Mr. Caleb Stroup reports

HEADWATER GOLD ANNOUNCES RESULTS FROM INITIAL DRILLING AT TJ PROJECT, NEVADA

Headwater Gold Inc. has released results from the company's maiden drill program on its 100-per-cent-owned TJ project, located in northeastern Nevada.

Highlights:

• All drill holes at TJ encountered widespread silicification and epithermal veining, as well as broad intervals of anomalous gold mineralization, suggesting the presence of a robust and fully preserved low sulphidation epithermal system with good potential for high-grade veins at depth.
• Reverse circulation drill hole TJ24-04 intercepted 123.44 metres grading 0.150 gram per tonne gold, including 0.687 g/t Au over 4.58 m. This hole was paused at 198.1 m due to difficult drilling conditions but was cased for re-entry and subsequent diamond core completion, expected in 2025.
• Drilling confirmed the presence of a large structure on the eastern margin of the main sinter exposure that is interpreted as an important conduit for mineralizing fluids. Geologic observations and geochemical data support that drilling did not penetrate sufficient depths in the system to test for the presence of potential high-grade veins within the main boiling horizon. The downdip projection of the East Sinter fault and associated structures represent high-priority targets for a follow-up campaign.
• Multielement geochemistry of drill samples reveals highly anomalous epithermal pathfinder element concentrations, providing further evidence for the scale and shallow nature of the hydrothermal cell.
• A follow-up core drilling program is being developed, with a clear objective of testing significant structures identified during the 2024 program at depth.

Caleb Stroup, president and chief executive officer of the company, stated: "Our maiden drill program at the TJ project has successfully demonstrated the strength and scale of this low-sulphidation epithermal system in the main Sinter zone. These results establish that alteration and mineralization is more widespread and extends to greater depths than was apparent from limited historic drilling. The geological and geochemical data from this program provide clear vectors to deeper targets and reinforce our confidence in the potential for high-grade vein-style mineralization in the district. With follow-up diamond core drilling plans under way, we are excited to further explore the potential of this promising system and deliver additional value to our shareholders."

2024 TJ drill program

Headwater Gold completed a maiden drill program at TJ consisting of five RC drill holes totalling 1,030 m prior to the winter shutdown in 2024. All holes intercepted epithermal veining and alteration in the hangingwall of the East Sinter fault. Drill holes TJ24-02, TJ24-03 and TJ24-05 crossed the structure itself where epithermal veining was most pronounced. Drill hole TJ24-04 was unable to reach target depth due to difficult drilling conditions and was cased as a precollar for future diamond core drilling.

The primary objective of the drill program was to test the extent of alteration and mineralization at depth and along strike, targeting multiple interpreted structures in the core of the main Sinter zone alteration cell. Shallow historic drilling completed by Kennecott and Challenger Gold between 1988 and 1992 targeted near-surface oxide mineralization and encountered broad zones of silicification, epithermal alteration and anomalous gold, but did not penetrate to sufficient depths to test for potential high-grade feeder structures. Headwater Gold drilling validates the presence of a thick and laterally extensive zone of strong epithermal alteration and veining, and provides critical structural and geochemical information to support vectoring into a potential high-grade feeder system.

Drill hole TJ24-01 did not reach target depth due to challenging drilling conditions. Drill hole TJ24-02 encountered a fault zone associated with a mapped structure interpreted to bound the eastern margin of the thick accumulation of silica sinter exposed in the core of the property (East Sinter fault). The upper portion of the drill hole intercepted a shallow zone of anomalous mercury and antimony values beneath the silica sinter cap and 59.43 m of anomalous gold mineralization grading 105 parts per billion Au. The main fault zone contains chalcedonic quartz and lattice-bladed quartz-after-calcite vein textures, indicative of boiling conditions. Alteration continues into granite in the immediate footwall of the structure.

Drill hole TJ24-03 targeted a downdip intersection along the East Sinter fault, and encountered a broad zone of chalcedonic veining, hydrothermal brecciation and intense silica flooding in the hangingwall of the fault. The drill hole intercepted 33.53 m grading 102 parts per billion Au from 48.77 m to 82.30 m, and 32.00 m of 107 ppb Au from a depth of 120.40 m to 152.40 m. The silver to gold ratio of mineralization in all drill holes ranges between five and 10 to one, consistent with the upper portions of many low-sulphidation epithermal systems in northern Nevada. Elevated sulphide and molybdenum concentrations are also evident throughout the alteration cell, and values generally increase with depth.

