Goldgroup Mining Inc. — Regulatory Filings 2023

FORM 51-102F3 MATERIAL CHANGE REPORT

Item 1

Name and Address of Company

Goldgroup Mining Inc. (the “Company”) 1166 Alberni Street, Suite 1201 Vancouver, BC V6E 3Z3

Item 2

Date of Material Change

June 28, 2023

Item 3 News Release

A news release announcing the material change was disseminated by the Company on June 28, 2023 and updated on July 7, 2023 through Newsfile.

Item 4 Summary of Material Change

Further to the Company’s news releases dated June 15, 2023, June 28, 2023 and July 7, 2023, at the Company’s Annual General and Special Meeting (the “Shareholders Meeting”) held on June 28, 2023, the shareholders of the Company approved a Settlement Agreement and an Exploitation and Option to Purchase Agreement and the transactions contemplated thereby, pursuant to which the Company will deliver the assets of its wholly owned subsidiary, Minas de Oroco Resources S.A. de C.V. (“Minas de Oroco”), to Minera Cerro Esperanza S.A de C.V. (“MER”) in full satisfaction of a loan (the “Accendo Loan”) obtained by the Company from Accendo Banco S.A., Multiple Banking Institution (“Accendo”) in 2020 and acquired from Accendo by MER in 2022.

MER is a wholly owned subsidiary of Calu Opportunity Fund LP (“Calu”). Calu is a shareholder and investor in the Company having acquired 1,177,500 Common Shares and having loaned the Company US$2.16 million (the “Calu Loan”). At the Shareholders Meeting, the shareholders of the Company approved the conversion of the Calu Loan into common shares of the Company, and upon conversion of the full amount of the Calu Loan into common shares of the Company, Calu will own a majority of the voting interest in the Company.

MER contacted the Company on April 26, 2023 seeking repayment of the US$1,850,000 outstanding under the Accendo Loan. However, during fiscal 2022, the Company experienced liquidity challenges which were mainly the result of a delay in the completion of a leach pad expansion which caused a significant delay in recovering gold, and subsequent negative impact on revenue generation through gold sales. This delay in revenue while incurring costs at full production levels caused a working capital constraint which plagued the Company throughout the year and caused the Company seek debt and equity financing in the financial markets. As the assets of Minas de Oroco are currently the only operating assets of the Company, the seizure of these assets would effectively place the Company into insolvency unless another arrangement was made.

Under the Settlement Agreement and the Exploitation and Option to Purchase Agreement, the Company is provided the right to operate the assets of Minas de Oroco going forward in consideration for a 2% NSR and to purchase the assets in the future for US$1,850,000 payable in cash or common shares of the Company (or a combination of cash and shares), as agreed by the parties.

The Settlement Agreement and the Exploitation and Option to Purchase Agreement and the transactions contemplated thereby were approved by a simple majority of the votes cast by shareholders present in person or represented by proxy at the Shareholders Meeting and entitled to vote. As Calu and its affiliates constitute related parties pursuant to MI 61-101, all common shares held by Calu and MER

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were excluded from voting at the Shareholders Meeting in respect of the Settlement Agreement and the Exploitation and Option to Purchase Agreement and the transactions contemplated thereby.

The Company and MER executed the Settlement Agreement and the Exploitation and Option to Purchase Agreement on July 1, 2023. A copy of the Settlement Agreement and the Exploitation and Option to Purchase Agreement have been filed on Sedar at www.sedar.com.

Item 5.1 Full Description of Material Change

The material change is fully described in Item 4 above.

Disclosure Required by MI 61-101

Pursuant to MI 61-101, Calu and its affiliates are considered related parties to the Company given that Calu beneficially owns a majority of the issued and outstanding common shares of the Company upon the conversion of the Calu Loan as approved at the Shareholders Meeting. The transactions contemplated by the Settlement Agreement and the Exploitation and Option to Purchase Agreement constitute related party transactions under MI 61-101.

While the Company obtained minority shareholder approval for the Settlement Agreement and Exploitation and Option to Purchase Agreement and the transactions contemplated thereby pursuant to MI 61-101, the Company is exempt from the valuation requirements of MI 61-101 by virtue of the exemption contained in section 5.5(g) on the basis that (i) the demand for payment by MER of the Accendo Loan places the Company is serious financial difficulty, (ii) the transactions contemplated by Settlement Agreement and the Exploitation and Option to Purchase Agreement are meant to improve the financial position of the Company and (iii) the Board as well as the independent directors of the Board, acting in good faith, have determined that (A) the Company is in serious financial difficulty, (B) the transactions contemplated by the Settlement Agreement and the Exploitation and Option to Purchase Agreement are meant to improve the financial position of the Company and (C) the terms of the transactions are reasonable in the circumstances of the Company.

