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September 16, 2016

PRIVATE AND STRICTLY CONFIDENTIAL

Ms. Caitlin Jeffs

President and Chief Executive Officer

- and -

Board of Directors

Red Metal Resources Ltd.

1158 Russell Street, Unit D

Thunder Bay, Ontario  P7B 5N2

Dear Ms. Jeffs and Directors:

TomaGold Corporation (“TomaGold”) is pleased to present a transaction proposal
whereby TomaGold (directly or through a subsidiary) would acquire, pursuant to a
takeover bid, business combination or similar transaction, all of the issued and
outstanding common shares of Red Metal Resources Ltd. (“Red Metal”), namely
34,290,302 common shares, as well as all of the common shares of Red Metal that
may be issued upon the exercise of any options, warrants or other convertible
securities after the formal filing of the Transaction but before its closing
(the “Transaction”). Our proposal would be that such Red Metal shareholders will
receive in exchange an aggregate consideration of CAD$3,250,000 (“Purchase
Price”) payable through: (i) the payment in cash of the Red Metal’s debts set
forth at Schedule A for a maximum amount of $500,000;  and (ii) for the
remainder of the aggregate consideration, the issuance of class “A” common
shares of the capital stock of TomaGold at a price that is the higher between
the average market price over the 20 days before the execution date of the
Definitive Agreement (as defined hereinafter) and of CAD$0.15, subject to a
maximum price of CAD$0.20 (“Share Consideration Price”). All TomaGold common
shares issued pursuant to the Transaction will be subject to the applicable hold
period set forth at Section 3(b)(10). We are highly committed to completing this
Transaction.

1.

Exclusivity

From the date hereof until the termination of this letter agreement in
accordance with Section 7 hereof (the “Exclusivity Period”), Red Metal agrees to
deal exclusively with TomaGold in connection with the Transaction. During the
Exclusivity Period, neither Red Metal nor any of its affiliates, officers,
directors, employees, agents, professional advisors or other representatives
will, directly or indirectly, without TomaGold’s prior written consent in its
sole discretion: (a) solicit, initiate, encourage or facilitate enquiries or
submissions of proposals from, or enter into or participate in any discussion or
negotiation with, any person other than TomaGold relating to the acquisition of
any shares or any material portion of the assets of Red Metal or any of its
subsidiaries; (b) furnish any information to any person other than TomaGold in
furtherance of any of the foregoing; or (c) otherwise cooperate in any manner
with, or assist or participate in, or encourage any effort or attempt by any
person to do or seek to do any of the foregoing. If any such action or
undertaking is currently being performed or undertaken, Red Metal will terminate
such action or undertaking promptly upon signing this letter agreement.

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The Definitive Agreement (as defined hereinafter) will include customary break
fee provisions, generally payable in the event that Red Metal does not complete
the Transaction.  However, during the Exclusivity Period and for this Letter of
Intent, the parties agree to a break-up fee of CAD$175,000 (i) payable to
TomaGold if Red Metal is in default of this Letter of Intent and if a superior
proposal is accepted by Red Metal’s shareholders, and (ii) payable to Red Metal
if TomaGold does not complete the Transaction for reasons other than there being
discovered an issue with their Confirmatory Due Diligence (as defined below).

Red Metal agrees to notify TomaGold forthwith if it, or its affiliates or its or
their respective affiliates, officers, directors, employees, agents,
professional advisors or other representatives receives after the date hereof
any indication of interest or other communication regarding any of the foregoing
and will furnish in writing to TomaGold all the terms and conditions of any such
indication or communication.

2.

Confirmatory Due Diligence

TomaGold shall complete its due diligence on Red Metal to its entire
satisfaction before the end of the Exclusivity Period (“Confirmatory Due
Diligence”). During the Exclusivity Period, Red Metal will assist TomaGold in
its due diligence investigations regarding Red Metal for the purpose of
satisfying legal, including mineral title to the Red Metal’s mineral projects,
environmental and financial due diligence, and such other due diligence review
as is customary in the scope of similar transactions including by providing to
TomaGold on a timely basis all materials and information regarding Red Metal and
its business and operations requested by TomaGold from time to time. Red Metal
will use its best efforts to promptly obtain any required consents in order to
permit TomaGold to review any materials or information of a nature requested by
TomaGold in connection with its due diligence that are subject to
confidentiality obligations of Red Metal.

