Mr. Buddy Doyle reports

ARCTIC STAR PROVIDES FINLAND DIAMOND UPDATE

Arctic Star Exploration Corp. has completed landowner payments necessary to keep its title in good standing on the Timantti project near Kuusamo, Finland. There have been several diamond-bearing kimberlite discoveries made on this project.

Introduction

The Timantti project consists of two exploration permits totalling 1,125 hectares: the 243-hectare Solavaara permit and the 882-hectare Vaimouso permit. The company purchased the Finnish holding company (Foriet Oy) that held the Solavaara permit and the White Wolf kimberlite discovery in 2018. Since acquisition, Arctic Star has discovered four new kimberlites: Black Wolf, Grey Wolf, Vassa and Karhu. The Vaimouso permit was obtained by Arctic Star to capture the surrounding exploration potential and it adjoins the Solavaara permit. Remarkably, each kimberlite discovery on the Timantti project is diamond bearing.

The project is located in excellent infrastructure with roads and power grids and lies 11 kilometres northeast of the town of Kuusamo, which is serviced by daily flights to Helsinki.

Table 1 lists the caustic fusion diamond results from each discovery, giving sample size in kilograms, with the diamond results sized by sieving noting the mesh size that the diamonds sit on.

Changing the model, the kimberlites are dikes not pipes.

The Wolf kimberlites where originally drill tested as if they were a cluster of kimberlite pipes. The standard model for kimberlites depicts the most common form as carrot shaped. However, they can also form as dikes, sills and ring dikes. The three Wolf kimberlites are approximately 30-metre-by-50-metre bodies forming an east-west-trending string 300 metres long. The White Wolf kimberlite received the most attention with holes being drilled at the 12-, 3-, 6- and 9-o'clock positions around the occurrence angled towards the centre. The northern 12-o'clock drill hole encountered kimberlite earlier than would be expected if the kimberlite was behaving like the model and forming a tapering carrot-shaped pipe, triggering a possible alternative explanation that this body is instead a dike dipping to the north at 30 degrees. The Black Wolf and Grey Wolf kimberlites were also interpreted as being part of the same dike, displaced tens of metres by postemplacement faulting. The plan is to return to the Wolf kimberlites test the dike concept with more drill holes angled from the north. If the concept is true, testing a single, slightly offset dike downdip has potential for increasing tonnage.

History of discovery and the possibility of further success

The White Wolf kimberlite was originally found by tracing a diamond indicator mineral (DIM) dispersal train in the till to where it terminated up-ice and then drill testing a magnetic anomaly. The Black Wolf and Grey Wolf companions were found after the company carried out trenching and drilling of nearby geophysical anomalies. It is intriguing is that each of these kimberlites had differing geophysical signatures. White Wolf and Black Wolf exhibited an electromagnetic and magnetic anomalies (highs) and Grey Wolf had no magnetic feature but showed up in the EM (conductors). All three had coincident gravity anomalies (lows). The kimberlites intrude into greenstone terrain, which consists of folded magnetic metabasalts and gabbros, which also produce magnetic-high anomalies that are difficult to distinguish from magnetic kimberlite anomalies. Given the variable nature of the geophysical footprint it is possible that strike extensions may be found if the Wolf kimberlites prove to be a dike.

Demonstrating efficient low-cost discovery, the company found the Vassa and Karhu kimberlites by trenching from surface with a backhoe. These kimberlites occur on the next ridge 1.5 kilometres north of the Wolf group. Vassa was drill tested and was shown to be a 1.5-metre-wide dike. Two separate dikes where intercepted. Karhu, with a White Wolf-like magnetic anomaly, is yet to be drill tested. The discovery of these kimberlites prove the company is in a cluster of kimberlites with multiple bodies. Around the world, kimberlite clusters average 30 members, and some clusters have hundreds, which suggests that there are more kimberlites to be found.

