Mr. Kal Malhi reports

HERTZ ENERGY ENTERS AGREEMENT TO ACQUIRE COMINCO URANIUM PROPERTY

Hertz Energy Inc. has entered into a property purchase and sale agreement dated Feb. 2, 2024, with BullRun Capital Inc. (the vendor) pursuant to which the company has agreed to acquire the Cominco uranium project, located in Bathurst Inlet, Nunavut, Canada.

Purchase agreement

The company has entered into the definitive agreement to acquire the Cominco property. Pursuant to the terms and conditions of the definitive agreement and as consideration for the acquisition of a 100-per-cent undivided interest in the Cominco property, the company has agreed to:

• Reimburse the vendor acquisition costs to date estimated not to exceed $75,000;
• Grant the vendor a 2-per-cent net smelter return royalty on the Cominco property.

Kal Malhi, chief executive officer of Hertz, states: "Hertz was always founded and positioned to explore for mineral deposits that will power the future. We started with our Lucky Mica project and have added the AC/DC lithium project, while also obtaining options to acquire the Snake and Patriota lithium projects, since our listing in April, 2023. Adding the Cominco property fits extremely well with our energy metals offering and we aim to aggressively explore both the lithium and uranium mineral projects and continue to offer investors a well-diversified energy metals project portfolio."

The vendor is wholly owned by Mr. Malhi, a director and officer of the company. Accordingly, the company's acquisition of the Cominco Property constitutes a related party transaction as defined in Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The company is relying on the exemption from valuation requirement and minority approval pursuant to subsections 5.5(a) and 5.7(1)(a) of MI 61-101, respectively, for its acquisition of the Cominco property, as the value of the consideration to be paid by the company for the acquisition of the Cominco property does not represent more than 25 per cent of the company's market capitalization, as determined in accordance with MI 61-101.

Cominco uranium property

The Cominco property is focused on two main uranium showings of interest, the Pomie and the Yon showings in Nunavut. Additional showings of uranium, copper, gold, nickel and lead are known in the area. The Pomie and Yon showings were both explored in the mid-1970s by Cominco and Noranda and no work using modern exploration technologies has taken place since.

Previous regional work in the area by the Geological Survey of Canada (GSC) identified mineral potential for uranium in the area (Roscoe, 1984), based on the presence of the above showings and favourable stratigraphy for the formation of unconformity-related uranium (URU) deposits, similar to the stratigraphy found in the Athabasca and Thelon basins.

The Cominco property covers the Yon and Pomie advanced exploration-stage showings and comprises four licences spanning 5,046.25 hectares covering favourable geology.

The two main uranium showings on the Cominco property, the Yon and Pomie showings, are described in greater detail below. There are other smaller occurrences usually associated with copper mineralization in the region.

Pomie uranium showing

The Pomie showing lies at the south end of Bathurst Lake, located near the Western River outflow into Bathurst Inlet. The Pomie showing was explored by Cominco in 1976 and 1977, following a regional airborne radiometric survey conducted in 1975 (Wright and Heddle, 1977). In 1977, Cominco drilled seven BQ-sized holes totalling 420 metres on the Pomie showing and determined that the mineralization was associated with the basalt.

The following summary is quoted from Nunavut mineral occurrence database for the Pomie showing ID 076JSW0003.

Capsule geology -- Cominco, 1977

"The Pomie prospect has the most significant uranium mineralization in bedrock discovered to date in the Bathurst Inlet region. There are two favourable intracratonic sedimentary basins in the region, namely the Kilohigok and Elu basins of Paleoproterozoic and Mesoproterozoic age, respectively. Main uranium exploration thrust in the region was during 1975 to 81, which involved mostly the reconnaissance-type work by major companies, namely Cominco, E & B Explorations, Noranda, SERU Nucleaire, Aquitaine, Essex, Gulf, and Giant Yellowknife."

Deformation/wetting

"Open folding and fracturing in the host strata of Pomie prospect are related to the Bathurst Inlet faults. The strata are part of the uppermost formation of the Goulburn group. The group is essentially coeval with the Coronation supergroup of the Wopmay orogen to the west deposited during 2000 to 1890 Ma, as well to the Great Slave supergroup to the southwest. North-northwest-trending Bathurst faults are coeval with the eats-northeast-trending faults of the Great Slave shear zone. Both are related to the terminal collision in the north-trending Wopmay orogen ca. 1883 Ma. Fanglomerates and associated sediments were deposited in grabens formed by these faults. They comprise the Mesoproterozoic Tinney Cove formation in Bathurst Inlet and Et-Then group in East Arm of Great Slave Lake. Basal unconformity of these sediments is marked by paleo-weathering. Hence they are favourable for unconformity-associated uranium mineralization. This also applies to the Ellis formation overlying the Tinney Cove formation. Whether the mineralization at Pomie prospect is related to unconformity is debatable. The 1022 Ma pitchblende age reported here is permissive in this regard."

