Mr. Caleb Stroup reports

HEADWATER GOLD COMMENCES DRILLING ON MAHOGANY PROJECT

Headwater Gold Inc. has commenced an up to 2,000-metre (m) drill program at the Mahogany project in Oregon and Idaho, to be wholly financed by Newcrest Mining Ltd. pursuant to the option and earn-in agreement announced on Aug. 16, 2022. The program is designed to follow up on Headwater's 2021 drill results which intercepted 1.47 grams per tonne gold over 12.25 m including 9.37 g/t Au over 0.73 m (see Headwater news release dated Jan. 27, 2022).

Highlights:

• Approximately 2,000 m of drilling is currently planned, utilizing two rigs and a combination of reverse circulation and core drilling;
• Mahogany is located along the Oregon-Idaho border, approximately 15 kilometres southeast of Headwater's Katey project and approximately 20 km northwest of Integra Resources' DeLamar mine complex.
• The drill program is fully financed by Newcrest through the option and earn-in transaction announced Aug. 16, 2022;
• The goals of the drill program are to:
  • Target the source of high-grade vein material within the mineralized Main Ridge fault, which returned up to 170.0 g/t Au from surface sampling;
  • Test high-grade epithermal vein targets at depth along the Main Ridge fault below Headwater's 2021 drilling which intercepted 1.47 g/t Au over 12.25 m including 9.37 g/t Au over 0.73 m;
  • Drilling will test two hydrothermal vent breccias which outcrop and include clasts of sinter and quartz vein fragments, and have no known drilling at depths greater than 50 m.

Caleb Stroup, the president and chief executive officer of the company, states: "We are very excited to begin a busy year of drilling with the Mahogany follow-up drill program. Results from our previous drilling campaign, which was limited in scale, identified several positive indicators of epithermal veining, including fault-hosted banded quartz veins and silica-cemented breccias with gold values up to 9.37 g/t Au. Due to the shallow nature of all previous drilling, we believe the true potential remains untested at depth and the focus of this year's drilling will be to intersect the prospective feeder structures at Mahogany at depths of between 150 m and 250 m. Additionally, the Vent breccia area is a new drill target for this year. Headwater geologists interpret the breccias exposed at the surface to be the surface manifestations of a high-energy feeder structure with untested vein potential at depth."

2023 drill program

The 2023 drill program is expected to consist of up to 2,000 m to test two target areas.

Main Ridge fault target: Drilling will target the source of high-grade vein material within the Main Ridge fault, which has yielded up to 170.0 g/t Au from surface sampling and 1.47 g/t Au over 12.25 m in drilling, including 9.37 g/t Au over 0.73 m. The current drill program will test depths of approximately 200 m to 250 m along the Main Ridge fault and at orientations identified during the company's initial oriented core program. Drill targeting also leverages results from a controlled-source audio-frequency magnetotelluric (CSAMT) resistivity survey totalling 11.3 line kilometres completed by Headwater in 2022.

Vent breccia target: Drilling will target vein-style mineralization in feeder structures inferred from geology and new CSAMT resistivity data beneath intensely silicified hydrothermal breccias containing silica sinter and quartz vein fragments. Results from the company's CSAMT survey support the existence of a major northeasterly structure and associated clay alteration envelope surrounding the outcrop exposures of hydrothermal breccia.

Shallow historic drilling and trenching were completed on Breccia Hill by Manville Exploration in the 1980s, but no known drilling exceeded depths of 50 m.

Headwater plans to test for high-grade epithermal veins in an inferred boiling horizon approximately 150 m to 225 m beneath the vent breccias.

About the Mahogany project

The Mahogany project is located in southeastern Oregon, 20 km northwest of Integra Resources' DeLamar deposit. Surface alteration at Mahogany is typical of a high-level epithermal system, including silica sinter and adularia within a broader zone of argillic alteration.

Headwater's initial drill program at Mahogany, completed in late 2021, consisted of five diamond core drill holes totalling 810 metres (see Headwater news release dated Jan. 27, 2022). Drilling confirmed the presence of structurally controlled high-grade gold zones, including a drill intercept that returned 9.37 g/t Au over a drilled thickness of 0.73 metre in hole MH21-02. Multiple priority targets will be tested in the two-rig drill program announced previously.

About Headwater Gold Inc.

Headwater Gold is a technically driven mineral exploration company focused on the exploration and discovery of high-grade precious metal deposits in the Western United States. Headwater is aggressively exploring one of the most well-endowed and mining-friendly jurisdictions in the world with a goal of making world-class precious metal discoveries. Headwater has a large portfolio of epithermal vein exploration projects and a technical team comprising experienced geologists with diverse capital markets, junior company and major mining company experience. The company is systematically drill testing several projects in Nevada, Idaho and Oregon, and in August, 2022, and May, 2023, announced transactions with Newcrest Mining where Newcrest acquired a 9.9-per-cent strategic equity interest in the company and entered into several option and earn-in agreements on Headwater's projects.

Qualified person

The technical information contained in this news release has been reviewed and approved by Scott Close, PGeo (158157), a qualified person (QP) as defined in National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.

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