Mr. Garrett Ainsworth reports

DISTRICT TO CONSOLIDATE 100% OF THE VIKEN ENERGY METALS DEPOSIT IN SWEDEN, WHICH CONTAINS AN HISTORICAL INFERRED RESOURCE OF 1.15 BILLION POUNDS OF U3O8

District Metals Corp. has entered into a definitive asset purchase agreement with an arm's-length vendor to acquire the remaining four mineral licences covering the Viken energy metals deposit located in Jamtland county, central Sweden, that the company did not already control. As a result, subject to closing, the company now controls 100 per cent of the mineral licences comprising the Viken deposit. The Viken deposit is the largest undeveloped Alum shale uranium-vanadium-potash-molybdenum-nickel-copper-zinc deposit in Sweden, and amongst the largest deposits based on total historic mineral resources (see below historical mineral resource disclosure) of uranium and vanadium in the world.

Highlights:

• The four mineral licences to be acquired are in good standing until late 2025, and comprise Norra Leden, Norr Viken, Lill Viken and Storviken, which have increased the area of the company's Viken property from 9,367 hectares (ha) to 10,812 ha.
• The Norra Leden, Norr Viken and Lill Viken mineral licences cover the southeast and east areas of the Viken deposit that remain open to the southeast based on historic drill results.
• The Storviken mineral licence covers the southwest corner of the Viken deposit that remains open to the south and west based on historic drill results.
• There is currently a moratorium on uranium mining and exploration that was imposed in 2018. The Swedish government has indicated a positive stance on re-evaluating and lifting the moratorium.

Garrett Ainsworth, chief executive officer of District, commented: "The consolidation of 100 per cent of the Viken energy metals deposit into District is an exciting event for the company, shareholders and stakeholders. The Alum shales in Sweden include critical energy metals for the green energy transition that include uranium, vanadium, nickel, molybdenum, copper, zinc and rare earth elements. Alum shales also present potential to produce significant potash, which would be of great benefit within the agriculturally dominant Jamtland county.

"The timing of this acquisition is right as the price of uranium continues to rise, and political leaders in Sweden continue to announce their positive stance on potentially lifting the moratorium on exploring for, and mining, uranium."

The purchase agreement

Pursuant to the purchase agreement, District will acquire the Norra Leden, Norr Viken, Lill Viken and Storviken mineral licences upon the following principal terms:

• $50,000 cash payable to the vendor on closing;
• $50,000 cash payable to the vendor within 30 days following the moratorium on uranium exploration and mining in Sweden being lifted;
• One million District shares to be issued to the vendor on closing;
• 3.5 million District shares to be issued to the vendor within 30 days following the moratorium on uranium exploration and mining in Sweden being lifted. These District shares will be subject to a voluntary lock-up pursuant to which 500,000 will be released after four months after issuance, 500,000 will be released after six months after issuance, one million will be released after 12 months after issuance, one million will be released after 18 months after issuance and 500,000 will be released 24 months after issuance;
• A 2-per-cent net smelter return (NSR) royalty to be granted to the vendor on closing that can be bought back in its entirety at any time for a value of $8-million where the first 1-per-cent NSR royalty may be purchased for $2-million.

Closing of the purchase agreement remains subject to TSX Venture Exchange approval.

The uranium-vanadium Viken deposit

The Viken deposit is situated in the province of Jamtland, approximately 570 kilometres northwest of Stockholm, Sweden. Infrastructure is well developed in the area with daily air service, as well as rail and truck freight services. Electrical power and modern communications are also readily available in the area.

The Geological Survey of Sweden (SGU) carried out work on the Alum shales from 1977 to 1978 and drilled approximately 19 holes within and in the vicinity of the Viken deposit. In 2005, Continental Precious Minerals Inc. (CPM) purchased mineral licences that covered prospective Alum shales where CPM drilled 26,293 metres in 133 holes from 2006 to 2008 to delineate the Viken deposit.

CPM retained P&E Mining Consultants Inc. to carry out a mineral resource estimate and preliminary economic assessment in 2010 that resulted in the historical mineral resource estimate noted herein.

In 2012, a bio-heap leach scenario was evaluated, and P&E Mining Consultants was retained again to conduct an updated mineral resource estimate and preliminary economic assessment on the Viken deposit with the historical estimate noted herein.

The categories of mineral resources were classified under the previous definition standards and do no match the current definition standards in National Instrument 43-101.

Block grades were estimated using ordinary kriging of capped composite samples. Only blocks wholly or partially within the mineralized shale domain were estimated, and between six and 15 samples from two or more drill holes within 660 m of the block centroid were used for estimation. A small area in the southern portion of the deposit with an average drill hole spacing of approximately 120 m has been classified as indicated.

An internal break-even cut-off grade of $11 (U.S.)/tonne was used in reporting this historical estimate.

The Viken deposit is a polymetallic shale resource contained within the Cambrian Viken shale which regionally is referred to as the Alum shale. The Alum shale is enriched in metals such as vanadium, uranium, nickel, copper, zinc and molybdenum. It occurs over a significant area in Sweden and is locally valued as a bituminous shale with recoverable hydrocarbons. The Alum shale is regionally extensive in Sweden.

The stratigraphy across the Viken mineral licence application consists of Upper Middle- and Upper Cambrian-age Alum shale occurring as both in situ and fault detached blocks, with the latter having greater potential for economic mineralization due to imbrication of mineralized blocks. The Alum shale is mostly exposed at surface and is underlain by Proterozoic granites and gneisses thrust eastward over Archean granitic basement rocks. The thickness of the Alum shale host rock has been tectonically thickened from 20 to 30 m by thrusting and folding during the Silurian to approximately 180 m.

Mineralization of potential economic significance is hosted in Middle and Upper Cambrian Alum shale, with the Upper Cambrian-age strata more enriched in vanadium and uranium than the Middle Cambrian. Vanadium occurs within the lattice of a mica mineral named roscoelite. Uranium values are predominantly associated with submicron-scale uraninite crystals. Nickel, molybdenum, copper and zinc are present as sulphides.

Technical information

All scientific and technical information in this news release has been prepared by, or approved by, Mr. Ainsworth, PGeo, president and CEO of the company. Mr. Ainsworth is a qualified person for the purposes of NI 43-101.

Drilling data disclosed in this news release relate to historical drilling results. District has not undertaken any independent investigation of the sampling, nor has it independently analyzed the results of the historical exploration work in order to verify the results. District considers these historical drill results relevant as the company is using these data as a guide to plan exploration programs. The company's current and future exploration work includes verification of the historical data through drilling.

About District Metals Corp.

District Metals is led by industry professionals with a record of success in the mining industry. The company's mandate is to seek out, explore and develop prospective mineral properties through a disciplined science-based approach to create shareholder value and benefit other stakeholders.

District is a polymetallic exploration and development company focused on the Viken and Tomtebo properties in Sweden. The Viken property covers 100 per cent of the uranium-vanadium Viken deposit, which is an asset with substantial exploration and development expenditures that resulted in the definition of large historic polymetallic resource estimates in 2010 and 2014. The Viken deposit is amongst the largest deposits by total historic mineral resources of uranium and vanadium in the world.

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