The following supplementary information is provided in accordance with Section 5.2 of MI 61‐101:

(a) a description of the transaction and its material terms:

See Item 4 above for a description of the transactions.

(b) the purpose and business reasons for the transaction:

See Item 4 above for a description of the transactions.

(c) the anticipated effect of the transaction on the issuer's business and affairs:

The Accendo Loan will be extinguished and the Company will continue to operate the assets of Minas de Oroco. In addition, the Company may exercise the option to acquire the Minas de Oroco assets in the future if the circumstances warrant. The conversion of the Calu Loan into common shares and/or the payment of the option price upon exercise of the option under the Exploitation and Option to Purchase Agreement will result in a material amount of dilution and Calu will own, directly and indirectly, a majority interest in the Company as noted below.

(d) a description of

(i) the interest in the transaction of every interested party and of the related parties and associated entities of the interested parties:

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MER is a wholly owned subsidiary of Calu Opportunity Fund LP. Calu is a shareholder and investor in the Company having acquired 1,177,500 Common Shares and having loaned the Company US$2.16 million (the “Calu Loan”) which is convertible into common shares of the Company representing approximately 52% of the voting interest in the Company upon conversion of the Calu Loan in full.

(ii) the anticipated effect of the transaction on the percentage of securities of the issuer, or of an affiliated entity of the issuer, beneficially owned or controlled by each person referred to in subparagraph (i) for which there would be a material change in that percentage :

If Calu converts the Calu Loan into common shares, it will own approximately 52% of the outstanding common shares of the Company. Furthermore, if the Company exercises the option and pays the option price in common shares at the floor price of $0.10 per share, Calu will own approximately 67% of the outstanding common shares of the Company.

(e) unless this information will be included in another disclosure document for the transaction, a discussion of the review and approval process adopted by the board of directors and the special committee, if any, of the issuer for the transaction, including a discussion of any materially contrary view or abstention by a director and any material disagreement between the board and the special committee:

See the Company’s Information Circular posted on the Company’s website https://goldgroupmining.com/investors/annual-reports-and-meetings and available under the Company’s profile on Sedar at www.sedar.com.

(f) a summary, in accordance with section 6.5, of the formal valuation, if any, obtained for the transaction, unless the formal valuation is included in its entirety in the material change report or will be included in its entirety in another disclosure document for the transaction :

Not applicable.

(g) disclosure, in accordance with section 6.8, of every prior valuation in respect of the issuer that relates to the subject matter of or is otherwise relevant to the transaction (i) that has been made in the 24 months before the date of the material change report, and (ii) the existence of which is known, after reasonable inquiry, to the issuer or to any director or senior officer of the issuer :

Not applicable.

(h) the general nature and material terms of any agreement entered into by the issuer, or a related party of the issuer, with an interested party or a joint actor with an interested party, in connection with the transaction :

The following summary of the Settlement Agreement and Exploitation and Option to Purchase Agreement is not exhaustive and is qualified in its entirety by the terms of the Settlement Agreement and Exploitation and Option to Purchase Agreement, copies of which have been filed on Sedar at www.sedar.com.

The Settlement Agreement

Under the Settlement Agreement:

1. the Company and Minas de Oroco agreed to deliver to MER clear title to all of the assets of Minas de Oroco in full and final satisfaction of the Accendo Loan, within 30 days of the receipt of shareholder approval. MER shall deliver a release of all liabilities and claims against the Company and Minas de Oroco in respect of the Accendo Loan at the time of delivery of title to the Minas de Oroco assets by the Company to MER; and

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1. the Company and MER agreed, contemporaneously with the execution of the Settlement Agreement, to enter into the Exploitation and Option to Purchase Agreement pursuant to which the Company is granted the right to operate the Minas de Oroco assets and to purchase the assets going forward, upon the terms and subject to the conditions set forth in the Exploitation and Option to Purchase Agreement.

The Settlement Agreement contains representations and warranties customary for agreements of this type.

The Exploitation and Option to Purchase Agreement

The Exploitation and Option to Purchase Agreement (the “EOP Agreement”) provides the Company with the exclusive right to operate the mining assets of Minas de Oroco in Mexico, and the exclusive right and option for the Company to purchase the assets during the term of the EOP Agreement for a pre-agreed value.

Operating Rights

MER owns all of the mining claims of Minas de Oroco in Mexico. These mining claims, together with all ores, minerals, surface and mineral rights, and the right to explore for, mine, and remove the same, and all water rights and improvements, easements, licenses, rights-of-way and other interests appurtenant thereto, owned by MER are referred to collectively as the “Property” in the EOP Agreement.

