Catalina Gold Corp. Announces Update on Joint Venture with Thrive Cannabis

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VANCOUVER, February 5, 2019 - Catalina Gold Corp. (the "Company") (NEX:CA.H) announces further to its news release dated October 26, 2018 it has entered into an amending agreement to its letter of intent (the "LOI") with Thrive Cannabis Inc. ("Thrive"), pursuant to which the parties extended the outside closing date of the transaction related to the construction and operation of medical cannabis facilities on the Simcoe, Ontario property (the "Transaction") to March 15, 2019.

As previously announced the Company and Thrive intend to form a joint venture entity ("JVCo") to be owned 75% by the Company and 25% by Thrive and enter into a joint venture. Pursuant to the terms of the Transaction, JVCo will enter into a lease agreement with the Thrive for the purpose of leasing the property located at 41 Townline Rd, Simcoe, Ontario (the "Property") for the proposed construction of an up to 100,000 square foot facility (the "Facility") for the production of medical cannabis for 21 years less a day to comply with the Planning Act requirements and a post-closing covenant to use reasonable efforts to obtain Planning Act consent to grant a longer lease term of 99 years. The Company is currently working with Thrive on a definitive agreement respecting the Transaction and will update the status of the Transaction upon completion of same.

The Property is located on approximately 180 acres of farmland which is available for facility expansion as well as outdoor growing. Currently located on the Property is Thrive's state-of-the-art 10,000 square foot indoor growing facility designed and built specifically to cultivate medicinal cannabis. Current annual capacity for production is approximately 1,000 kg of flower. The existing facility incorporates advanced cultivation methods and the latest technology in lighting, irrigation, controls and nutrient supply. The facility is fully operational, successfully growing multiple harvests since June, 2018. Additionally, Thrive has access to a laboratory facility that enables development and modification of select genetics to create unique cultivars and high cannabinoid content strains. The new Facility is expected to be capable of producing approximately 25,000 kg annually of flower.

As previously announced on November 28, 2018, the Company intends to complete a non-brokered private placement offering of common shares of the Company at a price of $0.12 per share (the "Bridge Financing") for expenses associated with completing the Transaction with Thrive. Following the Bridge Financing and prior to or concurrently with closing of the Transaction, the Company intends to complete a debt financing to raise gross proceeds of up to $35,000,000 for construction of the Facility (the "Concurrent Financing").

The Company has entered into a term sheet dated as of January 21, 2019 for the Concurrent Financing with Phoenix Corporate Finance Inc. (the "Agent") pursuant to which the Agent outlined the terms of a project financing facility in the amount of up to $35,000,000 to be advanced on a 'cost to complete' basis secured by a commercial first charge/lien to be registered on the Property against the borrower (the "Debt Facility"). The net proceeds of the Debt Facility are intended to be used to fund construction required to expand the existing cannabis production facility of Thrive on the Property to up to 110,000 square feet. The term of the Debt Facility is 18 months and interest is payable at a rate of 12% per annum on the outstanding principal. The Debt Facility is subject to a standby fee of $250,000 of which $50,000 is due and payable upon issuance of the final commitment letter. The Debt Facility is also subject to further lender's fees and broker's fees in an amount of up to 3.5% of the facility and additional advance and administration fees. The applicant for the Debt Facility is intended to be the JVCo and the facility is subject to prepayment in full at any time without notice. Completion of the Debt Facility is subject to customary closing conditions including entry into a binding commitment letter, registration of security on title, compliance with zoning and applicable licensing requirements for the proposed facility, completion of due diligence, receipt of all required third party consents including the consent of the TSX Venture Exchange (the "Exchange"). There is no assurance the Debt Facility will be completed as planned.

The Company also wishes to announce has amended its previously announced engagement letter (the "Engagement Letter") with Dominick Capital Corporation ("Dominick") pursuant to which under the revised terms Dominick will act as an advisor to the Transaction in connection with the Bridge Financing and Concurrent Financing. In consideration of its services, Dominick will receive (i) 250,000 common shares of the Company following completion of the Transaction and (ii) a cash fee in the amount of $50,000.

On or before closing of the Transaction, the Company will increase its board of directors to five (5) and will appoint two (2) nominees of Thrive as directors.

The Transaction constitutes a "Change of Business" and the Company will be making a filing in accordance with Exchange Policy 5.2. The Company intends to file materials with the Exchange requesting rectification as a Tier 2 Industrial Issuer upon completion of the Transaction.

About Thrive Cannabis

Thrive Cannabis is dedicated to cultivating and processing premium quality craft cannabis. Thrive Cannabis, a licenced ACMPR producer since March 2018, was founded near the shores of Lake Erie in southwestern Ontario by Art Bluhm. Mr. Bluhm's vision was to create a high-tech facility operated by the best in the business to grow cannabis at the highest standards. He leveraged his 35+ years of experience successfully establishing and managing several award-winning companies with his talented family to create a best-in-class cannabis business.

About Phoenix Corporate Finance Inc.

Phoenix Corporate Finance Inc. is an independently owned mid-market corporate finance firm which provides professional financing advisory and procurement services to smaller corporations and project developers based in Canada. Phoenix specializes in providing senior, subordinated and convertible debt financing from non-institutional sources of capital. For more information, visit our website at www.phoenixcorpfinance.ca

FOR FURTHER INFORMATION PLEASE CONTACT:

Marc Branson
Catalina Gold Corp.
Tel: (604) 816 2555
Email: marcbranson@icloud.com

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements in this news release include, but are not limited to, statements with respect to the size, operating capacities and success of operations at the Facility as targeted, the ability of Catalina to obtain financing for the development and operation of its joint venture projects, completion of the Debt Facility, completion of the Concurrent Financing and Bridge Financing, Catalina's business plan and access to future funding and projects, the ability of Catalina to pay interest, royalties, profit sharing or repayment of loans pursuant to its proposed debt facility financing. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions and changes in legislation applicable to the medicinal cannabis industry; adverse industry events; loss of markets; future legislative and regulatory developments; inability to access sufficient capital from internal and external sources to complete the Facility and for ongoing working capital needs, and/or inability to access sufficient capital on favourable terms; the medical cannabis industry in Canada generally; the ability of Catalina to complete the Transaction with Thrive and implement its business strategies; competition; crop failure; that construction of the Facility is completed on time and budget and other risks.

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Other factors which could materially affect such forward-looking information are described in the risk factors in the Company's most recent annual management's discussion and analysis that is available on the Company's profile on SEDAR at www.sedar.com. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the 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 Catalina Gold Corp. should be considered highly speculative.

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.

SOURCE: Catalina Gold Corp.