Mr. Caleb Stroup reports

NEWMONT ELECTS TO ADVANCE TO STAGE 2 OF THE SPRING PEAK EARN-IN AGREEMENT

Headwater Gold Inc. partner Newmont Corp. has completed Stage 1 of the Spring Peak earn-in agreement announced on Aug. 16, 2022, by sole financing of $15-million (U.S.) in exploration expenditures on the project. Newmont has earned a 51-per-cent interest in the Spring Peak project and has elected to proceed to Stage 2 of the earn-in agreement to potentially earn a 65-per-cent interest in the project by sole financing an additional $40-million (U.S.) within 36 months. The parties will establish a joint venture company pursuant to a definitive joint venture agreement, to be negotiated, which will govern management, financing commitments and operator transition terms to continue exploration on the project. Headwater is the operator of the project and earns a 10-per-cent management fee.

Highlights:

• Newmont has completed Stage 1 of the Spring Peak project earn-in agreement and has elected to advance the project to Stage 2.
• Under Stage 2, Newmont may increase its interest in the project from 51 per cent to 65 per cent by financing exploration expenditures of $40-million (U.S.).
• Upon completion of Stage 2, Newmont may elect to proceed to Stage 3 to earn an additional 10-per-cent interest, resulting in a 75-per-cent interest in the project, by:
  • Completing a prefeasibility study solely financed by Newmont within an additional two-year period;
  • Granting to Headwater a 2-per-cent NSR (net smelter return) royalty on claims 100 per cent owned by Headwater and a 1-per-cent NSR royalty on inlying claims subject to an underlying option agreement.
• Headwater will be the initial operator of the project under Stage 2 and earn a 10-per-cent management fee on exploration expenditures on the project.

Caleb Stroup, president and chief executive officer of Headwater, commented: "The completion of Stage 1 and commencement of Stage 2 at Spring Peak represent a major milestone for the project and the company. We are extremely pleased that Newmont has elected to continue our partnership on the project following the discovery of the high-grade Disco zone, encouraging drill results from the Shadow target and an expanding set of additional property-scale targets. The $40-million (U.S.) potential funding included in Stage 2 positions the company to aggressively explore the district-scale potential of the project. A significantly expanded drill permit is currently undergoing agency review, which will allow for testing of extensions to the Disco zone, the Shadow target and other potential mineralized structures via 266 proposed new drill sites."

About the Spring Peak project

The Spring Peak project is located in the Aurora mining district in the Walker Lane belt in west-central Nevada, approximately 50 kilometres southwest of the town of Hawthorne. The project adjoins Hecla Mining Company's past-producing Aurora mine complex, where existing infrastructure includes a 600-tonne-per-day mill, several production water wells and high-voltage three-phase power. Recent drilling at the Disco zone has confirmed the presence of high-grade gold mineralization, including significant intersections such as 15.92 grams per tonne gold over 2.38 metres and 10.43 grams per tonne gold over 2.01 metres within a broader zone of 2.73 grams per tonne gold over 34.72 metres. An exploration plan of operations has been submitted to the U.S. Forest Service proposing 266 additional drill sites to further explore for extensions of known mineralization and test additional targets within the land package. Headwater holds an option to acquire a 100-per-cent undivided interest in the Spring Peak project from Orogen Royalties, subject to retained royalties and subject to Newmont's option to acquire up to 75 per cent of the project following certain expenditures and preparation of a prefeasibility study within a designated time frame.

About Headwater Gold Inc.

Headwater Gold 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 Dr. Gregory Dering, PGeo (AIPG CPG-12298), a qualified person as defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects. Dr. Dering is not independent by reason of being the company's vice-president of exploration.

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