate); no materially adverse changes in national and local government, legislation, taxation, controls, regulations and political or economic developments; that various risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins and flooding) will not materialize; the ability to complete planned exploration programs; the ability to continue raising the necessary capital to finance operations; the ability to obtain adequate insurance to cover risks and hazards on favourable terms; that changes to laws and regulations will not impose greater or adverse restrictions on mineral exploration or mining activities; the continued stability of employee relations; relationships with local communities and indigenous populations; that costs associated with mining inputs and labour will not materially increase; that mineral exploration and development activities (including obtaining necessary licenses, permits and approvals from government authorities) will be successful; no disruptions due to a U.S. Government shutdown; and the continued validity and ownership of title to properties.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These include, among others, the cautionary statements in the “Risk Factors” section and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in this Offering Circular. See, “Cautionary Statement Regarding Forward-Looking Statements.”

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Business Overview

Contact Gold (formerly Winwell Ventures Inc., “Winwell”) was incorporated under the Yukon Business Corporations Act on May 26, 2000 and was continued under the Business Corporations Act (British Columbia) on June 14, 2006. On June 7, 2017, upon closing of the Transactions (as defined herein), the Company completed a legal continuance into the State of Nevada and changed its name to “Contact Gold Corp.” Contact Gold is domiciled in Canada and maintains a head office in Vancouver, British Columbia, Canada. Contact Gold’s Shares began trading on the TSXV under the symbol “C” on June 15, 2017. On October 17, 2018, Contact Gold submitted an application for listing its Shares for quotation on the OTCQX. Contact Gold’s authorized share capital is 500,000,000 Shares, par value US$0.001.

The Corporation is a gold exploration company focused on high-quality oxide gold targets and making district-scale gold discoveries in Nevada. The Corporation’s land holdings are located on the Carlin, Independence and Northern Nevada Rift gold trends. The Corporation currently owns, through Clover Nevada, a 100% interest in a portfolio of 11 gold properties encompassing approximately 200 km² located in Nevada, including the Pony Creek, North Star and Dixie Flats properties. The Corporation’s main focus is on advancing the Pony Creek project (“Pony Creek Project”), which is located in Elko County, Nevada and comprises 1,345 unpatented mining claims covering 107 km².

For further information about Contact Gold, see the section entitled “Business”.

Organizational Structure

Contact Gold has two wholly-owned subsidiaries as set forth below:

⁽¹⁾ Clover Nevada II LLC (“Clover Nevada”), established under the laws of Nevada, is the only material subsidiary of Contact Gold and holds the Contact Gold Properties.

Mineral Properties

The Company’s land holdings are on the Carlin, Independence and Northern Nevada Rift gold trends in northeastern Nevada. The Company’s current properties include the Pony Creek, North Star and Dixie Flats properties, as well as a portfolio of prospective properties comprised of the following: Cobb Creek, Dry Hills, Hot Creek, Rock Creek, Rock Horse, Sno, Woodruff, and Wilson Peak (together, the “Contact Gold Properties”). As at the date of this Offering Circular, the Contact Gold Properties comprise in aggregate, 212 km² of unpatented mining claims and mineral tenure.

The Company’s main focus is on advancing the Pony Creek Project, which is located in Elko County, Nevada.

The Pony Creek Project is comprised of a total of 1,345 unpatented lode mining claims and 68 leased claims, covering approximately 10,674 hectares (107 km²) in aggregate, in the southern part of the Piñon Range in Elko County, Nevada. The property is centered at approximately 40°21′10″N, 115°58′20″W, in the southern portion of the Carlin gold trend approximately 27 km south of the presently producing Emigrant gold mine of Newmont Mining Corporation (“Newmont”) and 11 kilometers (“km”) south of Gold Standard Ventures Corp.’s Pinion and Dark Star gold deposits (see Figure 1 in this Offering Circular under the heading “Description of Property”). From south to north, the claims occupy portions of T28N, R53E and R54E; T29N, R53E and R54E; and T30N, R53E, Mount Diablo Base and Meridian.

See under heading “Description of Property” in this Offering Circular, for a discussion of the Pony Creek Project.

Implications of Being an “Emerging Growth Company”

As an issuer with less than US$1.07 billion in total annual gross revenues during our last fiscal year, we qualify as an “emerging growth company” under the JOBS Act. An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company we:

• are not required to obtain an auditor attestation on our internal control over financial reporting pursuant to the Sarbanes- Oxley Act of 2002;

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• are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives (commonly referred to as “compensation discussion and analysis”);

• are not required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on-frequency” or “say-on-golden-parachute” votes);

• are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure;

• may present only two years of audited financial statements and only two years of related Management’s Discussion & Analysis of Financial Condition and Results of Operations, (“MD&A”); and

• are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act.

We may take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under §107 of the JOBS Act.

Certain of these reduced reporting requirements and exemptions are also available to us due to the fact that we may also qualify as a “smaller reporting company” under the SEC’s rules. For instance, smaller reporting companies are not required to obtain an auditor attestation on our assessment of internal control over financial reporting; are not required to provide a compensation discussion and analysis; are not required to provide a pay-for-performance graph or CEO pay ratio disclosure; and may present only two years of audited financial statements and related MD&A disclosure.

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THE OFFERING

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No sale may be made to you in this Offering if the aggregate purchase price you pay is more than (i) 10% of the greater of your annual income or net worth (if you are a natural person) or (ii) 10% of the greater of your revenue or net assets (if you are not a natural person), unless you are an “accredited investor” (as defined in Rule 501(a) of Regulation D under the Securities Act). Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

Each investor will be required to complete, execute and deliver a subscription agreement to purchase Shares in this Offering. See, “Underwriting.”

⁽¹⁾As of •, 2019, does not include up to 9,788,000 Shares issuable upon exercise of stock options to purchase Shares (“Options”) granted under the 2017 Contact Gold Omnibus Stock and Incentive Plan. As of •, 2019, we have granted Options exercisable to acquire up to 9,788,000 Shares at a weighted average exercise price of $0.54.
⁽²⁾Does not include Shares issuable upon conversion of the currently outstanding Contact Gold preferred stock (“Preferred Stock”). As of April 9, 2019, Contact Gold had 11,111,111 Preferred Stock issued and outstanding, which Preferred Stock is convertible at the election of the holder at any time, into Shares (subject to a cap such that at any time following any conversion, Waterton Nevada and its affiliates shall not hold more than 49% of the aggregate issued and outstanding Shares). The number of Shares to be issued pursuant to such conversion right shall be equal to the sum of the face value of the Preferred Stock together with any accrued and unpaid cumulative dividends thereon to the conversion date divided by the conversion price of the Preferred Stock on the conversion date, such price being subject to adjustment from time to time. The conversion price of the Preferred Stock is $1.35 (US$1.01 based on the Bank of Canada daily average exchange rate on April 9, 2019), and if fully converted would convert into 10,948,711 Shares. The conversion of the Preferred Stock from time to time, at the election of the holder, will result in dilution to other existing holders of Common Stock. See, “Description of Capital Stock – Preferred Stock.”
⁽³⁾Does not include Shares issuable upon exercise of 9,827,589 Rights (as defined below). Please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Outstanding Securities - Rights.”
⁽⁴⁾This figure assumes no Shares are sold pursuant to the Concurrent Private Placement, if any.

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RISK FACTORS

Investing in our Common Stock involves a high degree of risk. Prospective investors should carefully consider the risks described below, together with all of the other information included or referred to in this Offering Circular, before purchasing Shares. The risks set out below are not the only risks we face. Additional risks and uncertainties not presently known to us or not presently deemed material by us might also impair our operations and performance. If any of these risks actually occurs, our business, financial condition or results of operations may be materially adversely affected. In such case, the trading price of our Common Stock, could decline and investors in our Common Stock could lose all or part of their investment.

Risks Related to our Company

No History of Operations

Contact Gold is an exploration company and has no history of operations, mining or refining mineral products. Contact Gold is subject to many risks common to such enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. There is no assurance that Contact Gold will be successful in achieving a return on an investment for investors in the Common Stock and Contact Gold’s likelihood of success must be considered in light of its early stage of operations.

There can be no assurance that the Contact Gold Properties or any other property will be successfully placed into production, produce minerals in commercial quantities or otherwise generate operating earnings. Advancing projects from the exploration stage into development and commercial production requires significant capital and time and will be subject to the successful completion of further technical studies, permitting requirements and the construction of mines, processing plants, roads and related works and infrastructure. Contact Gold will continue to incur losses until mining-related operations successfully reach commercial production levels and generate sufficient revenue to fund continuing operations.

No Operating Revenues and History of Losses

Contact Gold has no operating revenues or earnings and a history of losses, and no operating revenues are anticipated until one of Contact Gold’s projects comes into production, which may or may not occur. As such, there is no certainty that Contact Gold will generate revenue from any source, operate profitably or provide a return on investment in the future. Contact Gold will continue to experience losses unless and until it can successfully develop and begin profitable commercial production at one of its mining properties. There can be no assurance that Contact Gold will be able to do so.

Additional Capital Requirements and Financing Risks

Contact Gold plans to focus on exploring for minerals and will use its working capital to carry out such exploration. Contact Gold has no source of operating cash flow and no assurance that acceptable additional funding will be available to it for the further exploration and development of its projects. The Corporation has incurred net losses in the past and may incur losses in the future and will continue to incur losses until and unless it can derive sufficient revenues from its mineral projects. These conditions, including other factors described herein, creates a material uncertainty regarding the Corporation’s ability to continue as a going concern.

It is likely that the development and exploration of Contact Gold’s Properties will require substantial additional financing. Further exploration and development of the Contact Gold Properties and/or other properties acquired by Contact Gold may be dependent upon its ability to obtain acceptable financing through equity or debt, and there can be no assurance that it will be able to obtain adequate financing in the future or that the terms of such financing will be acceptable. Failure to obtain such additional financing could result in the delay or indefinite postponement of further exploration and development of Contact Gold’s projects and Contact Gold may become unable to carry out its business objectives.

Reliance on a Limited Number of Properties

The only material property interest of Contact Gold is its interest in the Pony Creek Project located in Nevada. As a result, unless Contact Gold acquires additional property interests, any adverse developments affecting this property would have a material adverse effect upon Contact Gold and would materially and adversely affect the potential mineral resource production, profitability, financial performance and results of operations of Contact Gold. While Contact Gold may seek to acquire additional mineral properties in accordance with its business objectives, there can be no assurance that Contact Gold will be able to identify suitable additional mineral properties or, if it does identify suitable properties, that it will have sufficient financial resources to acquire such properties or that such properties will be available on terms acceptable to Contact Gold or at all and that Contact Gold will be able to successfully develop such properties and bring such properties into commercial production.

No History of Mineral Production

There is no history of mineral production on the Contact Gold Properties. The Contact Gold Properties are a high risk, speculative venture, and, until recently, only a minimal amount of exploration and sampling has been conducted by Contact Gold. There is no certainty that the expenditures proposed to be made by Contact Gold towards the search for and evaluation of gold or other minerals with regard to the Contact Gold Properties or otherwise will result in discoveries of commercial quantities of gold or other minerals. Until recently, all of the drilling on the Contact Gold Properties was completed by historical operators from 1981 through 2006.

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Furthermore, there is no assurance that commercial quantities of minerals will be discovered at any properties acquired in the future by Contact Gold, nor is there any assurance that any future exploration programs of Contact Gold on the Contact Gold Properties or any other properties will yield any positive results. Even where commercial quantities of minerals are discovered, there can be no assurance that any property of Contact Gold will ever be brought to a stage where mineral resources can be identified and mineral reserves can be profitably produced. Factors which may limit the ability of Contact Gold to produce mineral reserves from its properties include, but are not limited to, the price of mineral resources, the availability of additional capital and financing and the nature of any mineral deposits.

Early Stage Development Company

Contact Gold is a junior resource company focused primarily on the acquisition, exploration and development of mineral properties located in Nevada. Contact Gold’s properties have no established mineral reserves due to the early stage of exploration at this time. Any reference to potential quantities and/or grade is conceptual in nature, as there has been insufficient exploration to define any mineral resource and it is uncertain if further exploration will result in the determination of any mineral resource. Quantities and/or grade described in this Offering Circular should not be interpreted as assurances of a potential resource or reserve, or of potential future mine life or of the profitability of future operations.

The exploration and development of mineral deposits involves a high degree of financial risk over a significant period of time. Few properties that are explored are ultimately developed into producing mines and there is no assurance that any of Contact Gold’s projects can be mined profitably. Substantial expenditures are required to establish mineral resources and reserves through drilling, to develop metallurgical processes to extract the metal from the ore and in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining. It is impossible to ensure that the current exploration and development programs of Contact Gold will result in profitable commercial mining operations. The profitability of Contact Gold’s operations will be, in part, directly related to the cost and success of its exploration and development programs, which may be affected by a number of factors. Substantial expenditures are required to establish mineral resources and reserves that are sufficient to support commercial mining operations and to construct, complete and install mining and processing facilities on those properties that are actually developed.

No assurance can be given that any particular level of recovery of minerals will be realized or that any potential quantities and/or grade will ever qualify as a mineral resource or reserve, or that any such mineral resource or reserve will ever qualify as a commercially mineable (or viable) deposit which can be legally and economically exploited.

Where expenditures on a property have not led to the discovery of mineral resources or reserves, incurred expenditures will generally not be recoverable.

Exploration, Development and Operating Risks

Mining operations generally involve a high degree of risk. Contact Gold’s operations are subject to all the hazards and risks normally encountered in the exploration, development and production of gold and other minerals, including unusual and unexpected geologic formations, seismic activity, rock bursts, cave-ins, flooding and other conditions involved in the drilling and removal of material, any of which could result in damage to, or destruction of, mines and other production facilities, damage to life or property, environmental damage and possible legal liability. The financing, exploration, development and mining of any of Contact Gold’s properties is furthermore subject to a number of macroeconomic, legal and social factors, including commodity prices, laws and regulations, political conditions, currency fluctuations, the ability to hire and retain qualified people, the inability to obtain suitable and adequate machinery, equipment or labour and obtaining necessary services in the jurisdictions in which Contact Gold operates. Unfavourable changes to these and other factors have the potential to negatively affect Contact Gold’s operations and business.

Major expenses may be required to locate and establish mineral reserves and resources, to develop metallurgical processes and to construct mining and processing facilities at a particular site. Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants, which affect capital and operating costs. Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect Contact Gold’s operations, financial condition and results of operations. It is impossible to ensure that the exploration or development programs planned by Contact Gold will result in a profitable commercial mining operation. Whether a gold or other precious or base metal or mineral deposit will be commercially viable depends on a number of factors, some of which are: the particular attributes of the deposit, such as the quantity and quality of mineralization and proximity to infrastructure; mineral prices, which are highly cyclical; and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in Contact Gold not receiving an adequate return on invested capital.

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There is no certainty that the expenditures to be made by Contact Gold towards the exploration and evaluation of gold or other minerals will result in discoveries or production of commercial quantities of gold or other minerals. In addition, once in production, mineral reserves are finite and there can be no assurance that Contact Gold will be able to locate additional reserves as its existing reserves are depleted.

U.S. Domestic Issuer

Contact Gold is incorporated under the laws of Nevada and as such is deemed to be a “U.S. domestic issuer” (as defined in Rule 902(e) of Regulation S under the Securities Act) for U.S. securities laws purposes which creates several burdensome obligations.

Upon closing of this Offering, Contact Gold will be subject to continuing disclosure obligations with the SEC to submit annual reports on Form 1-K, semi-annual reports on Form 1-SA and current reports on Form 1-U. Contact Gold’s Shares would not be registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or subject to reporting obligations under Section 13 or Section 15(d) of the Exchange Act. Contact Gold may voluntarily elect to register its class of common stock under Section 12(g) of the Exchange Act by filing a Form 8-A registration statement with the SEC. In the event that Contact Gold voluntarily elects to become registered and a reporting issuer with the SEC under the Exchange Act, Contact Gold will be subject to substantial continuous disclosure obligations including among other things, the filing of Form 10-Ks (annual reports), Form 10-Qs (quarterly reports), Form 8-Ks (current reports), Schedule 14A (proxy statements) and will be subject to applicable provisions under the Sarbanes-Oxley Act. In addition, directors, officers, and shareholders holding 10% or more of the issued and outstanding Shares will be subject to Section 16 reporting (Form 3, 4, and 5 filings) and the short-swing profit rules, and shareholders holding 5% or more of the issued and outstanding Shares will be subject to Schedule 13D/G beneficial ownership reporting obligations.

Contact Gold must prepare its financial statements in accordance with U.S. GAAP and the audit fees are typically higher due to the SEC compliance requirements. Further, Contact Gold is a Canadian reporting issuer and accordingly is also subject to the reporting and disclosure regime in Canada. All of the aforementioned requirements would significantly increase the regulatory and compliance costs of Contact Gold if Contact Gold were to become a U.S. reporting company. In addition, unless a U.S. domestic issuer is registered and reporting with the SEC, all securities issued by a U.S. domestic issuer in private placement transactions – including those that are issued outside of the United States – are “restricted securities” under Rule 144 under the Securities Act, must bear a U.S. restrictive legend and will be subject to a one (1) year hold period. The removal of the restrictive legend will also require a U.S. opinion letter to be delivered to the transfer agent. As a result, the ability for U.S. domestic issuers to raise capital is more difficult and would be expected to result in share issuances at higher discounts to the market price. Note that even if Contact Gold does become a reporting issuer under the Exchange Act or elects to submit its first and third quarter financial information on Form 1-U, all securities issued in a private placement transaction by a U.S. domestic issuer will still be subject to a six-month hold period.

Overall, the regulatory and compliance requirements and costs for U.S. domestic issuers is higher and more complex than those applicable to “foreign private issuers” and the ability to raise capital is more difficult, all of which could have a material adverse impact on Contact Gold’s business and financial condition.

Land Title and Royalty Risks

General

There are uncertainties as to title matters in the mining industry. Any defects in title could cause Contact Gold to lose rights in its mineral properties and jeopardize its business operations. Contact Gold’s mineral properties currently consist of unpatented mining claims located on lands administered by the United States’ Department of Interior’s Bureau of Land Management (the “BLM”) , Nevada State Office to which Contact Gold only has possessory title. Because title to unpatented mining claims is subject to inherent uncertainties, it is difficult to determine conclusively the ownership of such claims. These uncertainties relate to such things as sufficiency of mineral discovery, proper location and posting and marking of boundaries, proper and timely payment of annual BLM claim maintenance fees, the existence and terms of royalties, and possible conflicts with other claims not determinable from descriptions of record.

The present status of Contact Gold’s unpatented mining claims located on public lands allows Contact Gold the right to mine and remove valuable minerals, such as precious and base metals, from the claims conditioned upon applicable environmental reviews and permitting programs. Contact Gold is also allowed to use the surface of the land solely for purposes related to mining and processing the mineral-bearing ores. However, legal ownership of the land remains with the United States. Contact Gold remains at risk that the mining claims may be forfeited either to the United States or to rival private claimants due to failure to comply with statutory requirements. Prior to 1993, a mining claim locator who was able to prove the discovery of valuable, locatable minerals on a mining claim, and to meet all other applicable federal and state requirements and procedures pertaining to the location and maintenance of federal unpatented mining claims, had the right to prosecute a patent application to secure fee title to the mining claim from the federal government. The right to pursue a patent, however, has been subject to a moratorium since October 1993, through federal legislation restricting the BLM from accepting any new mineral patent applications. If Contact Gold does not obtain fee title to its unpatented mining claims, there can be no assurance that it will be able to obtain compensation in connection with the forfeiture of such claims.

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Pending Federal Legislation that may affect the Company’s Operations

In recent years, members of the United States Congress have repeatedly introduced bills which would supplant or alter the provisions of the General Mining Act of 1872, a United States federal law that authorizes and governs prospecting and mining for economic minerals, such as gold, platinum, and silver, on federal public lands. Such bills have proposed, among other things, to either eliminate the right to a mineral patent, impose a federal royalty on production from unpatented mining claims, render certain federal lands unavailable for the location of unpatented mining claims, afford greater public involvement in the mine permitting process, provide for citizen suits, and impose new and stringent environmental operating standards and mined land reclamation requirements in addition to those already in effect. Such proposed legislation could change the cost of holding unpatented mining claims and could significantly impact Contact Gold’s ability to develop mineralized material on unpatented mining claims. Currently, all of Contact Gold’s mining claims are on unpatented claims. Although Contact Gold cannot predict what legislative changes might occur, the enactment of these proposed bills could adversely affect the potential for development of its mining claims, the economics of any mines that it brings into operation on federal unpatented mining claims, and as a result, adversely affect Contact Gold’s financial performance.

Title to Mineral Property Interests may be Challenged

There may be challenges to title to the mineral properties in which Contact Gold holds a material interest. If there are title defects with respect to any properties, Contact Gold might be required to compensate other persons or to reduce its interest in the affected property. Furthermore, in any such case, the investigation and resolution of these issues would divert Contact Gold management’s time from ongoing exploration and development programs. Title insurance generally is not available for mining claims in the U.S. and Contact Gold’s ability to ensure that it has obtained secure claim to individual mineral properties may be limited. The Contact Gold Properties may be subject to prior unregistered liens, agreements, transfers or claims, including native land claims and title may be affected by, among other things, undetected defects. In addition, Contact Gold may be unable to operate the properties as permitted or to enforce its rights with respect to its properties. The failure to comply with all applicable laws and regulations, including a failure to pay taxes or annual BLM claim maintenance fees may invalidate title to portions of the Contact Gold Properties. Contact Gold may incur significant costs related to defending the title to its properties. A successful claim contesting title to a property may cause Contact Gold to compensate other persons, or to reduce its interest in the affected property or to lose our rights to explore and, if warranted, develop that property. This could result in Contact Gold not being compensated for its prior expenditures relating to the property. Also, in any such case, the investigation and resolution of title issues would divert management’s time from ongoing exploration and, if warranted, development programs.

Mineral Properties may be Subject to Defects in Title

The ownership and validity or title of unpatented mining claims and concessions can at times be uncertain and may be contested. Contact Gold also may not have, or may not be able to obtain, all necessary surface rights to develop a property. Contact Gold has taken reasonable measures, in accordance with industry standards for properties at the same stage of exploration as that of Contact Gold, to ensure proper title to the Contact Gold Properties. However, there is no guarantee that title to any of its properties will not be challenged or impugned.

Interpretation of Royalty Agreements; Unfulfilled Contractual Obligations

Royalty interests in Contact Gold Properties, and any other royalty interests in respect of the properties of Contact Gold which may come into existence, may be subject to uncertainties and complexities arising from the application of contract and property laws in the jurisdictions where the mining projects are located. Operators and other parties to the agreements governing the royalty interests in Clover Nevada, or other royalty interests, may interpret their interests in a manner adverse to Contact Gold, and Contact Gold could be forced to take legal action to enforce its rights. Challenges to the terms of the royalty interests in Clover Nevada or the existence of other royalties could have a material adverse effect on the business, results of operations, cash flows and financial condition of Contact Gold. Disputes could arise with respect to, among other things:

• the existence or geographic extent of the royalty interests;

• the methods for calculating royalties;

• third party claims to the same royalty interest or to the property on which a royalty interest exists, or the existence of additional royalties on the same property;

• various rights of the operator or third parties in or to a royalty interest;

• production and other thresholds and caps applicable to payments of royalty interests;

• the obligation of an operator to make payments on royalty interests;

• various defects or ambiguities in the agreement governing a royalty interest; and

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• disputes over the interpretation of buy-back rights.

Natural Resource Properties are Largely Contractual in Nature

Parties to contracts do not always honour contractual terms and contracts themselves may be subject to interpretation or technical defects. Accordingly, there may be instances where Contact Gold would be forced to take legal action to enforce its contractual rights. Such litigation may be time consuming and costly and there is no guarantee of success. Any pending proceedings or actions or any decisions determined adversely to Contact Gold, may have a material and adverse effect on Contact Gold’s results of operations, financial condition and the trading price of the Shares.

There may be unknown defects in the asset portfolio

Contact Gold acquired the majority of the claims that comprise the Contact Gold Properties through its acquisition of Clover Nevada II LLC, who acquired the properties from Clover Nevada I LLC. Clover Nevada I LLC acquired the properties from a receiver in a bankruptcy process in 2015. The bankruptcy process purported to extinguish all claims and encumbrances against the Contact Gold Properties. New claims and encumbrances were established by Clover Nevada I LLC in connection with the sale. There is a risk that claims and encumbrances that existed prior to the bankruptcy (including certain royalty interests, easements or encroachments) have not been fully extinguished by the bankruptcy and that such claims and encumbrances could have a material and adverse effect on Contact Gold’s results of operations, financial condition and the trading price of the Shares.

