Mr. Campbell Smyth reports

GRAFTON RESOURCES ENTERS INTO DEFINITIVE OPTION AGREEMENT TO ACQUIRE 100% OF THE ALICAHUE COPPER-GOLD PROJECT IN CHILE

Grafton Resources Inc., through a wholly owned Chilean subsidiary, has entered into a definitive option agreement dated Dec. 16, 2025 (the subsidiary option agreement), with Asesorias e Inversiones Sol SpA (the vendor), an arm's-length vendor, pursuant to which the vendor has granted to the company an exclusive option to acquire a 100-per-cent interest in the Alicahue copper-gold project, located in the Valparaiso region of Chile. The project comprises 3,500 hectares of concessions at an average altitude of 1,700 metres. The project is located 140 kilometres by road to Santiago and 67 km from the coast. The subsidiary option agreement dated Dec. 11, 2025, together with a share consideration agreement dated Dec. 16, 2025, entered into between the company and the vendor supersede the framework agreement entered into between the company and the vendor that was previously announced in the company's press release dated Oct. 28, 2025.

Campbell Smyth, interim chief executive officer, chairman and a director of Grafton Resources, commented: "Completing the acquisition of Alicahue is the first step in building a high-value portfolio of gold and copper projects that can give shareholders both momentum and leverage to this metals cycle. We will continue to add Chilean copper and gold assets to Grafton as we believe both metals remain in a structural bull market and that Chile is among the most stable and mining-friendly jurisdictions worldwide."

Merlin Marr-Johnson, technical adviser to Grafton Resources, commented: "Alicahue offers Grafton a tremendous opportunity to explore several significant and newly identified copper and gold targets within one project area. The project lies in the southern projection of the same metallogenic belt of Chile that hosts large porphyries such as El Salvador, Escondida and Chuquicamata. The combination of geology and geochemistry points to the potential for a classic porphyry deposit at Alicahue. Ongoing mapping and sampling will be complemented by an airborne MMT geophysical survey in early 2026."

Option agreement terms

The option is structured with a five-year timeline, the first four years of which will be designated for exploration work, and the final year of which will be designated for the preparation of a technical report and payment of the option exercise payment.

The company is required to incur exploration expenditures of $4-million (U.S.) over the first four years (with no 12-month period seeing less than $500,000 (U.S.) in exploration expenditures).

Upon successful completion of the exploration expenditure commitment, the company is able to exercise the option by making an exercise payment of $3-million (U.S.).

Upon exercise of the option, the vendor will retain a 2.0-per-cent net smelter returns (NSR) royalty, and the company will have the option to repurchase one-half (1.0 per cent) of the NSR royalty for $5-million (U.S.).

The company will also pay a resource payment to the vendor on future resources defined on the project, with such resource payment to be $5.00 (U.S.) per tonne of contained copper equivalent metal using a 0.2-per-cent cut-off grade, based on measured, indicated and inferred resources as defined under a National Instrument 43-101-compliant mineral resource estimate as at the date of a construction decision.

The company will also make the following payments and share issuances as shown in the attached table.

Signing payment and finder's fee

In satisfaction of the signing payment obligations, the company has paid $1,000 (U.S.) to the vendor and issued 312,955 common shares in the capital of the company to the vendor at a deemed price of 44 cents per signing payment share.

The company will also issue 1,450,400 common shares in the capital of the company (representing a 7-per-cent finder's fee on the total value of the option, assuming full exercise) at a deemed price of 50 cents per finder share to a certain arm's-length finder in connection with the option agreement. The company has issued the first 500,000 finder shares, which became due upon signing of the option agreement. A further 500,000 finder shares will be issuable to the finder upon the completion of a maiden drill program on the project, and the last 450,400 finder shares will be issuable to the finder upon the exercise of the option.

The signing payment shares, all additional common shares to be issued to the vendor under the option agreement, and all finder shares will be subject to a four-month-and-a-day hold period pursuant to Canadian securities laws and the policies of the Canadian Securities Exchange.

Correction to news release dated Nov. 27, 2025

The company announces a correction to the finder's fee figures disclosed in its news release dated Nov. 27, 2025, relating to the closing of its non-brokered private placement. The company paid $137,784 in cash, and issued 275,568 non-transferable finders' warrants to certain arm's-length finders. Each November finder's warrant will entitle the holder to purchase one common share of the company at a purchase price of 80 cents per share until Nov. 27, 2027. The company will post an amended Form 9 -- Notice of Issuance or Proposed Issuance of Listed Securities on the exchange's website in order to reflect this correction.

About Grafton Resources Inc.

Grafton Resources is a Canadian exploration company listed on the Canadian Securities Exchange (CSE), focused on the discovery and development of copper and gold assets in the Americas. The company is committed to responsible exploration, strong community partnerships and generating shareholder value through disciplined project advancement.

We seek Safe Harbor.