Mr. Adrian Smith reports

FIRST ATLANTIC NICKEL ACQUIRES OPHIOLITE-X PROJECT TARGETING WHITE AND ORANGE GEOLOGIC HYDROGEN, CARBON CAPTURE, AND CRITICAL MINERALS IN WESTERN NEWFOUNDLAND

First Atlantic Nickel Corp. has entered into agreements to acquire a 100-per-cent interest in 18 mineral licences comprising 500 mineral claims (covering 12,500 hectares, or 125 square kilometres) within the Blow Me Down and Lewis Hills massifs in the Bay of Islands ophiolite complex (BOIC) in western Newfoundland. The company has branded this strategic land position as the Ophiolite-X project, recognizing its multicommodity potential spanning geologic (natural and stimulated) hydrogen, carbon capture and storage, awaruite nickel-iron-cobalt alloy mineralization, chromite, cobalt, copper, and platinum group elements (PGEs). Peer-reviewed research by Memorial University has calculated theoretical CO2 (carbon dioxide) storage capacity for the entire BOIC equivalent to more than 13 years of global emissions, while natural springs within the complex discharge dissolved hydrogen generated through active serpentinization. This process is of such scientific significance that NASA (National Aeronautics and Space Administration) researchers have identified the Tablelands massif in the BOIC as a Mars analogue site for studying serpentinizing environments.

The BOIC comprises four large-scale ophiolite massifs, Table Mountain (Tablelands), North Arm Mountain, Blow Me Down Mountain, and Lewis Hills, representing one of the world's best preserved and most complete ophiolite sequences. A recent study with funding from the Ministere de l'Economie, de l'Innovation et de l'Energie (MEIE) of Quebec, evaluating natural hydrogen potential across Quebec (Sejourne et al., 2024), noted that the potential for natural hydrogen in Southern Quebec is not necessarily limited to these areas. Key areas of interest include: (1) ophiolite complexes, which are correlative with the Bay of Islands complex in Newfoundland, where Szponar et al. (2013) sampled strongly alkaline and highly reducing water sources containing dissolved hydrogen.

In the Stanford University study techno-economic analysis of natural and stimulated geological hydrogen (Mathur et al., 2024), researchers concluded that, "While both natural and stimulated geological hydrogen present viable options for contributing to a sustainable energy future, practical considerations such as resource availability, production control and scalability make SGH a particularly attractive option for long-term hydrogen production, especially when co-located with demand centres." The study estimates production costs of approximately 54 cents per kilogram for natural geological hydrogen and 92 cents per kilogram for stimulated geological hydrogen, both below the U.S. Department of Energy's $1-per-kilogram target.

Key highlights:

1. Optimal geological hydrogen source rock: A 2024 study, with funding from the government of Quebec, evaluating 27 potential natural hydrogen source rocks, identified ophiolite complexes as the first key area of interest for geologic hydrogen exploration, with the BOIC as the reference analogue. Documented occurrences include strongly alkaline and highly reducing water sources containing dissolved hydrogen, positioning the BOIC as the type locality for hydrogen-prospective ophiolites in Eastern Canada.
2. Active geologic hydrogen generation: Active serpentinization within the BOIC produces dissolved hydrogen (H2) in ultrabasic springs, where highly reducing conditions and pH values up to 12.3 are conducive to continuing abiotic natural hydrogen production.
3. Bulqiza chromite mine hydrogen discovery analogue: Historic podiform chromite mineralization at Blow Me Down (32 to 40 per cent Cr2O3, mined in 1918) and Springers Hill (up to 53 per cent Cr2O3 in harzburgite) occur within serpentinized dunite-harzburgite sequences similar to Albania's Bulqiza mine in the Mirdita ophiolite, where chromite (33 to 54 per cent Cr2O3) is hosted in serpentinized harzburgite-dunite. A 2024 Science publication documented hydrogen with a purity of 84 per cent venting at an estimated 200 tonnes per year from Bulqiza, one of the largest flows ever recorded, and noted that places with similar geology should be good targets for finding other natural sources of hydrogen.
4. Samail ophiolite stimulated hydrogen analogue: The BOIC shares similar geological characteristics with Oman's Samail ophiolite, including serpentinized peridotite sequences, brucite-bearing alteration assemblages and hyperalkaline, hydrogen-producing springs. In 2023, Eden GeoPower signed the world's first agreement with Oman's Ministry of Energy and Minerals to pilot stimulated geological hydrogen production in the Samail ophiolite, positioning ophiolite complexes as optimal targets for both natural hydrogen exploration and stimulated production.
5. CO2 capture industrialization potential: Memorial University researchers conclude that, by injecting CO2-enriched waters into the subsurface, this process could likely be industrialized and require little energy input beyond drilling and pumping waters into the subsurface.
6. Massive carbon capture capacity: Research by Memorial University on the project calculated a theoretical total CO2 storage capacity of 5.1 multiplied by 10 to the power of 11 tonnes for the entire BOIC, equivalent to more than 13 years of global CO2 emissions (based on 2022 global emissions of 36.8 gigatonnes) and over 700 times Canada's annual emissions. Even 1 per cent carbonation could account for more than seven years of Canada's national CO2 output.
7. Most efficient carbon capture mineral: Brucite formed during serpentinization exhibits the highest CO2 reactivity among ultramafic alteration products, requiring only approximately 2.5 tonnes of mineral to sequester one tonne of CO2, compared with approximately four tonnes of forsterite, approximately six tonnes of serpentine and greater than 10 tonnes of basaltic glass. This positions brucite-bearing serpentinites as optimal targets for carbon capture operations.
8. Awaruite (NiFe) perspective environment: Hydrogen is a required precursor for the formation of awaruite nickel (NiFe), a natural nickel alloy that commonly contains cobalt. The highly reducing conditions created by serpentinization generate the hydrogen needed for awaruite to form, providing direct mineralogical evidence of hydrogen-rich conditions.