Drill hole TJ24-04 targeted an interpreted antithetic fault, which is thought to bound the western margin of the main alteration cell, coinciding with a significant resistivity contrast apparent in multiple CSAMT lines (see news release dated Oct. 7, 2024). The hole was paused prior to reaching planned depth due to drilling conditions, and casing was installed to allow for extending the hole with future core drilling. Despite not reaching target depth, the drill hole intersected 123.44 m grading 150 ppb Au, including 0.687 g/t Au over 4.58 m. The highest-grade individual interval graded 0.741 g/t Au over 1.52 m and corresponds to thin chalcedonic quartz veins with distinctive epithermal textures, including weak colloform banding and lattice-bladed calcite/quartz-after-calcite.

Drill hole TJ24-05 targeted the southern extension of the of the East Sinter fault, approximately 250 m south of holes TJ24-02 and TJ24-03, and also intercepted a broad zone of epithermal alteration and veining concentrated in the immediate hangingwall of the target structure. The drill hole intercepted a shallow zone of anomalous mercury values (greater than 10 parts per million) and weakly anomalous gold and silver values, as well as anomalous arsenic concentrations (greater than 100 ppm) associated with strong argillic alteration, hydrothermal brecciation and veining within the East Sinter fault zone. The fault zone hosts an array of crudely banded, sulphidic, chalcedonic quartz veins and veins with silica replacement of lattice-bladed calcite (see news release dated Dec. 20, 2024).

Headwater Gold's initial drill program at TJ demonstrated the presence of significant epithermal alteration, veining, anomalous pathfinder element geochemistry and anomalous gold mineralization, while identifying several prospective target structures with good potential for hosting high-grade feeder zones at depth. All three holes that tested the East Sinter fault intercepted the structure at high relative elevations within the system (approximately 100 to 150 m below the sinter exposure). Geologic observations and geochemical data from these holes support that drilling did not penetrate sufficient depths in the system to test for the presence of potential high-grade veins within the main boiling horizon. Subsequent diamond core drilling plans are under way, with a focus on testing the East Sinter fault at depths between 150 m and 300 m below surface along the greater-than-one-kilometre strike extent mapped on surface.

About the TJ project

The TJ project is located on Bureau of Land Management land in a relatively underexplored area of northeastern Nevada, approximately 25 kilometres southeast of the town of Jackpot. The project area contains indications of a fully preserved epithermal system, including a thick and laterally extensive accumulation of silica sinter and water table silica in the core of the property. Epithermal alteration is localized along a series of steeply inclined faults that bound a sedimentary graben filled with Miocene-age sedimentary rocks. Limited historic exploration at the property included shallow reverse circulation drilling that confirmed the presence of a broad zone of high-level epithermal alteration. The company completed an initial round of drilling in 2024 and believes that the project has potential for high-grade vein-style mineralization at depth. A follow-up core drilling program is being developed with the objective of testing structures identified during the 2024 program at depth.

The TJ project consists of 90 unpatented mining claims staked by Headwater Gold 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 Gold 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 any annual minimum payments, subject to net smelter return royalties of 2.5 per cent on the vendor claims and 1.5 per cent applicable on claims within a defined 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 National Instrument 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 Gold 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 Gold has a large portfolio of epithermal vein exploration projects and a technical team of experienced geologists with diverse capital markets and junior and major mining company backgrounds. The company is systematically drill testing several projects in Nevada, and, in August, 2022, and May, 2023, announced significant transactions with Newmont, where it acquired a 9.9-per-cent strategic equity interest in the company and entered into earn-in agreements on several of Headwater Gold's projects, including Spring Peak and Lodestar. In September of 2024, Centerra Gold Inc. acquired a strategic 9.9-per-cent interest in the company through a non-brokered private placement at a premium to market.

Headwater Gold is part of the NewQuest Capital Group, which is a discovery-driven investment enterprise that builds value through the incubation and financing of mineral projects and companies.

Qualified person

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

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