Control of the Company

As at the date of this Offering Circular, Waterton Nevada Splitter, LLC (“Waterton Nevada”), a limited liability company of which Waterton Precious Metals Fund II Cayman, LP (“Waterton”) is the sole member, holds, directly or indirectly, approximately 37% of the issued and outstanding Shares and 100% of the issued Preferred Stock (as defined herein), and is Contact Gold’s single largest shareholder and a control person for the purposes of Canadian securities law. As a result, Waterton Nevada has the ability to influence the outcome of matters submitted to the shareholders of Contact Gold for approval, which could include the election and removal of directors, amendments to Contact Gold’s corporate governing documents and business combinations. In addition to its ability to influence matters submitted to Contact Gold’s shareholders, Waterton has the right to nominate two directors to the Board, allowing Waterton the ability to participate in the oversight of Contact Gold’s direction and business activities. For so long as Waterton retains the right to nominate members of the Board, it will retain the ability to participate and influence the oversight of Contact Gold’s direction and business activities. Contact Gold’s interests and those of Waterton and of Waterton Nevada may at times conflict, and this conflict might be resolved against Contact Gold’s interests. The concentration of approximately 37% of the issued and outstanding Common Stock in the hands of a single shareholder may discourage an unsolicited bid for the Common Stock, and this may adversely impact the value and trading price of the Shares. Notwithstanding the foregoing, and in addition to any escrow provision imposed by applicable Canadian securities laws or the TSXV, Waterton Nevada has agreed not to, directly or indirectly, sell, contract to sell, grant any option to purchase, assign, transfer or otherwise dispose of the Shares acquired by Waterton Nevada under the Transactions for a period of 24 months following the effective date of the Transactions, subject to certain customary exceptions.

As at the date hereof, Contact Gold’s other major shareholder is Goldcorp USA, Inc. (“Goldcorp”), owning approximately 12% of the issued and outstanding Shares.

Investor Rights

Pursuant to the Governance and Investor Rights Agreement (as defined herein), dated June 7, 2017, as well as the rights associated with the Preferred Stock, Waterton has, in all cases subject to certain ownership thresholds: (i) the right to maintain its percentage interest in Contact Gold upon certain equity issuances undertaken by Contact Gold; (ii) director nomination and observer rights; and (iii) piggy-back and registration rights commencing in June 2019. Pursuant to the Goldcorp Investor Rights Agreement (as defined herein), dated June 7, 2017, Goldcorp has, in all cases subject to certain ownership thresholds: (i) the right to maintain its percentage interest in Contact Gold upon certain equity issuances by Contact Gold; and (ii) the right to require Contact Gold to form a technical committee and to nominate 25% of the members of the technical committee. See “Contractual Obligations” in the MD&A.

As a result of Waterton and Goldcorp’s aggregate shareholdings in Contact Gold, to the extent that each of them similarly vote for or against matters that are submitted to shareholders for approval, such as significant corporate transactions or those involving a change of control, such votes will be determinative of the outcome, which may not be beneficial to the other shareholders of Contact Gold. In some cases, the interests of Waterton and/or Goldcorp may not be the same as those of each other, or the Contact Gold’s other shareholders, and conflicts may arise from time to time that may be resolved in a manner detrimental to the Contact Gold’s other shareholders.

Preferred Stock

Contact Gold currently has issued and outstanding 11,111,111 Preferred Stock with an aggregate face value of US$11,100,000, issued to Waterton Nevada. The Preferred Stock have a maturity date of June 7, 2022 (“Maturity Date”), accrue preferential cumulative cash dividends at a fixed rate per annum equal to 7.5% on a simple and not compounded basis. The Preferred Stock is non-voting. The Preferred Stock is convertible at the election of the holder at any time, into Shares (subject to a cap such that at any time following any conversion, Waterton Nevada and its affiliates shall not hold more than 49% of the aggregate issued and outstanding Shares). The number of Shares to be issued pursuant to such conversion right shall be equal to the sum of the face value of the Preferred Stock together with any accrued and unpaid cumulative dividends thereon to the conversion date divided by the conversion price of the Preferred Stock on the conversion date, such price being subject to adjustment from time to time. The conversion price of the Preferred Stock is $1.35 (US$1.01 based on the Bank of Canada daily average exchange rate on April 9, 2019), and if fully converted would convert into 10,948,711 Shares.

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The conversion of the Preferred Stock from time to time, at the election of the holder, will not only increase the number of Shares held by Waterton Nevada and its affiliates (see “Risk Factors – Control of the Company”) but will also result in dilution to other existing shareholders of Contact Gold (see “Risk Factors – Dilution”).

At the Maturity Date, unless the holders thereof elect to convert any such Preferred Stock into Common Stock, Contact Gold will be required to redeem and pay the aggregate amount of the face value of all outstanding Preferred Stock plus all accrued dividends thereon. There is no assurance that Contact Gold will have the requisite funds to redeem the Preferred Stock. Even in the event Contact Gold is able to redeem the Preferred Stock in full, such redemption will reduce the amount of funds available to Contact Gold to pursue its business objectives and for other general working capital and corporate purposes, which could have a material adverse effect on Contact Gold.

Pursuant to the terms of the Preferred Stock, the holders are also entitled to certain other rights and preferences such as a right of first offer and a right of first refusal on any sale, lease, exchange, transfer or disposition of Contact Gold’s interests in the Contact Gold Properties and Contact Gold is further restricted from disposing of all or substantially all of its assets without such holders’ prior written consent. These rights and other covenants, as well as the other rights and restrictive covenants associated with the Preferred Stock, may restrict Contact Gold’s ability to conduct its business or enter into third party transactions in the ordinary course, which may adversely affect Contact Gold’s business. See “Description of Capital Stock – Preferred Stock” for a more details description of the Preferred Stock.

Dilution on Exercise of Rights

On March 14, 2019, we closed a non-brokered private placement of 9,827,589 shares of Common Stock, at a price of $0.29 per Common Stock (the “Placement Price”) for gross proceeds of $2,850,000. Each Common Stock was accompanied by one right (a “Right”). Subject to the rules and limitations of the TSXV, each Right shall automatically convert, without the payment of additional consideration, upon the earlier of (a) the closing of a public offering registered or qualified under the Securities Act (a “Qualified Offering”); (b) a change of control of Contact Gold (“Change of Control”); or (c) one year following the closing date of the private placement (“Time Deadline”), for shares of common stock of Contact Gold as follows: (i) if the offering price of common stock sold in a Qualified Offering is greater than the Placement Price, for that number of shares of common stock to provide a Placement Price with an effective 5% discount; (ii) if the offering price of common stock sold in a Qualified Offering is equal to or less than the Placement Price, for that number of shares of common stock to provide a Placement Price with an effective 10% discount to the Qualified Offering price; (iii) in the event of a Change of Control, for that number of shares of common stock to provide a Placement Price with an effective 5% discount; or (iv) in the event of conversion at the Time Deadline, for that number of shares of common stock to provide a Placement Price that is equal to the maximum allowable discount prescribed pursuant to the rules of the TSXV. All securities offered were restricted securities under Rule 144 under the Securities Act. The exercise of the Rights on the earlier of a Qualified Offering, a Change of Control or the Time Deadline will not only increase the number of Shares held by the holders of the Rights but will also result in dilution to other existing shareholders of Contact Gold.

Currency Rate Risk

The Company may be subject to currency risks. Contact Gold’s reporting currency is the United States dollar, which is exposed to fluctuations against other currencies. Contact Gold’s primary operations are located in the United States. Should Contact Gold expand its operations into additional countries its expenditures and obligations may be incurred in foreign currencies. As such, Contact Gold’s results of operations may become subject to foreign currency fluctuation risks and such fluctuations may adversely affect the financial position and operating results of Contact Gold. Contact Gold has not undertaken to mitigate transactional volatility in the United States dollar at this time. Contact Gold may, however, enter into foreign currency forward contracts in order to match or partially offset existing currency exposures.

Government Regulation

Contact Gold’s exploration operations are subject to government legislation, policies and controls relating to prospecting, development, production, environmental protection, including plant and animal species, and more specifically including the greater sage-grouse, mining taxes and labour standards. In order for Contact Gold to carry out its activities, its various licences and permits must be obtained and kept current. There is no guarantee that the Company’s licences and permits will be granted, or that once granted will be maintained and extended. In addition, the terms and conditions of such licences or permits could be changed and there can be no assurances that any application to renew any existing licences will be approved. There can be no assurance that all permits that Contact Gold requires will be obtainable on reasonable terms, or at all. Delays or a failure to obtain such permits, or a failure to comply with the terms of any such permits that Contact Gold has obtained, could have a material adverse impact on Contact Gold. Contact Gold may be required to contribute to the cost of providing the required infrastructure to facilitate the development of its properties and will also have to obtain and comply with permits and licences that may contain specific conditions concerning operating procedures, water use, waste disposal, spills, environmental studies, abandonment and restoration plans and financial assurances. There can be no assurance that Contact Gold will be able to comply with any such conditions and non-compliance with such conditions may result in the loss of certain of Contact Gold’s permits and licenses on properties, which may have a material adverse effect on Contact Gold. Future taxation of mining operators cannot be predicted with certainty so planning must be undertaken using present conditions and best estimates of any potential future changes. There is no certainty that such planning will be effective to mitigate adverse consequences of future taxation on Contact Gold.

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Global Financial Conditions

Recent global financial conditions have been characterized by increased volatility and access to public financing, particularly for junior mineral exploration companies, has been negatively impacted. These conditions, which include potential disruptions due to a U.S. Government shutdown, may affect Contact Gold’s ability to obtain equity or debt financing in the future on terms favourable to Contact Gold or at all. If such conditions continue, Contact Gold’s operations could be negatively impacted.

Commodity Markets

The price of Contact Gold’s securities, its financial results, and its access to the capital required to finance its exploration activities may in the future be adversely affected by declines in the price of precious and base metals and, in particular, the price of gold. Precious metal prices fluctuate widely and are affected by numerous factors beyond Contact Gold’s control such as the sale or purchase of precious metals by various dealers, central banks and financial institutions, interest rates, exchange rates, inflation or deflation, currency exchange fluctuation, global and regional supply and demand, production and consumption patterns, speculative activities, increased production due to improved mining and production methods, government regulations relating to prices, taxes, royalties, land tenure, land use and importing and exporting of minerals, environmental protection, and international political and economic trends, conditions and events. If these or other factors continue to adversely affect the price of gold, the market price of Contact Gold’s securities may decline and Contact Gold’s operations may be materially and adversely affected.

Market Fluctuation and Commercial Quantities

The market for minerals is influenced by many factors beyond Contact Gold’s control, including without limitation the supply and demand for minerals, the sale or purchase of precious metals by various dealers, central banks and financial institutions, interest rates, exchange rates, inflation or deflation, currency exchange fluctuation, global and regional supply and demand, production and consumption patterns, speculative activities, increased production due to improved mining and production methods, government regulations relating to prices, taxes, royalties, land tenure, land use and importing and exporting of minerals, environmental protection, and international political and economic trends, conditions and events. In addition, the metals industry in general is intensely competitive and there is no assurance that, even if apparently commercial quantities and qualities of metals (such as gold) are discovered, a market will exist for their profitable sale. Commercial viability of precious and base metals and other mineral deposits may be affected by other factors that are beyond Contact Gold’s control, including the particular attributes of the deposit such as its size, quantity and quality, the cost of mining and processing, proximity to infrastructure, the availability of transportation and sources of energy, financing, government legislation and regulations including those relating to prices, taxes, royalties, land tenure, land use, import and export restrictions, exchange controls, restrictions on production, and environmental protection. It is impossible to assess with certainty the impact of various factors that may affect commercial viability such that any adverse combination of such factors may result in Contact Gold not receiving an adequate return on invested capital or having its mineral projects be rendered uneconomic.

Estimates of Mineral Resource Risks

Mineral resource estimates will be based upon estimates made by Contact Gold’s personnel and independent geologists. These estimates are inherently subject to uncertainty and are based on geological interpretations and inferences drawn from drilling results and sampling analyses and may require revision based on further exploration or development work. The estimation of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. As a result of the foregoing, there may be material differences between actual and estimated mineral reserves, which may impact the viability of Contact Gold’s projects and have a material impact on Contact Gold.

The grade of mineralization which may ultimately be mined may differ from that indicated by drilling results and such differences could be material. The quantity and resulting valuation of mineral reserves and mineral resources may also vary depending on, among other things, mineral prices (which may render mineral reserves and mineral resources uneconomic), cut-off grades applied and estimates of future operating costs (which may be inaccurate). Production can be affected by such factors as permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. Any material change in quantity of mineral resources, mineral reserves, grade, or stripping ratio may also affect the economic viability of any project undertaken by Contact Gold. In addition, there can be no assurance that mineral recoveries in small scale, and/or pilot laboratory tests will be duplicated in a larger scale test under on-site conditions or during production. To the extent that Contact Gold is unable to mine and produce as expected and estimated, Contact Gold’s business may be materially and adversely affected.

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There is no certainty that any of the mineral resources identified on any of Contact Gold’s properties will be realized, that any mineral resources will ever be upgraded to mineral reserves, that any anticipated level of recovery of minerals will in fact be realized, or that an identified mineral reserve or mineral resource will ever qualify as a commercially mineable (or viable) deposit which can be legally and economically exploited. Until a deposit is actually mined and processed, the quantity of mineral resources and mineral reserves and grades must be considered as estimates only, and investors are cautioned that Contact Gold may ultimately never realize production on any of its properties.

Insurance and Uninsured Risks

Contact Gold’s business is subject to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, labour disputes, unusual or unexpected geological conditions, ground or slope failures, cave-ins, changes in the regulatory environment, natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to Contact Gold’s properties or the properties of others, delays in the ability to undertake exploration, monetary losses and possible legal liability.

Although Contact Gold may maintain insurance to protect against certain risks in such amounts as it considers to be reasonable, its insurance will not cover all the potential risks associated with its operations. Contact Gold may also be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration and production is not generally available to Contact Gold or to other companies in the mining industry on acceptable terms. Contact Gold might also become subject to liability for pollution or other hazards which it may not be insured against or which Contact Gold may elect not to insure against because of premium costs or other reasons. Losses from these events may cause Contact Gold to incur significant costs that could have a material adverse effect upon its financial performance and results of operations.

Health, Safety and Community Relations

Contact Gold’s operations are subject to various health and safety laws and regulations that impose various duties on the Company in respect of its operations, relating to, among other things, worker safety and the surrounding communities. These laws and regulations also grant the relevant authorities broad powers to, among other things, close unsafe operations and order corrective action relating to health and safety matters. The costs associated with the compliance with such health and safety laws and regulations may be substantial and any amendments to such laws and regulations, or more stringent implementation thereof, could cause additional expenditure or impose restrictions on, or suspensions of, Contact Gold’s operations. Contact Gold expects to make significant expenditures to comply with the extensive laws and regulations governing the protection of the environment, waste disposal, worker safety, mine development and protection of endangered and other special status species, and, to the extent reasonably practicable, to create social and economic benefit in the surrounding communities near Contact Gold’s mineral properties, but there can be no guarantee that these expenditures will ensure Contact Gold’s compliance with applicable laws and regulations and any non-compliance may have a material and adverse effect on Contact Gold.

Environmental Risks and Hazards

The mining and mineral processing industries are subject to extensive governmental regulations for the protection of the environment, including regulations relating to air and water quality, mine reclamation, solid and hazardous waste handling and disposal and the promotion of occupational health and safety, which may adversely affect Contact Gold or require it to expend significant funds in order to comply with such regulations. There is also a risk that environmental and other laws and regulations may become more onerous, making it more costly for Contact Gold to remain in compliance with such laws and regulations, which could result in the incurrence of additional costs and operational delays or the failure of Contact Gold’s business.

All phases of Contact Gold’s operations in Nevada will be subject to extensive federal and state environmental regulation, including:

• Comprehensive Environmental, Response, Compensation, and Liability Act (“CERCLA”);

• The Federal Resource Conservation and Recovery Act (“RCRA”);

• The Clean Air Act (“CAA”);

• The National Environmental Policy Act (“NEPA”);

• The Clean Water Act (“CWA”);

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• The Safe Drinking Water Act (“SDWA”); and

• The Endangered Species Act (“ESA”).

These environmental regulations require Contact Gold to obtain various operating approvals and licenses and also impose standards and controls relating to exploration, development and production activities. Nevada state statutes and regulations also establish reclamation and financial assurance requirements for mining operations and require that mining projects in Nevada obtain a reclamation permit. Mining projects are required to prepare a reclamation plan and provide financial assurance to ensure that the reclamation plan is implemented upon completion of operations. Compliance with federal and state regulations could result in delays in beginning or expanding operations, incurring additional costs for cleanup of hazardous substances, payment of penalties for discharge of pollutants, and post-mining reclamation and bonding, all of which could have an adverse impact on Contact Gold’s financial performance and results of operations.

There is no assurance that future changes in environmental regulation, if any, will not adversely affect Contact Gold’s operations. Environmental hazards may exist on the properties on which Contact Gold holds interests which are unknown to Contact Gold at present and which have been caused by previous or existing owners or operators of the properties, and which may result in the payment of fines and clean-up costs by Contact Gold and may adversely affect Contact Gold’s operations.

Contact Gold cannot give any assurances that breaches of environmental laws (whether inadvertent or not) or environmental pollution will not materially and adversely affect its financial condition. There is no assurance that any future changes to environmental regulation, if any, will not adversely affect Contact Gold.

Our activities are subject to environmental laws and regulations that may increase our costs of doing business and restrict our operations.

All phases of our operations are subject to environmental regulation in the jurisdictions in which we operate, certain of which regulations are set forth below. Environmental legislation is evolving in a manner which may result in stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. These laws address emissions into the air, discharges into water, management of waste, management of hazardous substances, protection of natural resources, antiquities and endangered species and reclamation of lands disturbed by mining operations. The costs associated with compliance with such laws and regulations are substantial. Compliance with environmental laws and regulations and future changes in these laws and regulations may require significant capital outlays and may cause material changes or delays in our operations and future activities. It is possible that future laws, regulations, or more restrictive interpretations of current laws and regulations by governmental authorities could have a significant adverse impact on our properties or some portion of our business, causing us to re-evaluate those activities at that time.

U.S. Federal Laws: CERCLA, and comparable state statutes, impose strict, joint and several liabilities on current and former owners and operators of sites and on persons who disposed of or arranged for the disposal of hazardous substances found at such sites. It is not uncommon for the government to file claims requiring cleanup actions, for reimbursement for government-incurred cleanup costs, or for natural resource damages, or for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances released into the environment. RCRA, and comparable state statutes, govern the disposal of solid waste and hazardous waste and authorize the imposition of substantial fines and penalties for noncompliance, as well as requirements for corrective actions. CERCLA, RCRA and comparable state statutes can impose liability for clean-up of sites and disposal of substances found on exploration, mining and processing sites long after activities on such sites have been completed.

CAA, as amended, restricts the emission of air pollutants from many sources, including mining and processing activities. Our mining operations may produce air emissions, including fugitive dust and other air pollutants from stationary equipment, storage facilities and the use of mobile sources such as trucks and heavy construction equipment, which are subject to review, monitoring and/or control requirements under the CAA and state air quality laws. New facilities may be required to obtain permits before work can begin, and existing facilities may be required to incur capital costs in order to remain in compliance. In addition, permitting rules may impose limitations on our production levels or result in additional capital expenditures in order to comply with the rules.

NEPA requires federal agencies to integrate environmental considerations into their decision-making processes by evaluating the environmental impacts of their proposed actions, including issuances of permits to mining facilities, and assessing alternatives to those actions. If a proposed action could significantly affect the environment, the agency must prepare a detailed statement known as an EIS. The United States Environmental Protection Agency (“EPA”), other federal agencies, and any interested third parties will review and comment on the scoping of the Environmental Impact Statement (“EIS”) and the adequacy of and findings set forth in the draft and final EIS. This process can cause delays in the issuance of required permits or result in changes to a project to mitigate its potential environmental impacts, which can in turn impact the economic feasibility of a proposed project.

CWA, and comparable state statutes, impose restrictions and controls on the discharge of pollutants into waters of the United States. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency. The CWA regulates storm water from mining facilities and requires a storm water discharge permit for certain activities. Such a permit requires the regulated facility to monitor and sample storm water run-off from its operations. The CWA and regulations implemented thereunder also prohibit discharges of dredged and fill materials in wetlands and other waters of the United States unless authorized by an appropriately issued permit. The CWA and comparable state statutes provide for civil, criminal and administrative penalties for unauthorized discharges of pollutants and impose liability on parties responsible for those discharges for the costs of cleaning up any environmental damage caused by the release and for natural resource damages resulting from the release.

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SDWA and the Underground Injection Control (“UIC”) program promulgated thereunder, regulate the drilling and operation of subsurface injection wells. The EPA directly administers the UIC program in some states and in others the responsibility for the program has been delegated to the state. The program requires that a permit be obtained before drilling a disposal or injection well. Violation of these regulations and/or contamination of groundwater by mining related activities may result in fines, penalties, and remediation costs, among other sanctions and liabilities under the SDWA and state laws. In addition, third party claims may be filed by landowners and other parties claiming damages for alternative water supplies, property damages, and bodily injury.

Nevada Laws: At the state level, mining operations in Nevada are also regulated by the Nevada Department of Conservation and Natural Resources, Division of Environmental Protection. Nevada state law requires mine operators to hold Nevada Water Pollution Control Permits, which dictate operating controls and closure and post-closure requirements directed at protecting surface and ground water.

Other Nevada regulations govern operating and design standards for the construction and operation of any source of air contamination and landfill operations. Any changes to these laws and regulations could have an adverse impact on our financial performance and results of operations by, for example, requiring changes to operating constraints, technical criteria, fees or surety requirements.

The Proposed CERCLA § 108(b) Hardrock Mining Financial Assurance Rules may adversely affect our business.

The EPA has proposed new rules requiring demonstration of financial responsibility which are applicable to facilities used for hard rock mining assurance. Although the rules are not final and have not been implemented, they could require us to obtain additional financial guarantees beyond our current reclamation requirements for our Pony Creek Project and our other projects if placed into production. The rule requires subject facilities to calculate their level of financial responsibility based on a formula included in the rule, secure an instrument or otherwise self-assure for the calculated amount, demonstrate to the EPA the proof of the security, and maintain the security until the EPA releases facilities from the CERCLA 108(b) regulations. With only a draft rule at this time, the final impacts of this rule to us are unknown; however, an obligation to secure and maintain financial assurance across all of our facilities could have a material adverse impact to our business. If a final rule is implemented, there can be no assurances that the financial assurance products required by the rule will be available or that we will be able to obtain such financial assurances on commercially reasonable terms, or at all.

Competitive Industry Environment

The mining industry is highly competitive in all of its phases, both domestically and internationally. Contact Gold’s ability to acquire properties and develop mineral resources and reserves in the future will depend not only on its ability to develop its present properties, but also on its ability to select and acquire suitable producing properties or prospects for mineral exploration, of which there is a limited supply. Contact Gold may be at a competitive disadvantage in acquiring additional mining properties because it must compete with other individuals and companies, many of which have greater financial resources, operational experience and technical capabilities than Contact Gold. Contact Gold may also encounter competition from other mining companies in its efforts to hire experienced mining professionals. Competition could adversely affect Contact Gold’s ability to attract necessary funding or acquire suitable producing properties or prospects for mineral exploration in the future. Competition for services and equipment could result in delays if such services or equipment cannot be obtained in a timely manner due to inadequate availability, and could also cause scheduling difficulties and cost increases due to the need to coordinate the availability of services or equipment. Any of the foregoing effects of competition could materially increase project development, exploration or construction costs, result in project delays and generally and adversely affect Contact Gold and its business and prospects.

Market Price of the Company’s Securities

The Shares currently trade on the TSXV. On October 17, 2018, Contact Gold submitted an application for listing its Shares for quotation on the OTCQX. Securities of micro-cap and small-cap companies have experienced substantial price and volume volatility in the past, often based on factors unrelated to the financial performance or prospects of the companies involved or the value of the underlying assets. These factors include macroeconomic developments and political environments in North America and globally and market perceptions of the attractiveness of particular industries. There is no assurance that the price of the Shares will be unaffected by any such volatility. The price of the Shares is also likely to be significantly affected by short-term changes in mineral and commodity prices or in Contact Gold’s financial condition and results of operations as reflected in its financial statements. Other factors unrelated to Contact Gold’s performance that may have an effect on the price of the Shares include the following: (i) the extent of analytical coverage available to investors concerning Contact Gold’s business may be limited if investment banks with research capabilities do not follow Contact Gold’s securities; (ii) lessening in trading volume and general market interest in Contact Gold’s securities may affect an investor’s ability to trade significant numbers of Shares; (iii) the size of Contact Gold’s public float may limit the ability of some institutions to invest in Contact Gold’s securities; (iv) a substantial decline in the price of the Shares that persists for a significant period of time could cause Contact Gold’s securities, if listed on an exchange, to be delisted from such exchange, further reducing market liquidity; and (v) the sale of securities by major shareholders .

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As a result of any of these factors, the market price of the Shares at any given point in time may not accurately reflect Contact Gold’s long-term value and its shareholders may experience capital losses as a result of their investment in Contact Gold. Securities class action litigation often has been brought against companies following periods of volatility in the market price of their securities. Contact Gold may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.