Under the EOP Agreement, the Company has the exclusive rights and privileges incident to ownership of the Property, including without limitation the right to mine underground or on the surface, access water or water rights, extract by leaching in place or any other means, remove, save, mill, concentrate, treat, stockpile, store, ship and sell or otherwise dispose of ores, concentrates, mineral-bearing earth and rock and other products therefrom and to construct, use and operate thereon and therein structures, excavations, stockpiles, facilities, roads, equipment and other improvements which the Company shall deem reasonably required for, or in connection with, the full enjoyment of the rights and interests granted to the Company by this EOP Agreement.

Royalty

The Company has agreed to pay MER a 2.00% NSR for gold, silver, other metals, mineral products or geothermal resources produced and sold from mining claims until the purchase option is exercised.

The term “net smelter return” means the net dollar amount received by the Company from the sale of minerals produced from the ore mined from the Property in the corresponding calendar quarter, after deducting: (i) all charges, penalties, and deductions of any nature made by the smelter, refinery, or other treatment plant or purchaser arising out of the receipt, processing or handling of production, including umpire charges: and (ii) the following items attributable to production paid by or for the account of the Company: (a) all brokers’ or agents’ commissions on the sale and all other costs of sale, (b) all cost of transportation and extraction of the production, and (c) any tax, royalty or fee levied on the ownership, mining production, processing, severance, or sale of the subject minerals.

Term and Termination

This EOP Agreement is for an initial term of thirty (30) years and shall automatically renew for additional thirty (30) year periods not to exceed 99 years.

The Company has the right to terminate the EOP Agreement at its sole discretion at any time by giving thirty (30) days written notice to MER. Upon termination, MER shall retain all payments previously made as liquidated damages and the EOP Agreement shall cease and terminate.

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If the Company fails to perform any material obligations under the EOP Agreement, including but not limited to the making of required payments due to MER, MER may declare the Company in default by giving the Company written notice of default which specifies the obligation(s) which the Company has failed to perform. If the Company fails to remedy a default in payment within sixty days (60) of receiving the notice of default, and within thirty (30) days for any other default, MER may terminate this EOP Agreement and the Company shall peaceably surrender possession of the Property to MER.

Representations, Warranties and Indemnities

The EOP Agreement contains representations and warranties customary for agreements of this type, including that the parties have the requisite authority to enter into the EOP Agreement and to perform their obligations under the EOP Agreement and that the EOP Agreement constitutes the valid and binding obligation of each party.

In addition, MER has made representations and warranties with respect to its ownership and possession of an undivided full interest and title to the mining claims in respect of the Property.

The Company has agreed to indemnify MER against all environmental liabilities arising at the Property as a result of work conducted by the Company.

Option to Purchase

MER has provided the Company with the option to purchase the Property during the term of the EOP Agreement for an aggregate of US$1,850,000 which may be paid in cash or that number of Common Shares of the Company at closing as is equal to US$1,850,000, as agreed by the parties (the “Option”) The Company may exercise the Option by written notice to MER and the parties have agreed to make diligent efforts to close the conveyance of the Property within thirty (30) days thereafter, with the Company being responsible for paying all applicable transfer taxes.

(i) disclosure of the formal valuation and minority approval exemptions, if any, on which the issuer is relying under sections 5.5 and 5.7, respectively, and the facts supporting reliance on the exemptions:

The Company is exempt from the valuation requirements of MI 61-101 by virtue of the exemption contained in section 5.5(g) on the basis that (i) the demand for payment by MER of the Accendo Loan places the Company is serious financial difficulty, (ii) the transactions contemplated by Settlement Agreement and the Exploitation and Option to Purchase Agreement are meant to improve the financial position of the Company and (iii) the Board as well as the independent directors of the Board, acting in good faith, have determined that (A) the Company is in serious financial difficulty, (B) the transactions contemplated by the Settlement Agreement and the Exploitation and Option to Purchase Agreement are meant to improve the financial position of the Company and (C) the terms of the transactions are reasonable in the circumstances of the Company

Item 5.2 Disclosure of Restructuring Transactions

Not applicable.

Item 6 Reliance on subsection 7.1(2) of National Instrument 51-102

Not applicable.

Item 7 Omitted Information

Not applicable.

Item 8 Executive Officer

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The following executive officer of the Company is knowledgeable about the material change and this Report:

Anthony Balic, Chief Executive Officer (Interim), Chief Financial Officer and Director Goldgroup Mining Inc. Phone: 604-312-2425

Item 9 Date of Report

July 7, 2023

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