AUGUSTA GOLD CORP.

ITEM 1A - RISK FACTORS

TOthere h than as set forth below, there have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The risks described in our Annual Report and as otherwise herein are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, cash flows, and/or future results.

There is no assurance when or if the Merger will be completed.

The completion of the Merger is subject to the satisfaction or waiver of a number of conditions as set forth in the Merger Agreement, including, among others (i) approval of the Merger and the Merger Agreement by the stockholders of the Company as required under the Merger Agreement, (ii) obtaining certain regulatory and governmental approvals, and (iii) the absence of legal restraints prohibiting the completion of the Merger. There can be no assurance as to when these conditions will be satisfied or waived, if at all, or that other events will not intervene to delay or result in the failure to close the Merger. A substantial delay in obtaining satisfactory approvals or the imposition of unfavorable terms or conditions in any government or regulatory approvals could have an adverse effect on the business or financial condition of the Company. In addition, if for any reason the conditions to the Merger are not satisfied or waived or if the Merger is not completed for any reason, the Companys ongoing business and financial results may be adversely affected, the market price of the Companys shares of common stock may be adversely affected.

Failure to complete the Merger could negatively impact the market price of the Companys shares of common stock and the Companys future business and financial results.

If the Merger is not completed for any reason, the Companys ongoing business and financial results may be adversely affected. In addition, if the Merger is not completed, the Company will be subject to a number of additional risks, including the following:

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The Company cannot guarantee when, or whether, the Merger will be completed, that there will not be a delay in the completion of the Merger or that all or any of the anticipated benefits of the Merger will be obtained. If the Merger is not completed or is delayed, the Company may experience the risks discussed above which may adversely affect the Companys business, financial results and share price.

The application of interim operating covenants may restrict the Companys ability to pursue certain opportunities.

Pursuant to the Merger Agreement, the Company has agreed to certain interim operating covenants intended to ensure that the Company carries on business in the ordinary course consistent with past practice, except as required or expressly authorized by the Merger Agreement or any applicable law, or unless the prior written consent of AngloGold Ashanti is obtained. These operating covenants cover a broad range of activities and business practices. Consequently, it is possible that a business opportunity will arise that is out of the ordinary course or is not consistent with past practices, and that the Company will not be able to pursue or undertake the opportunity due to its covenants in the Merger Agreement unless the prior written consent of AngloGold Ashanti is obtained (such consent not to be unreasonably withheld, conditioned or delayed).

The voting agreement entered into by directors and officers of the Company with AngloGold Ashanti may prevent certain directors and officers of the Company from supporting a third-party transaction.

The directors and officers of the Company that own shares of the Companys common stock have agreed not to support any third-party transaction during the term of the voting agreement they have signed with AngloGold Ashanti. Because these stockholders own or control approximately 31.5% of the issued and outstanding shares of the Companys common stock, it may not be possible for a competing purchaser to acquire the Company until the voting agreement is terminated. Directors of the Company are permitted under the voting agreement to undertake any actions necessary to the fulfilment of their fiduciary duties in their capacity as directors of the Company, which would include making a change in their recommendation regarding the Merger, but this would not extend to their support of a third-party transaction in their capacity as a stockholder of the Company. The voting agreement does terminate upon termination of the Merger Agreement, so in the case where the Merger Agreement is terminated, for example, upon acceptance of a superior proposal to acquire the Company from a third-party, the voting agreement would terminate and these restrictions would no longer apply.

The fairness opinion obtained by the Companys board of directors from its independent financial advisor will not reflect subsequent changes.

In connection with the proposed Merger, National Bank Financial delivered to the Companys board of directors an opinion dated July 15, 2025 to the effect that as of that date, and based upon and subject to the various considerations set forth in the opinion, the Merger Consideration was fair, from a financial point of view, to the Companys stockholders, excluding Augusta Investments Inc., Mr. Warke and Mr. Taylor (the Related Parties). The opinion does not reflect changes that may occur or that have occurred after the date of the opinion, including changes to the operations and prospects of the Company, fluctuations in the price of gold and silver, changes in the market prices of the Companys shares of common stock, changes in general market or economic conditions or regulatory or other factors. Any such changes, or changes of other factors on which the opinion is based, may materially alter or affect the fairness of the Merger Consideration and the value of the Merger.

The Merger Agreement limits the Companys ability to pursue alternatives to the Merger, including if the Merger is not completed.

The Merger Agreement contains provisions that restrict Augusta Gold from selling its business to a party other than the AngloGold Ashanti and restrict it from pursuing other strategic alternatives. These provisions include a general prohibition on soliciting any acquisition proposal or offer for a competing transaction and the requirement that the Company pay a termination fee if the Merger Agreement is terminated in specified circumstances. The Companys board of directors is also limited in its ability to make an adverse change in their recommendation to stockholders of the Company to approve the Merger. While the Company believes these provisions are reasonable, these provisions may discourage a third party that may have an interest in acquiring the Company from considering or proposing such an acquisition, even if such third party were prepared to pay consideration with a higher per share cash or market value than the consideration proposed to be received or realized in the Merger, or might result in a potential acquirer proposing to pay a lower price than it would otherwise have proposed to pay because of the added expense of the termination fee that may become payable. In addition, these provisions may prevent or delay the Company from having adequate time to avoid liquidity problems and continue as a going concern, which will be necessary if the Merger is terminated.

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Certain of the Companys directors and executive officers have interests in the Merger that are different from the interests of the Companys stockholders.

The Companys board of directors approved the Merger Agreement and the Merger, and determined that the Merger Consideration is fair to the Companys stockholders, excluding the Related Parties, and in the best interests of the Companys stockholders should be aware that the directors and executive officers of the Company may have financial interests in the Merger that are different from, or in addition to, the interests of stockholders. The directors and executive officers hold options in the Company that will accelerate and vest by reason of the Merger and cerain out-of-the money options will be cancelled in return for the payment of the Black-Scholes value of the options. In addition, certain officers of the Compnay are entitled to certain change of control, success fees and other payments as a result of the Transactions contemplated by the Merger Agreement. Certain directors and executive officers will also have the debt they are owed by the Company repaid at the effective time pursuant to the Merger. These interests may cause certain of directors and executive officers to view the Merger more favorably than other stockholders. Stockholders should carefully review the information in the definitive proxy statement to be sent to stockholders of the Company regarding these interests of directors and officers of the Company prior to voting on the matters at the special meeting of stockholders to be held for approval of the Merger.