Mr. Caleb Stroup reports

HEADWATER GOLD ACQUIRES THE TJ PROJECT IN ELKO COUNTY, NEVADA

Headwater Gold Inc. has acquired the TJ epithermal gold-silver project located in Elko county, Nevada.

Highlights:

• Headwater has acquired the TJ project in northern Elko county, Nevada, totalling 775 hectares, through claim staking and an option to acquire a 100-per-cent interest in pre-existing claims from a private party.
• The property contains a thick accumulation of silica sinter and opaline silica with indications of multiple generations of hydrothermal brecciation and veining.
• Shallow historic drilling encountered intense silicification with anomalous gold, silver and epithermal pathfinder element geochemistry.
• Multiple property-scale faults bisect the high-level epithermal alteration and present compelling targets with anomalous gold at surface and potential to host high-grade epithermal veins at depth.
• A CSAMT geophysical survey, geologic mapping and soil sampling are planned to aid in refining high-priority drill targets.

Caleb Stroup, the president and chief executive officer of the company, states: "We are very excited to add the TJ project to our portfolio of high-quality epithermal vein targets in Nevada. TJ meets all the criteria we look for in a compelling exploration opportunity, including a fully preserved epithermal alteration cell capped by a silica sinter. The TJ project has many geological similarities with Headwater's Spring Peak and Midas North projects, which are being actively drilled by the company. None of the shallow historic drill holes on the TJ property penetrated to the projected boiling zone where high-grade gold mineralization tends to form. The anomalous gold, silver and pathfinder element geochemistry in the historic dataset further demonstrates the potential to host high-grade veins at depth. Targeting work is currently under way to refine drill targets and advance the project to a drill stage."

About the TJ project

The TJ project consists of 103 claims totalling 775 hectares. The project is located on BLM land in an underexplored area of northeastern Elko county, Nevada.

Indications of a fully preserved epithermal system at TJ include a thick and laterally extensive accumulation of silica sinter and other alteration features. Alteration is localized along a series of steeply inclined faults within a graben partially filled by silicified, Miocene-age sedimentary rocks. The graben is bounded and underlain by granitic basement rocks which also host gold mineralization.

Historic exploration at the property consisted of limited geologic mapping, surface rock chip and soil sampling, various geophysical surveys and several shallow reverse circulation (RC) holes. Significant gold and silver anomalies in historic soil samples include up to 679 parts per billion (ppb) gold (Au) reported for a sample collected near the sinter exposure and 309 ppb Au in an area of anomalous soil geochemistry to the south. This area of anomalous soil geochemistry aligns with mapped north-trending faults along the main structural corridor and coincides with widespread silicification and clay alteration.

Shallow RC drilling on the property by Kennecott and Challenger Gold between 1988 and 1992 tested for a shallow, near-surface bulk-tonnage type deposit. Historical drilling records are incomplete but indicate the majority of holes were vertical and drilled to depths of less than 150 metres. The deepest hole reported from the main sinter area ended approximately 150 metres vertically below the sinter and intercepted 38.1 metres of 0.1 gram per tonne (g/t) Au.

2023 work plan

Headwater plans to employ an exploration strategy at TJ consistent with other early-stage projects in the company's portfolio. Headwater geologists believe the relatively simple structural setting of the property presents several potential targets for feeder structures which will be further refined using a combination of geologic mapping, surface geochemistry and geophysics. The Company plans to complete a controlled-source audio-frequency magnetotelluric (CSAMT) resistivity survey totalling eight line kilometres on 200-metre spaced profiles to estimate the depth to basement rock and identify high-resistivity targets at depth, which may correlate to structurally controlled zones of intense silicification and veining.

In addition to the CSAMT survey, detailed geologic mapping and rock chip sampling will be completed to help vector within the alteration cell and potentially further expand the footprint of the system.

Acquisition terms

The TJ project consists of 90 unpatented mining claims staked by Headwater and 13 unpatented mining claims under option from a private arm's-length party. By making an initial cash payment of $15,000 (U.S.), escalating annual payments and a $250,000 (U.S.) work commitment over a two-year term, Headwater retains a 30-year right to purchase an undivided 100-per-cent interest in the vendor claims for a one-time payment of $1.5-million (U.S.) inclusive of the annual minimum payments, subject to NSR (net smelter return) royalties of 2.5 per cent on the vendor claims and 1.5 per cent applicable on claims within an area of interest. The company may purchase 40 per cent of the NSR for $2-million (U.S.) at any time and an additional 40 per cent of the NSR may be purchased for fair value within 90 days after completion of a NI 43-101-compliant prefeasibility report.

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 of experienced geologists with diverse capital markets, junior and major mining company backgrounds.

We seek Safe Harbor.