Damara Announces Assignment of Proposed Option to Acquire 75% Interest in the Princeton Property

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NEWS RELEASE

Damara Announces Assignment of Proposed Option to Acquire 75% Interest in the

Princeton Property

October 19, 2020 TSX-V: DMR

DAMARA GOLD CORP. (TSX-V:DMR) (“Damara” or the “Company”), is pleased to announce

that it has entered into an assignment and assumption agreement (the “ Assignment

Agreement) with Canarc Resources Corp. (“Canarc”) pursuant to which Canarc has assigned

(the " Assignment") all of its rights, obligations, interests and assets with respect to a

property option agreement dated December 20, 2018 and amended on June 3, 2019 (the

“Option Agreement ”) between Canarc, Universal Copper Ltd. (“ Universal”) and Sydney

Wilson (“Wilson”) to acquire a 75% interest (the “ Option”) in certain mineral claims of

Universal and Wilson (the “Princeton Property”), subject to the Universal NSR and Wilson

NSR (as defined herein).

The Princeton Property is comprised of 22 mineral claims covering approximately 8,955

hectares located approximately 35km south of Princeton.

About the Princeton Property:

The Princeton Property is road accessible and lies within a highly mineralized belt, 18 km

south of the Copper Mountain porphyry copper deposits and 70 km south of the Elk gold

deposit. The earliest recorded exploration on the property was in 2008 with the discovery of

gold-bearing quartz boulders in newly built logging roads. Since that time, the Princeton

Property has been explored with soil geochemical surveys, prospecting and geological

mapping, an airborne magnetic survey, trenching and rock sampling.

The Princeton Property is being explored for orogenic or mesothermal-style, vein-hosted gold

mineralization. Historical rock-chip sampling identified gold-bearing, low-sulfide quartz veins

within the Wilson Gold Zone over a roughly 375 m diameter area. An additional, isolated area

of gold -bearing quartz -vein float lies 2 km to the north but has not yet been rigorously

explored1.

Historical trenching in 20182 and 20193 exposed gold-bearing quartz veins hosted in Triassic

Nicola volcanics and sediments as well as a hematized granitic host rock believed to be

Jurassic in age. The trenching established a minimum strike length of 235 m for the main vein

system. The vein system remains open to the southwest and to the northeast where it appears

to extend under younger volcanic cover. Along strike the system changes from a single vein

in the southwest to a broader, granite-hosted vein stockwork to the northeast that is at least

35 m wide.

1 Henneberry, R.T., 2017, 2017 Geochemical Report prepared for Tasca Resources Ltd.

2 Henneberry, R.T., 2018, 2018 Trenching Assessment Report, Princeton Property

3 Margolis, J. and Henneberry, R.T., 2020, 2019 Assessment Report for the Princeton Property.

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Phone: (250) 717-3151 • Fax: (250) 717-1845 • www.damaragoldcorp.com

The Company completed due diligence sampling on the Wilson Zone in 2020, prior to entering

into the Assignment Agreement. Five rock samples were collected by the Company’s Qualified

Person, including three outcrop chip samples from the main vein as well as two float grab

samples taken approximately 150m to the southeast of the main vein exposure (Table 1).

The outcrop s amples collected are chip samples over a given length and width of the vein,

with an effort to be as representative as possible.

It is believed that the only way to obtain a representative average gold value across the width

of a surface exposure of the vein would be to use a diamond saw to cut a proper channel.

Therefore the reader is cautioned that the outcrop chip samples collected on the main vein

and float grab samples are selective by nature and may not represent the true grade or style

of mineralization across the Property.