Diamond indicator mineral results from public data (taken by other companies) from both the Finnish and Russian sides of the border demonstrate a large, 30-kilometre-wide, regional DIM plume, formed by ice-age glaciation emanating from the Kuusamo area, continuing down-ice 30 kilometres east into Russia. Diamonds were reported from two samples on the Russian side. The Timantti kimberlites occupy the southern part of this plume and the diamond indicator minerals shedding from them cannot explain the entirety of the plume, and this is considered additional evidence of a larger cluster with multiple kimberlites yet to be discovered.

Exploration plans

The company retracts its prior statement press release dated May 28, 2025, commenting on future work plan projections.

The company plans to mount an exploration program in 2025 that would see a modest drilling program to test the dike theory at the Wolf kimberlites and Karhu. This work would be subject to financing with an expected budget of $800,000.

Gold added to the company's exploration plans

The company retracts its prior statement press release dated May 28, 2025, commenting on neighbouring public resource figures.

The host rock to the Timantti project kimberlite is the Kuusamo greenstone belt. Greenstone belts worldwide are known to host orogenic gold deposits. Recent exploration of the Kuusamo greenstone belt by other companies has resulted in a gold-cobalt discovery 20 kilometres north-northwest of Arctic Star's exploration permits. Latitude66, an Australian-listed company, has established potential for a camp-scale district at the KSB project with an existing JORC (Joint Ore Reserves Committee) mineral resource of 7.3 million tonnes at 2.7 grams per tonne gold for 650,000 ounces and 0.08 per cent cobalt for 5,840 tonnes.

When the company's field crews return to the property, they will have instructions to ascertain the gold potential of Arctic Star's holdings by systematic till and rock sampling.

Shareholder loan

Arctic Star accepted a 45,000-euro loan with an interest rate of 10 per cent per annum from shareholders to keep the Finnish permits in good standing. The company thanks these shareholders for their support of the project.

Diamond industry outlook

Clearly, the state of the rough diamond and jewellery market has a direct effect on how the market views Arctic Star. By reviewing expert opinions from current literature, the company provides the following summary.

The natural diamond market is in transition with a strong downturn after a record 2021 year. The downturn has been influenced by the following:

• Strong penetration of synthetic stones in the less-than-five-carat market non-coloured goods;
• The Ukraine war -- Russian goods (60 per cent of market value) are finding non-traditional selling avenues with greater interest in obtaining foreign exchange than seeking best prices.;
• Tariffs -- the United States, the biggest diamond importer in the world, may subject diamonds to tariffs, and this uncertainty affects diamond price.

The following quote from Boston Consulting Group (BCG) is provided as a summary of the industry consensus of the near future for the diamond market: "The industry's long-term outlook is supported by constrained primary supply, which is expected to decline as current mines reach the end of their productive life. Suppressed exploration budgets, a scarcity of large discoveries and lengthy mine development timelines will limit opportunities for significant new volume increases. On the demand side, rising global real GDP [gross domestic product], wealth and personal disposable income underpin the affordability of natural diamonds. There is more uncertainty regarding the long-term desirability of natural diamonds relative to other discretionary purchases. However, recent developments in LGD [lab-grown diamond] supply, price and retailer incentives point toward eventual differentiation between natural and LGDs as distinct categories."

Peak natural diamond production was in 2017, and, since then, supply has been reducing at 1 per cent to 2 per cent per year. Two thousand twenty-seven is predicted to see supply shortages if global GDP continues to grow and demand tracks this growth.

Arctic Star's planned return to Finland is part of its strategic restart to the company's diamond exploration efforts, which provides a unique opportunity for shareholders to participate in diamond exploration around the world. The company's high-quality Timantti project in Finland and other high-quality assets in Northwest Territories, Canada (the Diagras project with the Sequoia diamond-bearing kimberlite), could reward shareholders when the diamond market returns. Arctic Star reminds shareholders that this is an advanced exploration play, and economic success is not certain as there are numerous steps required before attaining this goal, not the least is determining the tonnes, grade and price per carat of these discoveries.

Technical information

The technical information in this news release was reviewed by Kevin Kivi, PGeo. Mr. Kivi is a qualified person for the purposes of National Instrument 43-101, Standards of Disclosure for Mineral Projects. Mr. Kivi is independent of the company.

We seek Safe Harbor.