Gold State Resources Inc. announced that it has closed the acquisition of the mineral claims comprising the Panteria copper-gold porphyry project (the "Project") from Peruvian Metals Corp. ("Peruvian"). The Project is located approximately 210 kilometres southeast of Lima, Peru, in the Huancavelica department, and is considered highly prospective for both copper-gold ("Cu-Au") porphyry-style mineralization and high-level gold-silver (Au-Ag) epithermal mineralization.

Approximately USD 5 million has been spent by former operators to date on the Project that has several untested exploration targets. The Project is composed of several mineral concessions covering an area of 2,700 hectares and is believed to be situated in the northern extension of the Southern Coastal porphyry belt. Peruvian acquired the project in 2010 and conducted extensive surface sampling and mapping programs followed by a small geophysical program in 2014.

Peruvian recognized the porphyry potential of the area, and through fieldwork, identified the high-level Renaldo Au-Ag zone 4.5 kilometres east of the main Panteria zone. First Quantum Minerals Ltd. ("First Quantum") optioned the project from Peruvian and explored the area from 2016 to 2018. A total of 8,699 metres were drilled on the Project by First Quantum in 11 holes.

Five main mineralized zones were identified on the Project by Peruvian and First Quantum; the Kisosko, El Corral, NW Corral, La Quebrada and Renaldo zones. To date the El Corral and NW Corral zones have proven the most prospective for Cu-Au porphyry mineralization while the Renaldo and Kiosko zones are considered high-level Au-Ag precious metal targets and have not been drill tested. The drilling by First Quantum mainly focused on the El Corral and La Quebrada zones.

Porphyry- style mineralization and alteration, defined by the drilling, have a minimum 1,300-metre horizontal extent and an over 700-metre vertical extent in the subsurface. The large horizontal and vertical extent of the porphyry-style mineralization and alteration indicates a large hydrothermal system is present, typical of porphyry systems. The untested Renaldo zone is considered a gold-silver precious metal target, located 4.5 kilometres east of the main Panteria zone. Since 2014, a total 323 rock samples have been taken by Peruvian and First Quantum.

Rock chip sampling from this prospective zone covers an area measuring one by two kilometres. Ronaldo zone sampling and mapping encountered gold and silver mineralization in a high-sulphidation lithocap that is hosted in shallow-dipping volcanics at higher elevations. Transactions details Pursuant to the terms of the Acquisition, the Company acquired the Project for consideration to Peruvian of a total of USD 200,000, with 50% payable on closing and 50% payable six months thereafter.

In addition, the Company delivered to Peruvian a total of 4,637,500 common shares (the "Shares") of the Company, with a further 4,637,500 Shares payable six months thereafter. The Acquisition of the Project is an arm's-length transaction, and no finder's fees were paid. Pursuant to the terms of the Acquisition, additional milestone payments include CAD 750,000 or Shares with the equivalent value to be paid on or before the completion date of 10,000 metres of drilling on the Project, and an additional CAD 750,000 or Shares with the equivalent value, payable on or before the completion date of 20,000 metres of drilling on the Project.

At the sole election of Gold State, these milestone payments may be made in either cash or by issuance of Shares at a deemed value of the greater of i) the Company's volume-weighted average share price for the 15 trading days prior to the date of issue, and ii) CAD 0.05 per share, provided that such issuance would not result in Peruvian holding 10% or more of the number of issued and outstanding Shares of Gold State following such issuance. In addition, Gold State has granted Peruvian 1.0% net smelter return royalty (the "Royalty") on the Project on the terms and conditions of a transferable net smelter royalty agreement to be agreed upon between the parties. Gold State shall have a right of first refusal in the event that Peruvian receives a third-party offer to purchase the Royalty, on the same terms and conditions as such third-party offer.

None of the securities issued in connection with the Acquisition will be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), and none of them may be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act. This news release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any state where such offer, solicitation, or sale would be unlawful.