Table 1 – Gold Assay Results and Descriptions for Samples Collected by the Company’s QP

Sample No Easting

N83Z10

Northing

N83Z10 Type Au(g/t) Description

PAu-01 685307 5448271 Bedrock 56.50

Vein - mainly bull quartz, rusty fractures

(Random chip sample - 1.2 m width x 1 m

length)

PAu-02 685288 5448267 Bedrock 1.14

Vertical qtz vein face, qtz with rusty fractures

(Random chip sample - 20 to 30 cm wide x 50

cm length)

PAu-03 685311 5448272 Bedrock 149.10 Chip sample from 30 cm wide mainly bull qtz

vein

PAu-04 685487 5448218 Float 132.50 Grab sample from strongly rusted quartz

boulder

PAu-05 685426 5448221 Float 18.00 Grab sample from quartz boulder with rusty

fractures

Qualified Person

Dr. Gerald G. Carlson, PhD, PEng, technical advisor to the Company, is the Qualified Person

as defined by National Instrument 43-101 who has reviewed and approved the technical data

in this report.

Highlights of the Assignment:

Consideration for the assignment of the Option Agreement to Damara includes:

• Complete the $300,000 in exploration expenditures on or before December 31, 2020

pursuant to the terms of the Option Agreement (the “Earn-In Expenditures”);

• Issuance of such number of common shares in the capital of Damara (the “Damara

Shares”) as is equal to 9.9% of the total issued and outstanding Damara Shares on

closing on the Assignment;

• subject to the exercise of the Option on or before December 31, 2021, the issuance of

such number of Damara Shares that increase Canarc’s aggregate owne rship in the

capital of Damara to 19.9%; and

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Phone: (250) 717-3151 • Fax: (250) 717-1845 • www.damaragoldcorp.com

• otherwise take all additional steps necessary to exercise the Option in accordance with

the terms and conditions of the Option Agreement

• The Princeton Property is subject to a 1% NSR to Universal which can be purchased

for $1,000,000 (the “Universal NSR”) and a 2% NSR to Wilson which can be reduced

1% for cash purchase of $1,000,000 (the “Wilson NSR”).

Financing

It is expected that a concurrent private placement financing of a minimum of $400,000 and

up to a maximum of $500,000 (the "Financing") will occur as part of the Assignment. The

details of the Financing will be announced separately in future press releases.

The Company intends to use the net proceeds of the Financing for purposes of completing the

Assignment and funding the required Earn-In Expenditures and operating costs in relation to

the development of the Princeton Property.

Completion of the Assignment and the Financing are expected to occur in November 2020

and are subject to satisfaction of a number of customary conditions precedent, including,

without limitation, the acceptance of the TSX Venture Exchange (the “Exchange”) and the

satisfaction of any conditions which the Exchange may impose, including those applicable to

Fundamental Acquisitions (as such term is defined in Exchange Policy 5.3).

About Damara

Damara Gold Corp. is a TSX Venture listed Canadian public company with a Board of Directors

seasoned in the mineral exploration industry with extensive and successful international

experience with a focus on identifying and acquiring prospective and under -explored gold

properties worldwide.

ON BEHALF OF THE BOARD OF DIRECTORS OF DAMARA

“Larry Nagy”

Larry Nagy, Chief Executive Officer

For additional information visit Damara’s website at www.damaragoldcorp.com or contact:

Damara Gold Corp.

Larry Nagy

Chief Executive Officer or

Terese Gieselman

Chief Financial Officer

Ph: (250-717-1840)

NR: 20-04

{02591613;2} 335 – 1632 Dickson Avenue • Kelowna, BC V1Y 7T2

Phone: (250) 717-3151 • Fax: (250) 717-1845 • www.damaragoldcorp.com

Disclaimer for Forward-Looking Information

This press release contains forward-looking statements and information that are based on the

beliefs of management and reflect Damara's current expectations. The forward -looking

statements and information in this press release information relat ing to the Financing,

including the use of proceeds from the Financing and the Company’s expectation that it will

close the Assignment . By their nature, forward -looking statements involve known and

unknown risks, uncertainties and other factors which may c ause 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.

THE FORWARD -LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE

REPRESENTS THE EXPECTATIONS OF DAMARA AS OF THE DATE OF THIS PRESS

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. WHILE

DAMARA MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION

AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH

APPLICABLE LAWS.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined

in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or

accuracy of this press release.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined

in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or

accuracy of this release.