Kaizen Discovery Gains 100% of the Pinaya Copper-Gold Project in Peru With Completion of AM Gold and Rokmaster Transactions

VANCOUVER, Oct 26, 2015 - Kaizen Discovery Inc. (TSX VENTURE:KZD) announced today that it has closed its definitive acquisition agreement with AM Gold Inc. (TSX VENTURE:AMG) (FRANKFURT:AMX) that gives Kaizen 100% ownership of the Pinaya Copper-Gold Project (the Pinaya Project) in Peru's provinces of Caylloma and Lampa (see figure 1 below).

The Pinaya Project covers 192 square kilometres and includes more than 25 kilometres of strike length within the Andahuaylas-Yauri Porphyry Belt in southeastern Peru. This belt hosts numerous productive and world-class porphyry and skarn systems, including Las Bambas, Tintaya, Constancia and Haquira. Project infrastructure consists of an exploration camp with a Hydracore 2000 hydraulic diamond drill and office facilities (see photos below). The exploration camp facilities also include a dormitory, dining facilities, a first aid station, general storage bays, a diamond saw station and two permanent drill core storage facilities, one of which is used for core logging and sampling.

The Pinaya Project contains Mineral Resources within three zones that are essentially contiguous over a 1.7-kilometre strike in the central part of the property. The Western and Northwestern porphyry zones hold estimated Measured and Indicated Resources of 32.3 million tonnes at 0.39% copper and 0.44 grams per tonne (g/t) of gold, for contained metal of 280 million pounds of copper and 452,000 ounces of gold. These porphyry zones also have additional Inferred Resources of 35.4 million tonnes grading 0.40% copper and 0.27 g/t gold, containing 314 million pounds of copper and 307,000 ounces of gold.

The Gold Oxide Skarn Zone has additional Measured and Indicated Resources of 6.4 million tonnes at 0.80 g/t gold and 0.092% copper, containing 164,000 ounces of gold and 13.0 million pounds of copper. This zone also has an Inferred Resource of 2.38 million tonnes grading 0.60 g/t of gold and 0.081% copper, containing 46,000 ounces of gold and 4.3 million pounds of copper.

Previous drilling on the property was focused mainly on defining the current resources and much less on systematic regional exploration. Regional soil geochemical and geophysical surveys have identified multiple, untested targets along and across strike of the resource.

"The acquisition of the Pinaya Project is an important step forward in the transformation of Kaizen, positioning the company for future growth," said B. Matthew Hornor, Kaizen's President and CEO. "Pinaya fits well with our long-term strategy of acquiring exploration and development-stage projects of interest to our Japanese funding partners, and we look forward to continued growth in the years to come."

"We believe that there are excellent opportunities to discover significant additional copper and gold mineralization at Pinaya, and are planning a comprehensive exploration program to follow up on these targets", added Dr. David Broughton, Kaizen's Executive Vice President, Exploration.

Figure 1: Location of the Pinaya Copper-Gold Project in Peru is available at the following address: http://media3.marketwire.com/docs/Figure1_Pinaya.pdf

Under the acquisition agreement, Kaizen has acquired Canper Exploraciones S.A.C., a Peruvian subsidiary of AM Gold. The Pinaya Project is Canper's principal asset.

AM Gold received 15,384,615 common shares of Kaizen - representing approximately 8.8% of Kaizen's issued and outstanding common shares, on an undiluted basis, a cash payment of C$500,000 and a US$198,617 reimbursement for certain property-maintenance payments made by AM Gold.

Kaizen also closed a concurrent agreement with Rokmaster Resources Corp., which previously had entered into an option and joint-venture agreement with AM Gold to earn up to a 75% interest in the Pinaya Project by spending approximately C$26 million. Rokmaster and AM Gold have been engaged in arbitration proceedings, which were suspended pending closing of the transaction with Kaizen. Under the terms of the agreement with Rokmaster, (i) Rokmaster transferred to Kaizen certain of Rokmaster's drill equipment located in Peru and (ii) Rokmaster agreed to, among other things, terminate the arbitration proceedings with AM Gold and Canper. As consideration, Kaizen issued 2,000,000 common shares of Kaizen and paid C$300,000 to Rokmaster.

The Kaizen common shares issued to AM Gold are subject to escrow trickle-out provisions under which 10% of the Kaizen common shares will be released from escrow to AM Gold on the first anniversary date of the closing of the transaction. A cumulative and further 10% will be released on each three-month anniversary thereafter, ensuring that all Kaizen common shares issued to AM Gold will be released from escrow 39 months after the closing date.

