Mr. Campbell Smyth reports

GRAFTON RESOURCES ANNOUNCES LETTER OF INTENT TO ACQUIRE SILVER ONE PROJECT IN CHILE

Grafton Resources has entered into a non-binding letter of intent (the LOI) with Asesorias e Inversiones Sol SpA (the vendor) pursuant to which the company proposes to acquire a direct 100-per-cent interest in the Silver One project located in Chile.

Highlights

• Potentially high-grade silver-copper veins as waste dump vein material averages 296 grams per tonne Ag (silver) and 2.6 per cent Cu (copper);
• Historic mining district hosts many Au-(gold)-Ag-Cu epithermal vein systems;
• Silver One project hosts an undrilled and open-ended mineralizing system.

Campbell Smyth, chairman, commented: "Silver One offers the opportunity to explore a high-grade silver-copper target that is uniquely well suited for development. The project is located in a well-established mining area and Silver One has the potential to be the next high-grade Ag-Cu deposit in this district.

"Grafton now has two ideally located projects in a premier mining jurisdiction. There is a global shortage of silver and copper assets with good grade, clean metallurgy, and simple geometry. We plan to drill Silver One in the second half of 2026 and are currently building up our local exploration team. Silver One is also accessed from the same logistical hub as the recently signed Alicahue copper project offering further logistical synergies."

Merlin Marr-Johnson, technical adviser, commented: "Silver grades of almost 300 g/t in the waste material are highly encouraging. The hope is that the primary material is even higher grade. The high tenor of the target, coupled with good access means that significant value can be created within a compact package."

Silver One project overview

Location

The Silver One project is centred on the San Lorenzo 1-18 concession located in the historic Au-Ag-Cu mining Pedernal district of the Petorca municipality, central Chile. The project is accessed via established gravel roads from Chincolco and Pedernales, with short private-road access to the site. Historic work was carried out by Eagle Rock Resources SpA under a lease agreement with SCM Cerro Pedernal Dos.

Background

The Silver One project is located in the region around Petorca which hosts nearly 90 ore bodies, mostly polymetallic veins, some copper veins and one copper breccia pipe. The area is characterized by epithermal low-sulphidation vein systems hosted by Cretaceous volcanic andesitic sequences (Camus et al., 1991) in the western foothills of the Andean Cordillera of central Chile.

The Silver One project targets silver-copper-bearing sulphide vein systems historically exploited by underground methods. The adit mouth is located at 332,252 E; 6,448,714 N (WGS 84, UTM Zone 19 South) Historic workings indicate the presence of structurally controlled mineralization hosted within volcanic and volcaniclastic sequences, with mineral assemblages consistent with Ag-Cu sulphide systems typical of the region. Work completed by Eagle Rock focused on integrating modern survey techniques with geological mapping and targeted sampling:

• High-resolution drone-based topographic survey, generating two-metre contour intervals and a 3-D surface model;
• Surface geological mapping identifying a volcanic-volcaniclastic stratigraphic sequence dominated by andesitic lavas, volcanic breccias and tuffs;
• Rehabilitation and lidar (light detection and ranging) survey of the Esperanza Adit (approximately 400 metres), enabling accurate 3-D modelling of underground access;
• Detailed underground geological mapping of the adit, identifying a vertically stacked sequence of grey to red andesites overlain by thick volcanic breccia and tuff units;
• Trenching and channel sampling of historic mine waste dumps to establish a proxy for grade where direct access to old stopes was not possible.

Geological interpretation and results

The underground mapping identifies that mineralized veins are hosted within grey volcanic breccias with reducing characteristics, interpreted as the favourable horizon for Ag-Cu sulphide deposition. The absence of surface exposure implies mineralization is blind and structurally controlled, potentially confined to a coherent zone with a probable southwest-northeast structural orientation.

