Mr. Caleb Stroup reports

HEADWATER GOLD ANNOUNCES COMMENCEMENT OF CENTERRA-FUNDED DRILLING AT CRANE CREEK PROJECT, IDAHO

Centerra Gold Inc. has commenced drilling at Headwater Gold Inc.'s Crane Creek project in western Idaho. The drill program is being operated and fully financed by Centerra pursuant to the earn-in agreement announced on Dec. 3, 2025.

Highlights:

• Centerra-financed drilling under way: Approximately 3,000 metres of reverse circulation (RC) and core drilling have commenced, representing the first drill program under the Centerra earn-in partnership and the first drilling at the project since the 1990s.
• Meaningful initial investment: Approximately $1.7-million (U.S.) of exploration expenditures are planned toward Centerra's $2.5-million (U.S.) minimum commitment in 2026.
• Testing historical gold mineralization and new targets: Drilling is designed to follow-up on areas of shallow historical gold mineralization, test below outcropping gold-bearing veins and stepout along strike away from known mineralized zones. Historical drilling at Crane Creek includes intercepts such as 62.5 metres grading 1.21 grams per tonne Au (gold), including 8.14 g/t Au over 3.0 m in hole 96-24.
• Large underexplored epithermal system: The program follows Headwater's recent geological and geophysical work, which expanded the target footprint beyond the area of historic drilling and defined multiple new structural targets.

Caleb Stroup, president and chief executive officer of Headwater, states: "We are very pleased to see Centerra drilling this high-priority project. This program represents the first major test of the project under our earn-in partnership and is expected to account for approximately $1.7-million (U.S.) of partner-funded exploration toward Centerra's $2.5-million (U.S.) minimum commitment. Prior explorers identified gold mineralization at Crane Creek, including localized high-grade epithermal vein intercepts, but historical drilling was shallow and potential deeper epithermal vein targets were largely untested. The current program is designed to follow up shallow mineralization identified with historical drilling, test below known vein-controlled mineralization, and stepout along strike and between zones. This is exactly the kind of partnership we seek at Headwater: meaningful discovery exposure for shareholders, funded by a technically strong partner, while preserving capital for continued generative exploration."

2026 Crane Creek drill program

Centerra has commenced an approximate 3,000-metre drill program at Crane Creek, consisting of up to 15 RC (reverse circulation) holes and five diamond core holes. The program is designed to test multiple target areas generated from the integration of historical drilling, surface sampling, geologic mapping and recently completed geophysical surveys. The program is expected to represent approximately $1.7-million (U.S.) in exploration expenditures toward Centerra's $2.5-million (U.S.) minimum commitment under the earn-in agreement (Table 1).

The RC portion of the drill program is designed to test multiple prospective targets across the project, including areas of known historical mineralization, along-strike extensions and newly defined structural targets. As the first diamond core program at the project, the core holes are designed to verify historical intercepts and provide important geological information to better understand the geological setting, including the relationship between gold mineralization and the underlying basalt unit.

Historic drilling at Crane Creek was mainly completed between 1984 and 1996 and consisted predominantly of shallow RC drilling in areas of outcropping gold-bearing epithermal quartz veins. Historical drilling in these areas completed by several previous operators encountered broad zones of low-grade gold mineralization as well as localized high-grade vein intercepts such as 62.5 m grading 1.21 g/t Au, including 8.14 g/t Au over 3.0 m in hole 96-24 3 (Golconda Resources, 1996). Many historical drill holes were terminated shortly after intersecting an underlying basalt unit, leaving the potential for deeper, basalt-hosted, epithermal veins largely untested.

Recent work by Headwater has significantly expanded the target concept beyond the historically drilled area. Airborne magnetic and radiometric surveys, together with ground gravity data, define a broader alteration and structural footprint across the project, including a four-kilometre-by-two-kilometre potassium anomaly, interpreted as illite-adularia alteration, and multiple north-northwest-trending structural breaks interpreted as prospective fault-hosted vein targets (Headwater news release -- Sept. 8, 2025).

Centerra earn-in agreement

The Crane Creek drill program is being completed under the earn-in agreement announced Dec. 3, 2025. Centerra is the operator during the earn-in period and may earn up to a 70-per-cent interest in the project through staged exploration expenditures and technical milestones.

Centerra has committed to fund a minimum of $2.5-million (U.S.) in exploration expenditures within the first three years of the agreement. The current program is expected to represent approximately $1.7-million (U.S.) of this minimum commitment. The agreement provides a pathway for up to $25-million (U.S.) in partner-financed exploration expenditures while preserving meaningful long-term exposure for Headwater.

About the Crane Creek project

The Crane Creek project is located in western Idaho, approximately 18 kilometres northeast of the town of Weiser and 90 km northwest of Boise, with a paved county road less than one km from the southern property boundary. The project is fully permitted for drilling under a notice of intent with the Bureau of Land Management (BLM) and a plan of operation with the Idaho Department of Lands. Crane Creek comprises approximately 1,240 hectares, consisting of 123 unpatented federal mining claims on BLM land, a 640-acre state of Idaho minerals lease and a private lease.

The project encompasses an array of mineralized epithermal quartz veins within a broad gold and trace element geochemical anomaly and features characteristics of a well-preserved low-sulphidation epithermal system, including historical mercury workings, widespread opaline silica and chalcedonic quartz veins. This alteration cell is located approximately 8 km northwest along trend of the Nutmeg Mountain gold project owned by NevGold Corp. Historical drilling primarily tested shallow near-surface mineralization in two main areas of outcropping gold-bearing quartz veins, leaving the potential for high-grade epithermal veins along strike and at depth largely untested.

About Headwater Gold Inc.

Headwater Gold is a technically driven mineral exploration company focused on exploring for and discovering high-grade precious metal deposits in the Western United States. Headwater is actively exploring one of the world's most well-endowed, mining-friendly jurisdictions, with a goal of making world-class precious metal discoveries. The company has a large portfolio of epithermal vein exploration projects and a technical team with diverse experience in capital markets and major mining companies. Headwater is systematically drill testing several projects and has strategic earn-in agreements with OceanaGold Corp. on its TJ, Jake Creek and Hot Creek projects, Newmont Corp. on its Spring Peak and Lodestar projects and Centerra on its Crane Creek project. In August, 2022, and September, 2024, Newmont and Centerra acquired strategic equity interests in the company, further strengthening Headwater's exploration capabilities.

Qualified person:

The technical information contained in this news release has been reviewed and approved by Joshua Carron (SME Reg No. 042931540), a qualified person (QP) as defined in National Instrument 43-101 -- Standards of Disclosure for Mineral Projects. Mr. Carron is not independent, as he is the company's vice-president, exploration.

Historical drill results and mineralized intercepts disclosed herein are historical in nature and were completed by previous operators. A qualified person has not independently verified the historical drilling, sampling, quality control, collar locations, down-hole surveys or assay data underlying these results, and Headwater has not completed sufficient work to validate the historical results. Accordingly, the historical results should not be relied upon as current or verified exploration results. The company considers the historical information relevant for the purpose of identifying areas for follow-up exploration, but its reliability is uncertain because the original sampling methods, analytical procedures, laboratory certifications, chain of custody and quality control protocols are not known and therefore do not meet current industry standards. Reported intervals should be treated as down-hole lengths and true widths are unknown.

We seek Safe Harbor.