Mr. Brandon Bonifacio reports

CAVALRY CAPITAL CORP. ANNOUNCES LETTER OF INTENT FOR PROPOSED BUSINESS COMBINATION WITH ADVANCED ENERGY FUELS INC.

Cavalry Capital Corp. has entered into a letter of intent (LOI) dated May 15, 2025, regarding a planned business combination with Advanced Energy Fuels Inc. It is expected that, upon completion of the transaction, the combined entity will meet the listing requirements for a Tier 2 mining issuer under the policies of the TSX Venture Exchange. The transaction is intended to constitute the qualifying transaction of Cavalry, as such a term is defined in TSX-V Policy 2.4 -- Capital Pool Companies.

General information on Advanced Energy

Advanced Energy is a private company that was incorporated under the laws of Delaware on July 17, 2024.

Advanced Energy is a battery materials company currently active in Australia and the United States, specifically at the South Woodie Woodie manganese project in Western Australia, and the Fluorite Ridge project in New Mexico, United States. Advanced will, subject to the completion of the transaction, continue to be active in Western Australia as it advances the South Woodie Woodie manganese project. Non-arm's-length parties (as defined in the policies of the TSX-V) of the company do not hold any direct or indirect beneficial interest in Advanced Energy.

Advanced Energy holds an option to acquire 100 per cent of the South Woodie Woodie manganese project, located in the Pilbara region. The SWWM project has undergone extensive technical evaluation, including two Joint Ore Reserves committee-compliant (2012 edition) mineral resource reports, an independent mine study, and advanced processing development focused on flowsheet optimization and battery precursor testwork. Advanced Energy will exercise the option and complete its acquisition of the SWWM project as a condition to the completion of the transaction. Subject to the completion of the transaction, the resulting issuer will continue to be active in Western Australia as it advances the SWWM project, as well as in New Mexico through its Fluorite Ridge project, which is non-material.

Advanced Energy has appointed an independent qualified person to undertake a conversion of the current JORC-compliant mineral resource report in respect of the SWWM project to a National Instrument 43-101-compliant report.

Immediately prior to the completion of the transaction, Advanced Energy will have 18,428,271 common shares issued and outstanding, and no other securities will be issued or outstanding.

Advanced Energy has an experienced board and leadership team with global multidisciplinary experience, headed by executive director Gary Lewis and technical director John Levings. Mr. Lewis and Mr. Levings have worked together since 2008, when they were respectively managing director and technical director of Australian Securities Exchange-listed Robust Resources Ltd. Since that time Mr. Lewis has been working in the critical-minerals sector, culminating in the listing of his private company, Electric Metals (USA) Ltd., in 2021. Mr. Levings is an accomplished economic geologist who has led teams globally into major discoveries, project acquisitions and developments.

Capitalization of Cavalry

Cavalry currently has 6,462,500 common shares outstanding and securities exercisable or exchangeable into an additional 1,010,188 Cavalry shares, being: (i) 613,938 incentive stock options exercisable at a price of five cents per Cavalry share; and (ii) 396,250 agents' warrants exercisable at 10 cents per Cavalry share.

Terms of the transaction

The transaction is expected to be completed by way of a three-cornered amalgamation, share purchase, share exchange or alternative transaction to be determined with input from the legal and tax advisers to each of Cavalry and Advanced Energy, which will result in Advanced Energy becoming a wholly owned subsidiary of Cavalry.

Upon the satisfaction or waiver of the conditions set out in the definitive transaction agreement to be entered into by Cavalry and Advanced Energy, the following, among other things, will be completed in connection with the transaction:

1. Cavalry will complete a consolidation of its outstanding share capital on the basis of 1.66 preconsolidation Cavalry shares for each postconsolidation Cavalry share. After the consolidation, Cavalry will have 3,893,072 Cavalry shares, 369,842 options and 238,705 warrants outstanding.
2. Cavalry will issue 18,428,271 postconsolidation Cavalry shares to the former holders of Advanced common shares.
3. Cavalry will complete a private placement of at least 10 million units at 25 cents per unit for gross proceeds of at least $2.5-million. Each unit will comprise one postconsolidation Cavalry share and one common share purchase warrant. Each Cavalry warrant will be exercisable for a period of two years to purchase one postconsolidation Cavalry share at an exercise price of 35 cents per share. The proceeds of the private placement will be used to advance the South Woodie Woodie manganese project, with the intention of completing a prefeasibility study (PFS) on the project.
4. Advanced Energy will exercise the option to acquire a 100-per-cent interest in the SWWM project by issuing to the vendor the higher of six million postconsolidation Cavalry shares or that number of postconsolidation Cavalry shares which, when added to the two million Cavalry shares to be issued to the vendor as an existing holder of Advanced Energy common shares, is equal to not less than 20 per cent of the total postconsolidation Cavalry shares outstanding on a posttransaction basis.
5. The management and board of directors of the resulting issuer will comprise three nominees from Advanced Energy and two nominees from Cavalry. The management and board of directors will be announced in further press releases.
6. Cavalry will change its name to such name as determined by Advanced Energy in its sole discretion, in compliance with applicable law and as may be acceptable to the TSX-V.

Following the execution of a definitive agreement, a more comprehensive news release will be issued by Cavalry disclosing further details of the transaction, including financial information respecting Advanced Energy and details of insiders and proposed directors and officers of the resulting issuer.

No finders' fees are payable in connection with the transaction.

Conditions of the transaction

The completion of the transaction is subject to the satisfaction of customary closing conditions, including: (i) the satisfactory completion of due diligence by each of Cavalry and Advanced Energy; (ii) entry into the definitive agreement; (iii) receipt of all required approvals and consents relating to the transaction, including, without limitation, any required approvals of the shareholders of Cavalry and Advanced Energy, required approval of the TSX-V and other approvals under applicable corporate or securities laws; (iv) completion of the private placement; (vi) completion of the SWWM acquisition; and (v) the TSX-V's approval for listing the shares of the resulting issuer.

Sponsorship of transaction

Sponsorship of a qualifying transaction of a capital pool company is required by the TSX-V, unless exempt in accordance with the policies of the TSX-V. Cavalry intends to apply for such an exemption.

Trading halt

Trading in the securities of Cavalry will be halted until the completion of the transaction.

Technical information in this press release regarding the mineral projects of Advanced Energy was reviewed and approved by John Levings, BSc, FAusIMM, a fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM), technical director of Advanced Energy, a qualified person as defined in NI 43-101.

All information in this press release relating to Advanced Energy has been provided by Advanced Energy and is the sole responsibility of Advanced Energy.

We seek Safe Harbor.