A detailed evaluation of a historic waste dump combined trenching, systematic sampling, granulometric analysis, topographic surveying, 3-D modelling and volumetric estimation. Ten pits (one to three m deep) and 24 samples defined an estimated 8,120 tonnes of historic mine waste, with average grades of approximately 96 grams per tonne Ag and 0.80 per cent Cu, calculated using a loose bulk density of 1.43 grams/cubic centimetre. The location of the waste dump and associated samples is 332,245 E; 6,448,707 N (WGS 84, UTM zone 19 south).

The waste material was screened using a five cm mesh to obtain samples suitable for manual sorting. Vein material (silica-carbonate) was separated from host rock (andesite), and each fraction was sent to the laboratory for analysis as separate samples. The vein material showed sulphide mineralization dominated by tennantite-tetrahedrite (locally freibergite), chalcocite-covellite, chalcopyrite, galena and rare bornite. The veins include abundant barite and banded quartz, consistent with epithermal to mesothermal vein systems. A total of 13.85 kg of vein material was assayed at AAA Laboratories and returned an average grade of 296 g/t Ag and 2.6 per cent Cu.

Project potential and next steps

Although the historic workings are not fully accessible, the combination of underground geometry, favourable lithological hosts and multielement sulphide mineralization confirms the presence of an open-ended mineralizing system. Potential next steps include:

• Securing safe access to historic stopes and raises to directly sample in situ vein material;
• Targeted geophysical surveys (IP/resistivity) to define sulphide structures beneath cover;
• Focused drilling to test continuity, thickness, and grade of interpreted vein zones.

Transaction terms

Under the terms of the LOI, the company proposes to acquire the project in exchange for total deemed consideration of $820,000 comprising:

1. A cash payment of $100,000 to the vendor;
2. The issuance of 800,000 common shares in the capital of the company to the vendor at a deemed price of 90 cents per consideration share having an aggregate deemed value of $720,000. The shares issued will be subject to voluntary escrow provisions and will be released over 36 months.

The final structure of the proposed acquisition is subject to, among other things, the negotiation and execution of a definitive agreement, completion of satisfactory due diligence, and the satisfaction of customary closing conditions. There can be no assurance that a definitive agreement will be entered into or that the proposed acquisition will be completed.

The proposed acquisition is consistent with the company's strategy focused on the discovery and development of mineral assets in the Americas. Subject to closing, the company intends to advance the project through systematic technical review and disciplined exploration planning.

OTCQB symbol change

The company is also pleased to announced that its common shares will commence trading under its new OTC ticker symbol GFTFF, effective Jan. 20, 2026.

The change from the previous symbol PMSXF to GFTFF is part of the company's continuing efforts to align its U.S. market identity with its current corporate name and Canadian Securities Exchange ticker GFT. The company's Cusip number remain unchanged.

QA/QC (quality assurance/quality control) procedures

Eagle Rock followed robust QA/QC procedures. The aim was to characterize silver, copper and associated metal content of historic waste dump material through systematic channel and rock sampling. Channel samples were cut using hand tools to a consistent width (approximately 10 to 20 cm) and depth (approximately three to five cm). Material was collected continuously along the channel and placed directly into labelled sample bags. The rock chips were screened to be greater than five cm and samples are intended to be indicative, not representative of bulk grade. The fragments were separated into vein, wall rock and unmineralized host rock by hand, weighed by rock type and samples were assigned a unique sample ID at the time of collection. The samples were sealed in heavy-duty plastic sample bags, tagged internally and externally, and transported by company personnel to the certified, independent AAA Laboratory in Chile. After standard sample preparation at the laboratory, silver and base metals were analyzed using ICP-MS following four-acid digestion.

Qualified person

Gilberto Schubert (BSc, MSc, MBA, MSc, MinEc), a qualified person as defined by National Instrument 43-101 and an independent technical adviser to the company, has reviewed and approved the technical information provided in this news release, including the sampling, analytical and test data underlying the technical information contained in this news release. Specifically, the QP verified selected laboratory assay certificates against the reported rock samples.

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 mineral assets in the Americas. The company is committed to responsible exploration, strong community partnerships and generating shareholder value through disciplined project advancement.

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