Sierra Madre Provides Additional Details on Business Combination and Concurrent Financing

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Sierra Madre Provides Additional Details on Business Combination and

Concurrent Financing

Vancouver, BC - February 22, 2021 – Sierra Madre Developments Inc. (the “Company”) (TSX-

V: SMG.H) is pleased to provide additional details on its proposed acquisition (the “ Business

Combination”) of Goldshore Resources Ltd. (“ Goldshore”) and the concurrent financing for

gross proceeds of up to $25,000,000 (the “Concurrent Financing”). The Business Combination

and Concurrent Financing were announced by the Company and Goldshore in a news release

dated January 26, 2021 (the “Initial News Release”).

About the Concurrent Financing

As disclosed in the Initial News Release , the Company and Goldshore have entered into an

engagement letter with Eventus Capital Corp. (the “ Lead Agent ”), as lead agent and sole

bookrunner, on its own behalf and on behalf of a syndicate of agents including Canaccord Genuity

Corp., Laurentian Bank S ecurities Inc., Haywood Securities Inc., and Desjardins Securities Inc.

(collectively with the Lead Agent, the “Agents”), in respect of a private placement of subscription

receipts (the “ Subscription Receipts ”) and flow -through subscription receipts (the “ Flow-

Through Subscription Receipts ” and together with the Subscription Receipts, the “ Offered

Securities”) for gross proceeds of up to $25,000,000.

The Initial News Release disclosed that all of the Offered Securities would be offered by

Goldshore. However , the Company wishes to announce that the Flow -Through Subscription

Receipts will be offered by the Company (constituting the “ Sierra Madre Financing ”). The

Subscription Receipts will be offered by Goldshore.

The Company will offer up to 13,333,333 Flow-Through Subscription Receipts at a price of $0.75

per Flow -Through Subscription Receipt. Each Flow -Through Subscription Receipt will be

automatically exercised, for no additional consideration, into one flow -through common share of

the Company (a “Flow-Through Share”).

The Flow-Through Subscription Receipts will be issued on a “flow-through” basis and will consist

of “flow-through shares” as defined in subsection 66(15) of the Income Tax Act (Canada) (the

“Tax Act ”). The Company will incur resource exploration expenses which will constitute

“Canadian exploration expenses” as defined in subsection 66.1(6) of the Tax Act and “flow

through mining expenditures” as defined in subsection 127(9) of the Tax Act, in an amount equal

to the amount raised pursuant to the sale of Flow -Through Subscription Receipts and the

Company will renounce the Canadian exploration expenses (on a pro rata basis) to each

subscriber with an effective date of no later than December 31, 2021 in accordance with the Tax

Act.

In connection with the Sierra Madre Financing, the Agents will be entitled to receive a cash fee

(the “Agents’ Commission”) equal to 6% of the aggregate gross proceeds of the Sierra Madre

Financing (provided that the cash commission for president’s list subscribers will be 4%) and such

number of compensation options (the “ Compensation Options”) equal to 6% of the number of

Flow-Through Subscription Receipts sold under the Sierra Madre Financing (provided that the

compensation options for president’s list subscribers will be 4%). Each Compensation Option will

be exercisable for one common share in the capital of the Company for a period of two years from

the date of closing of the Sierra Madre Financing at a price of $0.75 per share.

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The gross proceeds from the sale of Subscription Receipts, will be held by the subscription receipt

agent in a non-interest bearing account pending satisfaction or waiver (to the extent such waiver

is permitted) of the escrow release conditions. The Agents’ Commission and any additional

reasonable expenses of the Agents will be released from escrow to the Lead Agent, on behalf of

the Agents, and the escrowed a mount will be released from escrow to the Company upon

satisfaction of the escrow release conditions.

The Flow-Through Shares will be subject to a four -month hold period from the date of issuance.

Closing of the Sierra Madre Financing is subject to the approval of the TSX Venture Exchange.

All other details of the Concurrent Financing are as set out in the Initial News Release.

