Ms. Luisa Moreno reports

GRAPHANO ALERTS INVESTORS ON WARRANTS AND PROVIDES CORPORATE UPDATE

Graphano Energy Ltd. has provided a corporate update on warrants and project development.

Confirmation of date extension of warrants and exercise price of warrants

Exercise price

The company wishes to remind the holders of those common share purchase warrants issued Aug. 27, 2021, pursuant to the conversion of the subscription receipts issued Dec. 22, 2020, and April 19, 2021, respectively, that the exercise price per warrant into a common share in the capital of the company is 52 cents.

As background, each subscription receipt automatically converted on Aug. 27, 2021, into the underlying securities of (a) one share, and (b) one common share purchase warrant exercisable until Aug. 27, 2023, at eight cents into an additional share.

As disclosed in the company's news release of Sept. 2, 2021, a consolidation of the company's then outstanding share capital was completed just prior to the listing of the company's common shares on the TSX Venture Exchange on the basis of one postconsolidation common share for every 6.5 preconsolidation common shares. All of the outstanding securities of the company at such time were adjusted accordingly resulting in the exercise price of each warrant into a share being adjusted from the preconsolidation exercise price of eight cents to a postconsolidation exercise price of 52 cents. The initial listing price was also amended from five cents to 32.5 cents.

Expiration date extension

The holders of these warrants are further reminded that, as previously announced in the company's news release dated April 5, 2023, the expiration date of the warrants was extended by 24 months from Aug. 27, 2023, to now expire on Aug. 27, 2025. All other terms of the warrants, including the postconsolidation exercise price, remained the same. Therefore, each warrant entitles the holder thereof to acquire one share at a price of 52 cents until Aug. 27, 2025.

Investors are alerted that the market price of the shares is significantly depressed relative to the initial trading price. Shares are currently trading below cash per share in the company's treasury and below the exercise price of the warrant instruments. The junior resource market is currently significantly depressed and unpredictable. The company notes that the S&P/TSX Venture Composite Index is currently little more than half of its mid-February, 2021, value and less than one-fifth of its value in April, 2007.

Corporate update

Following the completion of phase II drilling at the company's graphite projects, Lac Aux Bouleaux (LAB) and Standard, the company has engaged qualified engineering firms to determine a timely path to production:

• Mercator Geological Services, a leading Canadian firm on resource estimation, was engaged by the company to help design future drilling programs and to prepare a resource estimate for the LAB and Standard projects.
• WSP Canada Inc. was engaged to perform an analysis of the permitting requirements to fast-track the development of the company's LAB and Standard projects, assuming an initial lower-production quarry model.
• Metallurgical testing, essential for the commissioning of a preliminary economic assessment planned for 2024, is expected to commence this month (August, 2023).
• Strategic partnerships -- the company has been approached by mining companies and end-users, which recognize the near-term production potential of the company, for possible collaborations and is considering all options with the aim of maximizing shareholder value.
• Financing -- the company has is in a good cash position to advance its projects to preliminary assessment and will seek to avoid raising equity at current prices, which it considers to be unduly depressed and unattractive to issue equity at.

Exploration work

Graphano owns a 100-per-cent interest in four graphite properties, all of which are within trucking distance of the LAB mine region which supports the company's resource consolidation strategy to feed a centralized processing plant at LAB.

The company is currently designing its next drilling programs with the support of Mercator Geological Services and with the aim of defining a resource that could be exploited in the near term to fulfill the coming demand for electric vehicle batteries that are planned for production in North America by 2026.

To date, 71 drill holes have been completed at the LAB and Standard projects for a total of 5,593 metres.

At the LAB project, drilling on three separate mineralized trends (zones 1, 3 and the historical Orrwell zone) has delineated substantial near-surface graphite mineralization ranging from one metre to 14 metres in thickness and which remains open for resource expansion. Collectively, these mineralized trends at LAB are several kilometres in length and hold significant upside potential. Highlight drill results included 6.26 per cent graphitic carbon (Cg) over 13.7 metres and 9.09 per cent Cg over eight m.

The LAB project exploration drilling to date suggests that the relatively high-grade LAB graphite horizons are locally folded and structurally thickened which can enhance the potential economics of the mineralization. This is similar to the Lac des Iles (LDI) deposit that has been mined for over 30 years and is located immediately adjacent to Graphano's LAB property.

At the Standard project, recent drilling, comprising 16 drill holes totalling 1,110 metres, and trenching programs have intersected very significant graphite mineralization and successfully discovered three major zones of mineralization. These zones have been tested from surface to a maximum vertical depth of approximately 60 metres locally and remain open in all directions for further expansion. The mineralized zones have an interpreted combined length of more than 1,300 metres.

Qualified persons

The technical content disclosed in this press release was reviewed and approved by Roger Dahn, BSc, PGeo, a director of the company and a qualified person as defined in National Instrument 43-101 -- Standards of Disclosure for Mineral Projects, who has provided the technical information in this press release, and by Martin Ethier, Geo (No. 1520), who is a member of the Order of Geologists of Quebec and also a qualified person under NI 43-101.

About Graphano Energy Ltd.

Graphano Energy is an exploration and development company that is focused on evaluating, acquiring and developing energy metals resources from exploration to production.

We seek Safe Harbor.