3.

Closing Conditions and Other Matters

Our proposal is conditional upon the following conditions:

(a)

Conditions in favor of both TomaGold and Red Metal:

1)

the entering into of a definitive agreement (the “Definitive Agreement”) between
TomaGold and Red Metal containing customary terms, conditions, representations
and warranties (including without limitation environmental-mining) upon which
the Transaction will be completed, including customary deal protection
mechanisms, including break-up fees of CAD$175,000, non-solicitation provisions
and the right to match any superior proposal, customary covenants with respect
to the conduct of the business and customary conditions and termination events;

2)

the receipt of the applicable third parties and regulatory renunciation or
approvals, including from the TSX Venture Exchange and the Securities and
Exchange Commission in the scope of any potential takeover bid, and the filing
of any document they may require; and

3)

the compliance by both Red Metal and TomaGold with any applicable securities
laws.

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(b)

Conditions in favor of TomaGold:

1)

the entering into lock-up/voting agreements with all founders and all
shareholders of Red Metal holding over 10% of the issued and outstanding Red
Metal common shares, each director and each senior officer of Red Metal whereby
all securities currently held or acquired thereafter would be subject to such
lock-up/voting agreements; provided that the lock-up/voting agreements will not
prevent a director or officer who is a shareholder of the company from
fulfilling his fiduciary duties in that capacity;

2)

the unanimous approval of the Transaction by the Board of Directors of Red Metal
and approval by the Board of Directors of TomaGold;

3)

Red Metal will have no debt at the closing of the Transaction and TomaGold will
assume none of the debt of Red Metal that will be outstanding immediately prior
to the closing of the Transaction, (no change of control payment);

4)

the assets of Red Metal will be free and clear of all liens, charges,
encumbrances, claims, mineral rights or interests, except any customary
royalties to be fully disclosed in the Definitive Agreement;

5)

Cancellation of the Red Metal’s Stock Option Plan;

6)

TomaGold shall complete its continued due diligence on Red Metal to its entire
satisfaction before the end of the Exclusivity Period;

7)

if a takeover bid, the unrevoked deposit of Red Metal securities in favour of
the Transaction enough to allow TomaGold to complete a squeeze-out transaction
whereby, pursuant to the applicable laws, TomaGold could force the sale to it of
all of the Red Metal securities that were not deposited pursuant to the
Transaction;

8)

if the transaction takes a form other than a takeover bid, such as a merger or
an arrangement, at least 66 2/3% of the Red Metal securities shall vote in favor
of the Transaction;

9)

from the date hereof until the closing of the Transaction, no material change
shall have occurred in the business, operations or capital of Red Metal;

10)

all founders of Red Metal and no less than 65% of Red Metal’s shareholders shall
complete a voting trust agreement of 24-month period in favour of the President
and the Board of directors of TomaGold whereby all securities currently held or
acquired thereafter would be subject to such voting trust agreements;

11)

all TomaGold common shares issued to the founders of Red Metal and shareholders
representing 65% of Red Metal’s shareholdings pursuant to the Transaction will
be subject to a hold period over three (3) years following the closing of the
Transaction, of which 10% will be free to trade on the closing, subject to the
foregoing, and then equal increments of one-sixth (1/6) of the remainder of the
shares issued will be free to trade every six (6) months thereafter. All
TomaGold common shares issued shall be subject to a hold period expiring four
(4) months following the closing of the Transaction; and

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12)

Subject to TomaGold’s review of the employment history and wage and salary
structure of the employees, TomaGold shall determine which employees will be
retained or terminated and the mechanics and process of such hiring and
termination will be agreed to in the Definitive Agreement. During the due
diligence, TomaGold will designate the key persons (the “Designated Key
Persons”) and coordinate any contact with them through Red Metal in advance.
TomaGold may require that prior to closing of the Transaction, each of the
Designated Key Persons enter into a mutual satisfactory employment agreement.  

