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Dear Shareholders and Interested Parties

As we previously reported, Pilar Gold completed the acquisition of the Laiva gold mine in Northern Finland in November 2022. Jim and Richard have been on site the last month working with our Laiva team in preparation for a restart of operations. The timing for this restart in the spring is good, and we have started discussions with contractors and suppliers to get back to work. To fund the re-opening we are today launching an C$8 million capital raise at the same terms as our last round of C$1 per share and full 2 year warrant at C$1.50 per share.

The Laiva gold mine comes with a state-of-the-art 6,000 tpd processing facility that was built for €240 million in 2010 and is still in excellent working condition. Most importantly, the Laiva plant is very similar to Pilar’s processing plant in Brazil, which is why our team has been able to identify a number of relatively simple but important adaptations to turn Laiva into a profitable business. The operation is mine ready and actually comes with blasted material in the South Pit that was left when mining unexpectedly stopped in December 2021.

Pilar Gold - Laiva Mine Presentation

For 2023, our target is to produce 50,000 ounces at an estimated AISC of $1,400 per ounce. We believe Laiva can achieve 100,000 ounces of annual production in the longer term. Laiva is a fully permitted turn-key operation with everything in place for a rapid restart of operations at a time of widely forecast improving precious metals prices. The Laiva plant houses the largest gold processing facility in Europe with some of the most state-of-the-art equipment. To build it today would cost an estimated €400 million (equivalent to C$2.38 per share of Pilar Gold) and take 2 years to complete. Pilar Gold acquired Laiva for US$23.5 million in equity, equivalent to C$0.13 per share of Pilar Gold. We think it is an excellent deal for our shareholders and will continue to look for these value enhancing transactions going forward.

Electricity is a significant swing factor to Laiva's profitability but we believe we are through the worst given the Olkiluoto 3 (OL3) nuclear power plant is set to start regular electricity production in March, after 17 years of construction. We are modelling 15 cents/kWh this year which compares with 15.35 cent/ kWh average in 2022. The commissioning of the OL3 nuclear power plant will add 14% to Finland´s grid capacity and we would not be surprised if electricity prices drop further from here.

Laiva has had its challenges in the past but a key benefit we have is we acquired the business debt-free and creditor free out of receivership. The other big difference is that the price of gold today is substantially higher and may rise further. We are planning an investor site visit to Laiva in April and will keep you posted on the exact dates. The train trip from Helsinki on the Artic Railway is a great way to start our journey to Laiva.

Concurrent with the equity raise we intend to seek expressions of interest for a US$15-20 million debt facility on Laiva. The completion of this facility won´t affect our restart timeline but if we are serious about taking this operation to the next level and achieve 100,000 ounces a year, it requires further funding.

Although we are looking forward to discussions with potential lenders, we are blessed to have over 400 shareholders who have always been there to support us when transformational acquisitions like this come along. Laiva is a low capex fast payback addition to our portfolio and is another step forward to becoming a mid tier gold producer.

Pilar Gold Subscription Document

Thanks again for your support and here is to a bonanza year for gold.

Regards,

Jeremy Gray | CEO
jeremy.gray@pilargold.com

Edward Balme | Head of Investor Relations
edward.balme@pilargold.com

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