PFIC (US Shareholders)

General Taxation Information:

Investment in Passive Foreign Investment Company ("PFIC")

for U.S. Shareholders

U.S. Income Tax Information 

The following information is being provided to assist U.S. individual shareholders ("Shareholder(s)") of Spanish Mountain Gold Ltd. (the "Company") in reporting distributions, if any, received from the Company on their Internal Revenue Service ("IRS") Form 1040, U.S. Individual Income Tax Return ("Form 1040") and IRS Form 8621, Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund ("Form 8621").

Spanish Mountain Gold Ltd.

PFIC Annual Information Statement—2022*

  1. This Information Statement applies to the taxable year of Spanish Mountain Gold Ltd. (the "Company") beginning on January 1, 2022 and ending on December 31, 2022.
  1. The shareholder's pro-rata share (per share) of the ordinary earnings and net capital gain of the Company for the taxable year of the Company specified in paragraph (1) above are as follows:
    1. Ordinary Income per share $ Nil
    2. Net Capital Gain per share $ Nil

    This net capital gain is subject to the highest capital gain rate applicable to the shareholder. 
  1. Amount of cash and fair market value of other property distributed or deemed distributed with respect to each ordinary share of the Company is as follows:
    1. Cash          $ Nil
    2. Property    $ Nil
  1. The Company will permit the shareholders to inspect a copy the Company's permanent books of account, records, and such other documents as may be maintained by the Company that are necessary to establish that PFIC ordinary earnings and net capital gain, as defined in section 1293(e) of the Internal Revenue Code, are computed in accordance with US federal income tax principles.

    Spanish Mountain Gold Ltd.
    By: Sharon Ng, Chief Financial Officer 
    Date: April 15, 2023

* the information is provided herein so that those shareholders who have elected to treat the Company as a "qualified electing fund" can comply with Sections 1293 and 1295 of the United States Internal Revenue Code and should not be used for other purposes.

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All rights reserved.

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