Strategic Partnerships and Joint Venture Agreements

Contact Gold may in the future enter into partnerships, option agreements and/or joint ventures as a means of acquiring additional property interests or to fully exploit the exploration and production potential of its assets. The failure of any partner to meet its obligations to Contact Gold or other third parties, or any disputes with respect to third parties’ respective rights and obligations, could have a material adverse effect on Contact Gold’s rights under such agreements. Contact Gold may also be unable to exert direct influence over strategic decisions made in respect of properties that are subject to the terms of these agreements, which may have a materially adverse impact on the strategic value of the underlying mineral claims. Furthermore, in the event Contact Gold is unable to meet its obligations or share of costs incurred under agreements to which it is a party, the Company may have its property interests subject to such agreements reduced as a result or face the termination of such agreements.

Acquisitions and Integration

From time to time, it can be expected that Contact Gold will examine opportunities to acquire additional exploration and/or mining assets and businesses. Any acquisition that Contact Gold may choose to complete may be of a significant size, will require significant attention by Contact Gold’s management, may change the scale of Contact Gold’s business and operations, and may expose Contact Gold to new geographic, political, operating, financial and geological risks. Contact Gold’s success in its acquisition activities depends upon its ability to identify suitable acquisition candidates, negotiate acceptable terms for any such acquisition, and integrate the acquired operations successfully with those of Contact Gold. Any acquisitions would be accompanied by risks. In the event that Contact Gold chooses to raise debt capital to finance any such acquisitions, Contact Gold’s leverage will be increased. If Contact Gold chooses to use equity as consideration for such acquisitions, existing shareholders may suffer dilution. Alternatively, Contact Gold may choose to finance any such acquisitions with its existing resources, which would result in the depletion of such resources. There can be no assurance that Contact Gold would be successful in overcoming these risks or any other problems encountered in connection with such acquisitions, that Contact Gold would be able to successfully integrate the acquired business into Contact Gold’s pre-existing business or that any such acquisition would not have a material and adverse effect on Contact Gold.

Dilution

With the net proceeds from this Offering, Contact Gold believes that it is adequately financed to carry out its exploration and development plans in the near term. However, financing the development of a mining operation through to production, should feasibility studies show it is recommended, would be expensive and Contact Gold would require additional capital to fund development and exploration programs and potential acquisitions. Contact Gold cannot predict the size of future issuances of the Shares or the issuance of debt instruments or other securities convertible into Shares in connection with any such financing. Likewise, Contact Gold cannot predict the effect, if any, that future issuances and sales of Contact Gold’s securities will have on the market price of the Shares. If Contact Gold raises additional funds by issuing additional equity securities, such financing may substantially dilute the interests of existing shareholders. Sales of substantial numbers of Shares, or the availability of such Shares for sale, could adversely affect prevailing market prices for Contact Gold’s securities and a securityholder’s interest in Contact Gold.

Future Sales of the Shares by Major Shareholder

Sales of a large number of Shares in the public markets, or the potential for such sales, could decrease the trading price of the Shares and could impair Contact Gold’s ability to raise capital through sales of Shares. In particular, as at the date hereof, Waterton Nevada owns, directly or indirectly, approximately 37% of the issued and outstanding Shares. Subject to the terms of the Governance and Investor Rights Agreement, Waterton Nevada is not permitted to dispose of its Shares until June 7, 2019. On the expiry of the lock-up period, if Waterton Nevada decides to liquidate all or a significant portion of its position, it could adversely affect the price of Shares.

Climate Change and Climate Change Regulations

Climate change could have an adverse impact on Contact Gold’s operations. The potential physical impacts of climate change on the operations of Contact Gold are highly uncertain, and would be particular to the geographic circumstances in areas in which it operates. These may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. These changes in climate could have an impact on the cost of development or production on Contact Gold’s mines and adversely affect the financial performance of its operations.

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Regulations and pending legislation governing issues involving climate change could result in increased operating costs, which could have a material adverse effect on the business of Contact Gold. A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to climate and its potential impacts. Legislation and increased regulation regarding climate change could impose significant costs on Contact Gold, its venture partners and its suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations. Any adopted climate change regulations could also negatively impact Contact Gold’s ability to compete with companies situated in areas not subject to such regulations. Given the emotion, political significance and uncertainty around the impact of climate change and how it should be dealt with, Contact Gold cannot predict how legislation and regulation will affect its financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by Contact Gold or other companies in the natural resources industry could harm the reputation of Contact Gold.

Risk of Litigation

Contact Gold may become involved in disputes with other parties in the future which may result in litigation. The results of litigation cannot be predicted with certainty. If Contact Gold is unable to resolve these disputes favourably, it may have a material adverse impact on the ability of Contact Gold to carry out its business plan.

Reliance on Key Personnel

Contact Gold’s development will depend on the efforts of key management and other key personnel. Loss of any of these people, particularly to competitors, could have a material adverse effect on Contact Gold’s business. Further, with respect to the future development of Contact Gold’s projects, it may become necessary to attract both international and local personnel for such development. The marketplace for key skilled personnel is becoming more competitive, which means the cost of hiring, training and retaining such personnel may increase. Factors outside Contact Gold’s control, including competition for human capital and the high level of technical expertise and experience required to execute this development, will affect Contact Gold’s ability to employ the specific personnel required. Due to the relatively small size of Contact Gold, the failure to retain or attract a sufficient number of key skilled personnel could have a material adverse effect on Contact Gold’s business, results of future operations and financial condition. Moreover, Contact Gold does not intend to take out ‘key person’ insurance in respect of any directors, officers or other employees.

Influence of Third Party Stakeholders

Some of the lands in which Contact Gold holds an interest, or the exploration equipment and roads or other means of access which Contact Gold intends to utilize in carrying out its work programs or general business mandates, may be subject to interests or claims by third party individuals, groups or companies. In the event that such third parties assert any claims, Contact Gold work programs may be delayed even if such claims are not meritorious. Such delays may result in significant financial loss and loss of opportunity for Contact Gold.

Internal Controls

Internal controls over financial reporting are procedures designed to provide reasonable assurance that transactions are properly authorized, assets are safeguarded against unauthorized or improper use, and transactions are properly recorded and reported. A control system, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation. Though Contact Gold intends to put into place a system of internal controls appropriate for its size, and reflective of its level of operations, there are limited internal controls currently in place. Contact Gold has a very limited history of operations and has not made any assessment as to the effectiveness of its internal controls. If we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of its internal control over financial reporting when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of the Common Stock could be negatively affected. We also could become subject to investigations by the stock exchange on which the securities are listed, the Commission, or other regulatory authorities, which could require additional financial and management resources.

Dividend Policy

No dividends on the Shares have been paid by Contact Gold to date. Other than holders of Preferred Stock, investors in Contact Gold’s securities cannot expect to receive a dividend on their investment in the foreseeable future, if at all. Accordingly, it is unlikely that investors will receive any return on their investment in Contact Gold’s securities (other than Preferred Stock) other than through possible Share price appreciation. On completion of the Transactions, the Company issued preferred shares to Waterton Nevada, which shares, in priority to the rights of holders of the Shares or other classes of stock of Contact Gold, shall be entitled to receive and Contact Gold shall pay thereon, as and when declared by the Board out of the assets of Contact Gold properly applicable to the payment of dividends, preferential cumulative cash dividends at a fixed rate per annum equal to 7.5%, on a simple and not compounded basis. Moreover, for so long as Waterton Nevada has the right to appoint one or more nominees to the Board, Contact Gold shall not declare or pay any cash dividend or distribution on the Shares unless such dividend or distribution has been approved by the nominees of Waterton Nevada, in addition to approval by a majority of the Board.

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Conflicts of Interest

Certain of the directors and officers of Contact Gold also serve as directors and/or officers of other companies involved in natural resource exploration and development and consequently there exists the possibility for such directors and officers to be in a position of conflict. Any decision made by any of such directors and officers involving Contact Gold must be made in accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests of Contact Gold and its shareholders. In addition, each of the directors is required to declare and refrain from voting on any matter in which such directors may have a conflict of interest in accordance with the procedures set forth in the Revised Statutes applicable to Nevada corporations, Title 7, Chapter 78 (the “Nevada Act”) and other applicable Laws.

Liquidity Risk

Liquidity risk arises through the excess of financial obligations due over available financial assets at any point in time. Contact Gold’s objective in managing liquidity risk will be to maintain sufficient readily available cash reserves and credit in order to meet its liquidity requirements at any point in time. As Contact Gold does not currently have revenue, and is not expected to have revenue in the foreseeable future, Contact Gold will be reliant upon debt and equity financing to mitigate liquidity risk. The total cost and planned timing of acquisitions and/or other development or construction projects is not currently determinable and it is not currently known precisely when Contact Gold will require external financing in future periods. There is no guarantee that external financing will be available on commercially reasonable terms, or at all, and Contact Gold’s inability to finance future development and acquisitions would have a material and adverse effect on Contact Gold and its business and prospects.

Risks Relating to our Common Stock

An active market in which investors can resell their Common Stock may not develop.

We cannot predict the extent to which an active market for our Common Stock will develop or be sustained after this Offering, or how the development of such a market might affect the market price of our Common Stock. The offering price of our Common Stock in this Offering has been agreed to between us and the Underwriters based on a number of factors, including market conditions in effect around the time of this Offering, and it may not be in any way indicative of the price at which our Common Stock will trade following the completion of this Offering. Even if a trading market develops, investors may not be able to resell their Common Stock at or above the initial offering price. Investors are cautioned that if an active market for our Common Stock does not arise, investors may not be able to resell their Common Stock, or may be forced to do so at a loss.

You will experience immediate and substantial dilution as a result of this Offering.

You will incur immediate and substantial dilution as a result of this Offering. After giving effect to the sale by us of our Shares in this offering at an initial public Offering price of $• per Share, after deducting the underwriting discount and commissions and estimated offering expenses payable by us, and after giving effect to the shares issuable upon the automatic conversion of the Rights investors in this Offering can expect an immediate dilution of $• per share, which figure assumes that no Shares are sold pursuant to the Concurrent Private Placement. See “Dilution.”

We are an “emerging growth company,” and cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our Common Stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years: however, circumstances could cause us to lose that status earlier, including if the market value of our Common Stock held by non-affiliates exceeds $700 million, if we issue $1 billion or more in non-convertible debt during a three-year period, or if our annual gross revenues exceed $1.07 billion. Absent the foregoing circumstances, we would cease to be an emerging growth company on the last day of the fiscal year following the date of the fifth anniversary of our first sale of common equity securities under an effective registration statement (note that the offering of Common Stock pursuant to this Offering Circular will not result in the sale of securities under an effective registration statement). Finally, at any time we may choose to opt-out of the emerging growth company reporting requirements. If we choose to opt out, we will be unable to opt back in to being an emerging growth company. We cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile.

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The market price of our Common Stock may be volatile.

The trading price of the stock and the price at which we may sell stock in the future are subject to fluctuations in response to any of the following:

• limited trading volume in the Common Stock;

• quarterly variations in operating results;

• involvement in litigation;

• general financial market conditions;

• the prices of gold and other precious metals;

• announcements by us of, for example, disappointing results of exploratory drilling, the incurrence of environmental liabilities or other material developments;

• announcements of material developments by our competitors;

• our ability to raise additional funds;

• changes in government regulations; and

• other material events.

In the event that the occurrence of any of these events causes the price of our Common Stock to decrease, investors may be forced to sell their Shares at a loss.

We may issue Preferred Stock that could adversely affect holders of Common Stock.

The Board has the power, without stockholder approval and subject to the terms of our amended and restated certificate of incorporation, to set the terms of any shares of Preferred Stock that may be issued, including voting rights, dividend rights, conversion features, preferences over our Common Stock with respect to dividends or upon liquidation, dissolution, or winding up of the business. The Board previously authorized the issuance of 11,111,111 Preferred Stock carrying preferential rights to dividends, among other things. If we issue Preferred Stock again in the future that have a preference over Common Stock with respect to the payment of dividends or upon liquidation, dissolution or winding up, or if we issue Preferred Stock with voting rights that dilute the voting power of Common Stock, the rights of holders of Common Stock or the trading price of our Common Stock could be adversely affected.

Currently outstanding and future issuances of Preferred Stock, which rank senior to our Common Stock for the purposes of dividends and liquidating distributions will, and any future issuances of debt securities, which would rank senior to our Common Stock upon our bankruptcy or liquidation may, adversely affect the level of return you may be able to achieve from an investment in our Common Stock.

Currently outstanding Preferred Stock have preference on bankruptcy over the Common Stock and holders of the Preferred Stock are entitled to receive from the assets of the Company in priority to the holders of Common Stock on a liquidation, dissolution, winding up or other distribution of assets of the Company. In the future, we may attempt to increase our capital resources by offering debt securities or additional Preferred Stock. Upon a potential bankruptcy or liquidation, holders of our debt securities or Preferred Stock, and lenders with respect to other borrowings we may make, may receive distributions of our available assets prior to any distributions being made to holders of our Common Stock. Because our decision to issue debt securities or Preferred Stock in any future offering, or borrow money from lenders, will depend in part on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any such future offerings or borrowings. Holders of our Common Stock must bear the risk that any future offerings we conduct or borrowings we make may adversely affect the level of return they may be able to achieve from an investment in our Common Stock, upon bankruptcy or otherwise.

If our Common Stock become subject to the penny stock rules, it would become more difficult to trade our Shares.

The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price per share of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, before effecting a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that, before effecting any such transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our Common Stock, and therefore stockholders may have difficulty selling their Shares.

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FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative, low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. The FINRA requirements may make it more difficult for broker-dealers to recommend that their customers buy our Common Stock, which may have the effect of reducing the level of trading activity in our Common Stock. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder’s ability to resell our Common Stock.

Our management has broad discretion as to the use of certain of the net proceeds from this Offering.

We currently intend to use up to $• of the net proceeds from this Offering to fund our 2019 exploration and development activities on existing mineral properties, including the Pony Creek Project. However, we cannot specify with certainty the particular uses of such proceeds. Our management will have broad discretion in the application of the net proceeds designated to fund our capital expenditures on existing mineral properties, acquire additional acreage leaseholds, acquire additional producing properties and associated leaseholds, or for general corporate purposes, which are subject to change in the future, and which may change in response to the proceeds raised pursuant to the Concurrent Private Placement. Accordingly, you will have to rely upon the judgment of our management with respect to the use of these proceeds. Our management may spend a portion or all of the net proceeds from this Offering in ways that holders of our Common Stock may not desire or that may not yield a significant return or any return at all. The failure by our management to apply these funds effectively could harm our business. Pending their use, we may also invest the net proceeds from this Offering in a manner that does not produce income or that loses value. Please see “Use of Proceeds” below for more information.

As an emerging growth company, our auditor is not required to attest to the effectiveness of our internal controls.

Our independent auditors are not required to attest to the effectiveness of our internal control over financial reporting while we are an emerging growth company. This means that the effectiveness of our financial operations may differ from our peer companies in that they may be required to obtain independent registered public accounting firm attestations as to the effectiveness of their internal controls over financial reporting while we are not. While our management will be required to attest to internal control over financial reporting and we will be required to detail changes to our internal controls on a quarterly basis, we cannot provide assurance that the independent registered public accounting firm’s review process in assessing the effectiveness of our internal controls over financial reporting, if obtained, would not find one or more material weaknesses or significant deficiencies. Further, once we cease to be an emerging growth company we will be subject to independent registered public accounting firm attestation regarding the effectiveness of our internal controls over financial reporting unless our public float is less than US$75 million. Even if management finds such controls to be effective, our independent registered public accounting firm may decline to attest to the effectiveness of such internal controls and issue a qualified report.

We may elect to become a reporting issuer under the Exchange Act and, if we do, we believe that we will be considered a smaller reporting company and will be exempt from certain disclosure requirements, which could make our Common Stock less attractive to potential investors.

Rule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:

• had a public float of less than US$250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or

• in the case of an initial registration statement under the Securities Act, or the Exchange Act of 1934, as amended, which we refer to as the Exchange Act, for shares of its common equity, had a public float of less than US$250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated initial public offering price of the shares; or

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• in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero or less than US$700 million, had annual revenues of less than US$100 million during the most recently completed fiscal year for which audited financial statements are available.

We believe that we are a smaller reporting company, and as such that we will not be required and may not include a Compensation Discussion and Analysis section in our proxy statements; we will provide only two years of financial statements; and we need not provide the table of selected financial data. We also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies. These “scaled” disclosure requirements make our Common Stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their Shares.

We are taxed as a corporation for U.S. federal income tax purposes.

We will pay U.S. federal income tax on our taxable income at the corporate tax rate, which is currently a maximum of 21%, and will pay state and local income tax at varying rates. Distributions will generally be taxed again as corporate dividends (to the extent of our current and accumulated earnings and profits), and no income, gains, losses, deductions, or credits will flow through to you. In addition, changes in current state law may subject us to additional entity-level taxation by individual states. Because of state budget deficits and other reasons, several states are evaluating ways to subject corporations to additional forms of taxation. We will be subject to a material amount of entity-level taxation, which will result in a material reduction in the anticipated cash flow and after-tax return to our shareholders.

A non-U.S. holder of our Common Stock will be treated as having income that is “effectively connected” with a United States trade or business upon the sale or disposition of our Common Stock unless (i) our Common Stock is regularly traded on an established securities market and (ii) the non-U.S. holder owned not more than 5% of our Common Stock during the applicable testing period.

A non-U.S. holder of our Common Stock generally will incur U.S. Federal income tax on any gain realized upon a sale or other disposition of our Common Stock to the extent our Common Stock constitutes a “United States real property interest” (“USRPI”), under the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”). A USRPI includes stock in a “United States real property holding corporation.” We are, and expect to continue to be for the foreseeable future, a “United States real property holding corporation.”

Under FIRPTA, a non-U.S. holder is taxed on any gain realized upon a sale or other disposition of a USRPI as if such gain were “effectively connected” with a United States trade or business of the non-U.S. holder. A non-U.S. holder thus will be taxed on such a gain at the same graduated rates generally applicable to U.S. persons. In addition, a non-U.S. holder would have to file a U.S. federal income tax return reporting that gain. A non-U.S. holder that is a foreign corporation and not entitled to treaty relief or exemption also may be subject to the 30% branch profits tax on such gain.

However, if our Common Stock becomes regularly traded on an established securities market, then gains realized upon a sale or other disposition of our Common Stock will not be treated as gains from the sale of a USRPI, as long as the non-U.S. holder did not own more than 5% of our Common Stock at any time during the five-year period preceding the sale or other disposition or, if shorter, the non-U.S. holder’s holding period for its Common Stock. At this time, we generally expect our Common Stock will continue to be regularly traded on an established securities market, and so gains realized upon a sale or other disposition of our Common Stock will not be treated as gains from the sale of a USRPI, as long as the non-U.S. holder did not own more than 5% of our Common Stock at any time during the applicable testing period. However, in the event that our Common Stock is not regularly traded on an established securities market, then gains recognized by a non-U.S. holder upon a sale or other disposition of our Common Stock will be subject to tax under FIRPTA unless an exemption applies.

The tax treatment of corporations or an investment in our Common Stock could be subject to potential legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis.

The present U.S. federal income tax treatment of corporations, including us, or an investment in our Common Stock, may be modified by administrative, legislative or judicial interpretation at any time. For example, from time to time, members of Congress and the President propose and consider substantive changes to the existing U.S. federal income tax laws that affect corporations. Any modification to the U.S. federal income tax laws and interpretations thereof may or may not be retroactively applied and could make it more difficult or impossible to meet our cash flow needs for operations, acquisitions or other purposes. We are unable to predict whether any of these changes or other proposals will be enacted. However, it is possible that a change in law could affect us, and any such changes could negatively impact the value of an investment in our Common Stock.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Offering Circular, including any supplement to this Offering Circular, includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern our anticipated results and developments in our operations in future periods, planned exploration and development of our properties, plans related to our business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. These statements include, but are not limited to, comments regarding:

Forward-looking statements may include, but are not limited to, statements with respect to the future financial or operating performance of Contact Gold and its subsidiaries and its mineral project, the future price of metals, test work and confirming results from work performed to date, the estimation of mineral resources and mineral reserves, the realization of mineral resource and mineral reserve estimates, the timing and amount of estimated future capital, operating and exploration expenditures, costs and timing of the development of new deposits, costs and timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, and limitations of insurance coverage. Often, but not always, forward looking statements can be identified by the use of words and phrases such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.

Forward looking statements are based on the opinions and estimates of management as of the date such statements are made and are based on various assumptions such as future business and property integrations remaining successful; favourable and stable general macroeconomic conditions, securities markets, spot and forward prices of gold, silver, base metals and certain other commodities, currency markets (such as the $ to US$ exchange rate); no materially adverse changes in national and local government, legislation, taxation, controls, regulations and political or economic developments; that various risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins and flooding) will not materialize; the ability to complete planned exploration programs; the ability to continue raising the necessary capital to finance operations; no disruptions or delays due to a U.S. Government shutdown; the ability to obtain adequate insurance to cover risks and hazards on favourable terms; that changes to laws and regulations will not impose greater or adverse restrictions on mineral exploration or mining activities; the continued stability of employee relations; relationships with local communities and indigenous populations; that costs associated with mining inputs and labour will not materially increase; that mineral exploration and development activities (including obtaining necessary licenses, permits and approvals from government authorities) will be successful; and the continued validity and ownership of title to properties.

Forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Contact Gold to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. Such factors include, among others, general business, economic, competitive, political and social uncertainties; the actual results of current and future exploration activities differing from projected results; the inability to meet various expected cost estimates; changes or downgrades in project parameters and/or economic assessments as plans continue to be refined; fluctuations in the future prices of metals; possible variations of mineral grade or recovery rates below those that are expected; the risk that actual costs may exceed estimated costs; failure of equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; political instability; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled “Risk Factors” in this Offering Circular. Although Contact Gold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward looking statements contained herein are made as of the date of this Offering Circular and Contact Gold disclaims any obligation to update any forward looking statements, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that forward looking statements will prove to be accurate. Accordingly, readers should not place undue reliance on forward looking statements.

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DIVIDEND POLICY

We have paid no dividends on the Shares to date and we do not expect to pay dividends on our common stock in the foreseeable future. Other than holders of Preferred Stock, investors in Contact Gold’s securities cannot expect to receive a dividend in the foreseeable future, if at all. The Preferred Stock issued to Waterton Nevada has priority to the rights of the Shares or other classes of stock of Contact Gold and is entitled to receive, when declared by the Board, preferential cumulative cash dividends at a fixed rate per annum equal to 7.5%, on a simple and not compounded basis. Moreover, for so long as Waterton Nevada has the right to appoint one or more nominees to the Board, Contact Gold shall not declare or pay any cash dividend or distribution on the Shares unless such dividend or distribution has been approved by the nominees of Waterton Nevada, in addition to approval by a majority of the Board.

See “Dividend Policy” in Risk Factors.

USE OF PROCEEDS

We expect to receive approximately $• million of net proceeds from the sale of the Common Stock offered hereby after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

Set forth below is a table showing the estimated uses of proceeds from this Offering.

⁽¹⁾This figure assumes no Shares are sold pursuant to the Concurrent Private Placement. This amount excludes proceeds from the Over-Allotment Option, which if exercised in full, we would expect to receive approximately an additional $• million of net proceeds, after deducting underwriting discounts. We currently intend to use the proceeds from the exercise of Over-Allotment Option, if any, for general working capital purposes.
⁽²⁾Estimated offering expenses include legal, accounting, printing, advertising, marketing, state registration fees, and other expenses of this Offering.
⁽³⁾Assuming proceeds of $•, the Company will implement a Phase 3 exploration program to follow-up on its 2017 and 2018 exploration programs consistent with the recommendations in the Technical Report. Early results from drilling at the West Zone, the North Zone and step-out drilling at the Bowl Zone, along with the definition of several new targets on the property warrant a significant amount of follow-up exploration including RC and core drilling to refine existing targets and develop new targets. It is anticipated that the $• will be spent on the Phase 3 program over a • month period. Contingent on the success of the Phase 3 program, a follow-up Phase 4 program is intended to be pursued in line with the recommendations in the Technical Report. Refer to the section entitled “The Pony Creek Project” under the heading “Description of Property”.
⁽⁴⁾Target generation and interpretation of data at the Company’s North Star project supports undertaking an initial drill program at that project in 2019. The remaining balance allocated to “Exploration Expenditures at North Star and other Contact Gold Properties” includes the cost of maintaining all of the Company’s portfolio projects in good standing.
⁽⁵⁾These amounts may be used to pay expenses relating to salaries, bonuses and other compensation to our officers and employees.

Such allocation of net proceeds may be subject to future revision depending on, among other factors, market conditions, commodity prices, drilling costs and availability of drilling and production equipment, future operating results, and acquisition opportunities.

