Mr. Caleb Stroup reports

HEADWATER GOLD COMMENCES DRILLING AT LODESTAR PROJECT, NEVADA

Headwater Gold Inc. has commenced drilling on the Lodestar project, located in the Walker Lane mineral belt of western Nevada. The program will total up to 3,500 metres of combined core and reverse circulation (RC) drilling, fully financed through an earn-in agreement with Newmont Corp. announced on May 9, 2023.

Highlights:

• Up to 3,500 metres of core and RC drilling -- program to consist of 10 to 15 holes testing multiple gold targets on the Lodestar property;
• Fully financed program -- the planned drill program is fully financed through a $2-million (U.S.) minimum expenditure commitment by Newmont;
• Priority focus on the Zodiac sinter ridge target -- first systematic test of epithermal vein targets at depths greater than 100 metres below silica sinter and adjacent intensely altered breccias at the Zodiac target;
• Additional drilling to target major structures concealed under thin volcanic cover -- structural targets supported by a combination of CSAMT (controlled-source audio-frequency magnetotelluric) resistivity, induced polarization and detailed gravity will be tested with RC scout drilling.

Caleb Stroup, president and chief executive officer of the company, stated: "The start of drilling at Lodestar marks an exciting step for Headwater. The initial focus of this much anticipated program will be the Zodiac sinter target, where the geology and geophysics point to a well-preserved epithermal system with significant discovery potential. The program is designed to test both the structural feeders beneath the sinter and a series of geophysical anomalies elsewhere on the property for high-grade epithermal veins at depth. The endowment of the greater Aurora district, together with the intensity and character of the surface alteration at Lodestar, give our geologists a high degree of optimism as we kick this drilling off. With strong support in place from our funding partner, we are well positioned to advance Lodestar aggressively and test multiple high-priority targets in one of Nevada's most prospective gold districts."

2025 Lodestar drill program

The 2025 program represents the first modern drill test of the Lodestar property and is designed to evaluate the Zodiac target structural corridor, which currently has approximately 700 metres of exposed strike length and has the potential to extend farther in both directions under volcanic cover. Core drilling will initially focus on testing structural feeder zone targets beneath the silicified fault breccia and sinter ridge on the Zodiac target. A three-hole fence is planned beneath the silicified breccia to be followed by at least one hole 175 metres north, beneath thick sinter blocks. Each hole is designed to intersect the west-dipping structural zone. The holes are targeting an inferred boiling horizon 150 to 250 metres below surface, where gold-silver deposition can occur in low-sulphidation vein systems. The location of subsequent core holes will be prioritized based on the structure and alteration encountered in the initial drilling. The drill program design allows flexibility to adapt drilling based on geology and field-based analytical results, including precollared RC/core tails along strike if mineralized structures are confirmed.

RC drilling will test several concealed targets, guided by CSAMT resistivity, IP and gravity data that delineate steep gradients consistent with faulted basement blocks. The targets include an inferred footwall structure parallel to the main Zodiac target and a major east-northeast-trending gravity break that lies parallel to the main mineralized trend of Hecla's adjacent Aurora mine. Additional drilling is planned north and south along strike from the Zodiac target, where gravity and resistivity anomalies suggest a continuation of the Zodiac structure beneath thin volcanic cover.

About the Lodestar project

The Lodestar project is located in the Aurora mining district in the Walker Lane belt in west-central Nevada, approximately 10 kilometres north of Headwater's Spring Peak project and adjacent to Hecla Mining Company's past-producing Aurora mine complex, which hosts existing infrastructure, including a 600-ton-per-day mill, several production water wells and high-voltage, three-phase power. The project features a prominent silicified and brecciated ridgeline capped by a silica sinter, similar in scale to the sinter overlying the Disco zone at Spring Peak, where Headwater intersected high-grade gold mineralization, including 15.92 grams per tonne gold over 2.38 metres and 10.43 grams per tonne gold over 2.01 metres. The Zodiac sinter shows evidence of dynamic fluid flow and volatile transport of far greater intensity than at Spring Peak, including widespread oxidation after sulphides, crosscutting fluidized breccias and vent features. The structurally aligned breccia bodies on the adjacent ridgeline are similarly characteristic of a particularly high-energy vent environment, with intense silica flooding, oxidation and host crosscutting high-level silica veins.

The conceptual model guiding the Lodestar drill program builds on the successful exploration model at Spring Peak. The preserved silica sinter represents a fossil hot-spring apron at the paleosurface, while high-grade mineralization is expected to occur in steeply dipping feeder faults at depth. By drilling beneath the sinter and adjacent outcropping breccia at Lodestar, the company aims to identify epithermal veins within the fault zone at depth.

Historic shallow drilling at Lodestar encountered anomalous gold but did not test deeper feeder structures, leaving exploration potential untested. Headwater holds an option to acquire a 100-per-cent undivided interest in the Lodestar project from a private vendor, subject to retained royalties and Newmont's option to acquire up to 75 per cent of the project following certain expenditures and delivery 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.

Qualified person

The technical information contained in this news release has been reviewed and approved by Dr. Gregory Dering, PGeo (AIPG CPG No. 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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