Mr. Caleb Stroup reports

HEADWATER GOLD AND OCEANAGOLD SIGN LETTER OF INTENT TO EXPLORE THREE PROJECTS IN NEVADA

Headwater Gold Inc. has signed a non-binding letter of intent with a subsidiary of Oceanagold Corp. The parties propose to enter into a definitive agreement within 90 days for Oceanagold to acquire an option to earn an up-to-75-per-cent interest in Headwater's TJ, Jake Creek and Hot Creek projects in Nevada through staged exploration expenditures totalling up to $65-million (U.S.) and the completion of prefeasibility studies.

Highlights:

• Oceanagold proposes to finance a firm minimum commitment of $2.5-million (U.S.) in exploration expenditures across three projects within the first two years of the agreement.
• Oceanagold may elect to earn an up-to-65-per-cent interest in each project by financing exploration expenditures of $25-million (U.S.) on each of TJ and Jake Creek and $15-million (U.S.) on Hot Creek within an eight-year period.
• Oceanagold may elect to earn an additional 10-per-cent interest (to 75 per cent) by completing a prefeasibility study on each project and granting Headwater a 1-per-cent net smelter return royalty upon completion of the PFS.
• Under the partnership, Headwater will be the initial operator of the projects and will receive a 10-per-cent management fee.
• Headwater and Oceanagold are preparing to initiate drilling programs at the TJ project immediately following the execution of the agreement.

Caleb Stroup, Headwater's president and chief executive officer, stated: "We are excited to announce this LOI with Oceanagold, a highly respected technical partner and a successful epithermal gold explorer and mid-tier gold miner. The LOI outlines a clear framework to advance our TJ, Jake Creek and Hot Creek projects through significant exploration funding and drilling, while allowing Headwater to retain meaningful carried interests and royalties. This deal aligns with our strategy of partnering with strong corporate partners to aggressively accelerate exploration on our high-potential projects in Nevada, one of the world's premier mining jurisdictions. We look forward to working with Oceanagold and initiating the various programs, which will supplement another busy year of exploration for the company."

LOI commercial terms

The LOI outlines the proposed terms for the definitive agreement under which Oceanagold would make cash payments and incur exploration expenditures to acquire an up-to-75-per-cent interest in each of the three projects through a three separate staged earn-in process. As consideration for entering into the LOI, Oceanagold shall advance a non-refundable payment of $150,000 (U.S.) to Headwater that will be used to finance predrilling expenses on the projects.

Upon execution of the agreement, Oceanagold will pay $100,000 (U.S.) to Headwater and an additional $100,000 (U.S.) on the first anniversary of the agreement if Oceanagold elects to continue into the second year on at least one project.

Earn-in structure

Stage 1: Oceanagold may elect to earn a 51-per-cent interest in each project by sole financing expenditures of $10-million (U.S.) per project for each of TJ and Jake Creek and $5-million (U.S.) for Hot Creek within 48 months of the execution date. Stage 1 includes a firm commitment to finance a minimum of $1-million (U.S.) in exploration expenditures on both TJ and Jake Creek and $500,000 (U.S.) at Hot Creek within the first two years.

Stage 2: Oceanagold may elect to earn an additional 14-per-cent interest (to 65 per cent) in each project by sole financing additional expenditures of $15-million (U.S.) per project for each of TJ and Jake Creek and $10-million (U.S.) for Hot Creek within 48 months following the completion of Stage 1.

Stage 3: Oceanagold may earn an additional 10-per-cent interest (to 75 per cent) in each project by completing a prefeasibility study for the respective project and granting a 1-per-cent NSR royalty to Headwater, within 24 months following completion of Stage 2.

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 in the core of the property. Epithermal alteration is localized along a series of steeply inclined faults that bound a graben filled with Miocene-age sedimentary rocks.

Limited historic exploration on 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 scout drilling in 2024, which confirmed the project has potential for high-grade epithermal vein-style mineralization at depth. A follow-up core drilling program is being planned with the objective of testing prospective epithermal structures identified during the 2024 program at depth.

The TJ project is subject to an underlying exploration lease and option to purchase agreement under which the company may acquire a 100-per-cent interest in the project for $1.5-million (U.S.) inclusive of annual minimum payments. A portion of the project is subject to net smelter return royalties ranging from 1.5 per cent to 2.5 per cent with Headwater retaining the right to buy down 80 per cent of the NSR.

About the Jake Creek project

The Jake Creek project is 100 per cent owned and consists of 189 unpatented lode mining claims on BLM land in Humboldt county, Nevada, located 65 km northwest of Winnemucca and eight km east of the Nevada Gold Mines' Turquoise Ridge mine complex. Historic drilling by Evolving Gold Corp. in 2010 and 2011 (13 reverse circulation holes) intersected widespread epithermal mineralization at the Tertiary unconformity, with notable intercepts such as 11.3 grams per tonne gold over 1.52 metres within 45.72 m grading 0.96 g/t Au in hole JC-005. This mineralization, associated with silicification, clay alteration and banded quartz veining, suggests a robust low-sulphidation epithermal system with potential for high-grade feeder zones at depth or along strike. A portion of the project is subject to a 1-per-cent NSR, half of which can be purchased for $1-million at any time.

About the Hot Creek project

The Hot Creek project is 100 per cent owned and royalty free, and consists of 52 unpatented mining claims staked by Headwater in the Tuscarora district in Nevada. The project hosts a widespread zone of silica flooding in Tertiary sediments in the immediate hangingwall of a silicified range front fault. Historical shallow drilling results include grades up to 1.04 g/t Au over 12.2 m and 0.34 g/t Au over 117.3 m along a range front fault. The majority of the historic drill holes at Hot Creek was relatively shallow and did not adequately test for the presence of high-grade feeders at depth along the range front fault or subsidiary structures. Future exploration at Hot Creek will focus on refining the geological model, identifying new high-potential targets and conducting additional geological mapping and surface sampling.

About Headwater Gold Inc.

Headwater Gold Inc. is a technically driven mineral exploration company focused on exploring for and discovering high-grade precious metal deposits in the western United States. Headwater is actively exploring one of the world's most well-endowed, mining-friendly jurisdictions, with a goal of making world-class precious metal discoveries. The company has a large portfolio of epithermal vein exploration projects and a technical team with diverse experience in capital markets and major mining companies. Headwater is systematically drill-testing several projects in Nevada, and has strategic earn-in agreements with Newmont on its Spring Peak and Lodestar projects. In August, 2022, and September, 2024, Newmont and Centerra Gold Inc. acquired strategic equity interests in the company, further strengthening Headwater's exploration capabilities.

Headwater 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), an independent qualified person as defined in National Instrument 43-101 (Standards of Disclosure for Mineral Projects).

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