We granted the Underwriters an Over-Allotment Option, which if exercised in full, would result in our receiving approximately an additional $• million of net proceeds, after deducting underwriting discounts and assuming no sales to persons on the President’s List. We currently intend to use the proceeds from the exercise of Over-Allotment Option, if any, for general working capital purposes. There can be no assurance that the Over-Allotment Option will be exercised.

The above-noted allocation represents the Company’s intention with respect to its use of proceeds based on current knowledge and planning by management of the Company. There may be circumstances where, for sound business reasons, the Company reallocates the use of proceeds in a manner that management believes to be in the best interests of the Company. In such circumstances, the actual expenditures may differ from the estimates set forth above.

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DETERMINATION OF OFFERING PRICE

The initial public offering price will be determined by arm’s length negotiations between us and the Lead Underwriter on behalf of the Underwriters. In determining the initial public offering price, we and the Lead Underwriter on behalf of the Underwriters expect to consider a number of factors including:

• the information set forth in this Offering Circular and otherwise available to the representatives;

• our prospects and the history and prospects for the industry in which we compete;

• an assessment of our management;

• the general condition of the securities markets at the time of this Offering;

• the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

• other factors deemed relevant by the representatives of the Underwriters and us.

Neither we nor the Underwriters can assure investors that an active trading market will develop for the Shares, or that the Shares will trade in the public market at or above the initial public offering price. See “Underwriting” for additional information regarding our arrangement with our Underwriters.

CAPITALIZATION

The following table sets forth our cash and capitalization as of December 31, 2018 and •, 2019, on:

• an actual basis; and

• an as-adjusted basis to reflect our receipt of the net proceeds from our sale of Shares in this Offering at an assumed initial public offering price of $• per Share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. This amount assumes no sales to purchasers on the President’s List and no sales of Common Stock issuable under the Concurrent Private Placement. See “Contractual Obligations” in the MD&A.

The as adjusted information below is illustrative only, and our capitalization following the closing of this Offering will be adjusted based on the actual terms of this Offering determined at the time of pricing as well as our actual expenses. You should read this table together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes appearing elsewhere in this Offering Circular.

⁽¹⁾Data at December 31, 2018, is derived from our audited financial statements for the fiscal year ended December 31, 2018.

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⁽²⁾On March 14, 2019, we closed a non-brokered private placement of 9,827,589 shares of Common Stock, at the Placement Price for gross proceeds of $2,850,000. Each Common Stock was accompanied by one Right. Subject to the rules and limitations of the TSXV, each Right shall automatically convert, without the payment of additional consideration, upon the earlier of (a) a Qualified Offering; (b) a Change of Control; or (c) the Time Deadline, for shares of common stock of Contact Gold as follows: (i) if the offering price of common stock sold in a Qualified Offering is greater than the Placement Price, for that number of shares of common stock to provide a Placement Price with an effective 5% discount; (ii) if the offering price of common stock sold in a Qualified Offering is equal to or less than the Placement Price, for that number of shares of common stock to provide a Placement Price with an effective 10% discount to the Qualified Offering price; (iii) in the event of a Change of Control, for that number of shares of common stock to provide a Placement Price with an effective 5% discount; or (iv) in the event of conversion at the Time Deadline, for that number of shares of common stock to provide a Placement Price that is equal to the maximum allowable discount prescribed pursuant to the rules of the TSXV. All securities offered were restricted securities under Rule 144 under the Securities Act.
⁽³⁾ Contact Gold currently has issued and outstanding 11,111,111 shares of Preferred Stock with an aggregate face value of US$11,100,000, issued to Waterton Nevada in connection with the Transactions. The Preferred Stock will mature on the Maturity Date, accrue preferential cumulative cash dividends at a fixed rate per annum equal to 7.5% on a simple and not compounded basis. The Preferred Stock is non-voting. The Preferred Stock is convertible at the election of the holder at any time, into Shares (subject to a cap such that at any time following any conversion, Waterton Nevada and its affiliates shall not hold more than 49% of the aggregate issued and outstanding Shares). The number of Shares to be issued pursuant to such conversion right shall be equal to the sum of the face value of the Preferred Stock together with any accrued and unpaid cumulative dividends thereon to the conversion date divided by the conversion price of the Preferred Stock on the conversion date, such price being subject to adjustment from time to time. As of April 9, 2019, the conversion price of the Preferred Stock is $1.35 (US$1.01 based on the Bank of Canada exchange rate on April 9, 2019), and if fully converted would convert into 10,948,711 Shares.
⁽⁴⁾Pro forma based on the financial data as of •, 2019, on an as-adjusted basis to reflect our receipt of the net proceeds from our sale of Shares in this Offering at an offering price of $• per Share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us

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DILUTION

Purchasers of our Shares in this Offering will experience immediate and substantial dilution in the net tangible book value (tangible assets less total liabilities) per Share of our Shares for accounting purposes. Our net tangible book value as of December 31, 2018 was approximately $28,275,550, or $0.56 per Share.

Pro forma net tangible book value per Share is determined by dividing our net tangible book value, or total tangible assets less total liabilities, by our shares of Common Stock that will be outstanding immediately following the closing of this Offering. Based on a public offering price of $• per Share, after giving effect to the sale of the Shares in this Offering and the issuance of Shares pursuant to the automatic conversion of the Rights, and further assuming the receipt of the estimated net proceeds (after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us), our adjusted pro forma net tangible book value as of •, 2019 would have been approximately $•, or $• per share. For these purposes, we have assumed no sales to purchasers on the President’s List and no sales of Common Stock issuable under the Concurrent Private Placement. This represents an immediate increase in the net tangible book value of $• per Share to our existing stockholders and an immediate dilution to new investors purchasing Shares in this Offering of $• per Share, resulting from the difference between the offering price and the pro forma as-adjusted net tangible book value after this Offering. The following table illustrates the per Share dilution to new investors purchasing Shares in this Offering (excluding the Over-Allotment Option): This amount assumes no sales to purchasers on the President’s List and no sales of Common Stock issuable under the Concurrent Private Placement.

Over-Allotment Option Dilution

In addition, we granted the Underwriters an Over-Allotment Option, which if exercised in full, would lead to approximately an additional $ • million of net proceeds, after deducting underwriting commissions. Assuming we close the stated amount of the Offering and assuming the full exercise of the Over-Allotment Option, our adjusted pro forma net tangible book value as of •, 2019 would have been approximately $•, or $• per share. Assuming the full exercise of the Over-Allotment Option, this would represent an immediate increase in the net tangible book value of $• per Share to our existing stockholders and an immediate dilution to new investors purchasing Shares in this Offering of $• per Share, resulting from the difference between the offering price and the pro forma as-adjusted net tangible book value after this Offering.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the accompanying financial statements and related notes included elsewhere in this Offering Circular for the years ended December 31, 2018, December 31, 2017, and the period from incorporation on November 23, 2016 to December 31, 2016, respectively. Terms defined within this Management’s Discussion of Financial Condition and Results of Operations (the “MD&A”) are defined solely for this section.

This discussion contains forward-looking statements reflecting our current expectations, whose actual outcomes involve risks and uncertainties. Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors,” “Cautionary Statement Regarding Forward-Looking Statements,” and elsewhere in this Offering Circular. The comparative financial information presented herein and in both the consolidated financial statements as at and for the years ended December 31, 2018 and 2017, and for the period from incorporation on November 23, 2016 to December 31, 2016 (the “Annual Statements”), prepared in accordance with U.S. GAAP, reflect only the value of share capital and the assets, liabilities and operations of Carlin since its incorporation.

Our reporting currency is the Canadian dollar (“CAD”), and all amounts in this MD&A are expressed in Canadian dollars unless otherwise stated. Amounts in United States dollars are expressed as “USD”. As at December 31, 2018, the indicative rate of exchange, per $1.00 as published by the Bank of Canada, was USD 0.7330 (USD 0.7971 at December 31, 2017).

The MD&A should be read in conjunction with our audited Annual Statements.

Highlights and recent developments

Over the course of 2018, Contact Gold continued advancing the Company’s flagship Pony Creek property into a robust project hosting multiple Carlin Type gold occurrences.

In the 18-months since the establishment of Contact Gold, we’ve hit gold mineralization in 87 of the 93 holes drilled (including those lost before planned depth), and have continued to drill high-grade and oxide results at Pony Creek, the majority of which are step-outs from the historical mineral resource estimate area at the property’s Bowl Zone.

During the year ended December 31, 2018, Contact Gold reported the following:

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Subsequent to December 31, 2018, Contact Gold reported the following:

Corporate History

Contact Gold is a gold exploration company focused on high-quality oxide gold targets and making district-scale gold discoveries in Nevada.

The Company was incorporated under the Business Corporations Act (Yukon) on May 26, 2000 and was continued under the Business Corporations Act (British Columbia) on June 14, 2006. On June 7, 2017, upon closing of the Transactions (as defined in this MD&A), the Company completed a legal continuance into the State of Nevada and changed its name to “Contact Gold Corp.” Contact Gold is domiciled in Canada and maintains a head office in Vancouver, British Columbia, Canada. Contact Shares began trading on the TSXV under the symbol “C” on June 15, 2017.

Contact Gold’s land holdings are on the Carlin, Independence, and North Nevada Rift gold trends which host numerous gold deposits and mines. Contact Gold’s land position, as of the date of this Offering Circular, is comprised of approximately 200 km² of mineral tenure which hosts numerous known gold occurrences, ranging from early- to advanced-exploration and resource definition stage.

The Transactions

On June 7, 2017, the following transactions closed, pursuant to a court approved plan of arrangement:

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I.             The reverse take-over transaction (“RTO”) and financing:

Carlin Opportunities Inc. (“Carlin”), a company incorporated in British Columbia on November 23, 2016, closed financings (the “Financings”) during the first half of 2017, to raise gross proceeds of $21,157,500, by issuing 23,815,000 common shares (“Carlin Shares”). A total of $0.95 million in agent and financial advisory fees were paid, and a further $0.61 million in expenditures were incurred, in connection with the Financings.

On June 7, 2017, Contact Gold completed a share consolidation on the basis of one common share of Winwell (a “New Winwell Share”) for every eight existing common shares of Winwell (the “Consolidation”). Pursuant to a post-consolidation adjustment, whereby New Winwell Shares were issued for each whole, consolidated common share held, with fractional shares rounded-down, there were 2,769,486 New Winwell Shares issued and outstanding following the Consolidation.

All of the issued and outstanding Carlin Shares, including 5,000,000 Carlin Shares issued in 2016, were then exchanged (the “Share Exchange”) for all of the New Winwell Shares (becoming “Contact Shares”), and Carlin became a legal subsidiary of Contact Gold. Upon closing of the Share Exchange, there were 31,584,486 Contact Shares issued and outstanding; 91.2% of which were issued to shareholders of Carlin, yielding them control of Contact Gold.

The substance of the Acquisition was determined to be an RTO of a non-operating company. However, as a non-operating company lacking an integrated set of activities and assets capable of being conducted and managed for the purpose of providing a return, or other economic benefits, directly to its investors, Winwell did not constitute a business. As a result, the Acquisition was accounted for as a capital reorganization, with Carlin identified as the accounting acquirer. Accordingly, the Annual Statements reflect the continuation of the financial statements of Carlin, with one adjustment, which is to retroactively adjust Carlin’s legal capital in order to reflect the capital of Winwell (the accounting acquiree), as the legal parent of the consolidated entity. Comparative information presented in the Annual Statements is also retroactively adjusted to reflect the legal capital of Winwell.

The transaction has been measured at the carrying value of the net assets of Winwell that were acquired, less RTO transaction costs, which is summarized below:

Transaction costs directly relating to the RTO incurred by Carlin in the amount of $321,269 (of which $58,152 had been incurred through December 31, 2016 and deferred), were recorded as a charge to retained earnings of Contact Gold to the extent of Winwell’s cash balance ($361,659) immediately prior to closing the Transactions. Accordingly, the balance of cash recognized as acquired from Winwell is $40,390 on closing of the Transactions.

II.            Asset Acquisition – Clover

Pursuant to a securities exchange agreement, dated December 8, 2016, amended on January 31, 2017, and with effect of June 7, 2017 (the “Exchange Agreement”), Contact Gold also acquired Clover Nevada II LLC (“Clover”), the entity that holds the Contact Gold Properties from Waterton Nevada, a limited liability company of which Waterton is the sole member.

Consideration paid, and the values thereof, has been accounted for as follows:

• $7 million in cash (the “Cash Payment”);

• 11,111,111 non-voting preferred shares of Contact Gold ($14,987,020) (“Contact Preferred Shares”); and

• 18,550,000 Contact Shares ($18,550,000).

(the transaction to acquire Clover, being the “Asset Acquisition”, and together with the RTO, the “Transactions”).

Through to the closing date of the Asset Acquisition, and in addition to the Advance Cash Payment, Contact Gold had deferred $586,073, in expenditures to acquire Clover (“Acquisition Costs”). Acquisition Costs comprise primarily legal and advisory fees, and internal due diligence costs, and have been allocated to the respective Contact Gold Properties.

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The Asset Acquisition did not meet the definition of a business combination as (i) the Contact Gold Properties are at the exploration stage with no defined mineral reserves, and (ii) Clover does not have any business processes. Consequently, the transaction was accounted for as an acquisition of an asset.

The allocation of consideration, including Acquisition Costs, for the Asset Acquisition is as follows:

In asset purchases that are not business combinations under ASC 805, Business Combinations, a deferred tax asset or liability is recorded with the offset generally recorded against the assigned value of the asset. Because ASC 740 Income Taxes (“ASC 740”) prohibits any immediate income tax expense or benefit from the recognition of those deferred taxes, the amount of the deferred tax asset (“DTA”) or liability (“DTL”) is determined by using a simultaneous equations method. At the time of the Asset Acquisition, Contact Gold calculated a $2,149,915 DTL on the value of the acquired assets, the amount of which has been allocated to the respective assets acquired.

The relative values (determined at the date of the Transactions) and consideration paid for each of the acquired assets, including attribution of the DTL, and adjusted for the impact of foreign exchange through year end, is detailed in the Annual Statements. Contact Gold has elected not to reflect the new basis of accounting in the financial records of Clover.

Mineral Properties

The Contact Gold Properties are located on Nevada’s Carlin, Independence, and Northern Nevada Rift gold trends. The 23,091 hectares (231 km²) of target-rich mineral tenure acquired on June 7, 2017, hosts numerous known gold occurrences ranging from early- to advanced-exploration and resource definition stage.

The total purchase consideration in the Asset Acquisition was allocated to the respective exploration property interests acquired principally on the basis of a value-per-hectare of each individual property acquired (based on that of a group of peer companies and their respective exploration property interests), along with management-assessed quantitative and qualitative judgments relating to the prospectivity and marketability of each.

The value attributed to each of the Contact Gold Properties pursuant to the acquisition of Clover is as follows:

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In asset purchases that are not business combinations under ASC 805, a DTA or DTL is calculated with the impact recorded against the assigned value of the asset acquired. However, ASC 740 prohibits any immediate income tax expense or benefit from the recognition of those deferred taxes. There is a DTL-related balance attributable to the mineral properties acquired in respect of Nevada net proceeds tax (“NNPT”; calculated at a rate of 5%), determined using a simultaneous equations method, attributed to the respective properties.

As detailed in this MD&A in the discussion relating to the Contact Preferred Shares, and more specifically as part of the “Other Terms”, Waterton Nevada was granted certain rights relating to the Contact Gold Properties, including a right of first offer (“ROFO”), and a right of first refusal (“ROFR”). A third-party also holds a ROFO on certain of the Portfolio properties.

Subsequent to closing the Asset Acquisition, the Company acquired additional mineral property claims contiguous to the original tenure through (i) direct staking and (ii) relatively low-cost acquisitions from private land owners.

On November 27, 2018, the Company disposed of the “Santa Renia”, and “Golden Cloud” exploration properties to Waterton Nevada Splitter, LLC (“Waterton Nevada”), a related party to the Company, in exchange for cash consideration of approximately $0.64 million (discussed in this MD&A under the heading “Mineral Properties - Portfolio”).

As at December 31, 2017 and 2018, including subsequently acquired additional mineral property claims contiguous to the original tenure the values of the Contact Gold Properties are:

Balances presented as “Portfolio properties” include the remaining nine Contact Gold Properties.

Because the functional currency of Clover is the United States dollar, and the reporting currency of the Company is the Canadian dollar, the values of the individual Contact Gold Properties are subject to change from period-to-period based on the relative changes to the currencies. For the year ended December 31, 2018, a $3.3 million increase to the value of the Contact Gold Properties was recorded due to changes in the relative rates of foreign exchange (year ended December 31, 2017: $3.0 million decrease). The exchange differences are reflected as a component of other comprehensive loss.

Expenditures directly attributable to the acquisition of mineral property interests have been capitalized; Claims Maintenance fees, staking costs and related land claims fees paid and exploration and evaluation expenditures incurred by Contact Gold have been expensed. None of the Company’s properties have any known body of commercial ore or any established economic deposit; all are currently in the exploration stage.

Certain Contact Gold Properties that management expects will continue to be of focus include:

• Pony Creek

Pony Creek is located within the Pinion Range, in western Elko County, Nevada, south of GSV’s Railroad-Pinion project (“Pinion”). Since acquisition, through to the date of this Offering Circular, Pony Creek has been the principal focus of the Company’s exploration efforts. The Pony Creek property comprises 1,345 claims encompassing approximately 107 km² in the southern portion of the Carlin gold trend and hosts near surface oxide and deeper high-grade targets supported by extensive exploration databases.

Since closing the Transactions, the Company staked or acquired an additional 34 km2 of prospective mineral tenure adjacent to Pony Creek, primarily to the east and south. The new claims, including those previously known as Pony Spur and East Bailey¹, cover prospective host rocks with significant exploration potential that have seen minimal exploration effort in the past. A new gold discovery was made at Pony Spur through initial drill testing, and subsequent soil sampling at Pony Spur has identified a significant area of anomalous gold westward of this year’s drilling.

^{____________________________________
1} In September 2017, Contact Gold acquired the Pony Spur property in exchange for 75,000 Contact Shares, US$ 50,000 and the reimbursement of claims fees, with such costs capitalized to the carrying value of Pony Creek. On February 6, 2018, the Company acquired the East Bailey property in exchange for 250,000 Contact Shares, also capitalized to the carrying value of Pony Creek, and the award of a 2% NSR royalty to the vendor.

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Large areas of prospective geological setting at Pony Creek had never been sampled or explored, particularly where the newly-recognized host horizons at the nearby Pinion project are exposed. Prior to acquisition by Contact Gold, no drilling had been conducted at Pony Creek in 10 years.

In 2017 we completed an initial drill program which defined oxidized corridors at both the North Zone and western portion of the Bowl Zone with 40 of the 42 drill holes (10,390 m) intersecting significant gold mineralization. The 2017 exploration program also included: over 3,500 soil samples, geological mapping, 427 gravity stations, and 33 line-km of CSAMT geophysical surveys. The exploration successes and targets generated in 2017 set the stage for an aggressive follow-up drill program in 2018.

Through 2018 the Company completed 51 drill holes (approximately 10,860 m). In 2018, the exploration team made two new gold discoveries (West Zone and Pony Spur); and expanded the footprints of the property’s Bowl Zone, and North Zone, both of which remain open for expansion in most directions. The exploration team also identified several never-before drilled targets including, the Moleen target, and the Elliot Dome target, each of which, as well as the oxide zones at the Bowl Zone, the North Zone and the West Zone, are expected to be followed-up with drilling in 2019. Additional targets of merit include the “Pony Spur”, “Willow”, and “Palomino” targets. All of the targets advanced to date are in the northern part of the property, with a significant area believed to be on-strike yet to be explored toward the south.

The Company determined to reduce the previously announced drill program (16,000 m) in order to manage capital and ensure that we could continue to refine and target more efficiently as results became available.

The Company has multiple approved Notices of Intent (“NOI”) (including subsequent amendments) to allow for the necessary disturbance of the initial holes of the planned 2019 drill program. In early 2019 management expects to submit for approval a Plan of Operations for up to 60 acres of additional disturbance on the property. Required cultural, biological and other environmental surveys to inform the Plan of Operations are underway. Approved receipt of the Plan of Operations is anticipated mid-2019.

There is a 3% net smelter returns royalty (“NSR”) on the claims that comprise Pony Creek acquired from Waterton Nevada, 1% of which can be bought-back prior to February 7, 2020 for USD 1,500,000. In addition to the NSR awarded on the acquisition of East Bailey, there is a 3% NSR over certain of the East Bailey claims, up to 2% of which can be bought-back for USD 1,000,000 per 1% increment. Advanced royalty payments are due annually for certain of the East Bailey claims; the amount due for the forthcoming year is USD15,000.

For the year ended December 31, 2018, expenditures, including non-cash items, incurred at Pony Creek were $3.85 million (year ended December 31, 2017: $3.95 million. The approved budget for 2018 at Pony Creek is $3.82 million. Through 2018 we spent $3.85 million on exploration at the property.

Details of exploration and evaluation expenditures incurred and expensed by Contact Gold at Pony Creek through the year ended December 31, 2018, including non-cash items, are summarized in this MD&A under heading “Discussion of operations”. Additional information about Pony Creek is summarized in the Technical Report.

• Dixie Flats

The Dixie Flats gold property (“Dixie Flats”) sits approximately 2.5 km to the east and south the Emigrant Mine (“Emigrant”) operated by Newmont Mining Corporation (“Newmont”), in western Elko County, Nevada. The property boundary of Dixie Flats is 13 km north of Pony Creek, sitting along the Emigrant fault and sharing many of the same host rocks and much of the same stratigraphy as Pony Creek and Emigrant. As of the date of this Offering Circular, Dixie Flats comprises 324 unpatented mining claims covering 27.1 km2 of prospective ground.

Although there had been limited historic exploration activity at Dixie Flats, there are 27 historical drill holes on the property, several of which intersected significant gold mineralization. Highlights of historical results include ~1 g/t Au over 6 metres and 0.23 g/t over 23 metres.

To date, work at Dixie Flats has consisted of data compilation, 26 line km of Controlled Source Audio-frequency Magnetotelluric (“CSAMT”) geophysical surveys, a 304-station gravity survey, drill target selection and report preparation. Results reinforce management’s belief in the prospectivity of the property. Interpretation of geophysical data indicates that the main Emigrant-Dark Star controlling structure projects southward through Dixie Flats from Emigrant mine to GSV’s Dark Star deposit (“Dark Star”). The Company expects to continue refining targets in anticipation of a future drill program.

For the year ended December 31, 2018, expenditures, including non-cash items, incurred at Dixie Flats were $0.09 million. The 2018 budget was $0.07 million.

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There is a 2% NSR on the Dixie Flats property, 1% of which can be bought-back prior to February 8, 2020 for US$1,500,000.

• North Star

The North Star property (“North Star”) is located along the Emigrant fault, between Pony Creek and the Dixie Flats property. North Star is 1.5 kilometres north of Dark Star in western Elko County, Nevada. As of the date of this Offering Circular, North Star comprises 56 unpatented mining claims covering 4.68 km2 of prospective ground. The Company believes the location to be a significant piece of the district. Data and interpretation from the 2017 exploration program, including the results of CSMAT and gravity surveys show compelling evidence that the extension of the Emigrant-Dark Star controlling structure projects through the North Star property.

There has been no historical drilling completed on the property. Data and interpretation from the 2017 exploration program, including the results of CSMAT and gravity surveys show compelling evidence that the extension of the Emigrant and Dark Star controlling structure projecting through the North Star property. The Company completed geochemical surveys, data compilation from the 2017 program and a NOI permit application through 2018. The Company expects to undertake a drill program in the future and has completed construction of necessary drill pads; the highest priority targets sit under or adjacent to main access road to Dark Star.

For the year ended December 31, 2018, expenditures, including non-cash items, incurred at North Star were $0.02 million (budget of $0.39 million).

There is a 3% NSR on the North Star property.

• Cobb Creek

Although when acquired pursuant to the Transactions, the Company held only a 49% interest in the Cobb Creek property, the Company consolidated its interest on November 7, 2017 by agreeing to make six annual payments of US$30,000 in cash to a private individual (the “Cobb Counterparty”) with whom the original (dating back to 2002) partnership agreement had been made. As of the date of this Offering Circular, the first and second installments of this payment have been paid. Associated acquisition costs of $156,040 have been capitalized to Cobb Creek for this incremental 51% interest. The total remaining obligation at December 31, 2018 is $110,102 (December 31, 2017: $117,341); with the current and non-current amounts reflected as such on the consolidated balance sheet.

The Company has recently staked an additional 116 unpatented mining claims covering an additional 8.25 km² of prospective ground. Data compilation, mapping, 3D modeling, and target refinement is ongoing.

For the year ended December 31, 2018, expenditures, including non-cash items (and exclusive of non-cash accounting charges incurred at Cobb Creek were $0.15 million (budget of $0.39 million).

• Portfolio

The remaining Contact Gold Properties, described herein as the “portfolio properties”, are situated along the Carlin, Independence, and Northern Nevada Rift Trends, well known mining areas in the state of Nevada.