Summary of the agreements

The company entered into three separate agreements with arm's-length parties on Dec. 3 and Dec. 4, 2025, to strategically expand its mineral holdings within the BOIC.

Pursuant to the first agreement, the company will acquire a 100-per-cent undivided interest in two mining licences comprising 26 mineral claims. Consideration is the issuance of 260,000 common shares of the company. The claims are subject to a 2.5-per-cent net smelter return (NSR) royalty in favour of arm's-length royalty holders, of which the company may repurchase up to 1.5 per cent for $1-million at any time prior to commercial production, leaving a 1.0-per-cent NSR royalty thereafter. Pursuant to the second agreement, the company will acquire a 100-per-cent undivided interest in 13 mining licences comprising 432 mineral claims. Consideration is the issuance of an aggregate of 3.8 million common shares of the company. The claims are subject to a 2.0-per-cent NSR royalty, of which the company may repurchase 1.0 per cent for $1-million prior to commercial production, leaving a 1.0-per-cent-NSR royalty thereafter. Pursuant to the third agreement, the company will acquire a 100-per-cent undivided interest in three mining licences comprising 42 mineral claims. Consideration is the issuance of an aggregate of 650,000 common shares of the company. The claims are subject to a 2.0-per-cent NSR royalty, of which the company may repurchase 1.0 per cent for $1-million prior to commercial production, leaving a 1.0-per-cent NSR royalty thereafter. Closing of each agreement is subject to customary conditions, including receipt of all required regulatory approvals, including TSX Venture Exchange acceptance. All shares issued in connection with the agreements will be subject to a statutory hold period of four months and one day from the date of issuance, in accordance with Canadian securities laws and TSX-V policies. There were no finders' fees payable in connection with the agreements.

Investor information

The company's common shares trade on the TSX-V under the symbol FAN and the American OTCQB exchange under the symbol FANCF and on several German exchanges, including Frankfurt and Tradegate, under the symbol P21.

Disclosure

Adrian Smith, PGeo, a director and the chief executive officer of the company, is a qualified person as defined by National Instrument 43-101. The qualified person is a member in good standing of the Professional Engineers and Geoscientists Newfoundland and Labrador (PEGNL) and is a registered professional geoscientist (PGeo). Mr. Smith has reviewed and approved the technical information disclosed herein.

The company has not independently verified the historic samples reported in this release but has received data from the previous property owners and from the government of Newfoundland and Labrador's on-line database.

About First Atlantic Nickel Corp.

First Atlantic Nickel is a critical mineral exploration company in Newfoundland and Labrador developing the Pipestone XL nickel alloy project. The project spans the entire 30-kilometre Pipestone ophiolite complex, where multiple zones, including RPM, Super Gulp, Atlantic Lake and Chrome Pond, contain awaruite (NiFe), a naturally occurring magnetic nickel-iron-cobalt alloy of approximately 75 per cent nickel with no sulphur and no sulphides, along with secondary chromium mineralization. Awaruite's sulphur-free composition removes acid mine drainage (AMD) risks, while its unique magnetic properties enable processing through magnetic separation, eliminating the electricity requirements, emissions and environmental impacts of conventional smelting, roasting or high-pressure acid leaching while reducing dependence on overseas nickel processing infrastructure.

The U.S. Geological Survey recognized awaruite's strategic importance in its 2012 Annual Report on Nickel, noting that these deposits may help alleviate prolonged nickel concentrate shortages since the natural alloy is much easier to concentrate than typical nickel sulphides. The Pipestone XL nickel alloy project is located near existing infrastructure with year-round road access and proximity to hydroelectric power. These features provide favourable logistics for exploration and future development, strengthening First Atlantic's role to establish a secure and reliable source of North American nickel production for the stainless steel, electric vehicle, aerospace and defence industries. This mission gained importance when the United States added nickel to its critical minerals list in 2022, recognizing it as a non-fuel mineral essential to economic and national security with a supply chain vulnerable to disruption.

We seek Safe Harbor.