(c)

Conditions in favor of Red Metal:

1)

if approval of TomaGold shareholders is required for the Transaction under
applicable laws, such approval is obtained; and

2)

the closing by TomaGold of a financing of CAD$700,000 before the closing of the
Transaction.

Each party may want to implement certain reorganization transactions before
closing in order to, among other reasons, make the transaction more tax
efficient, provided that such reorganization transactions do not, in any manner,
affect the Transaction or the Purchase Price, as the case may be.

4.

Financing

TomaGold’s offer is not subject to a financing condition, except as provided at
Section 3(c)2).

5.

Public Disclosure and Material Transactions

During the Exclusivity Period, Red Metal will obtain the prior written consent
of TomaGold prior to:

(a)

issuing a press release, filing a material change report with any securities
commission or otherwise making any public disclosure regarding the Transaction;
provided, however, that nothing in this letter agreement will prevent Red Metal
from good faith compliance with its disclosure obligations under applicable
securities law or applicable regulatory or stock exchange requirements;

(b)

entering into any material contract or amending or modifying any existing
material contract;

(c)

entering into any employment or other agreement that contains a change of
control or similar provision that provides for a payment in connection with a
change of control;

(d)

issuing any securities or any options, warrants or other rights to acquire
securities of Red Metal, except pursuant to the exercise of existing stock
options or share purchase warrants disclosed in its public disclosure; or

(e)

entering into any agreements or arrangements that would reasonably be expected
to adversely affect the value of the assets or common shares of Red Metal.

6.

Expenses

Each of Red Metal and TomaGold will be responsible for its own costs and
expenses incurred in connection with its evaluation and pursuit of the
Transaction except that TomaGold will also be responsible for the costs and
expenses to delist the common shares of Red Metal.

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7.

Term and Termination

This letter agreement (except Section 2 (Confirmatory Due Diligence), Section 8
(Not a Binding Agreement) and Section 9 (Governing Law)) will automatically
terminate without further action by TomaGold or Red Metal and be of no further
force and effect upon the earliest to occur of:

(a)

the entering into of the Definitive Agreement;

(b)

the mutual written agreement by TomaGold and Red Metal; and

(c)

the 60th day following the date that this letter agreement is fully executed, or
such later date as may be agreed to in writing by TomaGold and Red Metal.

Notwithstanding anything in this Section 7, the terms of this letter agreement
shall not affect any right either party has with respect to the breach of this
letter agreement by the other party prior to such termination.

8.

Not a Binding Agreement

With the exception of Section 1 (Exclusivity), Section 2 (Confirmatory Due
Diligence), Section 5 (Public Disclosure and Material Transactions), Section 7
(Term and Termination), Section 8 (Not a Binding Agreement), and Section 9
(Governing Law), this letter agreement does not, nor is it intended to,
constitute a binding agreement, an agreement in principle or a legally binding
contract between TomaGold and Red Metal. Unless and until the Definitive
Agreement has been executed and delivered, neither TomaGold nor Red Metal will
be under any legal obligation of any kind whatsoever with respect to the
Transaction by virtue of this letter agreement, except for the matters
specifically identified in this Section 8 as legally binding.

9.

Governing Law

This letter agreement will be governed by and construed in accordance with the
laws of the Province of Québec and the federal laws of Canada applicable
therein. Each Party irrevocably attorns and submits to the non-exclusive
jurisdiction of the Québec courts situated in the City of Montréal and waives
objection to the venue of any proceeding in such court or that such court
provides an inconvenient forum.

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We look forward to proceeding expeditiously towards a transaction. Please do not
hesitate to contact us at any time should you have any questions regarding our
proposal. Please indicate your acknowledgement and agreement by signing below
and returning a signed copy to the attention of David Grondin as soon as
possible, and in any event, by 5:00 p.m. (Montréal Time) on September 16, 2016.

Yours very truly,

TOMAGOLD CORPORATION

By:

/s/ David Grondin

Name:

David Grondin

President and Chief Executive Officer

The undersigned acknowledges and agrees to the foregoing as of the16th day of
September, 2016.

RED METAL RESOURCES LTD.

By:

/s/ Caitlin Jeffs

Name:

Caitlin Jeffs

President and Chief Executive Officer

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SCHEDULE A

RED METAL'S DEBTS

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