Mr. Robert Rohlfing reports

DESERT MOUNTAIN ENERGY SIGNS LOI FOR SNC BATTERY PLANT IN ROSWELL, NEW MEXICO

Desert Mountain Energy Corp. has signed a non-binding letter of intent (LOI) to form a joint venture to build and operate a sodium-nickel-chloride (SNC) battery manufacturing facility in Roswell in New Mexico. The proposed operation would utilize produced water from regional oil and gas wells as part of an environmentally responsible cooling and processing system designed to support both battery production and a planned artificial intelligence (AI) data centre complex.

Strategic use of produced water and integration with AI data centre

Under the contemplated structure, produced water from area operators would be treated and repurposed for cooling and processing needs, thereby significantly reducing the volume of water extracted from the aquifer, as well as lowering operating costs for smaller oil and gas producers. Desert Mountain Energy's own wells generate minimal produced water, but the company's processing expertise positions it to serve as a strategic solutions provider to neighboring operators.

The initiative also supports the company's plan to use its natural gas resources to generate local electricity for the produced water system and the adjacent AI data centre infrastructure, creating a vertically integrated and energy-efficient footprint.

Sodium, REE (rare earth element) and byproduct management

As part of the produced water treatment process, salts and certain critical REEs are extracted and separated:

• Sodium will be dried and utilized directly in the production of SNC battery units.
• Isolated REEs will be dried, sealed and shipped to qualified facilities for further refining.

This creates multiple value-added revenue streams while minimizing waste and maximizing the commercial usefulness of extracted materials.

About SNC battery technology

Sodium-nickel-chloride batteries are known for their stability, long life cycle and strong safety profile. Unlike lithium-ion systems, SNC batteries cannot burn or explode, making them well suited for grid support, industrial power systems and data centre applications. Altech Batteries Ltd., a global leader in the space, is currently constructing a $170-million (U.S.) SNC plant in Saxony, Germany, underscoring the technology's growing commercial relevance.

Altech's publicly available research notes several advantages for SNC chemistry, including the potential for alumina sourced from recycled specialty aircraft components -- supporting broader circular economy initiatives.

Economic benefits for Roswell and the state of New Mexico

The joint venture and associated AI infrastructure development are expected to create new job opportunities and diversify revenue sources for Chaves County and the State of New Mexico. Increased support services for smaller oil and gas operators -- including lower disposal costs and extended well life -- are expected to lead to higher production levels, which in turn increase tax contributions to local schools, counties and state programs.

The initiative aligns with local, state and federal programs offering incentives for energy transition manufacturing, critical materials management and advanced technology deployment, including elements referenced in yesterday's Genesis Mission Executive Order from the White House.

Next steps

The parties will now begin detailed due diligence, engineering evaluation and the development of a definitive joint venture agreement. Further updates will be provided as milestones are reached.

About Desert Mountain Energy Corp.

Desert Mountain Energy is a publicly traded resource company primarily focused on the exploration, development and production of helium, hydrogen and natural gas. The company is focused on helium extraction from different raw gas sources in an environmental and economic manner, supplying elements deemed critical to the renewable energy and high-technology industries.

We seek Safe Harbor.