Toropunto Silver Inc. entered into a non-binding letter of intent to acquire DGL Investments No. 1 Inc. (TSXV:DGL.P) in a reverse merger transaction on November 17, 2021. Business of Toropunto will become the business of the Resulting Issuer.

Pursuant to transaction, (i) every 1 issued and outstanding common share of Toropunto will be exchanged for 1 common share of Resulting Issuer at a deemed price per share equal to the price per share of securities issued pursuant to Concurrent Financing (as defined below) per Resulting Issuer Common Share; (ii) common shares of DGL will be consolidated by a ratio such that total number of DGL Common Shares existing following such consolidation is equal to 1,300,000 divided by the price per share of securities issued in the Concurrent Financing; and (iii) each outstanding stock option, warrant and other convertible or exchangeable securities of DGL and Toropunto will be consolidated or exchanged for stock options, warrants and other convertible or exchangeable securities of Resulting Issuer on an equivalent economic basis. Pursuant to letter of intent, within 120 days of November 17, 2021, Toropunto will complete a private placement of units consisting of one Toropunto Common Share and one Toropunto Common Share purchase warrant at a price per unit of CAD 0.30, for gross proceeds of not less than CAD 1,000,000. Pursuant to LOI, prior to or concurrent with closing, either Toropunto or DGL will complete a private placement of securities or DGL or Toropunto for gross proceeds of up to CAD 9,000,000 at a price per share commensurate with market conditions, such price per share to be in compliance with the policies of the Exchange.

It is expected that upon completion of transaction, Resulting Issuer, will be renamed Toropunto Silver Inc., will be listed as a Tier 2 Mining Issuer on the Exchange. Luis H. Goyzueta, director of DGL is Chairman of board of directors of Toropunto and is beneficial holder of one third (33.33%) of the issued and outstanding common shares of Toropunto at date of this release. A more comprehensive news release will be issued by DGL disclosing details once definitive agreement has been executed and certain conditions have been met, including satisfactory completion of due diligence.

DGL does not believe that shareholder approval will be required for transaction under rules of Exchange applicable to capital pool companies. DGL may be required to hold a shareholders meeting to approve transaction. Shareholder approval of elements of transaction, including Consolidation, will be required under incorporating statute of DGL or pursuant to other policies of Exchange or applicable securities laws.

Completion is subject to conditions, including but not limited to, execution of a binding definitive agreement relating to transaction, Exchange acceptance, completion of the Toropunto Private Placement and Concurrent Financing, and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, transaction cannot close until the required shareholder approval is obtained.