The Portfolio properties each carry an NSR of either 3% or 4%, some of which include buy-down options that expire on February 7, 2020. Significant activities relating to the Portfolio properties include: By an agreement dated November 5, 2018 (the “Disposal Agreement”), the Company disposed of two properties, Golden Cloud and Santa Renia to Waterton Nevada in exchange for cash consideration. The carrying values and the value of consideration translated to Canadian dollars at the date of the Disposal Agreement, are as follows:

Pursuant to the Disposal Agreement, Waterton Nevada also reimbursed the Company for $79,008 (USD 60,975) in prepaid Claims Maintenance fees relating in aggregate to the two properties. The Company recognized as $1,962,061 loss on disposal as a consequence of this transaction. The reimbursed funds were applied against the carrying value of Claims Maintenance fees.

The disposal of Santa Renia and Golden Cloud to Waterton Nevada is considered to be a related party transaction.

During the year ended December 31, 2018, the Company determined to impair those mineral property claims that comprise the Woodruff property. According, the carrying value of Woodruff has been written-down by $85,176 to $nil.

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Outstanding Securities

Recent Financings and issuances of Common Stock

Refer also in this Offering Circular to discussion under heading “Description of Capital Stock”, and summary of the Private Placement at Note 16: “Subsequent Events” in the Annual Statements.

There were 50,596,986 Contact Shares issued and outstanding as at December 31, 2018 (50,346,986 at December 31, 2017), including 66,667 Restricted Shares (December 31, 2017: 100,000).

As of the date of this Offering Circular, including the Restricted Shares, there are 60,424,575 Contact Shares issued and outstanding. As at December 31, 2018, 10,534,611 (December 31, 2017 – 17,557,685) Contact Shares were held in escrow and restricted from trading, pursuant to the rules of the TSXV. These trading restrictions expire as follows:

As a condition to the completion of the Transactions, and in addition to escrow provisions imposed by the TSXV, Waterton Nevada’s shareholdings in Contact Gold (18,500,000 Contact Shares) are subject to a lock-up whereby it shall not sell or otherwise dispose of its security holdings in Contact Gold until June 7, 2019, other than in limited circumstances. These same restrictions apply to Contact Shares held by certain officers and directors of Contact Gold.

In addition to having a right to receive regular updates of technical information about Contact Gold, Goldcorp USA Inc. (“Goldcorp”, a 12.4% shareholder of the Company), holds a right to maintain its pro rata ownership percentage of Contact Gold during future financings.

Stock-based compensation

As at December 31, 2018, there were 8,198,000 Options outstanding to purchase Contact Shares; 9,788,000 as of the date of this Offering Circular. 1,166,583 of the Options had vested as of December 31, 2018; and 2,494,916 had vested as of the date of this Offering Circular.

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As at December 31, 2017 there were 3,583,000 Options outstanding to purchase Contact Shares; none had vested as of December 31, 2017.

Detail relating to the issuances of Options from June 7, 2017 to December 31, 2018 is set out below under heading “Discussion of Operations – Stock-based Compensation”.

Subsequent to period end, and through to the date of this Offering Circular, 80,000 Options originally awarded to a consultant to the Company were forfeit. On April 3, 2019, the Company awarded 1,670,000 Options to directors, officers and employees, exercisable at $0.275 with a five-year expiry; vesting in thirds over a period of three years.

As at December 31, 2017, there were 100,000 Restricted Shares outstanding; 33,333 had vested as of December 31, 2018.

Contact Preferred Shares

On June 7, 2017, as partial consideration for the Asset Acquisition, the Company issued 11,111,111 Contact Preferred Shares with an aggregate face value denominated in US$11,100,000 (the “Face Value”) ($15,000,000, converted using the Bank of Canada indicative exchange rate on the date prior to issuance of US$ 0.74), maturing on the Maturity Date, and carrying a cumulative cash dividend accruing at 7.5% per annum (the “Dividend”), to Waterton Nevada (the Face Value, and the sum of the accrued Dividend amount together being the “Redemption Amount”). The accrued Dividend amount is payable on the earlier of conversion and the Maturity Date and has priority over any other dividends declared on other classes of the Company’s stock.

As a contract to buy non-financial assets (the Contact Gold Properties) that is ultimately settled in either cash or Contact Shares, the Contact Preferred Shares are considered to be comprised of (i) a “host” instrument, and (ii) the value of certain rights, privileges, restrictions and conditions attached to the Contact Preferred Shares (the “Pref Share Rights”) each, respectively determined to be an embedded derivative (together, the “Embedded Derivatives”).

As a reflection of the potential modification and variability of the cash flows arising from the “host” instrument and the Embedded Derivatives, each are measured separately from each other.

Industry standard methodology was used to determine the fair value of the host and the Embedded Derivatives, utilizing a set of coupled partial differential Black-Scholes equations solved numerically using finite-difference methods. Upon issuance, the fair value of the Contact Preferred Shares was determined to be $14,987,020 (approximately equal to the Face Value), including $6,846,649 in value attributable to the Embedded Derivatives.

Contact Preferred Shares (host)

The estimated fair value of the host instrument at December 31, 2018 is US$8,495,835($11,590,018), an increase from the estimated fair value at December 31, 2017 of US$8,032,846 ($10,077,205). The carrying value, including the aggregate Dividend amount for the five-year term, has been recognized as a financial liability at amortized cost via the effective interest rate method. Recognition of the host at amortized cost is in view of the i) Dividend being at a fixed rate and ii) mandatory redemption feature of the instrument, both of which are payable in cash on the Maturity Date. Mandatorily redeemable instruments are classified as liabilities pursuant to ASC 480, Distinguishing Liabilities From Equity, therefore any dividends or accretion on instruments that have a legal form of equity should generally be presented as interest expense. The cumulative amount of the accrued Dividend reflected in the accretion expense for the year ended December 31, 2018 is $1,779,776 (through December 31, 2017: $592,287).

The host instrument was initially recorded at fair value of US$6,033,480 ($8,140,371) and is revalued each period end using the same approach as described to revalue the Embedded Derivatives, resulting in a difference to the fair value that will vary from period-to-period.

In determining the fair value of the host on the date of issue it was necessary for Contact Gold to make certain assumptions to derive the effective interest rate used in calculating Contact Gold’s credit spread. Using the effective interest rate method, at a rate of 18.99%, the Contact Preferred Shares are remeasured at amortized cost each period end, with an accretion expense recorded to the consolidated statements of loss and comprehensive loss.

The impact from changes to the foreign exchange rate resulted in a gain for the year ended December 31, 2018 and as well as through the period June 7, 2017 to December 31, 2017, and reducing the redeemable preferred stock obligation for each period.

A summary of changes to the value of the Contact Preferred Shares host instrument for the year ended December 31, 2018 and for the period from June 7, 2017 to December 31, 2017, is set out below under heading “Discussion of Operations – Preferred Stock”:

Embedded Derivatives – Pref Share Rights

The Embedded Derivatives are classified as liabilities, and each are interconnected and relate to similar risk exposures, namely Contact Gold’s interest rate risk (as changes in Contact Gold’s credit spread change the economic value of the redemption), and Contact Gold’s foreign exchange rate risk exposure (as the foreign exchange rate, and the price of the Contact Shares and volatility thereof, impact the conversion price and number of Contact Shares issuable on conversion). Accordingly, the Embedded Derivatives are valued together as one compound instrument.

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Those Pref Share Rights for which there is separate accounting from the host contract are as follows:

The total estimated fair value of the Embedded Derivatives at issuance was US$5,066,520 ($6,846,649). This amount was recorded as part of the redeemable preferred stock obligation liability account on the consolidated balance sheets. In addition to certain observable inputs, the valuation technique used significant unobservable inputs such that the fair value measurement was classified as Level 3. Significant inputs into the determination of fair value included (i) the Company’s common share price, (ii) an indexed average historical volatility of 48.1% at December 31, 2018 (52.4% at December 31, 2017 and 48.5% at inception), (iii) rates from the US$/CAD foreign exchange forward curve, and (iv) the US$ risk-free rate curve and the $ risk-free rate curve, at the date of inception, and again at period end.

It was also necessary for Contact Gold to make certain judgments relating to the probability and timing of a change of control. Accordingly, it is necessary for Contact Gold to determine probability weightings for the potential exercise and timing thereof of the (i) COCROption, and (ii) EROption.

Changes in estimates as to the exercise of the COCROption, and EROption offset each other. There is an inverse correlation of the fair value of the Embedded Derivative and the US$-denominated value of the Contact Shares on the TSXV; there is also an inverse relationship to the fair value of the Embedded Derivative and the risk-free rates. Although there is complexity to the interplay and impact of these various inputs and assumptions, the quantum resultant from these relationships, as well as the impact from changes to management’s assumptions as to the potential exercise and timing thereof of the COCROption and the EROption, impact the fair value of the Embedded Derivative from period to period.

The assumptions used in these calculations are inherently uncertain, and subject to change from period-to-period. Existing circumstances and assumptions about future developments, may change due to market change or circumstances arising beyond the control of Contact Gold. Such changes could materially affect the related fair value estimate and are reflected in the assumptions when they occur.

During the year ended December 31, 2018 and the period June 7, 2017 to December 31, 2017, the fair value of the Embedded Derivative decreased as a result of changes to these inputs and assumptions. The amount of this change is included in the gain on Embedded Derivatives account on the statements of loss and comprehensive loss. A summary of changes to the value of the Embedded Derivatives for the period from June 7, 2017 to December 31, 2017, and January 1, 2018 to December 31, 2018 is set out below under heading “Discussion of Operations – Preferred Stock”.

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Other Pref Share Rights

In addition to the Embedded Derivatives, the Pref Share Rights include the following rights, privileges, restrictions and conditions (“Other Terms”) for which there is no accounting impact:

The number of Contact Shares to be issued would be 11,216,756 if all of the outstanding Contact Preferred Shares had been converted into Contact Shares based on the rate of foreign exchange of $0.7330 on December 31, 2018 (10,314,778 Contact Shares at December 31, 2017, based on the then rate of exchange of $0.7971). Diluted loss per share does not include the effect of such issuance for either period as the Contact Preferred Shares have been anti-dilutive. The number of Contact Shares to be issued upon conversion of the Contact Preferred Shares may be materially different depending upon the USD-Canadian dollar exchange rates at the time of such conversion.

Rights

On March 14, 2019, we closed a private placement of 9,827,589 Contact Share at the Placement Price for proceeds of $2,850,000. Each issued Contact Share was accompanied by one Right. Each Right is exercisable for additional Contact Shares upon the earlier of:

Subject to the rules and limitations of the TSXV, each Right shall automatically convert, without the payment of additional consideration, for Contact Shares as follows:

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Contractual Obligations

Other than those disclosed herein, including those associated with the Cobb Creek acquisition, and the Contact Preferred Shares, Contact Gold has certain additional contractual obligations arising from the RTO, Financings and Asset Acquisition, including those associated with the Contact Preferred Shares.

As a consequence of the closing of the March 14, 2019 private placement, the right at item (b) is no longer applicable.

Related Parties

Contact Gold’s related parties also include its subsidiaries, and Waterton Nevada as a reflection of its 37% ownership interest in the Company, its preferred shareholding and the right Waterton Nevada holds to place two nominees to the Board.

Pursuant to the Disposal Agreement, the Company sold the Golden Cloud and Santa Renia mineral properties to Waterton Nevada in exchange for consideration in the amount of $560,951. The amount of cash received, included an amount of $79,008 as reimbursement of Claims Maintenance fees. The Company recognized a $1,962,061 loss on disposal as a consequence of this transaction.

Options were granted during each of 2018 and 2017, and director fees were paid and payable for 2018 to Mr. Charlie Davies, one of Waterton Nevada’s Board nominees. Mr. Davies is an employee of an affiliate of Waterton Nevada.

An amount of $60,000 (2017: $34,000; 2016: $-nil) was invoiced by Cairn Merchant Partners LP (“Cairn”), an entity in which Andrew Farncomb, a director and officer of the Company is a principal. Mr. Farncomb’s base salary is paid in part directly and in part to Cairn in consideration of general management and administrative services rendered through Cairn. At December 31, 2018, $45,000 remained payable in regard to such services (December 31, 2017: $13,003; 2016: $-nil). The 2018 balance has been fully paid. Subsequent to year end, Waterton Nevada also purchased 3,603,020 Contact Shares in the Private Placement such that it maintained its 36.66% pro rata share of the Company.

Selected Financial Information

Management is responsible for, and the Board approved, the Annual Statements.

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Our significant accounting policies are presented in Note 2 of the Annual Statements; except as noted therein we followed these accounting policies consistently throughout all periods summarized in this MD&A. Contact Gold operates in one segment – the exploration of mineral property interests.

Management has determined that Contact Gold and Carlin have a CAD functional currency because each finance activities and incur expenses primarily in Canadian dollars. Clover has a US$ functional currency reflecting the primary currency in which it incurs expenditures, and in which it receives funding from Contact Gold. Contact Gold’s presentation currency is Canadian dollars. Accordingly, and as Contact Gold’s most significant balances are assets held by Clover, each reporting period will likely include a foreign currency adjustment as part of accumulated other comprehensive loss (income).

The following financial data are derived from, and should be read in conjunction with, our Annual Statements.

Selected Balance Sheet Data

The balance of current assets includes i) cash, ii) GST receivable, iii) prepaid insurance premiums, iv) the value of certain prepayments for software usage and participation in marketing events, and v) the value of the Claims Maintenance fees.

In addition to those items classified as current, total assets include most significantly, the value attributable to the purchase of Clover and the Contact Gold Properties.

Payables as at December 31, 2018 of $726,738 (December 31, 2017: $403,344), and accrued liabilities of $159,193 (December 31, 2017: $88,616) include all expenditures incurred through the respective period ends. As of the date of this Offering Circular, all trade amounts payable, and wages & salaries due to officers and employees due at December 31, 2018 have been paid.

In addition to those items classified as current, the balance of total liabilities reflects the value of the Contact Preferred Shares issued to Waterton Nevada as partial consideration for the Asset Acquisition. The value of the Contact Preferred Shares was bifurcated to a “host” instrument and to certain identified Embedded Derivatives. The Contact Preferred Shares were concluded to be a form of obligation and have been included as a non-current liability. The Contact Preferred Shares have a maturity date of five years from the date of issuance and a cumulative cash dividend payable upon redemption, at a fixed rate equal to 7.5% per annum. At issuance, the “host” instrument was valued in US$ at US$6,033,480. The value, translated to Canadian dollars of $8,140,371 and including the value of the accumulated accrued dividends, is accreted back to the full value of $15,262,500 (including the aggregate cash Dividends), over the five-year term of the Contact Preferred Shares. Expenditures incurred relating to the issuance of the Contact Preferred Shares are included in the total of Transaction Costs, as the Contact Preferred Shares were issued as partial consideration in exchange for the acquisition of Clover.

Selected Statement of Loss and Comprehensive Loss Data

Loss for each of 2018 and 2017 reflects primarily exploration and evaluation expenditures on the Contact Gold Properties, and a gain on the fair value of the Embedded Derivatives. The period ended 2016 included those costs incurred as the Company began to establish itself that were not directly attributable to raising financing or the acquisition of the Contact Gold Properties. Comprehensive losses for the years ended December 31, 2018 and 2017, include an amount arising as a foreign currency reserve from the translation of Clover’s US$ legal entity financial statements into Canadian dollars for consolidation purposes.

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Discussion of Operations

Exploration and evaluation expenditures

Details of exploration and evaluation expenditures incurred by Contact Gold, including staking costs and Claims Maintenance fees paid, have been cumulatively expensed in the statement of loss and comprehensive loss, and are as follows for each summarized period:

⁽¹⁾The Company has determined to account for Claims Maintenance fees each year as prepaid expenses, amortized evenly over the course of the year with an expense for amortization recorded to each of the Contact Gold Properties for the related period. Accordingly, the timing of cash outflows will not correspond with reported values at any given period

There are no prior period amounts incurred by Contact Gold on the respective properties reflecting the acquisition of the Contact Gold Properties on June 7, 2017.

Wages and salaries through December 31, 2018, include share-based compensation of $177,653 (December 31, 2017: $80,770). An amount of $8,514 (December 31, 2017, -$nil) in amortization expense arising from the use of fixed assets at Pony Creek has been included in the amount reported as geological contractors/consultants & related crew care costs.

Details of exploration and evaluation expenditures incurred and expensed by Contact Gold on specific Contact Gold Properties are as follows:

Contact Gold has determined to account for Claims Maintenance fees each year as prepaid expenses, amortized evenly over the course of the year. An expense for amortization of this balance has been recorded to each of the respective Contact Gold Properties for the year ended December 31, 2018 and the period from acquisition to December 31, 2017.

There are no balances recorded prior to June 7, 2017 on the respective properties reflecting the acquisition of the Contact Gold Properties by Contact Gold on that date. Waterton Nevada had, prior to closing of the Transactions, focused principally on activities to keep the properties in good standing.

Preferred Stock

Contact Gold has recorded the impacts arising from the Contact Preferred Shares under different accounts on statement of loss and comprehensive loss for the period.

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The changes period-to-period for the host instrument element are reflective of the amount of accretion, and the impact of foreign exchange, for the period. Depending on the volatility of the exchange rate from period to period the impact on the statement of loss and comprehensive loss could be significant.

A summary of changes to the value of the Contact Preferred Shares host instrument for the period from issuance on June 7, 2017 to December 31, 2018 is set out below:

The changes period-to-period recognized on the statement of loss and comprehensive loss are also reflective of a revaluation of the Embedded Derivative element. Determining the fair value of the Embedded Derivatives at each period includes a considerable amount of judgment from management and is potentially subject to a significant amount of change from period to period. Each period, impacts from changes to the fair value of the Embedded Derivative, based on assumptions and estimates as described in this Annual MD&A will result in an impact to the statement of loss and comprehensive loss.

A summary of changes to the value of the Embedded Derivatives since issuance on June 7, 2017 is set out below:

The change for the period from incorporation on November 23, 2016 to December 31, 2016: $nil.

This relatively significant change is reflective of the valuation methodology used, and the impact of market factors – particularly the market price of the Contact Shares, and a 7% change in the US$/$, in the brief period from June 7, 2017 to December 31, 2017.

At December 31, 2018 the Company also reassessed and slightly increased its assumption as to the possibility of a Change of Control, decreasing the total estimated fair value of the Embedded Derivatives by an incremental $230,670 over that which would have otherwise been determined.

Share-based compensation

Share-based compensation expense for the year ended December 31, 2018 totaled $1,202,235 (2017: $569,514; period from incorporation on November 23, 2016 to December 31, 2016: $nil). The expense reflects primarily (i) the relative value of Options on June 13, 2017 expensed through the period, with the additional impact from Options awarded through each of 2017 and 2018. Share-based compensation expense should be expected to vary from period to period depending on several factors, including whether Options are granted in a period, and the timing of vesting or cancellation of such equity instruments. There was also an amount of $177,653 relating to share-based compensation recorded to exploration and evaluation expense in the year ended December 31, 2018 (2017: $80,770; period from incorporation on November 23, 2016 to December 31, 2016: $nil).

In determining the fair market value of share-based compensation granted to employees and non-employees, management makes significant assumptions and estimates. These assumptions and estimates have an effect on the share-based compensation expense and contributed surplus balance reflected on our statements of financial position. Management has made estimates of the life of the Options, the expected volatility, and the expected dividend yields, that could materially affect the fair market value of this type of security. Estimates were chosen after reviewing the historical life of the Options and analyzing share price history to determine volatility.

For the purposes of estimating the fair value of Options awarded in 2018, using the Black-Scholes model, certain assumptions are made such as the expected dividend yield (0%), risk-free interest rates (range between 1.15% and 2.14%), and expected average life of the options (5 years). As the expected life of Contact Gold’s Options exceeded the length of time over which the Contact Shares have traded, average rates of volatility of 65%-71% were used, reflecting those of a group of similar publicly-listed companies in determining an expectation of volatility of the market price of the Company’s shares. A 0% forfeiture rate was applied to the Option expense.

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Professional, legal and advisory fees

Professional, legal and advisory fees through the year ended December 31, 2018 of $421,946 (2017: $568,429; period from incorporation on November 23, 2016 to December 31, 2016: $212,438) include those in the normal course. For 2017 such fees also included costs incurred directly related to the Transactions, including structuring, financing, legal and tax advisory fees, that were not otherwise eligible to record as part of (i) the acquisition of Clover, (ii) the RTO-transaction, or (iii) as share issue costs (amounts arising from each of which is recorded separately). The majority of such professional, legal and advisory fees were incurred during the first six months of 2017, prior to closing of the Transactions.

Wages and salaries

Wages and salaries through the year ended December 31, 2018 of $1,070,348 (2017: $428,411; period from incorporation on November 23, 2016 to December 31, 2016: $-nil). Wages and salaries reflect amounts earned by officers and employees of Contact Gold, beginning initially at half of their respective agreed-to rates of remuneration in mid-April 2017, and increasing to the full rate upon closing of the Transactions. There were no wages or employment related costs incurred during 2016.

Investor relations, promotion and advertising

Investor relations, promotion and advertising expenses of $502,384 for the year ended December 31, 2018, include marketing activities (including related travel costs), website design and information technology related costs (2017: $321,428; period from incorporation on November 23, 2016 to December 31, 2016: $3,186).

Administrative, office and general

Administrative, office and general expenses of $240,914 for the year ended December 31, 2018 (2017: $178,292; period from incorporation on November 23, 2016 to December 31, 2016: $272), includes listing and filings fees, incorporation costs, banking charges, and head office-related costs.

Selected Statement of Cash Flows data

Net cash used in operating activities for each of the year ended December 31, 2018 and 2017 are primarily reflective of the exploration programs underway on the Contact Gold Properties including directly attributable wages and salaries; professional, legal and advisory fees; investor relations, promotions and advertising costs; administrative, office and general expenses; and wages and salaries incurred to run the business. The Company did not have any cash, or cash flows in 2016.

Cash flows from investing activities in 2018 include the cash received from disposal of two properties – Santa Renia and Golden Cloud ($639,959) and the purchase of Equipment ($38,314), net of cash paid as consideration for the acquisition of the East Bailey and Cobb Creek properties ($31,643 and $38,871). In 2017 investing cash flows include the acquisition and related costs of Clover and the Contact Gold Properties. In 2016, the $200,000 amount is the advance paid to Waterton in contemplation of the Clover acquisition.

During the year ended December 31, 2018, the Company had incurred costs in advance of undertaking the Offering contemplated in this Offering Circular, as well as certain costs associated with the preparation and filing of materials to supplement the Shelf Prospectus. Such costs are reflected on the balance sheet as deferred share issue costs. During the year ended December 31, 2017, Contact Gold received $21,157,500 in gross proceeds upon closing of the Financings; Contact Gold paid $1,561,052 in share issue costs in connection with this capital raise. In the period ended December 31, 2016, the $200,000 inflow of cash was an advance to enable the Company to pay the deposit due to Waterton described above.

Summary of Quarterly Results

The Company was established during the fourth quarter of 2016, and accordingly the discussion in this MD&A relating to its business, operations and cash flows is only through each successive quarter.

The following table sets out selected quarterly financial information of Contact Gold and is derived from unaudited quarterly U.S. GAAP financial statements prepared by management.

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¹ Dividend payable on the Contact Preferred Shares are reflected as a component of the accretion expense each period on the ‘host’ instrument. No amount is payable until such time as the Contact Preferred Shares are redeemed.

The Company and its business are relatively new, and the Company’s expenditures and cash requirements may fluctuate and lack some degree of comparability from period to period as activities are normalized and strategies are refined and executed. The Company’s quarterly results may be affected by many factors such as seasonal fluctuations, the write-off of capitalized amounts, share-based payment costs, tax recoveries and other factors that affect Company’s exploration and financing activities. In addition, the non-cashflow related impact of fair value fluctuations arising on the Contact Preferred Share embedded derivatives may give rise to significant results from one period to the next. Furthermore, the Company’s expenditures may also be affected by the strength of capital markets. The Company’s primary source of funding is through the issuance of share capital. When the capital markets are depressed, the Company’s activity level may decline as a result of difficulties raising funds. When capital markets strengthen, and the Company is able to secure equity financing with favourable terms, the Company’s activity levels and the size and scope of planned exploration projects may increase.

The Company’s loss and comprehensive loss for the fourth quarter of 2018 reflects (i) $2,085,252 recognized in other comprehensive income from the revaluation of the Company’s USD-denominated Contact Gold Properties; (ii) loss on disposal of exploration properties of $1,962,061, (iii) exploration and evaluation expenditures of $551,692, (iv) the non-cash accretion of the host amount of the Contact Preferred Shares of $493,258, (v) foreign exchange loss of $569,521, and (vi)has general office & administrative costs, investor relations and other costs to administer the Company.

The Company’s loss and comprehensive loss for the third quarter of 2018 reflects (i) $696,054 recognized in other comprehensive loss (income) from the revaluation of the Company’s USD-denominated Contact Gold Properties; (ii) exploration and evaluation expenditures of $1,937,226, (iii) the non-cash accretion of the host amount of $470,901, and (iv) general office & administrative costs, investor relations and other costs to administer the Company.

