SAN FRANCISCO MINE

Magna entered into a definitive purchase agreement with Timmins Goldcorp Mexico, a wholly owned subsidiary of Alio Gold, to acquire the San Francisco Mine.

Magna’s acquisition of San Francisco in conjunction with exploration projects in the Sonora-Mojave Megashear at the San Judas project represent significant gold and silver resource upside potential as shown below:

Table 1.- San Francisco Project – Historical Reserves and Resources as of July 1, 2018

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Figures may not total due to rounding

Exploration

Exploration works prior to Magna Gold Corp

Prior to Magna's acquisition of the San Francisco operation, the project had undergone multiple exploration works. There are historical drilling records dating from 1996 through 2018, time at which the most recent drilling campaign was carried out. Since then, more than 500,000 meters of drilling have accumulated. The following table shows the drilling campaigns carried out at the San Francisco mining unit.

Figures 2 and 3 below show locations where holes were drilled years 2016-2017 and the drilling works carried out in previous years

Exploration Works by Magna Gold Corp

Magna is to conduct project data review and quality of data validation in order to create a new geological model. Once completed, an updated resources estimate will follow. The company will be reviewing metallurgical information and key economic parameters in order to evaluate the potential economics of an open pit gold mine and a heap leach extraction facility.

Figure 2

Location of the In-Fill Drilling Program in the Area of the San Francisco Pit

Figure 3

Location of the In-Fill Drilling Program in the Area of the La Chicharra Pit

San Francisco Mine Acquisition

On May 6, 2020, Magna closed the acquisition of the San Francisco Mine located in Sonora, Mexico (the “Molimentales Acquisition”) pursuant to a definitive share purchase agreement dated March 5, 2020, as amended April 24, 2020 (the “Definitive Agreement”), between Timmins GoldCorp Mexico S.A. de C.V. (“Timmins”), a wholly owned subsidiary of Alio Gold Inc. (“Alio”), and the Company. (1) Refer to the “Non-GAAP Measures” section of the MD&A. Magna Gold Corp. Management’s Discussion and Analysis Nine Months Ended December 31, 2020 and Year Ended March 31, 2020 Discussion dated: April 7, 2021 (In millions of US Dollars, unless otherwise stated) 3 Under the terms of the Definitive Agreement, Magna acquired ownership of Alio’s indirect wholly owned subsidiary, Molimentales del Noroeste, S.A. de C.V. (“Molimentales”), 100% owner of the San Francisco Mine, in exchange for (i) the issuance to Timmins of 9,740,000 common shares in the capital of the Company (the “Consideration Shares”) at a fair value of $0.28 (C$0.40) per Consideration Share; and (ii) $5.0 million in cash, on or before May 6, 2021. Should the Company not pay this amount the Company will in lieu grant a 1% net smelter return royalty in respect of the San Francisco Mine. The Consideration Shares are subject to a lock up agreement until the earlier of (i) May 6, 2021; and (ii) the date on which Timmins and its affiliates collectively hold less than 9.9% of the issued and outstanding common shares in the capital of the Company (“Common Shares”) on an undiluted basis. In the event that Timmins wishes to sell any or all of its Common Shares, Magna will have the option to arrange the purchaser of such shares until Timmins and its affiliates collectively hold less than 9.9% of the issued and outstanding Common Shares on an undiluted basis. Molimentales is party to an ongoing amparo suit with Inmobiliaria y Hotelera Los Algodones, S.A. de C.V. with respect to an amount of $1.7 million. In connection with the Molimentales Acquisition, Medalist Capital Ltd. and Trinity Advisors Corporation received advisory fees consisting of an aggregate of $0.2 million in cash and the issuance of an aggregate of 1,029,999 Common Shares (the “Compensation Shares”) at a fair value of $0.28 (C$0.40) per Compensation Share. The Compensation S