Scorpio Gold Announces US$6 Million Convertible Debenture Private Placement Financing

TSX -V: SGN

206-595 Howe St.

Vancouver, British Columbia

Canada, V6C 2T5

Tel: (604) 678-9639

www.scor piog old .com

News Release No. 266

Scorpio Gold Announces

US$6 Million Convertible Debenture Private Placement Financing

Vancouver, January 28, 2019 - Scorpio Gold Corporation (“Scorpi o Gold” or the “Company”) (TSX-V:

SGN) is pleased to announce a non-brokered private plac ement offering (the “Private Placement”) of

secured convertible debentures (each, a “Debenture”) for g ross proceeds of up to US$6,000,000. The

Company intends to use the net proceeds from the Private Placement for the Buyout (as defined below) and

for general working capital purposes.

Each Debenture will have an issue price of US$1,000, a term of three years from the date of issuance and

will bear interest at a rate of 10% per annum, payable semi-annually, which, subject to regulatory approval,

may be paid in common shares of the Company (“Shares”) at the option of the Company or the holder of

the Debenture. The Debentures will be secured by a security interest subordinate to all existing and future

senior indebtedness of Company, including any future senior indede btness in connection with the

construction of a new processing plant at the Mineral Ridge Project.

Each Debenture is convertible into Shares at the option of the holder at any time prior to maturity at a

conversion price of US$0.08 per Share (the “Conversion Price”), which is equivalent to 12,500 Shares for

each US$1,000 principal amount of Debentures, subject to adjustment in certain circumstances. Debentures

must be converted in minimum amounts of US$1,000. The Company will have the option on maturity,

subject to regulatory approval, to repay any portion of the principal amount of the Debentures in cash or by

issuing and delivering to the holders of the Debentures such number of Shares equal to the principal amount

of the Debenture divided by the Conversion Price.

Prior to the issuance of the Debentures, the Company will complete a 2:1 consolidation of its Shares (the

“Share Consolidation”). The Company intends to seek shareholder approval of the Share Consolidation at

a special and general meeting of its shareholders to be held on February 27, 2019.

The closing of the Private Placement is subject to cer tain conditions including, but not limited to, the

acceptance of the TSX Venture Exchange (the “Exchange”), the c ompletion of the Share Consolidation,

and the concurrent completion of the Buyout (as defined below). The Debentures and Shares issued upon

conversion thereof will be subject to a four month hold period from the date of issuance of the Debentures

in accordance with applicable securities laws and, if required, the policies of the Exchange. A finder’s fee

within Exchange policy guidelines may be paid in Debentures in connection with the Private Placement.

The Company intends to use US$3,000,000 of the proceeds of the P rivate Placement to fund (i) the

settlement of the loan advanced from Waterton Precious Me tals Fund II Cayman, LP (the “Lender”) to

Scorpio Gold, pursuant to the terms of a senior secured credit agreement among the Company, its

subsidiaries and the Lender, which was originally announced in the Company’s press release dated August

17, 2015 (the “Credit Facility”), (ii) the termination of a gold and silver supply agreement dated May 18,

2011 among the Company, Scorpio Gold (US) Corporation (“Scorpi o Gold US”), Mineral Ridge Gold,

LLC (“Mineral Ridge Gold”) and an affiliate of the Lender; and (iii) the purchase of the 30% membership

interest of Elevon LLC (“Elevon”) in Mineral Ridge Gold (which holds the Mineral Ridge Project) and the

termination of an operating agreement dated March 10, 2010 between Scorpio Gold US and Elevon,

(collectively, the “Buyout”). Scorpio Gold has entered into a non-binding letter of intent with the Lender

in connection with the Buyout, and intends to enter into defi nitive agreements with the Lender and its

affiliates in connection with the Buyout on or prior to the closing of the Private Placement. Additionally,

the Company and the Lender have entered into a further binding forebearance agreement in respect of the

Credit Facility, pursuant to which the Lender has extended the maturity date of the Credit Facility to March

4, 2019. The Company intends to close the Private Placement and the Buyout on or about March 4, 2019.

The securities being offered 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 applicable securities laws of any state of the

United States and may not be offered or sold within the United States or to, or for the account or benefit of,

U.S. persons absent of such registration or an applicab le exemption from such registration requirements.

This press release does not constitute an offer for sale of, or a solicitation of an offer to buy, the securities,

nor will there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation

or sale is not permitted, including, but not limited to, the United States (“United States” and “U.S. person”

are defined in Regulation S under the U.S. Securities Act).

About Scorpio Gold Corporation

Scorpio Gold holds a 70% interest in the producing Mineral Ri dge gold mining operation located in

Esmeralda County, Nevada with joint venture partner Ele von, LLC (30%). Mineral Ridge is a

conventional open pit mining and heap leach operation. Mini ng at Mineral Ridge was suspended in

November 2017; however, the Company continues to generate limite d revenues from residual but

diminishing recoveries from the leach pads. Scorpio Gold als o holds a 100% interest in the advanced

exploration-stage Goldwedge property in Manhattan, Nevada with a fully permitted underground mine

and 400 ton per day mill facility. The Goldwedge mill facility has been placed on a care and maintenance

basis and can be restarted immediately when needed.

ON BEHALF OF THE BOARD

SCORPIO GOLD CORPORATION

Brian Lock,

Interim CEO

For further information contact:

Brian Lock, Director and Interim Chief Executive Officer

Tel: (604) 889-2543

Email: [email protected] or [email protected]

Website: www.scorpiogold.com

Neither 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.

The Company relies on litigation protection for "forwa rd-looking" statements. This news release contains forwar d-looking

statements that are based on the Company’s current expe ctations and estimates. Forward-looking statements are fr equently

characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “suggest”, “indicate” and

other similar words or statements that certain events or conditions “may” or “will” occur, and include, without limitation, statements

regarding the completion of the Private Placement (including the timing thereof) and the allocation of the use of proceeds thereof,

the negotiation and completion of the Buyout and the entering of definitive agreements in connection therewith. The Company

cautions that the letter of intent in respect of the Buyout is not legally binding, and completion of the Buyout is subject to a number

of conditions, including the negotiation and execution of definitive binding agreements. Such forward-looking statements involve

known and unknown risks, uncertainties and other factors that coul d cause actual events or results to differ materially fr om

estimated or anticipated events or results implied or e xpressed in such forward-looking statements, including risks relating to

operation of a gold mine, including the availability of cash flows or financing to meet the Company’s ongoing financial obligations;

the inability of the Company to re-finance its long-term debt obligations; unanticipated changes in the mineral content of materials

being mined; unanticipated changes in recovery rates; changes in project parameters; failure of equipment or processes to operate

as anticipated; the failure of contracted parties to perform; availability of skilled labour and the impact of labour disputes; obtaining

the required permits to expand and extend mining activities; delays in obtaining governmental approvals; changes in metals prices;

unanticipated changes in key management personnel; changes in general economic conditions; other risks of the mining industry

and those risk factors outlined in the Company’s Management Discussion and Analysis as filed on SEDAR. Any forward-looking

statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company

disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events

or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should

not be put on such statements due to the inherent uncertainty thereof.