The Company’s loss and comprehensive loss for the second quarter of 2018 reflects (i) $811,020 recognized in other comprehensive income from the revaluation of the Company’s US$-denominated Contact Gold Properties; (ii) exploration and evaluation expenditures of $1,349,598, (iii) the non-cash accretion of the host amount of $449,558, (iv) write-off (non-cash) of the Woodruff property of $84,286, and (vi) general office & administrative costs, investor relations and other costs to administer the Company.

The Company’s loss and comprehensive loss for the first quarter of 2018 reflects (i) $1,089,810 recognized in other comprehensive income from the revaluation of the Company’s US$-denominated Contact Gold Properties; (ii) the impact of a $564,605 non-cash fair value adjustment (gain) on the value of the Embedded Derivatives, (iii) exploration and evaluation expenditures of $608,863, (iv) the non-cash accretion of the host amount of $429,183, and (v) general office & administrative costs, investor relations and other costs to administer the Company.

The Company’s loss and comprehensive loss of $1,833,231 for the fourth quarter of 2017 is reflective of expenditures at the Contact Gold Properties at which an active drilling and exploration program was underway, net of a non-cash fair value gain recognized on the Contact Preferred Shares. Other activities and expenditures in the fourth quarter include the normalization of investor relations and marking activities, administrative operations and the cost of maintaining a public listing. The amount of the comprehensive loss recorded for the period reflects the non-cash effect of exchange differences on the translation of Clover and its assets. Cashflows through the fourth quarter are reflective of ongoing operating activities, including $2,247,647 in exploration and evaluation expenditures. There were no meaningful investing activities or financing activities in the fourth quarter. Non-cash impacts, including (i) a $1,321,685 gain on the value of the Contact Preferred Share Embedded Derivatives, (ii) a gain on the translation of the value of the Contact Gold Properties of $404,348 included in other comprehensive loss, (iii) accretion expense of $434,657 and (iv) share-based compensation expense of $249,702, comprise the majority of the remaining financial impacts to the fourth quarter financial results.

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The Company’s loss and comprehensive loss of $1,670,656 for the third quarter of 2017 reflects the significant impact of a $2,611,802 non-cash fair value adjustment (gain), a $1,564,306 non-cash loss on the value of the Company’s US$-denominated assets due to changes in rates of foreign exchanges, and a non-cash $284,735 foreign exchange gain on the Contact Preferred Share Embedded Derivatives. Activities and expenditures in the third quarter include the commencement of active exploration programs in the United States, the normalization of investor relations and marking activities, administrative operations and the cost of maintaining a public listing. The amount of the comprehensive loss recorded for the period reflects the non-cash effect of exchange differences on the translation of Clover and its assets.

The Company recorded a gain and comprehensive gain of $58,479 for the second quarter of 2017 as a consequence of a significant non-cash gain of $1,866,120 arising on the fair value adjustment of the Contact Preferred Share Embedded Derivatives. The fair value adjustment offset the total of those costs arising from the closing of the Transactions and the listing of Contact Gold’s shares on the TSXV. The non-cash effect of exchange differences on the translation of Clover and its assets of $1,630,417 recognized as comprehensive loss recorded for the period further reduced the total comprehensive gain. The closing of the Transactions included the closing of $18.5 million raised through the Subscription Receipts financing, of which $6.8 million was immediately conveyed as the remaining balance of the Cash Payment for the acquisition of Clover. Cash outflows included settlement of the accumulated payables arising over multiple periods.

The Company’s loss and comprehensive loss of $119,023 for the first quarter of 2017 is comprised primarily of expenditures for legal and advisory services made relating to the Transactions and the Financings. The receipt of proceeds from the Financings in June allowed the Company to begin to settle payables incurred through to that point; most of which were unsettled as at March 31, 2017. The Company’s loss and comprehensive loss of $215,896 for the fourth quarter of 2016 reflects incorporation costs, and expenditures for legal and advisory services made relating to the Transactions. Reflecting the Company’s then financial status, there were no reportable cash flows for the period.

Operating Capital and Capital Expenditures Requirements

Liquidity Risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

The properties in which we currently have an interest are in the exploration stage. The Company has not generated significant revenues or cash flows from operations since inception and does not expect to do so for the foreseeable future. Accordingly, we are dependent on external financing, including the proceeds of future equity issuances or debt financing, to fund our activities.

Through the year ended December 31, 2018, the Company recognized a comprehensive loss of $8.57 million. As at December 31, 2018, Contact Gold has an accumulated deficit of $12.85 million, and working capital of $0.43 million. The Company has not generated significant revenues or cash flows from operations since inception and does not expect to do so for the foreseeable future.

As at the date of this Offering Circular, the Company has approximately $1.8 million available in cash and working capital of approximately $2.2 million. Contact Gold’s financial liabilities of payables and accrued liabilities are generally payable within a 90-day period. Although non-current, the Company has exposure to significant obligations relating to the terms and various covenants in and to the Contact Preferred Shares.

Contact Gold’s continuation as a going concern depends on its ability to successfully raise financing through the issuance of debt or equity. Although the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms acceptable to the Company; and therefore, substantial doubt exists as to whether Contact Gold’s cash resources and working capital will be sufficient to enable the Company to continue as a going concern for the 12-month period after the date that the Annual Statements are issued. Circumstances that could impair our ability to raise additional funds, or our ability to undertake transactions, are discussed in this Offering Circular under the heading “Risk Factors”. In particular, the Company’s access to capital and its liquidity will be impacted by global macroeconomic trends, fluctuating commodity prices and general investor sentiment for the mining and metals industry. There is no assurance that we will be able to raise the necessary funds through capital raisings in the future.

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Consequently, management is pursuing various financing alternatives to fund operations and advance its business plan, including:

On March 14, 2019, we closed a private placement of 9,827,589 shares of Common Stock, at the Placement Price for proceeds of $2,850,000. Each Common Stock was accompanied by one Right. See, “Highlights and Recent Events – Subsequent to December 31, 2018”, above, and “Outstanding Securities – Rights,” above.

On April •, 2019, we filed this Offering Circular in connection with this Offering.

To facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. The Company may determine to reduce the level of activity and expenditures, or divest certain mineral property assets, to preserve working capital and alleviate any going concern risk.

The Annual Statements have been prepared on a going concern basis that contemplates the realization of assets and discharge of liabilities at their carrying values in the normal course of business for the foreseeable future; and do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.

Capital Management

Contact Gold manages its capital in order to meet short term business requirements, after taking into account cash flows from operations, expected capital expenditures and Contact Gold’s holdings of cash. To facilitate the management of its capital requirements, Contact Gold prepares annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. On an ongoing basis, management evaluates and adjusts its planned level of activities, including planned exploration, development, permitting activities, and committed administrative costs, to ensure that adequate levels of working capital are maintained. We believe that this approach, given the relative size and stage of Contact Gold, is reasonable.

There may be circumstances where, for sound business reasons, funds may be re-allocated at the discretion of the Board or management of Contact Gold. While we remain focused on our plans to continue exploration and development on the Contact Gold Properties, we may (i) conclude to curtail certain operations; or (ii) should we enter into agreements in the future on new properties we may be required to make cash payments and complete work expenditure commitments under those agreements, which would change our planned expenditures.

There are no known restrictions on the ability of our affiliates to transfer or return funds amongst the group.

Additional Risks Associated With Financial Instruments

Contact Gold is exposed in varying degrees to a variety of financial instrument related risks. The Company’s financial instruments consist of cash, receivables, accounts payable and accrued liabilities, the Contact Preferred Shares and the Embedded Derivatives. It is management’s opinion that with the exception of the Contact Preferred Shares and the Embedded Derivatives: (i) the Company is not exposed to significant interest, currency or credit risks arising from its financial instruments, and (ii) the fair values of these financial instruments approximate their carrying values unless otherwise noted in these Annual Statements.

Contact Preferred Shares, the Embedded Derivatives, and the Cobb Creek Obligation are each considered to be Level 3 type financial liabilities, with each determined by observable data points, in particular the Company’s share price, the rate of CAD/US$ foreign and the Company’s credit spread, with reference to current interest rates and yield curves.

The type of risk exposure and the way in which such exposure is managed is provided as follows:

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Contact Gold’s credit risk is primarily attributable to its liquid financial assets. Contact Gold limits exposure to credit risk and liquid financial assets through maintaining its cash with high credit quality banking institutions in Canada and the USA. Contact Gold mitigates credit risk on these financial instruments by adhering to its investment policy that outlines credit risk parameters and concentration limits. As at December 31, 2018, the balance of cash held on deposit was $0.5 million (December 31, 2017: $6.2 million). The Company has not experienced any losses in such amounts and believes it is not exposed to any significant risks on its cash in bank accounts.

Interest Rate Risk

Contact Gold is subject to interest rate risk with respect to its investments in cash. Contact Gold’s current policy is to invest cash at floating rates of interest, and cash reserves are to be maintained in cash and cash equivalents in order to maintain liquidity, while achieving a satisfactory return for shareholders. Fluctuations in interest rates when cash and cash equivalents mature impact interest income earned.

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Market Risk - Foreign Exchange

The significant market risk to which the Company is exposed is foreign exchange risk. The results of the Company’s operations are exposed to currency fluctuations. To date, the Company has raised funds entirely in Canadian dollars. The majority of the Company’s mineral property expenditures, will be incurred in United States dollars. The fluctuation of the Canadian dollar relation to the US$ will consequently have an impact upon the financial results of the Company.

At December 31, 2018, a 1% increase or decrease in the exchange rate of the US dollar against the Canadian dollar would have resulted in a $4,203 increase or decrease respectively, in the Company’s cash balance. The Company has not entered into any derivative contracts to manage foreign exchange risk at the date of this Offering Circular. Depending upon available capital, planned expenditures and timing thereof, a significant portion of the Company’s cash balance may, from time to time, be held in US$.

Fair Value Estimation

With the exception of the Contact Preferred Shares, and other non-current liabilities, the carrying value of Contact Gold’s financial assets and liabilities approximates their estimated fair value due to their short-term nature.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make judgements, estimates, and assumptions that affect the reported amounts of assets, liabilities, and expenses. A detailed presentation of all of Contact Gold’s significant accounting policies and the estimates derived there from is included in Note 2 to the Annual Statements.

While all of the significant accounting policies are important to Contact Gold’s consolidated financial statements, the following accounting policies and the judgments and estimates applied thereon have been identified as being critical:

Judgments

In the process of applying accounting policies for Contact Gold, management has made the following judgments, which have the most significant effect on the amounts recognised in the financial statements.

The application of Contact Gold’s accounting policy for exploration property acquisition and transaction costs requires judgment to determine the type and amount of such costs to be deferred. Furthermore, judgment is required to determine whether future economic benefits are likely, from either future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves.

Relatively significant costs may be incurred when evaluating, pursuing and completing an acquisition, with such costs often included amongst legal and advisory fees incurred as part of more general consultation and advisory services. Pursuant to U.S. GAAP, only those direct, incremental costs of any such acquisition can be deferred; accordingly, judgment may be required in determining which of the expenditures are eligible for deferral.

Contact Gold determined the price at which Contact Shares were issued in the Subscription Receipts financing to be the most appropriate indicator of value in the acquisition of Clover and the portfolio of exploration properties held by that entity as the $1.00 per Subscription Receipt price reflected the understanding of market participants of the Transaction, and particularly the planned Asset Acquisition.

The $41.12 million value of Consideration paid, net of Acquisition Costs, reflects the aggregate value of the Cash Payment, and the fair value of the Contact Preferred Shares, with the remaining value attributed to the Contact Shares. Consideration was allocated to the respective exploration property interests acquired principally on the basis of a value-per-hectare of each individual property acquired (based on that of a group of peer companies and their respective exploration property interests), along with management-assess quantitative and qualitative judgments relating to the prospectivity and marketability of each.

Resource exploration is a speculative business and involves a high degree of risk. There is no certainty that the expenditures made by Contact Gold in the exploration of its property interests will result in discoveries of commercial quantities of minerals. Exploration for mineral deposits involves risks which even a combination of professional evaluation and management experience may not eliminate. Significant expenditures are required to locate and estimate ore reserves, and further the development of a property.

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Capital expenditures to bring a property to a commercial production stage are also significant. There is no assurance Contact Gold has, or will have, commercially viable ore bodies. There is no assurance that the management will be able to arrange sufficient financing to bring ore bodies into production.

At each reporting date, management assesses the possibility of impairment in the carrying value of long-lived assets, including capitalized acquisition costs, development costs, and prepaid claims maintenance fees, whenever events or circumstances indicate that the carrying amounts of the asset or asset group may not be recoverable. An impairment is determined to exist if the total projected future cash flows on an undiscounted pre-tax basis are less than the carrying amount of a long-lived asset or asset group. An impairment loss is measured with reference to the amount by which the carrying amount of the asset exceeds its fair value using market participant assumptions. Such fair value is determined with reference to ASC 820, “Fair Value Measurements and Disclosures”, as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Where practical, management calculates the estimated undiscounted future net cash flows relating to the asset or asset group using estimated future prices, proven and probable reserves and other mineral resources, and operating, capital and reclamation costs. In the case of exploration properties for which it is not possible to determine cash flow information, management considers, among other things, enterprise value to hectare (the size of the respective properties) as compared to that of a select group of peer companies’ mineral property assets, an estimate of potential sales proceeds as compared to the carrying value of the property, and other similar factors which may indicate or question the potential economic value of an exploration property.

Management’s estimates of mineral prices, mineral resources, foreign exchange rates, production levels, operating capital requirements and reclamation costs are subject to risk and uncertainties that may affect the determination of the recoverability of the long-lived asset. It is possible that material changes could occur that may adversely affect management’s estimates.

In determining the fair value of the Embedded Derivatives on the date of issue it was necessary for Contact Gold to make certain judgments relating to the probability and timing of a change of control. The nature of this judgment, and the factors management considered in determining the resultant calculation is inherently uncertain, and subject to change from period to period. Such changes could materially affect the fair value estimate of the Embedded Derivatives and the change from period to period.

Estimates and assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the carve-out financial statements and the reported amounts of expenses during the reporting period. Management of Contact Gold have evaluated estimates and assumptions related to asset valuations, asset impairment, and loss contingencies. Management bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the other sources. The actual results experienced by Contact Gold may differ materially and adversely from the estimates presented in these financial statements. To the extent there are material differences between estimates and the actual results, future results of operations will be affected. The key assumption concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is as follows:

Exploration property acquisition costs are capitalized. Development costs are capitalized only when it has been established that a mineral deposit can be commercially mined, and a decision has been made to formulate a mining plan. In addition to applying judgment to determine whether future economic benefits are likely to arise from Contact Gold’s exploration and evaluation assets or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves, management must apply a number of estimates and assumptions.

The publication of a resource pursuant to applicable securities laws and guidance is itself an estimation process that involves varying degrees of uncertainty depending on how the resources are classified (i.e., measured, indicated or inferred). The estimates and related determination of potential project economics directly impact when Contact Gold capitalizes exploration property acquisition costs and development expenditures. Any such estimates and assumptions may change as new information becomes available. If, after development expenditures are capitalised, information becomes available suggesting that the recovery of such expenditure is unlikely, the relevant capitalised amount is written off in the statement of loss and other comprehensive loss in the period when the new information becomes available.

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Contact Gold based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market change or circumstances arising beyond the control of Contact Gold. Such changes are reflected in the assumptions when they occur.

As it relates to equity remuneration, this calculated amount is not based on historical cost, but is derived based on assumptions (such as the expected volatility of the price of the underlying security, expected hold period before exercise, dividend yield and the risk-free rate of return) input into a pricing model. The model requires that management make forecasts as to future events, including estimates of: the average future hold period of issued stock options before exercise, expiry or cancellation; future volatility of Contact Gold’s share price in the expected hold period; dividend yield; and the appropriate risk-free rate of interest. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 9 to the Annual Statements. The resulting value calculated is not necessarily the value that the holder of the equity compensation could receive in an arm’s length transaction, given that there is no market for the options and they are not transferable.

The assumptions used in these calculations are inherently uncertain. Changes in these assumptions could materially affect the related fair value estimates.

In determining the fair value of the Embedded Derivatives on the date of issue of US$ 5,066,520 ($6,846,649), it was necessary for Contact Gold to make certain assumptions to derive the effective interest rate used in calculating Contact Gold’s credit spread, as well as assumptions relating to the probability and timing of a change of control, exercise of the early redemption option, share price volatility, and future fluctuations in the rate of foreign exchange between the Canadian and United States dollar.

There is an inverse correlation of the fair value of the Embedded Derivative and the US$-denominated value of the Contact Shares on the TSXV. The impact of changes in estimates as to the exercise of the probability and timing of a change of control, are generally correlated, however, the calculation of such is also impacted by changes to the different risk-free rate curves, further impacting the fair value of the Embedded Derivative. There is significant complexity to the interplay and impact of these various inputs and the quantum resultant from these relationships which is further influenced by changes to management’s assumptions as to the potential exercise and timing thereof of the COCROption and the EROption. Accordingly, there may be significant volatility to the fair value of the Embedded Derivative from period to period. Contact Gold based its assumptions and estimates on parameters relevant to the June 7, 2017 issue date of the Contact Preferred Shares, and then again as at each of December 31, 2018 and 2017.

Similarly, Contact Gold made certain assumptions to determine the appropriate effective interest rate in calculating the fair value of the Cobb Creek Obligation, with such determination made in alignment with the rate determined to fair value the Embedded Derivatives.

The assumptions used in these calculations are inherently uncertain. Existing circumstances and assumptions about future developments, may change due to market change or circumstances arising beyond the control of Contact Gold. Such changes could materially affect the related fair value estimate, and are reflected in the assumptions when they occur. Factors that could affect these estimates are discussed in this Offering Circular, under the heading, “Risk Factors”. Subject to the impact of such risks, the carrying value of Contact Gold’s financial assets and liabilities approximates their estimated fair value.

Changes in Accounting Policies and New Accounting Pronouncements

For information on Contact Gold’s accounting policies and a summary of new accounting pronouncements, please refer to our disclosures in the Annual Statements at Note 2(p).

Preliminary internal discussions have begun in order to evaluate the consequences of the new pronouncements, but the full impact has yet to be assessed.

Off-Balance Sheet Arrangements and Legal Matters

Contact Gold has no off-balance sheet arrangements, and there are no outstanding legal matters of which management is aware.

Proposed Transactions

There are no proposed material transactions. However, as is typical of the mineral exploration and development industry, management of Contact Gold continually review potential merger, acquisition, investment, and joint venture transactions and opportunities that could enhance shareholder value. There is no guarantee that any contemplated transaction will be concluded.

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Industry and economic factors that may affect our business

Economic and industry risk factors that may affect our business, in particular those that could affect our liquidity and capital resources, are as described under the heading “Risk Factors” in this Offering Circular. In particular, there are currently significant uncertainties in capital markets impacting the availability of equity financing for the purposes of mineral exploration and development. We anticipate having to rely on financing undertaken by Contact Gold in order to continue to fund activities.

Certain uncertainties relating to the global economy, political uncertainties and increasing geopolitical risk, increased volatility in the prices of gold, copper, other precious and base metals and other minerals, as well as increasing volatility in the foreign currency exchange markets may impact Contact Gold’s business and accordingly, may impact our ability to remain a going concern.

A comprehensive discussion of Contact Gold’s risks and uncertainties is set out in this Offering Circular. The reader is directed to carefully review this discussion for a proper understanding of these risks and uncertainties.

Subsequent Events Not Otherwise Described Herein

With the exception of transactions and activities described in this MD&A, there were no subsequent events after period end.

Scientific and Technical Disclosure

The Contact Gold Properties are all early stage and do not contain any mineral resource estimates as defined by NI 43-101. There are no assurances that the geological similarities to projects mentioned herein operated by GSV or Newmont, or other project along the Carlin Trend, will result in the establishment of any resource estimates at any of Contact Gold’s property interests including Pony Creek, or that the Pony Creek can be advanced in a similar timeframe. The potential quantities and grades disclosed herein are conceptual in nature and there has been insufficient exploration to define a mineral resource for the targets disclosed herein. It is uncertain if further exploration will result in targets on any of the Contact Gold Properties being delineated as a mineral resource.

The scientific and technical information contained in this MD&A has been reviewed and approved by Vance Spalding, CPG, Vice President Exploration, Contact Gold, who is a “qualified person” within the meaning of NI 43-10.

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BUSINESS

The following discussion should be read in conjunction with the accompanying financial statements, management’s discussion and analysis and related notes included elsewhere in this Offering Circular.

Business Objectives and Operations

Contact Gold is a gold exploration company focused on high-quality oxide gold targets and making district-scale gold discoveries in Nevada. Contact Gold’s land holdings are located on the Carlin, Independence and Northern Nevada Rift gold trends. Contact Gold currently owns, through Clover Nevada, a 100% interest in a portfolio of 11 gold properties encompassing approximately 200 km² located in Nevada, including the Pony Creek, North Star and Dixie Flats properties. As at the date of this Offering Circular, Contact Gold’s properties comprise, in aggregate, approximately 212 km² of unpatented mining claims and mineral tenure. Contact Gold’s main focus is on advancing the Pony Creek project, which is located in Elko County, Nevada and comprises 1,345 unpatented mining claims covering 107 km².

Contact Gold recently concluded what previously was planned to be a 16,000 m reverse circulation drill program at Pony Creek (the “Drill Program”). The Drill Program forms part of a comprehensive property wide exploration program comprising over 4,000 soil samples, geological mapping, and additional drill target generation. During 2018, Contact Gold completed 51 drill holes totaling over 10,800 m of the Drill Program. On February 28, 2019, Contact Gold announced results from the final three drill holes from the 2018 Drill Program, further described below under the header “Recent Developments”. With the exception of the exploration results detailed below, results from the Drill Program are included in the Technical Report.

During 2018 the exploration team made two new gold discoveries (West Zone and Pony Spur) and expanded the footprints of the property’s Bowl Zone (host to a historical resource) and North Zone, both of which remain open for expansion in most directions. The exploration team also identified several never-before drilled targets including, the Moleen target, and the Elliot Dome target, each of which is expected to be followed-up with drilling in 2019. All of the targets advanced to date are in the northern part of the property, with a significant area believed to be on strike yet to be explored toward the south. Contact Gold has multiple approved Notices of Intent (“NOI”) (including subsequent amendments) to allow for the necessary disturbance of the initial holes of the planned 2019 drill program. The 2019 drill program is expected to begin in May.

See “The Pony Creek Project” under the header “Description of Property” in this Offering Circular.

Recent Developments

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The scientific and technical data contained in the section entitled “Recent Developments” has been reviewed and approved by Vance Spalding, CPG, Vice President Exploration of the Corporation, who is a “qualified person” under NI 43-101.

Three-Year History

Corporate

Over the most recently completed financial year and preceding periods, the following events have contributed to Contact Gold’s development:

2016

2017

2018

• On February 6, 2018, Contact Gold acquired an additional 109 unpatented mining claims known as the Lumps, Umps and East Bailey properties, (together, “East Bailey”) covering 9.1 km² of prospective mineral tenure adjacent to the Pony Creek Project, in exchange for 250,000 Contact Shares, and the grant of a 2% NSR on certain portions of the East Bailey property which did not already have royalties in place. Existing royalties over certain portions of the East Bailey property comprise a 3% NSR, with an option to reduce such royalty to 1%. East Bailey also carries an escalating advance royalty payment obligation, the first amount of which (US$10,000) has been paid.

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2019

Competitive Conditions

The mining business is competitive in all phases of exploration, development and production. Contact Gold competes with a number of other exploration and mining companies in the search for, and acquisition of, mineral properties, many of whom have greater financial resources. As a result of this competition, Contact Gold may be unable to acquire attractive mineral properties in the future on terms it considers acceptable. Contact Gold also competes for financing with other resource companies, many of whom have greater financial resources and/or more advanced properties. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favourable to Contact Gold.

The ability of Contact Gold to acquire properties largely depends on its success in exploring and developing its present properties and on its ability to select, acquire and bring to production suitable properties or prospects for mineral exploration and development. Contact Gold may compete with other exploration and mining companies for the procurement of equipment and for the availability of skilled labour. Factors beyond the control of Contact Gold may affect the marketability of minerals mined or discovered by Contact Gold. See “Risk Factors” in this Offering Circular.

Industry and economic factors that may affect our business

We anticipate having to rely on financings through the issuances of Common Stock in order to continue to fund activities. There are significant uncertainties in capital markets impacting the availability of equity financing for the purposes of mineral exploration and development. Certain uncertainties relating to the global economy, political uncertainties and increasing geopolitical risk, increased volatility in the prices of gold, copper, other precious and base metals and other minerals, as well as increasing volatility in the foreign currency exchange markets may also impact the Company’s business and our ability to raise new capital, and accordingly, may impact our ability to remain a going concern.

