Gatling Exploration : Management Information Circular

NOTICE OF MEETING OF SECURITYHOLDERS AND

MANAGEMENT INFORMATION CIRCULAR

OF

GATLING EXPLORATION INC.

with respect to a proposed

PLAN OF ARRANGEMENT

involving

GATLING EXPLORATION INC.

and

MAG SILVER CORP.

April 11, 2022

Vote Today.

The Board of Directors of Gatling recommends that Gatling Securityholders vote FOR the Arrangement Resolutions

These materials are important and require your immediate attention. The securityholders of Gatling Exploration Inc. are required to make important decisions. If you have any doubt as to how to make such decisions, please contact your tax, financial, legal or other professional advisors. Gatling Securityholders that require further assistance may contact Gatling Exploration Inc.'s proxy solicitation agent and securityholder communications advisor, Laurel Hill Advisory Group, at:

Laurel Hill Advisory Group

North American Toll-Free: 1.877.452.7184 Calls Outside North America: 1.416.304.0211

Email:[e-mail]

TABLE OF CONTENTS

Page

LETTER TO SECURITYHOLDERS ................................................................................................................ 1

GATLING EXPLORATION INC. NOTICE OF MEETING OF SECURITYHOLDERS ..................................... 5

QUESTIONS AND ANSWERS RELATING TO THE GATLING MEETING AND ARRANGEMENT ................ 7

Questions Relating to the Arrangement .................................................................................................. 7

MANAGEMENT INFORMATION CIRCULAR ............................................................................................... 15

Introduction ........................................................................................................................................... 15

Cautionary Notice Regarding Forward-Looking Statements and Information ........................................ 16

Information for United States Gatling Securityholders ........................................................................... 18

Cautionary Note to United States Gatling Securityholders Concerning Estimates of Measured, Indicated

and Inferred Mineral Reserves and Resources .............................................................................. 19

Currency Exchange Rates .................................................................................................................... 20

GLOSSARY OF TERMS .............................................................................................................................. 21

SUMMARY INFORMATION ......................................................................................................................... 32

The Gatling Meeting .............................................................................................................................. 32

Recommendation of the Special Committee and Board ........................................................................ 32

Reasons for Recommendation of the Special Committee and the Board .............................................. 32

Opinion of Sprott Capital ....................................................................................................................... 36

Effect of the Arrangement ..................................................................................................................... 36

Details of the Arrangement ................................................................................................................... 37

Bridge Loan .......................................................................................................................................... 38

MAG Voting Agreements ...................................................................................................................... 38

Approval of Gatling Securityholders Required for the Arrangement ...................................................... 38

Court Approval ...................................................................................................................................... 38

Stock Exchange Listing Approvals and Delisting Matters ...................................................................... 39

Timing ................................................................................................................................................... 39

Procedure for Exchange of Gatling Shares ........................................................................................... 39

Treatment of Fractional MAG Shares .................................................................................................... 40

Right to Dissent .................................................................................................................................... 40

Certain Canadian Federal Income Tax Considerations ......................................................................... 41

Certain United States Federal Income Tax Considerations ................................................................... 41

Risk Factors .......................................................................................................................................... 42

PART I. - THE ARRANGEMENT ................................................................................................................ 43

Background to the Arrangement ................................................................................................................... 43

Recommendation of the Special Committee and the Board .......................................................................... 46

Reasons for Recommendation of the Special Committee and the Board ...................................................... 46

Opinion of Sprott Capital ............................................................................................................................... 49

Risk Factors Related to the Arrangement ..................................................................................................... 50

Risk Factors Related to the Operations of the Combined Company ............................................................. 54

Effect of the Arrangement ............................................................................................................................. 56

Details of the Arrangement ........................................................................................................................... 57

Bridge Loan .................................................................................................................................................. 59

MAG Voting Agreements .............................................................................................................................. 60

The Arrangement Agreement ....................................................................................................................... 61

Procedure for the Arrangement Becoming Effective ..................................................................................... 76

Approval of Gatling Securityholders Required for the Arrangement .............................................................. 76

Court Approvals ............................................................................................................................................ 76

Stock Exchange Listing Approvals and Delisting Matters .............................................................................. 77

Timing .......................................................................................................................................................... 78

Procedure for Exchange of Gatling Shares ................................................................................................... 79

Treatment of Fractional MAG Shares ........................................................................................................... 80

Return of Gatling Shares .............................................................................................................................. 80

Mail Service Interruption ............................................................................................................................... 80

Lost Certificates ............................................................................................................................................ 80

Withholding Rights ........................................................................................................................................ 81

Right to Dissent ............................................................................................................................................ 81

Interests of Certain Persons or Companies in the Arrangement ................................................................... 84

Expenses of the Arrangement ...................................................................................................................... 86

Securities Law Matters ................................................................................................................................. 86

Certain Canadian Federal Income Tax Considerations ................................................................................. 89

Certain United States Federal Income Tax Considerations ........................................................................... 95

PART II. - INFORMATION CONCERNING THE PARTIES TO THE ARRANGEMENT ............................ 102

Information Concerning Gatling Exploration Inc . ......................................................................................... 102

Information Concerning MAG Silver Corp . .................................................................................................. 102

Information Concerning the Combined Company ....................................................................................... 103