The Kaizen common shares issued to Rokmaster also are subject to restrictions on disposition pursuant to a lock-up agreement between Rokmaster and Kaizen wherein, without having first obtained the prior written consent of Kaizen, Rokmaster may only dispose of 25% of the Kaizen common shares on the first trading day after the expiry of the four-month hold period under applicable securities laws. A cumulative and further 25% will be released on each subsequent three-month anniversary.

The Kaizen common shares issued to Rokmaster also are subject to a placement right during the 14 days prior to each release date, permitting Kaizen to arrange the sale of the escrowed Kaizen shares, provided the sale price is at least equal to the 30-day volume-weighted average trading price prior to such release date.

Kaizen will be participating at the upcoming Mining and Investment Latin America Summit at The Westin Lima Hotel on November 4 and 5 (www.mininglatam.com), and will be conducting investor tours with its Japanese partners around the same time period. Discussions have commenced with potential funding partners to jointly explore and develop the Pinaya Project.

Photo 1: Pinaya camp facilities is available at the following address:
http://media3.marketwire.com/docs/Photo_1_Pinaya.jpg

Photo 2: Pinaya core shed is available at the following address:
http://media3.marketwire.com/docs/Photo_2_Pinaya.jpg


Qualified Person and Mineral Resources

The scientific and technical information in this news release has been reviewed and approved by C. M. Rebagliati, P. Eng., a Qualified Person under the terms of National Instrument 43-101. Mr. Rebagliati has verified the technical data disclosed in this news release. Mr. Rebagliati is independent of Kaizen for purposes of NI 43-101.

The Mineral Resources disclosed in this news release are reported in the NI 43-101 Technical Report dated May 30, 2011 "Updated Resource Estimate on the Pinaya Gold/Copper Property, Caylloma and Lampa Provinces, Peru for AM Gold Inc." by Messrs. Brian Cole P.Geo. and Ronald Simpson P.Geo. (the Technical Report). Mr. Rebagliati has reviewed the Technical Report on behalf of Kaizen. To the best of Kaizen's knowledge, information, and belief, there is no new material scientific or technical information that would make the disclosure of the mineral resources, mineral reserves or results of a preliminary economic assessment inaccurate or misleading.

For detailed information about QA/QC procedures, data verification measures and other parameters used to estimate these Mineral Resources, please refer to the Technical Report that is available on AM Gold's SEDAR profile.


About Kaizen Discovery

Kaizen is a Canadian mineral exploration and development company. Kaizen has a collaboration agreement with ITOCHU Corporation of Japan and has access to HPX TechCo's proprietary, geophysical, Typhoon technology under a dedicated services agreement. Kaizen's long-term growth strategy is to work with Japanese entities to identify, explore and develop high-quality mineral projects that have the potential to produce and deliver minerals to Japan's industrial sector.

More information on Kaizen is available at www.kaizendiscovery.com.


Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.


FORWARD-LOOKING STATEMENTS

Statements in this news release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed here and elsewhere in both Kaizen's and AM Gold's periodic filings with Canadian securities regulators. When used in this news release, words such as "will", "could", "plan", "estimate", "expect", "intend", "may", "potential", "should," and similar expressions, are forward-looking statements. Information provided in this document is necessarily summarized and may not contain all available material information.

Forward-looking statements include, without limitation, statements regarding the expected benefits of the transaction, the future growth and long-term strategy of Kaizen, the discovery of significant additional cooper and gold mineralization at Pinaya, the planning of an exploration program, potential funding partners and other statements that are not facts. Forward-looking statements are based on a number of assumptions and estimates that, while considered reasonable by management based on the business and markets in which Kaizen operates, are inherently subject to significant operational, economic and competitive uncertainties and contingencies.

Although Kaizen has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize.

Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this news release, and Kaizen disclaims any intention or obligation to update or revise such information, except as required by applicable law, and Kaizen does not assume any liability for disclosure relating to any other company herein.

This news release also contains references to estimates of Mineral Resources. The estimation of Mineral Resources is inherently uncertain and involves subjective judgments about many relevant factors. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The accuracy of any such estimates is a function of the quantity and quality of available data, and of the assumptions made and judgments used in engineering and geological interpretation, which may prove to be unreliable and depend, to a certain extent, upon the analysis of drilling results and statistical inferences that may ultimately prove to be inaccurate. Mineral Resource estimates may have to be re-estimated based on, among other things: (i) fluctuations in metal or mineral prices; (ii) results of drilling; (iii) results of studies; and (iv) the possible failure to receive required permits, approvals and licences.



Contact

Kaizen Discovery Inc.
B. Matthew Hornor, President and Chief Executive Officer
+1-604-669-6446
matthew@kaizendiscovery.com

Kaizen Discovery Inc.
Steve Vanry, Executive Vice President - Corporate Development
+1-604-669-6446
steve@kaizendiscovery.com