Mr. Mark Tory reports

DEFENSE METALS SETTLES DEBT WITH HATCH THROUGH EQUITY

Defense Metals Corp. has entered into a shares-for-debt settlement agreement with Hatch Ltd. in connection with outstanding debt related to engineering services previously provided to the company.

Pursuant to the agreement, Defense Metals will settle an aggregate of $846,547.31 in outstanding payables owed to Hatch through the issuance of 5,290,920 common shares at a deemed price of 16 cents per share. In addition, the company will issue to Hatch 2,645,460 common share purchase warrants, representing one-half warrant for each settlement share. Each warrant will entitle Hatch to purchase one additional common share of the company at a price of 21 cents per share for a period of 36 months from the date of issuance.

Discussions with Hatch have revolved around pricing this agreement on the same terms as the company's previous raising as announced on May 21, 2025 (that was 15 cents with a half-warrant at an exercise price of 20 cents). However, given the share price appreciation, there are regulations that state a maximum discount of 25 per cent is allowed; therefore, the pricing agreed as above.

The settlement shares and warrants will be subject to a six-month hold period in accordance with the agreement.

As part of the transaction, Defense Metals and Hatch have also entered into a side letter agreement whereby Defense Metals has indicated its intention to engage Hatch to provide engineering and related services for the full feasibility study on the company's 100-per-cent-owned Wicheeda rare earth element project in British Columbia, subject to the parties reaching agreement on commercially acceptable terms. This side letter reflects the company's commitment to working with top-tier engineering partners as it progresses toward full project development.

Mark Tory, president and chief executive officer of Defense Metals, commented: "We are pleased to be strengthening our relationship with Hatch, a globally respected engineering firm. Their willingness to accept equity demonstrates their positive view of the Wicheeda project and confidence in its future. We look forward to continuing our collaboration as we move toward the next phase of technical studies."

The shares-for-debt transaction and issuance of warrants are subject to the final approval of the TSX Venture Exchange.

About Defense Metals Corp.

Defense Metals is focused on the development of its 100-per-cent-owned, 11,800-hectare (approximately 29,158 acres) Wicheeda rare earth element property that is located on the traditional territory of the McLeod Lake Indian Band in British Columbia, Canada.

The Wicheeda project, approximately 80 kilometres (approximately 50 miles) northeast of the city of Prince George, is readily accessible by a paved highway and all-weather gravel roads and is close to infrastructure, including hydro power transmission lines and gas pipelines. The nearby Canadian National Railway and major highways allow easy access to the port facilities at Prince Rupert, the closest major North American port to Asia. The company recently completed a preliminary feasibility study that demonstrated the robust economics of the project.

We seek Safe Harbor.