Contact Gold’s operations are also exposed to various levels of regulatory, economic, political and other risks and uncertainties which may impact the Company’s business and our ability to raise new capital. There can be no assurance that Contact Gold will be able to comply with any a changing regulatory, economic or political environment. See “Risk Factors” in this Offering Circular.

Environmental Regulation

Contact Gold’s exploration and development activities, as well as any current or future operations, are subject to environmental laws and regulations in the jurisdictions in which it operates. See “Risk Factors”. Contact Gold maintains, and anticipates continuing to maintain, a policy of operating its business in compliance with all environmental laws and regulations.

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Cycles

Given the general weather conditions and exploration season in North Central Nevada, Contact Gold’s exploration and evaluation asset expenditures tend to be greater from April to December than in the rest of the year.

Employees

As at the date of this Offering Circular, Contact Gold has 5 employees located in Canada and 2 employees located in Nevada. Contact Gold also operates through sub-contractors and consultants.

Significant Acquisitions

None, other than those described herein relating to the Transactions which closed on June 7, 2017.

Significant Dispositions

No significant dispositions have been completed by the Company since the commencement of its financial year ended December 31, 2018.

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DESCRIPTION OF PROPERTY

The Pony Creek Project

Unless stated otherwise, the information in this section is summarized, compiled or extracted from the Technical Report. The Technical Report was prepared in accordance with NI 43-101 and has been filed with the securities regulatory authorities in all of the provinces and territories of Canada, except Québec. The disclosure in this Offering Circular is derived from the Technical Report has been prepared with the consent of Mr. Spalding, Vice-President, Exploration of the Company, who is a qualified person within the meaning of NI 43-101.

The Technical Report is subject to certain assumptions, qualifications and procedures described therein. Reference should be made to the full text of the Technical Report, which has been filed with the applicable Canadian securities regulatory authorities pursuant to NI 43-101 and is available for review under the Company’s issuer profile on SEDAR at www.sedar.com. The Technical Report is not and shall not be deemed to be incorporated by reference in this Offering Circular.

Property Description and Location

The Pony Creek property is comprised of 1,345 unpatented lode mining claims located on federal lands managed by the BLM covering approximately 107 square kilometers in the southern part of the Piñon Range in Elko County, Nevada (see Figure 1 below). The property is centered at approximately 40°21′10″N, 115°58′20″W, in the southern portion of the Carlin gold trend, approximately 27 kilometers south of the presently producing Emigrant gold mine of Newmont and 11 kilometers south of Gold Standard Ventures’ Pinion and Dark Star gold deposits (see Figure 2 below).

Ownership of the unpatented mining claims is in the name of the holder (locator), subject to the paramount title of the United States, under the administration of the BLM. Under the General Mining Act of 1872, which governs the location of unpatented mining claims on federal lands in the United States, the locator has the right to explore, develop, and mine minerals on unpatented mining claims without payments of production royalties to the U.S. government, subject to the surface management regulation of the BLM. Annual claim maintenance and County filing fees are the only government payments related to the unpatented mining claims, and these fees, totalling US$224,625 annually have been paid in full through September 1, 2019. Other annual holding costs for 68 leased claims through September 14, 2019 were US$10,000.

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Royalties and Agreements

In December 2016, Winwell entered into a securities exchange agreement with Waterton to acquire the Contact Gold Properties. The consideration for the acquisition of the Contact Gold Properties was a cash payment by Contact Gold (Winwell following completion of the Arrangement) of $7.0 million and the issuance to Waterton of common shares of Contact Gold representing approximately 37% of the pro forma interest in Contact Gold and preferred shares of Contact Gold with a face value of $15 million.

The Pony Creek claims are subject to a royalty of 3.0% of the net smelter returns from any and all production and sale of minerals from the claims. The royalty is payable to Royalty Consolidation Company LLC (“RCC”), and its successors. RCC is an affiliate of Waterton. The claims owner may permanently reduce the royalty rate from 3.0% to 2.0% in exchange for the payment to RCC of US$1,500,000. The royalty reduction option expires on February 7, 2020.

Mineral production from the Pony Creek claims would be subject to the Nevada net proceeds tax (“NPT”). For operations with annual gross proceeds over $4,000,000, the NPT rate is 5%. For operations with gross proceeds less than $4,000,000 annually, the NPT tax rate is dependent on the ratio of net proceeds to gross proceeds.

Environmental and Permitting

There are no known environmental liabilities within the Pony Creek property. Contact Gold currently has one Plan of Operations being prepared for submittal to the BLM for review and six notices of intent in place for exploration on Pony Creek.

Based on the personal observations of the author of the Technical Report (the “Technical Report Author”), there is no indication of encumbrances or known problems with legal access of the Pony Creek property, and the Technical Report Author was not aware of any land use or conflicting rights, or such other factors and risks that might affect title or the right to explore, beyond what is described in the Technical Report.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

Physiography

The Pony Creek property covers the crest of the Piñon Range at elevations ranging from 2,000 meters to about 2,400 meters within the Bailey Mountain and Robinson Mountain U.S.G.S. 7.5 minute topographic quadrangles. Most of the property comprises gently rolling to moderately steep, sagebrush- and grass- covered hills with a few juniper, mountain mahogany and pine trees.

Access to Property

From Elko, Nevada access to the property is generally by proceeding south via State Highway 227 (Lamoille highway) for a distance of 8.7 kilometers, then south on State Highway 228 past the town of Jiggs, for a total of 53.3 kilometers to the intersection with the Red Rock Ranch gravel county road. Proceeding west on the Red Rock Ranch road, after 2.1 kilometers bear left at the first intersection and bear left again at the next intersection after another 2.3 kilometers. After traveling 24.3 kilometers, you are on the Pony Creek eastern project boundary. To continue to the Bowl Zone, turn right on a two-track road and after 2.1 kilometers turn right on another two-track road and continue to the top of the range where the Bowl Zone is situated. Alternatively Pony Creek can be accessed from the west by travelling the Indian Pony road off State Highway 278.

Climate

The climate can be described as dry and montane. Temperatures are cool to cold during the winter, with occasional moderate snowfalls, and summers are warm with cool nights. The area is fairly dry during the summer. Total annual precipitation is about 23 centimeters per year, mostly as snow during the winter months. The climate is favorable for year-round mining. Road access for exploration may be limited or interrupted by snow and mud during December through April. Conditions can be highly variable from year to year.

Local Resources and Infrastructure

A highly-trained mining and industrial workforce is available at Elko, Carlin, Winnemucca, and Reno, Nevada, as well as in Salt Lake City, Utah. The project area is served by U.S. Interstate Highway 80, which passes about 45 kilometers to the north. Mining and industrial equipment, fuel, maintenance, and engineering services and supplies are available in Elko, as are telecommunications, a regional commercial airport, hospitals, and banking.

There are no inhabitants in the immediate project area and there is no electrical power at the project site, but ranch power is available a few miles away. Although the project area is generally hilly, flat areas are present and have the potential for sitting a processing plant, tailings storage areas, waste disposal areas, and leach pads.

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Year-round surface water is not available within the property, and most of the springs dry up in August and September. No ground water has been encountered in airlift testing of Contact Gold’s RC drill holes to date. A few holes have encountered very small volumes of ground water, but not enough to stop the pneumatic hammer from functioning. The drilled area to date appears to be mostly dewatered as is the case at the Bald Mountain mine to the south, and while detailed hydrological studies will need to be completed as part of any future mine planning, it would appear that dewatering requirements will be minimal in the areas that Contact has been drilling. Large water volumes were encountered in one of the Grandview 2017 holes drilled near the Red Rock Ranch in the lower elevations on the east side of the project.

History

Silver, gold, copper, lead, and zinc were discovered approximately 22.5 kilometers north of the Pony Creek property in the central Piñon Range in 1869, at what was subsequently organized into the Railroad (or Bullion) mining district. The Railroad district was worked throughout the 1870s and 1880s, mainly for lead, copper, and silver. The district was later revived in 1905, and there was intermittent production through to the early 1940s.

In the southern Piñon Range, the Larrabee mining district was organized and covered two areas of shallow workings and prospects where small, but unrecorded, amounts of silver and copper may have been produced, as well as less than 1,000 tons of barite. Modern historical exploration in the southern Piñon Range commenced with regional stream-sediment sampling by Newmont in 1980. This led to the recognition of anomalous gold and arsenic in exposures of hydrothermally altered rhyolite within what is now the Pony Creek property. Table 1 below summarizes the historical exploration of the Pony Creek Project area.

Newmont located 180 claims at Pony Creek in the early 1980s and, beginning in 1981, conducted drilling programs intermittently through 1989. In 1987, NERCO drilled six RC holes, but it is not known if this was done under an agreement with Newmont or on ground not controlled by Newmont; the holes were drilled outside of the current property limits. Gold mineralization was intersected by Newmont’s drilling in the south lobe of a rhyolitic intrusive body and in sedimentary rocks beneath the rhyolite, in what became to be known as the Bowl area. The results of Newmont’s exploration program apparently did not meet their corporate objectives, and Newmont optioned the property to Westmont Mining, Inc. (“Westmont”) in 1990. Westmont drilled 31 RC holes through 1992.

In April of 1993, Quest International Management Services, Inc. (“Quest”) acquired Westmont and in 1994 formed a joint venture with Uranerz U.S.A., Inc. (“Uranerz”) to explore the property. In 1995, the Uranerz joint venture was terminated. A total of 173 holes were drilled from 1981 through 1995.

Quest and Barrick Gold Exploration Inc. (“Barrick”) formed a joint venture in August 1997. Barrick’s main effort consisted of recompiling and reinterpreting drill hole and geophysical data generated by previous operators and conducting a controlled-source audio-magnetotelluric (“CSAMT”) survey in the northern part of the claim block. The joint venture drilled 4 RC holes.

In 1999, Quest was acquired by the Standard Mining Co., which abandoned the Pony Creek property. Later that year, Mr. Carl Pescio located new claims over the mineralized rhyolite area and leased the property to the Homestake Mining Company (“Homestake”) shortly afterward. Homestake drilled 5 RC holes and terminated their agreement with Mr. Pescio.

Nevada Contact Inc. (“Nevada Contact”, unrelated to Contact Gold) optioned the property from Mr. Pescio in 2001 and drilled 8 RC holes in 2002 before terminating the agreement in early 2003. In July 2003, Mill City International Corp. (“Mill City”) purchased the property from Mr. Pescio, who became an officer of Mill City.

Grandview Gold Inc. (“Grandview”) entered into a letter option agreement with Mill City in 2004. Grandview carried out mapping and surface sampling, and in 2005 and 2006 drilled a total of 10 core holes.

A 2006 technical report on the Pony Creek project prepared for Vista Gold (the “Russell Report, 2006”) presented regional gravity and total-field aeromagnetic maps compiled and interpreted by J. Wright in 2004. The Russell Report, 2006 did not specify the company that commissioned the Wright 2004 geophysical interpretations, so it is not clear if this work was done for Mill City or Grandview. These regional geophysical maps are presented in Figure 3 below.

By 2006 ownership of the Pony Creek property had been transferred from Mill City to the “Pescio Group”. In mid-2006, Vista Gold Corp. (“Vista”) acquired the Pony Creek property from the Pescio Group and, following a series of transactions, control of the property was assigned to Allied Nevada Gold Corp. (“Allied Nevada”) in May 2007. Neither Vista nor Allied Nevada conducted exploration of the Pony Creek property, but the claims were maintained.

During 2007, Grandview drilled 13 RC holes. It is assumed by the Technical Report Author that Grandview’s option, discussed above, survived through the change in property ownership to Allied Nevada.

Allied Nevada entered bankruptcy in March 2015. In June of the same year, a subsidiary of Waterton acquired Pony Creek, along with other exploration assets, through the bankruptcy process.

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Contact Gold was formed pursuant to the Arrangement. As part of the Arrangement, Winwell continued into the State of Nevada and changed its name to Contact Gold, following which, Contact Gold acquired Clover Nevada from Waterton, which held the Pony Creek property, along with 12 other exploration stage properties in Nevada. No recorded mineral production has been attributed to the Pony Creek property and no workings larger than a few small prospect pits are known to exist.

Table 1 –Exploration at Pony Creek Since 1980

Geological Setting and Mineralization

The Pony Creek project is situated in the south-central Carlin trend, a northwest-southeast alignment of sedimentary rock-hosted gold deposits and mineralization in the Basin and Range geologic province of western North America. The area of what is now known as the greater Carlin trend was within the passive, marine continental margin during early and middle Paleozoic time, which is the time of deposition of the oldest rocks observed in the area. A westward-thickening wedge of sediments was deposited along the continental margin, in which the eastern facies tended to be siltier and carbonate-rich shelf and slope deposits and carbonate platform deposits, while the western facies were primarily fine-grained siliciclastic sediments of deeper basin environments. The Carlin trend is proximal to the shelf-slope break, although the position of this break was not static over time.

A prominent structural feature of the Piñon Range is the Piñon Range anticline and the related “Piñon graben” (Abbott, 2003). Abbott (2003) considered the anticline to be related to the development of the Eocene Ruby Mountains metamorphic core complex, which overprinted the folds and faults of the Antler, Sonoma and Sevier fold and thrust belts. According to Abbott (2003) the Piñon Range anticline was overprinted by a Tertiary right-lateral wrench fault system.

Hydrothermal alteration at Pony Creek is reported to be characterized by the assemblage quartz-sericite- pyrite within the intrusive body in and near north-trending and northeast-trending faults. The fault zones are fragmental and/or brecciated, and contain very fine-grained quartz, sericite, and pyrite or limonite. Pyrite occurs both as disseminated grains and on fracture surfaces while limonite occurs after pyrite or is secondary in fractures. Away from the faults the intrusion becomes less altered, grading outward from a rock with relict feldspar ghosts to one with a distinct porphyritic texture. In the center of the intrusion, a granular texture in which the feldspars have been argillically altered is present, leaving open or clay- filled vugs. The intrusion locally contains 3% to 5% pyritized and chloritized hornblende crystals.

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Newmont geologists used the terms “sanded rhyolite” and “rhyolite sand” to describe the texture of the rhyolite intrusion in some of the altered and mineralized areas. They reported that sanded rhyolite consists of medium-grained, rounded clasts of glassy rhyolite breccia commonly occurring near the margins and at the base of the intrusion, and locally as narrow stockwork zones within the intrusion. The distribution and texture of the sanded rhyolite suggest that the unit formed in vitric chill margins and was apparently affected by subsequent hydrothermal activity.

Sedimentary rocks along the margins of the intrusion and immediately beneath it are silicified, decalcified, sulfidized, and variably oxidized near gold mineralized zones.

Almost all significant mineralization identified to date in surface exposures and drilling is spatially associated with the rhyolite intrusive body, either within it or in silicified and altered Mississippian- Permian clastic rocks immediately beneath and adjacent to the intrusion. This mineralization appears to be related to or controlled by north, northwest and northeast striking structures.

At the Pony Creek property, a porphyritic rhyolite intrusion of Eocene age is present near the axis of the Piñon Range anticline, emplaced as a north-south elongated body that is approximately 3.2 km long and 1.2 km wide. It is variably hydrothermally altered and locally mineralized. Almost all significant gold mineralization identified to date in surface exposures and drilling is spatially associated with the rhyolite intrusive body, either within it or in silicified and altered Mississippian-Permian clastic rocks immediately beneath and adjacent to the intrusion. This mineralization appears to be related to or controlled by north and north-east striking structures.

Bowl Zone

The presence of significant gold mineralization at the Bowl Zone was first established by Newmont. The mineralization is associated with oxidized and unoxidized marcasite, pyrite, and minor realgar and stibnite that occur along fractures and as disseminations in and beneath the rhyolite intrusion, as well as in the matrix of breccias in the intrusion. Newmont defined two continuous zones of mineralization in the Bowl area. One occurs along what is interpreted as a steeply dipping, north-trending structure that forms the eastern boundary of the Bowl area. The second lies to the west and forms a tabular, flat-lying zone or zones of mineralization that occur at, or on either side of, the lower contact of the rhyolite with the underlying Paleozoic sediments. Work by Contact Gold has identified a second, north-striking structure parallel to the eastern bounding fault. Drilling has shown that these three zones are continuously mineralized in some areas.

As presently defined by drilling, the Bowl area is somewhat continuously mineralized over a north-south strike length of about 1,400 meters, with maximum east-west extents of 600 meters and a maximum depth of about 200 meters. This area includes the three more continuously mineralized zones mentioned above. The high-angle, structurally-controlled mineralization along the eastern limits of the Bowl area is generally narrow, sinuous, and irregular, but can have substantial grades. For example, Newmont’s hole PC-20 intercepted 22.9 meters of continuous gold mineralization starting at 124.97 meters that averages 7.17g Au/t, including a 6.1 -meter interval of 15.99g Au/t. While this intercept is from a vertical RC hole, which therefore overstates the true thickness of the steeply dipping mineralization along the fault, the grade is consistent with adjacent holes. It seems likely that the mineralizing fluids in the Bowl area were at least partially focused along this high-angle north-south structure, which is near the eastern contact of the rhyolite intrusion in this area. The mineralized fault may be related to the reactivation of a structural zone that controlled the hypothetical dike-like roots of the flat-lying portions of the rhyolite intrusion.

Of Contact Gold’s 93 holes drilled to date, 56 have been at the Bowl Zone. These holes were designed to: confirm and expand areas of mineralization intersected in historic holes, to gather cyanide solubility data to eventually develop an oxide model to target higher grade and better oxidized portions of the Bowl mineralization, to explore the edges of the current drill pattern where ore controls were thought to exist, and three deep core holes were completed in 2017 as recommended by Gustin (2017) to test for the Devil’s Gate/Webb contact at depth beneath the high-grade portion of the Bowl Zone. The deepest hole, PC17-27 was drilled to a total depth of 977.4 meters where the hole remained in Pennsylvanian/Permian aged sedimentary rocks with abundant fusilinid fossils which are age diagnostic.

West Target

The West Target was generated by Contact Gold in 2017 based on geology, geochemistry, and geophysics, and was never drilled by previous explorers. A new, significant area of gold mineralization currently measuring 1 km in a north-south direction and 400 meters wide east-west at its maximum, was subsequently defined after the discovery hole, PC18-18 returned 0.42 g/t Au over 33.53 meters starting 4.57 meters below surface. Cyanide assays showed the intervals to be well oxidized with cyanide assays averaging 89% of fire assays for the entire interval in hole 18 and similar, strong recoveries in the other holes’ cyanide assays.

Gold mineralization at the West Target is associated with a large silicified, north-striking rib of Pennsylvanian-Permian aged calcareous conglomerate (the same host at GSV’s North Dark Star deposit to the north of Pony Creek). Gold grades are enhanced where multiple cross cutting NW and NE striking faults intersect the North-South Conglomerate ridge that occupies the Emigrant-Dark Star-Dixie-Bowl zone structural corridor. To date the best gold grades have been encountered on the east and west margins of this silicified conglomerate. Assays have been received for 16 holes to date, with all widely spaced holes returning anomalous to low grade gold intersections. It remains completely open for expansion, particularly to the north and south.

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Contact Gold drilling to date includes 23 holes at the West Target.

North Zone

Gold mineralization has been somewhat irregularly intersected in drilling in a broad area within and adjacent to the northern lobe of the rhyolite intrusion. The most continuous mineralization identified to date in this area occurs within two north-trending zones that occur within a larger northwest-trending zone of generally lower-grade and more erratically distributed mineralization.

The easternmost of the two north-trending zones includes the most significant and continuous gold mineralization in the North area. This approximately 40-meter wide mineralized zone occurs over a strike length of 200 meters, is open to the south, and is defined by holes PC-111, PC-121, PC-128, 95-07, 95-08, and PC-06-03. The most significant intercept, 16.8 meters @ 1.50 g Au/t, was returned from hole PC-121. The top of the mineralization lies 50 to 100 meters from the surface, with mineralized thicknesses of 15 to 30 meters. The mineralization within this zone is very similar to the Bowl area, with the gold occurring near the contact of rhyolite intrusion and underlying Pennsylvanian/Permian age calcareous sandstone and conglomerate units. Specific mineralized areas are shown in Figure 3 below.

As part of Westmont’s 1992 drilling program, three holes (PC-129, PC-130, and PC-131) tested the possible northern extension of the eastern north-trending zone as it projects beyond the limits of the rhyolite intrusion. These three holes are the northernmost holes drilled at Pony Creek. PC-129, the southern of the three holes, intersected 42.7 meters grading 0.47 g Au/t starting at a down-the-hole depth of 26 meters. The gold mineralization in this hole is hosted in what was logged as weakly argillized arkosic sandstone with veinlets of very fine-grained pyrite and limonite-stained fractures. The next hole to the north, PC-130, intersected a large void and was abandoned; the void might be indicative of the targeted fault. The northernmost hole intersected unmineralized sedimentary rocks. The eastern, possibly northwest-trending portion of the North area is predominantly characterized by anomalous to low-grade gold values within the rhyolite intrusion and Permian-Pennsylvanian units, although thin higher-grade zones were intermittently intersected.

The 11 holes drilled by Contact Gold at the North Zone were designed as offsets of previously mineralized holes, particularly Westmont hole 129.

Pony Spur

The Pony Spur Target was acquired in 2017 as part of Contact Gold’s expansion of Pony Creek. The claims cover a regional-scale, northwest-striking fault that projects into the Bowl Zone and into the major SE flexure in the otherwise north-striking Emigrant/ Dark Star/ Pony Creek structural zone. Very strong silicification with a high barite and hematite content occurs within the Mississippian Chainman sandstone at Pony Spur. Contact Gold drilled three holes in 2018, with significant gold intersections in each hole. Two of the three intercepts were well oxidized with good gold recoveries in cyanide assays. Gold mineralization occurs at the Devonian Devil’s Gate/Webb contact (same host as the Pinion deposit owned by Gold Standard Ventures and Alligator Ridge Mine owned by Kinross).

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Exploration

Contact Gold began exploration at Pony Creek in late June, 2017 after 10 years of dormancy at the property. Contact Gold has completed 93 drill holes totalling 21,216 meters to the date of this Offering Circular. Drill programs were designed to confirm and expand known areas of historic drilling, with a focus on understanding the controls to mineralization as well as the degree and configuration of oxidation and the orientation of the higher grade gold mineralization, and to test new exploration targets that were developed through geological mapping, soil and rock geochemistry and gravity and CSAMT surveys.

Drilling

The project database includes data for 295 holes totalling 59,837 meters drilled at the Pony Creek project from 1981 through September 2018 as summarized in Table 2 (historical drilling) and Table 3 (Contact Gold drilling) below. Data is missing for 11 of the historic holes mentioned by Russell (2004). Seventeen of the holes were drilled with diamond core (“core”) methods and the rest were RC drill holes. A total of 148 holes were inclined and 147 holes were vertical or near vertical. Of Contact Gold’s 93 drill holes, only 27 were vertical, and a qualitative analysis of intercepts indicates that the angle holes more often intersect significant intervals of gold because those holes have a higher likelihood of intersecting high angle, structural controls to gold mineralization. Most of the holes mentioned by Michael Gustin in a technical report prepared for Contact Gold prior to completing the Arrangement (“Gustin, 2017”) as being off the current Pony Creek boundary are now within Pony Creek due to the acquisition of the Pony Spur claims.

The available data are not complete enough to determine the relationship between the true thickness of the gold mineralization and the length of the mineralized intercepts in the drill holes. In most cases, the orientation of the mineralization is unknown.

The most significant intervals of gold mineralization encountered in the historical drilling are listed in Table 2 below.

Table 2 – Summary of Historical Drilling at the Pony Creek Project

No information is available concerning the drilling contractors, drill rig types and drilling methods used during the Newmont and NERCO drill programs from 1981 through 1989. The drilling done by the Westmont-Newmont joint venture in 1991 and 1992 was done by Hackworth Drilling of Elko, Nevada. In 1991, an Ingersoll-Rand PH600 truck-mounted RC drill was used and an MPD 1000 track-mounted drill was used. In 1992, a Schramm C650 track-mounted RC drill was used. No other information is available.

The Technical Report Author has been unable to obtain any information on the drilling contractors, drill rig types and drilling methods used during the Uranerz drilling in 1994-1995, or the drilling done by Barrick in July, 1998.

Database files indicate that the Homestake drilling in 2000, and the Nevada Contact drilling in 2001-2003 utilized RC drilling. Eklund Drilling of Elko, Nevada conducted the Homestake RC drilling using a track-mounted MPD 1500 drill. A track-mounted RC rig was also used by Nevada Contact for most of their 2002 holes, with a truck-mounted TH-75 RC rig used for hole PCK02-06A.

Mill City did not conduct any drilling on the property. Grandview completed 2 core holes in 2005 and resumed drilling in late July, 2006. The 2006 drilling was conducted by Boart Longyear using a core drill. Inspection of core stored in Lovelock, Nevada indicates the drilling was done with HQ-diameter core size. In 2007 Grandview drilled 12 RC holes, but no other information is available. Portions of the 10 core holes drilled by Grandview are stored in the Waterton Resources storage facility in Lovelock, Nevada, and have been recovered by Contact Gold.

