Mr. Charles Desjardins reports

UPDATED FINAL COPY OF PRESIDENT'S MESSAGE TO SHAREHOLDERS

On behalf of the directors and myself, Pistol Bay Mining Inc. would like to thank all our loyal shareholders for your support in 2017 and look forward to your continued support in 2018 and beyond.

As we move forward in 2018, which we feel will be a very exciting time in the company's history, I would like to reflect upon our activities and accomplishments in 2017.

Confederation Lake (zinc, copper, silver, gold VMS (volcanogenic massive sulphide) greenstone belt)

The year started off with the company receiving exchange approval to proceed with acquiring the AurCrest properties in the Confederation Lake greenstone belt. These properties expanded our holdings in Confederation Lake, making us the dominant landholder in this VMS-rich greenstone belt. With this land package, plus the previous landholdings, Pistol Bay made plans to do a VTEM Plus survey over a large portion of our claims. This geophysical survey was commissioned to test depths of up to 700 metres in areas that were previously tested to only to a depth of 200 metres.

In February, Jody Dahrouge, BSc, SpC, PGeol, was added to our advisory board. Mr. Dahrouge has been involved in all aspects of mineral exploration and development for a wide variety of commodities worldwide. He is president of Dahrouge Geological Consulting Ltd., a geological service company that provides consulting services to a broad range of public and private exploration and mining companies.

In February and March, Pistol Bay acquired additional landholdings in Confederation Lake that included all historical data, which were reviewed by Colin Bowdidge, PhD, PGeo, and his team. We also closed a private placement financing and received a cash infusion of $750,000 from Rio Tinto exercising part of its option for our Athabascan basin uranium property (C4, C5 and C6 blocks).

In April, we started the VTEM Plus survey, which showed fantastic results in identifying numerous new conductors and IP-(induced polarization)-effect anomalies throughout our landholdings and confirming that many deposits that were already indicated in the historical data acquired in February had potential for tonnage growth. These results were supplied to us by Geotech in September after carefully analyzing and compiling a 3-D module model of the data. As a result of all our acquisitions, we now have a total of 297 claim units, bringing Pistol Bay's total land package in the Confederation Lake greenstone belt to over 42,000 acres.

Pistol Bay was invited by the Province of Ontario to be part of its delegation at the Mines and Money Conference in London, England, held in November, 2017. This conference provided many leads, which the company is currently in discussions with. With the data in hand from the VTEM Plus survey, we had several joint venture discussions with companies wanting to get involved with the claims Pistol Bay holds in the Confederation Lake area. Some of these JV discussions are in progress, and we hope to announce the first joint venture in the very near term.

PB Blockchain Inc. (a wholly owned subsidiary of Pistol Bay Mining)

The company realized early in 2017 that there was a fundamental shift happening in technology and blockchain, the benefits of distributed ledger were going to impact most industries, if not all, and there is an opportunity to create blockchain products specific to the mining and oil and gas industries.

With this in mind, we created a subsidiary focused on blockchain applications for mining and resource company management. We will be leveraging the work of other application program interface (API) companies to build a suite of blockchain products to address needs that are particular to the data management and security of mining/oil and gas companies. It is expected that many of these blockchain products could have crossover to other industries. These blockchain products may include, but will not be limited to, focused Ethereum smart contracts, security, claim management, resource management and the tokenization of resources.

In December, PB Blockchain, the wholly owned subsidiary of Pistol Bay, added Brad Moynes to the advisory board. Mr. Moynes is the founder of DigaTrade Financial Corp., which launched its digital assets exchange on July 1, 2015. Along with his accomplishments in the bitcoin early entry into the cryptocurrency and blockchain space, Mr. Moynes has extensive experience in public company management, finance and corporate relations and has served as a senior executive for a junior mining exploration company.

The technical team is now prioritizing products and working on timelines for rollout of early adopter products. We anticipate several announcements in this regard in January, 2018.

The Pistol Bay team would like to wish everyone a happy and prosperous new year!

Charles Desjardins,

President and chief executive officer,

Pistol Bay Mining