Mr. Galen McNamara reports

AERO ENERGY ANNOUNCES UPDATE ON SASKATCHEWAN URANIUM PROJECTS AND UP TO $5 MILLION NON-BROKERED PRIVATE PLACEMENT

Aero Energy Ltd. has provided an update regarding its uranium exploration portfolio located in the Athabasca basin, Saskatchewan, and has arranged a non-brokered private placement offering for aggregate gross proceeds of up to $5-million.

Murmac and Strike projects -- amendment provides enhanced flexibility

Aero is pleased to announce that it has amended its option agreement dated Dec. 15, 2023, with Fortune Bay Corp. and 7153945 Canada Inc. (the optionor) in respect of the Murmac and Strike projects near Uranium City along the northern margin of the Athabasca basin, Saskatchewan.

To date, Aero has incurred or financed approximately $2.5-million in exploration expenditures on the Murmac and Strike projects, leaving approximately $500,000 in remaining exploration expenditures in order to earn an initial 51-per-cent interest in the Murmac and Strike projects, in addition to certain cash and share payments to made by Aero in accordance with the Murmac-Strike option agreement.

Pursuant to the amendment, Aero must either (i) incur or finance the remaining first option expenditures, (ii) pay a cash deposit to the optionor equal to the remaining first option expenditures (the cash deposit) or (iii) complete a combination of the foregoing, all by March 15, 2026. The optionor will use any cash deposit to incur or finance the remaining first option expenditures on behalf of and for Aero by Oct. 31, 2026, with any unused portion of the cash deposit returned to Aero following the deadline. In order to earn the first option interest, (i) the remaining first option expenditures must be incurred or funded by the deadline and (ii) Aero must complete the first option payments (which remain unchanged).

The second and third options to earn an additional aggregate 19-per-cent interest in the Murmac and Strike projects (for a total of 70 per cent) through certain cash and share payments and the incurrence and funding of additional exploration expenditures remain unchanged.

Sun Dog project -- project relinquished

Aero has elected to relinquish its option agreement dated Oct. 20, 2023, with Standard Uranium Ltd. in respect of the Sun Dog uranium project. The company has fully satisfied all year 1 commitments under the agreement and, as part of its continuing portfolio review and capital allocation strategy, has chosen not to proceed further. This decision allows Aero to concentrate its financial and technical resources on its highest-priority uranium exploration projects in the Athabasca basin and the United States.

Private placement offering

The company is also pleased to announce a non-brokered private placement offering for aggregate gross proceeds of up to $5-million that will, upon completion of the consolidation (as defined below), consist of the issuance of a combination of:

• Up to 10,869,565 postconsolidation common shares of the company (NFT shares) at a price of 23 cents per NFT share for gross proceeds of up to approximately $2.5-million;
• Up to 7,142,857 charity flow-through postconsolidation common shares of the company (CFT shares) at a price of 35 cents per CFT share for gross proceeds of up to approximately $2.5-million.

Each CFT share will qualify as a flow-through share within the meaning of the Income Tax Act (Canada) and as an eligible flow-through share within the meaning of The Mineral Exploration Tax Credit Regulations, 2014 (Saskatchewan).

The NFT shares and CFT shares will be offered pursuant to Part 5A.2 of National Instrument 45-106, as amended by Coordinated Blanket Order 45-935 -- Exemptions from Certain Conditions of the Listed Issuer Financing Exemption, to purchasers in Canada (other than Quebec).

In connection with the offering, the company may pay finders' fees in accordance with the policies of the TSX Venture Exchange. Eventus Capital Corp. has been appointed as a finder in connection with the offering.

The company plans to use the proceeds of the offering as follows:

• The net proceeds from the sale of NFT shares will be used to finance the exploration and advancement of the issuer's uranium properties in Saskatchewan and Nevada, and general working capital purposes.
• The gross proceeds received from the sale of the CFT shares will be used to incur (i) eligible Canadian exploration expenses that qualify as flow-through critical mineral mining expenditures as both terms are defined in the Income Tax Act (Canada) and (ii) eligible flow-through mining expenditures, as defined in The Mineral Exploration Tax Credit Regulations, 2014 (Saskatchewan) related to the issuer's projects in Saskatchewan, on or before Dec. 31, 2026. Such qualifying expenditures will be renounced in favour of the subscribers of the CFT shares effective Dec. 31, 2025.

The offering is expected to close on or about Dec. 23, 2025. The offering remains subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and other approvals including the approval of the exchange. Further information regarding the proposed consolidation of the common shares of the company on the basis of one postconsolidation common share for 10 preconsolidation common shares is contained in the company's news release dated Dec. 9, 2025.

There is an offering document in respect of the offering that can be accessed under the company's profile on SEDAR+ and the company's website. Prospective investors of NFT shares and CFT shares should read the offering document before making an investment decision.

The NFT shares and the CFT shares will not be subject to a hold period in Canada, subject to any hold periods required by the exchange.

About Aero Energy Ltd.

Aero Energy, following its successful merger with Kraken Energy Corp., has established a robust portfolio of uranium assets in North America. The company controls a district-scale land package in Saskatchewan's Athabasca basin, including its Strike and Murmac projects, which collectively host dozens of shallow drill-ready targets on the north rim of the Athabasca basin. These projects are guided by an award-winning technical team with a proven record, responsible for major discoveries such as Gryphon, Arrow and Triple-R. Additionally, Aero's portfolio includes Kraken's 100-per-cent-owned Apex uranium property, Nevada's largest past-producing uranium mine, and the Huber Hills property, spanning 1,044 hectares in Nevada and encompassing the historic Race Track open pit mine. This strategic merger combines Aero's extensive Canadian exploration assets with Kraken's high-grade U.S. properties, positioning Aero to unlock significant high-grade, unconformity-style uranium mineralization and capitalize on the growing global demand for uranium.

We seek Safe Harbor.