The most significant intervals of gold mineralization encountered from Contact Gold’s drilling are listed in Table 3 below. Of the 40 drill holes not listed in Table 3 below, only three did not contain a reportable gold intercept (minimum of 0.14 g/t Au over 3.05m) .

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Table 3 – Summary of Significant Mineralized Intervals, Contact Gold Drilling at Pony Creek⁽¹⁾

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⁽¹⁾ Contact Gold has completed cyanide assays at ALS Chemex on all 2018 fire assays above 0.10 g/t Au and all 2017 fire assays above 0.14 g/t Au, to begin to develop a database from which an oxide model can be built (refer to discussion under sub-heading “Mineral Processing and Metallurgical Testing”). Certain intervals provided in the table above highlight results indicating mineralization that is either oxide or mixed type from such preliminary metallurgical testing. Oxidation in Contact Gold’s drill intercepts of gold mineralization varies from complete to almost none. The Company continues to gather, assess and analyze data in order to classify portions of the gold mineralization drilled to date as oxide, transitional or sulfide. Drill intervals for which there is no initial metallurgical notation provided require the Company to undertake additional testing in order to make an initial determination of potential recovery.

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Contact Gold utilized a Shramm 455 track mounted RC drill provided by Major Drilling of Salt Lake City for the 2017 and 2018 programs, and in 2017 Major utilized a LF 90 core drill. All RC drilling was wet and utilized a rotary, 16 section pie splitter for sample collection, and great care was taken to make sure enough pie plates were installed to avoid overfilling and losing sample. Only one to occasionally two pie plates were left open for sample collection. Almost all core drilling was HQ size, although one hole had to be reduced to NQ due to pullback limitations of the drill. All drill cores were photographed and then sawn in half by Rangefront Consulting in their Elko warehouse and half was submitted to ALS Chemex for assay, while the other half was kept and is in storage at Contact Gold’s Elko warehouse.

Interpretation

Half of the holes at Pony Creek have been drilled at vertical to subvertical angles. In some areas, such as at Bowl, there are sufficient drill data to define mineralization that is oriented subhorizontally, and in these areas the steeply-angled holes cut the shallowly-dipping mineralization at high angles. This leads to drilled thicknesses that approximate true mineralized thicknesses. However, steeply-dipping holes that intersect high-angle mineralized structures, such as at the eastern limits of the Bowl area, can lead to down-hole gold intercepts that exaggerate the true thickness of the mineralization. Vertical and near vertical holes also have a much lesser chance of intersecting high angle mineral controls compared to angle holes, and Contact has observed that when angle holes and vertical holes are drilled from the same pad, the angle holes are often better mineralized because the vertical holes have a lesser chance of cutting the high angle, mineralized structures. As noted by the Technical Report, in many cases throughout the property, the data are not sufficient to determine the orientation of the intersected mineralization with confidence, although significant improvements in the understanding of ore controls have been gained by Contact Gold’s drilling. Future resource estimation will need to account for variable drill-hole- to-mineralization orientations in order to avoid overstatement of mineralized widths.

Due to the preponderance of RC drilling at the project, 1.524 -meter (5-foot) down-hole sample lengths dominate the drill-hole database. Very little information is available for the sampling methods and analytical procedures used at Pony Creek prior to 2000. Most of the RC drilling was sampled and assayed at 1.524 -meter intervals, but there is little information regarding dry versus wet RC drilling, potential RC contamination issues, or how RC samples were collected and split. Drill core was mainly sampled on 1.524 -meter intervals, although in some holes long intervals were not sampled and assayed. In 1991, Westmont’s RC samples were collected at 1.524 -meter intervals and split with a Gilson splitter when dry, or a rotating cone splitter when wet. Beginning with the Homestake RC drilling in 2000, sample intervals were mainly every 1.524 meters. For core holes drilled by Grandview in 2006, the core was sawed in half on 1.524 -meter sample intervals after being logged and photographed. As the Pony Creek mineralization is presently understood, these sample lengths are appropriate.

Mineral Processing and Metallurgical Testing

The assay database provided by Waterton, as well as the paper data obtained from Barrick by Contact Gold in 2018, did not include any cyanide soluble gold assays or other metallurgical test work from prior operators at Pony Creek.

Contact Gold has completed cyanide assays at ALS Chemex on all 2018 fire assays above 0.100 g/t Au and all 2017 fire assays above 0.140 g/t Au, to begin to develop a database from which a three-dimensional oxide model can be built to constrain a future resource calculation. Oxidation in Contact Gold’s drill intercepts of gold mineralization varies from complete to almost none. Contact Gold’s programs then completed fire assays with a gravimetric finish (ALS code Au-GRA21) for fire assay AA values in excess of 4.0 ppm Au; and for samples with a fire assay AA value exceeding 0.14 ppm in 2017 and 0.100 ppm Au in 2018, cyanide solubility assays were complete (ALS code Au-AA13) to identify oxide (typically more readily extracted and recovered) versus sulfide (often requiring more complex processing) mineralization.

The best oxidized interval encountered to date was from drill hole PC18-003 which returned 2.51 g/t Au over 47.24 meters from 86.87 meters depth. Cyanide assays from this interval averaged 89% recovery when compared to the fire assay / AA values used to calculate the intercept.

In 2018, Contact Gold generated composites using remaining pulp material from 111 individual samples from oxidized, mixed and sulfide drill intercepts. Gold recoveries on two oxide composites by Contact Gold were 85% for the rhyolite gold mineralization and 90% for the conglomerate composite of the weighted average of fire assays for the same composites, indicating that the oxidized portion of gold mineralization at Pony Creek’s Bowl Zone is amenable to standard cyanidation processing.

A summary of bottle roll test results performed for Contact Gold are summarized in Table 4 below.

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Table 4: Summary of bottle roll test results conducted by ALS Chemex for Bowl Zone composites

Based upon the fact that most cyanide assays conducted by Contact Gold demonstrate recovery of at least some gold in cyanide assays from some sulfide material, whereas most double refractory Carlin-Type gold ores (carbonaceous and sulfide encapsulated) do not yield any detectable gold from cyanide assays, and upon the fact that very little carbon that might be preg robbing has been observed in logging chips and core by Contact Gold geologists, preg robbing assays were completed on one sulfide interval from drill hole PC18- 04.

The objective was to determine if the sulfide mineralization might be placed on a heap leach along with oxide without any ill effects, as opposed to being selectively mined and placed on a waste dump, which would increase mining costs. Further metallurgical testing will be needed to say for sure, but perhaps some gold might even be recovered from the sulfide in the process. The preg robbing values varied for 34 individual 1.524 metre intervals from -3% to 69% preg robbing with 59% (20 of 34) of the samples 40% preg robbing which is the threshold where heap leach operations become concerned. More testing will be needed to see if the higher values might be just preg “borrowing” in which case a heavier dose of CN might recover the gold and keep it separate from the rest of the pad or put it on the top lift of the pad.

Sampling, Analysis and Security of Samples

There is no information on the analytical laboratories, sample preparation procedures and analytical methods used prior to 2000. Homestake’s RC samples drilled in 2000 were sent to the Bondar Clegg laboratory in Sparks, Nevada. Gold was determined by fire-assay fusion of 30g aliquots with an atomic absorption (“AA”) finish. Mercury was determined by cold-vapor AA, and silver plus 35 major, minor and trace elements were determined by inductively-coupled plasma-emission spectrometry (“ICP”) following an aqua regia digestion. It is not known how the samples were prepared for assay.

Nevada Contact’s RC drilling samples in 2003 were sent to ALS Chemex in Elko, Nevada, for sample preparation. The samples were oven dried, then crushed in their entirety to 70% at -2mm. The crushed material was riffle split to obtain a 250g split, which was then ring-pulverized to 85% at -75μm. These pulps were then shipped to the ALS Chemex analytical laboratory in either Sparks, Nevada, or in North Vancouver, British Columbia, for assaying. Gold was determined by fire-assay fusion with an AA finish using 30g aliquots.

In 2005 and 2006, Grandview’s core samples were sent to ALS Chemex in Elko, Nevada, for sample preparation. The samples were crushed to 70% at -2mm. The crushed material was riffle split to obtain a 1.0kg split, which was then ring-pulverized to 85% at -75μm. These pulps were then shipped to the ALS Chemex analytical laboratory in either Sparks, Nevada, or in North Vancouver, British Columbia, for assaying. Gold was determined by fire-assay fusion with an AA finish using 50g aliquots. 34 major, minor and trace elements were determined by ICP following an aqua regia digestion.

Grandview’s rock samples in 2006 were also prepared at the ALS Chemex facility in Elko, Nevada, using the preparation methods described for the 2005-2006 core samples. The rock sample pulps were assayed by ALS Chemex in North Vancouver, British Columbia, for gold by 30g fire-assay fusion with an AA finish. Separate 1g aliquots were analyzed for 47 major, minor and trace elements using a combination of ICP and mass spectrometry (“ICP-MS”), and mercury was determined by cold-vapor AA.

In 2007 Grandview’s RC drilling samples were submitted to ALS Chemex in Elko, Nevada. Following sample preparation, the pulps were then shipped to the ALS Chemex analytical laboratory in either Sparks, Nevada, or in North Vancouver, British Columbia, for assaying. Gold was determined by fire- assay fusion with an AA finish using 30g aliquots.

Contact Gold’s RC and core samples were assayed by ALS Chemex using standard preparation - crushed to 70% at -2mm. The crushed material was riffle split to obtain a 1.0kg split, which was then ring-pulverized to 85% at -75μm. These pulps were then shipped to the ALS Chemex analytical laboratory in either Sparks, Nevada, or in North Vancouver, British Columbia, for assaying. Gold was determined by ALS Chemex method FAAA23 fire-assay fusion with an AA finish and 5 ppb detection using 30g aliquots. 6.09 meter composites were prepared from four 1.524 meter samples on RC holes, and the composites were assayed by ALS Chemex method MEMS61M for 49 major, minor and trace elements using a 4 acid digestion for all elements except mercury which is analyzed by cold vapor. Core samples were assayed for the same MEMS61M package but was not composited.

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Sample Security

The Technical Report Author is unaware of any information concerning the handling, storage or transport of drilling samples from the drill sites to the analytical laboratories by the historical operators of the Pony Creek project.

Quality Assurance/Quality Control

During the 2000 RC drilling by Homestake, a total of 54 duplicate RC samples were analyzed at Bondar Clegg. A total of six core duplicate samples and 38 RC duplicate samples were analyzed by ALS Chemex during Grandview’s drilling in 2006 and 2007. It is not known if QA/QC programs were instituted by the other historical operators at the Pony Creek project. Internal QA/QC methods involving analytical blanks, standards, and duplicate samples were employed by Bondar Clegg for the analyses of Homestake’s drilling samples in 2000. ALS Chemex typically used internal blanks, standards, and duplicate samples for QA/QC controls during the analyses of Grandview’s drilling and rock samples in 2005-2006.

Contact Gold implements an industry standard QA/QC program. A certified standard, duplicate or blank is inserted into the sample sequence every 10 samples using sequential numbers, with no footage or meters noted on samples. RC duplicates were initially collected using a Y splitter attachment on the rig, but because those initial Y split duplicates regularly failed in comparison, a riffle splitter is now used to split the single sample into two and duplicate assays now compare very well. QA/QC failures are addressed in the form of re assaying batches in which they occur prior to finalizing gold intercept calculations. A yearly summary report is completed documenting all failures and follow-up measures and includes charts of duplicates, standards and blanks.

Site Inspection

The Technical Report Author has visited the project numerous times in his capacity of VP Exploration for Contact Gold, based in Elko, Nevada. Most visits have been to the drill rig to inspect sampling and logging methods, safety protocols and to visit key outcrops and soil and rock anomalies as they are identified. As part of the claims check, the Technical Report Author located and recorded with GPS several claim posts in 2017 and 2018 and conducted rock chip sampling as follow up within soil anomalies.

The Technical Report Author assisted in locating and moving the core and chips from Waterton’s Lovelock facility to Contact Gold’s Elko facilities, and reviewed many of the mineralized RC chips and drill core intervals as assays arrived.

Mineral Resources and Mineral Reserves

There are no current mineral resources or mineral reserves estimated for the Pony Creek project at this time.

Exploration and Development

On the basis of the discussion in previous sections, the Pony Creek project clearly warrants additional exploration investment. An aggressive work program is therefore recommended.

Multiple, high quality drill targets have been defined by Contact Gold at Bowl and North Zones, and at West, Pony Spur, Moleen, Elliott Dome and Willow targets. Detailed mapping and rock sampling has been completed, and CSAMT data is sufficient so that there are seven, drill ready targets/zones, but further surface investigations should be completed to both refine existing targets and to develop new targets elsewhere on Pony Creek. To this end, detailed mapping focused on gold and trace element soil anomalies should continue, accompanied by selective rock-chip sampling of altered or otherwise permissive outcrops. Core drilling should be 25% of the total meterage to provide the exploration team with the details of the project stratigraphy, structure, alteration, and mineralization. Since the stratigraphy will be a critical component of the development of targets and interpretation of results, Contact Gold should continue with the biostratigraphy program, and a consultant who is expert in Nevada stratigraphy, such as Jon Thorson who Contact Gold used in 2017 should inspect drill core.

Contact Gold exceeded the Phase 1 program of US$2.5M recommended in the Gustin, 2017 43-101 report by spending US$3.1M, and in 2018 conducted a Phase 2 program estimated to total of US$2.5M. Due to the success of these programs in confirming and adding significant areas of gold mineralization, the project warrants additional exploration investment.

A Phase 3 budget and program totaling US$3,500,000, including of 10,000 meters of RC and 2,500 meters of core drilling is therefore recommended, to be immediately followed by a Phase 4 budget and program of US$6,520,000, including 20,000 meters of RC and 5,000 meters of core. These programs include RC and core drilling and associated road building, additional soil and rock- chip sampling, geologic studies, and geophysics, and resource calculation and metallurgical studies. Costs for the recommended program are summarized in Table 5 below.

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Table 5: Summary of Estimated Costs for Recommended Exploration

It is the Technical Report Author’s opinion that the Pony Creek project is a project of merit and warrants the proposed program and level of expenditures outlined above.

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DIRECTORS, OFFICERS AND CERTAIN SIGNIFICANT EMPLOYEES

The following table sets forth the names, ages and titles of our directors and executive officers.

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Involvement in Certain Legal Proceedings

Corporate Cease Trade Orders

To Contact Gold’s knowledge, no director or executive officer of Contact Gold is, as of the date hereof, or was within ten years before the date hereof, a director, chief executive officer or chief financial officer of any company (including Contact Gold), that:

Bankruptcies and Other Proceedings

To Contact Gold’s knowledge, no director or executive officer of Contact Gold, or a shareholder holding a sufficient number of securities of Contact Gold to affect materially the control of Contact Gold:

Penalties or Sanctions

To Contact Gold’s knowledge, no director or executive officer of the Contact Gold, or a shareholder holding a sufficient number of securities of Contact Gold to affect materially the control of Contact Gold, has been subject to:

Board of Directors

The Board, at present, is composed of seven directors, two of whom are executive officers of Contact Gold and five of whom are considered to be “independent”, as that term is defined in applicable securities legislation. Each of Messrs. Davies, Dorward, Lalani, Salamis and Wellings are considered to be independent directors. Mr. Lennox-King, by reason of his being the President and Chief Executive Officer of Contact Gold and Mr. Farncomb by reason of his position as Executive Vice-President are not. In determining whether a director is independent, the Board, among other things, considers whether the director has a relationship which could be perceived to interfere with the director’s ability to objectively assess the performance of management.

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The Board is responsible for approving long-term strategic plans and annual operating plans and budgets recommended by management. Board consideration and approval is also required for material contracts and business transactions, and all debt and equity financing transactions.

The Board delegates to management responsibility for meeting defined corporate objectives, implementing approved strategic and operating plans, carrying on Contact Gold’s business in the ordinary course, managing Contact Gold’s cash flow, evaluating new business opportunities, recruiting staff and complying with applicable regulatory requirements. The Board also looks to management to furnish recommendations respecting corporate objectives, long-term strategic plans and annual operating plans.

Directorships

Certain of the directors of Contact Gold are also directors of other reporting issuers (or equivalent) in a jurisdiction or a foreign jurisdiction as follows:

⁽¹⁾ a company listed on the Australian Securities Exchange

Interlocking Boards and CEO Board restriction

None of Contact Gold’s directors currently serve together on the board of any other reporting issuer. Mr. Lennox-King is not allowed to sit on the board of more than one other reporting issuer.

Orientation and Continuing Education

Contact Gold has not yet developed an official orientation or training program for new directors. As required, new directors have the opportunity to become familiar with the Contact Gold by meeting with the other directors, officers and employees. Orientation activities are tailored to the particular needs and experience of each director and the overall requirements of the Board.

Director Term Limits

Contact Gold has not adopted term limits for the directors of the Board as term limits could result in the loss of directors who have been able to develop, over a period of time, significant insight into Contact Gold and its operations and an institutional memory that benefits the Board as well as Contact Gold and its stakeholders.

Retirement Policy

Contact Gold does not currently have a retirement policy requiring its directors to retire at a certain age.

Written Position Description of the CEO

The Board has developed a written position description for the CEO, which delineates the role and responsibilities of the CEO, along with such other responsibilities as may be delegated to the CEO by the Board or its Committees from time to time.

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CEO Succession Planning

There is currently no formal process in place to manage succession planning for the position of CEO. The Corporate Governance and Nominating Committee (“CGNC”) and the Board does not believe at this time that Contact Gold is dependent upon any one of the individual Executives, including the CEO so as to require a formal succession plan. It is envisaged that a member of the Executive or the Board would temporarily assume the position and duties of CEO on an interim basis should the need arise while a search for a suitable candidate was undertaken. The CGNC expect to continue its ongoing review for a need to formalize a succession process in 2019 in order to ensure that a qualified successor to Contact Gold’s Chief Executive Officer position can be identified, if and when appropriate.

Ethical Business Conduct

The Board monitors the ethical conduct of Contact Gold and ensures that it complies with the applicable legal and regulatory requirements of relevant securities commissions and stock exchanges. Contact Gold has a Code of Conduct and Business Ethics, as well as more specific Codes of Conduct for Senior Financial Officers and for members of the Board. Each of which can be found on Contact Gold’s website at http://contactgold.com/corporate/governance/.

In general, the Board has found that the fiduciary duties placed on individual directors by Contact Gold’s governing corporate legislation and the common law, as well as the restrictions placed by applicable corporate legislation on the individual director’s participation in decisions of the Board in which the director has an interest, have been sufficient to ensure that the Board operates independently of management and in the best interests of Contact Gold.

Complaints Procedures

Contact Gold has also adopted specific procedures to receive complaints and submissions relating to accounting matters (the “Whistleblower Policy”, included as a schedule to the Code of Conduct and Business Ethics), which outline complaint procedures for financial concerns and other corporate issues. A Complaints Officer has been appointed under the Whistleblower Policy to whom complaints and submissions can be made regarding accounting, internal accounting controls or auditing matters or issues of concern regarding accounting or auditing matters.

Excluding complaints or submissions made directly to the Complaints Officer regarding financial, accounting or auditing matters, the Board does not formally monitor compliance with the Codes. Management is responsible to report to the CGNC when they become aware of any breaches or alleged breaches of the Codes and complaints made by suppliers or employees against Contact Gold or any director, employee or officer. In the event of a violation of any of the Code of Conduct and Business Ethics, the applicable committee of the Board will investigate the breach or alleged breach and, if appropriate, recommend corrective disciplinary action, including, if warranted, termination of employment. In the event that a breach or alleged breach relates to financial, accounting or auditing issues, the Complaints Officer and the Audit Committee will share responsibility to investigate the matter.

At the date of this Circular, there has been no conduct by a director or executive officer that constitutes a departure from the Codes and the Complaints Officer has received no complaints under the Whistleblower Policy.

Meetings without management present

During 2017 and 2018, the independent members of the Board met in camera at each regular board and committee meeting.

Nomination of Directors

The Board does not have a formal process for identifying new candidates for Board nomination. When required, the Board collaborates with management to identify potential candidates to consider their suitability for membership on the Board.

Corporate Governance and Nominating Committee

The Board has established a Corporate Governance and Nominating Committee that is comprised entirely of independent directors; this committee is charged with the responsibility of identifying new candidates for Board nomination, among other things. The current members of the CGNC are: Mr. George Salamis (Chair), Mr. Mark Wellings, and Mr. Riyaz Lalani. While a formal process has not yet been developed, it is expected that Board candidates will be identified through industry contacts and search firms.

The responsibilities and powers of the Corporate Governance and Nominating Committee are set out in its written charter, and include, among other things:

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Compensation Committee

The Board has also established a Compensation Committee, which is comprised entirely of independent directors. The current members of the Compensation Committee are Messrs. Mark Wellings (Chair), John Dorward and George Salamis. Each of the Committee members has served for several years in either a senior management capacity, or as a director and compensation committee member of an issuer, at which they would have had direct responsibility for reviewing performance of direct reports, hiring, setting of performance goals and objectives and setting salaries.

The Compensation Committee has adopted a written charter, pursuant to which its responsibilities include, among other things:

Contact Gold has not completed an assessment of potential risks associated with Contact Gold’s compensation policies and practices. The Compensation Committee is responsible for annually reviewing Contact Gold’s compensation arrangements, as set out above, and may determine to undertake such an assessment during a later period.

Audit Committee

Contact Gold has an Audit Committee, which is currently comprised of Mr. Riyaz Lalani (Chair), Mr. Mark Wellings, and Mr. John Dorward, each of whom is considered independent and financially literate in accordance with applicable securities laws. The Audit Committee has adopted a written charter that sets out its duties and responsibilities. Each of Mr. Dorward and Mr. Wellings is a financial expert, with experience preparing, analyzing and evaluating financial statements presenting a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by financial statements prepared by Contact Gold. Mr. Dorward holds a Bachelor of Commerce degree, and has completed the Chartered Financial Analyst designation (Australia). Mr. Dorward has previously served as Chief Financial Officer of other publicly-listed companies in the mining and metals sector, and also sat on the audit committee of other similar companies. Mr. Wellings holds a Master’s degree in Business Administration, and had over 18 years of experience leading the corporate finance group (mining) at GMP Securities. He has also served on the audit committees of other similar companies.

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As part of Contact Gold’s corporate governance practices, the Audit Committee has adopted a Policy on Pre-Approval of Audit and Non-Audit Services for the pre-approval of services performed by Contact Gold’s auditors. The objective of this policy is to specify the scope of services permitted to be performed by Contact Gold’s auditors and to ensure that the independence of Contact Gold’s auditors is not compromised through engaging them for other services. All services provided by Contact Gold’s auditors are pre-approved by the Audit Committee as they arise or through an annual pre- approval of amounts for specific types of services. The Audit Committee has concluded that all services performed by Contact Gold’s auditors comply with the Policy on Pre-Approval of Non-Audit Services, and professional standards and securities regulations governing auditor independence.

The Charter of the Audit Committee can be found on Contact Gold’s website at http://contactgold.com/_resources/governance/Contact-Gold-Audit-Committee-Charter-2017.pdf.

Health, Safety & Sustainability

Contact Gold has established a Health, Safety and Sustainability Committee, which is currently comprised of Messrs. George Salamis, Charlie Davies, and Matthew Lennox-King. The Health, Safety and Sustainability Committee have adopted a written charter, pursuant to which its responsibilities include, among other things:

The Health, Safety and Sustainability Committee has also adopted a policy recognizing that Contact Gold’s success is tied to health, safety and sustainability of the communities in which Contact Gold operates, and acknowledges that Contact Gold and its personnel have a shared responsibility in working with the communities in which Contact Gold operates.

Other Board Committees

Other than as described herein, the Board has not appointed any other committees to date.

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EXECUTIVE COMPENSATION

The following table contains compensation data for our named executive officers for the current fiscal year. In this section “Named Executive Officer” or “NEO” means the Chief Executive Officer, the Chief Financial Officer and each of the three most highly compensated executive officers, other than the Chief Executive Officer and the Chief Financial Officer, who were serving as executive officers at the end of the most recently completed fiscal years ended December 31, 2018 and 2017, and whose total salary and bonus exceeds $150,000, as well as any additional individuals for whom disclosure would have been provided except that the individual was not serving as an officer of Contact Gold at the end of the most recently completed financial year end.

The following table sets for all direct and indirect compensation paid, payable, awarded, granted, given or otherwise provided, directly or indirectly, by Contact Gold any subsidiary thereof to each Named Executive Officer and each director of Contact Gold, in any capacity, including, for greater certainly, all plan and non-plan compensation, direct and in-direct pay, remuneration, economic or financial award, reward, benefit, gift or perquisite paid, payable, awarded, granted, given or otherwise provided to the Named Executive Officers or director for services provided and for services to be provided, directly or indirectly, to Contact Gold or any subsidiary thereof:

Table of compensation