About Goldshore

Goldshore is a private company incorporated under the Business Corporations Act (British

Columbia) with a mandate to identify and evaluate mining related projects in North America. To

date, Goldshore has raised approximately $4 million, identified and evaluated a number of

projects and negotiate d an asset purchase agreement dated January 25, 2021 with Wesdome

Gold Mines Ltd. (“ Wesdome”) and Moss Lake Gold Mines Ltd., a subsidiary of Wesdome,

pursuant to which Goldshore will acquire a 100% interest in the Moss Lake gold project (the “Moss

Lake Project ”), located in Ontario, Canada. Goldshore does not have any material non-cash

assets other than the Moss Lake Project. Following completion of the Business Combination, the

Company will not have any business interests other than the Moss Lake Project.

The following selected financial information is taken from the unaudited financial statements of

Goldshore for the period from the date of incorporation (October 23, 2020) to January 31, 2021:

Date of incorporation (October 23, 2020) to

January 31, 2021

(Unaudited)

Assets $3,982,504

Liabilities $130,211

Shareholders’ Equity $3,852,293

Revenues -

Net Profit (Loss) $(142,119)

Further details regarding Goldshore and the Business Combination a re disclosed in the Initial

News Release.

Sierra Madre Developments Inc.

“Hani Zabaneh”

Hani Zabaneh

CEO & Director

Cautionary Note Regarding Forward-Looking Statements

This news release contains statements that constitute “forward-looking statements.” Such forward

looking statements involve known and unknown risks, uncertainties and other factors that may

cause the Company’s actual results, performance or achievements, or developments to differ

materially from the anticipated results, performance or achievements expressed or implied by

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such forward -looking statements . Forward looking statements are statements that are not

historical facts and are generally, but not always, identified by the words “expects,” “plans,”

“anticipates,” “believes,” “intends,” “estimates,” “projects,” “potential” and similar expressions, or

that events or conditions “will,” “would,” “may,” “could” or “should” occur.

Forward-looking statements in this document include, among others, statements relating to

expectations regarding the completion of the Business Combination (inc luding all require d

approvals), the Concurrent Financing (including the size of the Concurrent Financing and the use

of the proceeds therefrom) and other statements that are not historical facts. By their nature,

forward-looking statements involve known and unknown risks, u ncertainties and other factors

which may cause our actual results, performance or achievements, or other future events, to be

materially different from any future results, performance or achievements expressed or implied

by such forward-looking statements. Such factors and risks include, among others: that there is

no assurance that the parties hereto will obtain the requisite director, shareholder and regulatory

approvals for the Business Combination, and there is no assurance that the Business

Combination will be completed as anticipated, or at all; there is no assurance that the Concurrent

Financing will be completed or as to the actual offering price or gross proceeds to be raised in

connection with the Concurrent Financing; following completion of the Business Combination, the

Company may require additional financing from time to time in order to continue its operations

which may not be available when needed or on acceptable terms and conditions acceptable;

compliance with exten sive government regulatio n; domestic and foreign laws and regulations

could adversely affect the Company’s business and results of operations; the stock markets have

experienced volatility that often has been unrelated to the performance of companies and these

fluctuations may adversely affect the price of the Company’s securities, regardless of its operating

performance; and the impact of COVID-19.

The forward-looking information contained in this news release represents the expectations of the

Company as of the date of this news release and, accordingly, is subject to change after such

date. Readers should not place undue importance on forward-looking information and should not

rely upon this information as of any other date. The Company does not undertake any obligation

to update these forward-looking statements in the event that management's beliefs, estimates or

opinions, or other factors, should change.

This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any

securities in the United States. The securities have not been and will not be registered under the

United States Securities Act of 1933, as amended (the “ U.S. Securities Act ”) or any state

securities laws and may not be offered or sold within the United States or to U.S. Persons unless

registered under the U.S. Securities Act and applicable state securities laws or an exemption from

such registration is available.

Completion of the transaction is subject to a number of conditions, including but not limited to,

Exchange acceptance and if applicable, disinterested shareholder approval. Where applicable,

the transaction cannot close until the required shareholder approval is obtained. There can be no

assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing

statement to be prepared in connection with the transaction, any information released or received

with respect to the transaction may not be accurate or complete and should not be relied upon.

Trading in the securities of the Company should be considered highly speculative.

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The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed

transaction and has neither approved nor disapproved the contents of this news release.