PART III. - OTHER INFORMATION ......................................................................................................... 103

Interest of Informed Persons in Material Transactions ................................................................................ 103

Auditors ...................................................................................................................................................... 103

Experts ....................................................................................................................................................... 103

PART IV. - GENERAL PROXY MATTERS ............................................................................................... 104

Solicitation of Proxies ................................................................................................................................. 104

Record Date ............................................................................................................................................... 104

Appointment and Revocation of Proxies ..................................................................................................... 104

Signature of Proxy ...................................................................................................................................... 105

Voting of Proxies ........................................................................................................................................ 105

Exercise of Discretion of Proxy ................................................................................................................... 106

Voting by Internet and Telephone ............................................................................................................... 106

Information for Non-Registered Shareholders ............................................................................................. 106

Voting Securities and Principal Holders Thereof ......................................................................................... 107

Procedure and Votes Required ................................................................................................................... 108

PART V. - APPROVALS .......................................................................................................................... 108

Board of Directors' Approval ....................................................................................................................... 108

PART VI. - CONSENT OF FINANCIAL ADVISOR ................................................................................... 109

Consent of Sprott Capital Partners LP ........................................................................................................ 109

APPENDICES

Page
Appendix A	Arrangement Resolutions ......................................................................................... A-1
Appendix B	Interim Order ............................................................................................................ B-1
Appendix C	Petition ..................................................................................................................... C-1
Appendix D	Plan of Arrangement ................................................................................................ D-1
Appendix E	Opinion of Sprott Capital Partners LP ...................................................................... E-1
Appendix F	Information Concerning Gatling Exploration Inc . ...................................................... F-1
Appendix G	Information Concerning MAG Silver Corp . ............................................................... G-1
Appendix H	Information Concerning MAG Silver Corp. Following Completion
of the Arrangement .................................................................................................. H-1
Appendix I	Section 237 through Section 247 of the Business Corporations Act
(British Columbia) .................................................................................................... I-1

- 1-

GATLING EXPLORATION INC.

LETTER TO SECURITYHOLDERS

April 11, 2022

Dear Fellow Gatling Securityholders:

You are invited to attend a Meeting (the "Gatling Meeting") of the shareholders and optionholders (''Gatling Securityholders") of Gatling Exploration Inc. (''Gatling") to be held at the offices of Gatling located at 200 Burrard Street, Suite 1680, Vancouver, British Columbia, V6C 3L6 at 9:00 a.m. (Vancouver time) on Friday, May 13, 2022.

At the Gatling Meeting, you will be asked to consider a resolution to approve the proposed plan of arrangement (the "Arrangement") under the Business Corporations Act (British Columbia) involving Gatling and MAG Silver Corp. (''MAG"). Please complete the enclosed form of proxy and submit it to our transfer agent and registrar, Computershare Investor Services Inc., or alternatively, follow the instructions in such documents to vote electronically, as soon as possible but no later than 9:00 a.m. (Vancouver time) on May 11, 2022 or 48 hours (excluding weekends and holidays in the Province of British Columbia) prior to the time of any adjourned or postponed Gatling Meeting.

The Arrangement

On March 10, 2022, Gatling and MAG entered into an arrangement agreement dated March 10, 2022 (the "Arrangement Agreement"). Pursuant to the Arrangement Agreement and the accompanying plan of arrangement, MAG has agreed to acquire all of the issued and outstanding common shares of Gatling ("Gatling Shares") for 0.0170627 of a MAG common share (each a "MAG Share") pursuant to the Arrangement (the "Consideration"). Holders ("Gatling Optionholders") of options to purchase Gatling Shares ("Gatling Options") will receive replacement options of MAG ("Replacement Options") entitling them to receive, on exercise, MAG Shares, subject to an adjustment to reflect the Arrangement. Holders of outstanding common share purchase warrants ("Gatling Warrants") of Gatling will have their Gatling Warrants adjusted in accordance with their respective contractual terms.

Immediately following completion of the Arrangement, Former Gatling Shareholders are anticipated to own approximately 0.79% of the pro forma combined company and existing shareholders of MAG (the "MAG Shareholders") are anticipated to own approximately 99.21% of the pro forma combined company.

On March 10, 2022, MAG agreed to provide a bridge loan of up to $3,000,000 (the "Bridge Loan") to Gatling, such Bridge Loan being evidenced by a loan agreement and promissory note and secured by a debenture and general security agreement all dated March 10, 2022 (collectively, the "Bridge Loan Documents"). The loan bears interest at a rate of 12% per annum and includes a conversion right whereby MAG may convert all or a portion of the outstanding principal amount and accrued interest into up to 19.9% of the issued and outstanding Gatling Shares. MAG advanced the Bridge Loan to Gatling on March 28, 2022. Gatling shall use the proceeds of the Bridge Loan solely to finance its operating expenses, with all such expenses subject to the prior approval of MAG.

The Arrangement is currently anticipated to be completed by late-May 2022. Registered holders of Gatling Shares ("Registered Shareholders") are concurrently being provided with a Letter of Transmittal explaining how to exchange their Gatling Shares for MAG Shares. Gatling Shareholders whose Gatling Shares are registered in the name of a broker, dealer, bank, trust company or other nominee must contact their nominee to deposit their Gatling Shares under the Arrangement.