Mr. Paul Wood reports

UPDATE ON BTU DIXIE HALO PROJECT - KINROSS (GREAT BEAR) OPTION

BTU Metals Corp. has provided updates on the exploration work completed on the Dixie Halo project optioned to Kinross Gold Corp. Kinross holds its interests in the area in a wholly owned subsidiary, Great Bear Resources Ltd. (GBR). The company's Dixie Halo project is a strategic, large land position adjacent to the world-class Great Bear gold deposit southeast of the main Red Lake Gold camp area in Northwestern Ontario.

The Dixie Halo project is located adjacent to Kinross's Great Bear project, where Kinross has budgeted $85-million for 2024 for the continuing exploration and development of what it refers to as a world-class gold deposit. Kinross continues to expand the envelope of the known gold mineralization downdip and along strike and it has also announced plans to explore outside the known mineralization this year. Kinross recently announced deep drill hole results on the Great Bear project, which included an intersection of 389.57 grams per tonne gold over a 4.4-metre core length (drill hole BR843AC1A).

Exploration summary and exploration plan for 2024

A state-of-the-art airborne magnetic survey was completed in late 2023 using the same contractor (Geotech Ltd.) and the same airborne geophysical system as was used at the Great Bear project to provide a seamless, consistent high-quality airborne magnetic data set to generate a solid base for updated geophysical interpretation and geological correlation across the Great Bear and Dixie Halo projects. Detailed interpretation of the data is continuing.

GBR is continuing work under the option agreement, including a continuing program of relogging and sampling of all of the BTU drill core using its ever-expanding experience and geological knowledge it has amassed in relation to the gold mineralization at the Great Bear project. GBR will use the sampling protocols used at Great Bear to provide a more comprehensive and complete understanding of the geology and alteration on the Dixie Halo project and to provide an expanded basis for the correlation of geological units and alteration throughout the area.

GBR plans to complete a geological review and sampling of various outcrop areas of interest on Dixie Halo, including some of the areas worked in the past by BTU.

As the various review, relogging and sampling results are received and compiled by GBR, an initial core drilling program will be planned and GBR expects to be in a position to execute an initial drill program once it has secured an exploration permit from the Ontario government.

Under the option agreement, GBR is required to spend not less than $2.7-million over the first three years and a total of $4.7-million to earn a 70-per-cent interest in the Dixie Halo property. The BTU/GBR option agreement closed on Feb. 22, 2023.

BTU chief executive officer Paul Wood commented: "We are very pleased to be working with Kinross and the Great Bear project team as they carry on the exploration of the Dixie Halo project. We are excited to be involved as they apply their expertise to continue the evaluation of the best places to explore on the Dixie Halo project. We look forward to them defining the best available gold targets and then drill testing those targets. The knowledge and expertise they bring to the further evaluation of the Dixie Halo project are invaluable, given they are the experts at defining the structure, alteration and gold mineralization in the area."

BTU has now received the $300,000 anniversary payment from GBR under the purchase agreement, bringing the company's cash balance to approximately $1.7-million.

February, 2023, transactions with GBR

The transactions entered into by BTU and GBR in late February, 2023, included: (i) a purchase agreement pursuant to which GBR acquired from BTU certain unpatented mining claims located in the Kenora district of Ontario, with BTU continuing to participate in those lands through a newly created royalty payable to BTU; (ii) an option agreement, which provides GBR with an option to earn a 70-per-cent interest in certain unpatented mining claims held by BTU located in the Kenora district of Ontario; and (iii) a subscription agreement pursuant to which GBR purchased 25 million common shares of BTU at a purchase price of five cents per common share.

Asset acquisition

The company entered into a purchase agreement with GBR, a wholly owned subsidiary of Kinross, for the purchase of certain unpatented mining claims located in the Kenora district of Ontario. The acquisition properties had a total area of 2,637 hectares and consisted of 39 boundary-cell mining claims and 76 single-cell mining claims located to the south of the Great Bear project as well as two multicell mining claims located to the north of the Great Bear project. BTU holds net smelter return (NSR) royalties from 1.5 per cent to 2.5 per cent on these properties as well as underlying royalty buyback rights.

The consideration payable by GBR pursuant to the acquisition was: (i) $1.55-million in cash, with $1.25-million due immediately on closing and an additional $300,000 due on the one-year anniversary of the closing date (received February, 2024); and (ii) GBR issued to the company a variable 1.5-per-cent to 2.5-per-cent NSR royalty on the acquisition properties such that each acquisition property will have a cumulative total 4-per-cent NSR royalty attached to it upon the grant of the royalty, once combined with the existing royalties payable over and in respect of the acquisition property. BTU will maintain any existing third party royalty buyback rights in respect of the acquisition properties.

The acquisition was an arm's-length transaction pursuant to the policies of the TSX Venture Exchange.

About the option agreement

The company entered into a property option agreement with GBR, pursuant to which GBR has been granted the right to acquire an undivided 70-per-cent interest in and to 757 mining claims (12 boundary-cell mining claims, three multicell mining claims and 742 single-cell mining claims) covering approximately 16,410 hectares of land, located in the Kenora district of Ontario.

Pursuant to the terms of the option agreement, GBR has the option to acquire the 70-per-cent interest in the optioned properties in consideration for completing cash payments or exploration expenditures on the optioned properties, being: (i) $2.7-million in expenditures, to be incurred by GBR on or before the date that is 36 months from the effective date of the option agreement; and (ii) a further $2-million of expenditures, to be incurred by GBR in its sole discretion within 48 months from the effective date of the option agreement.

In connection with a private placement in February, 2023, GBR acquired 25 million common shares. Pursuant to the private placement, GBR held an aggregate of 25 million common shares, representing approximately 17.5 per cent of the current issued and outstanding common shares on a non-diluted basis of the company.

About BTU Metals Corp.

BTU Metals is a junior mining exploration company focused on the Dixie Halo project, located in Red Lake, Ont., immediately adjacent to the Great Bear project. The company has no debt and no property obligations and maintains a cash balance of approximately $1.7-million.

We seek Safe Harbor.