Mineralization

"A sample of arkose from trench 9 assaying 87 pounds U3O8 per ton (36.888 kilogram U/metric tonne or 3.689 per cent U) was examined in polished section (Wright, 1976; Roscoe, 1984). Radioactive material is extremely fine grained and disseminated in matrix of quartz grains, clay minerals and minor sulphides (pyrite and chalcopyrite). A sample of basalt from trench 9 assaying 130 lb U3O8 per ton (5.512 per cent U; note: check assay of 89 lb U3O8/ton) gave essentially the same result, mineralization being finely disseminated in the matrix and coating grains of sulphides. A linear concentration of fracture-filling was noted. A scanning electron microscope study of this radioactive material indicated mainly U with minor Si, Fe and Ca suggesting that uraninite is the uranium mineral with minor impurities of quartz, iron oxides and calcite. The best grade encountered at surface was 41.96 lb U3O8/ton (1.779 per cent U) over 13 feet (3.96 m) in trench 9 at the south end of the main mineralized zone adjacent to a large area of drift and muskeg."

Yon uranium showing

The Yon showing was explored by Noranda commencing with radiometric surveys and reconnaissance work conducted in 1976 followed by mapping, prospecting and trenching in 1977.

The Yon showing lies on the eastern side of Bathurst Inlet and is hosted in the Western River formation. Vein-hosted mineralization occurs within brecciated Western River formation rocks. Mineralization is fault controlled, bounded to the east and west by the Grizzly and McLaughlin faults, and occurs above the east-trending Coliver fault.

The following summary is quoted from Nunavut mineral occurrence database for the Yon showing ID 076JNW0005.

Capsule geology -- Noranda, 1977

"A regional airborne radiometric survey in 1976 by Noranda detected anomalies in a thick sequence of green and grey siltstones, which on the ground gave readings of total 6,000 to 10,000 cpm on McPhar TV-1 spectrometer. However, these anomalies led to discovery of mineralized talus to the southwest on the east face of a sandstone ridge. The showing was explored by mapping and trenching during 1976 to 1977. Further prospecting led to located veins on both sides of the ridge. Considerable surface exploration was done on the prospect in 1977, but no drilling has been done. 13 trenches in 350 by 400 m area; best assay from a 1.5 m channel sample across a vein: 0.33 per cent U and 0.4 per cent Cu."

Mineralization

"Widely spaced fracture-filling suggests a large but weak mineralizing system. The country rocks and host rocks include a large proportion of sandstones that are favourable for sandstone-type uranium mineralization. They are faulted and locally highly tilted but are essentially unmetamorphosed. The Yon prospect is close to the basal unconformity of the Western River formation with the Archean basement, and there is some development of paleoregolith on the basement. Granitoid rocks in the basement are potential source rocks for the uranium seen in the veins. One of the 11 grab samples assayed in 1976 gave the following best metal values: 0.644 per cent U3O8 (0.456 per cent U), 1.23 per cent Cu, 0.62 oz/ton Ag and 0.005 oz/ton Au."

Update on the company's properties

AC/DC lithium project -- James Bay, Canada

The AC/DC lithium project is district size at 265 square kilometres and adjoins and shares similar geology to Rio Tinto's Kaanaayaa lithium project in James Bay, Quebec. The AC/DC lithium project is also amidst large lithium discoveries by Patriot Battery Metals' 109-million-tonne Corvette lithium discovery, Winsome Resources' 59 Mt Adina discovery, Brunswick Exploration Mirage lithium discovery, Loyal Lithium Trieste lithium discovery, and Azimut Exploration and Midland/Rio Tinto's respective Galinee projects.

Snake lithium project -- James Bay, Canada

The Snake lithium project spans 217 square km located next to drill-ready lithium discoveries by Brunswick Lithium's Arwen (Elrond) lithium discovery, Harfang Exploration's Serpent lithium discovery and Quebec Precious Metals' Ninaaskumuwin lithium discovery. The company holds an option to acquire the Snake lithium project from Sirios Resources Inc.

Lucky Mica lithium project -- Arizona, United States

The Lucky Mica project covers 939 hectares in Maricopa county, Arizona, along the Arizona pegmatite belt and sits between Patriot Lithium's projects. The area is easily accessible through the public road network and is approximately 105 km northwest of Phoenix. SGS Canada Inc. has defined a target envelope tonnage of between 330,000 and 551,000 tonnes to a depth of 60 m with average grades between 0.3 per cent and 2.5 per cent lithium oxide.

Patriota lithium project -- Minas Gerais, Brazil

The Patriota lithium project is located in Minas Gerais, Brazil. The tenements cover 2,963.7 hectares in proximity to areas of economically significant lithium deposits, including Sigma Lithium's green lithium mine, Ionic Lithium's Itinga and Salinas projects, and CBL's Cachoeira mine. The company holds an option to acquire the Patriota lithium project from Brascan Resources Inc. and RTB Geologia e Mineracao Ltda.

2024 exploration strategy

The company is committed to advancing its well-diversified energy metals portfolio and recently closed a $1.5-million charity flow-through financing which will be solely dedicated to its lithium projects in Quebec. The company also recently closed a $1,037,000 non-flow-through financing which will be dedicated toward its extraction technology, exploration at its Lucky Mica project, consulting/management fees, marketing/investor relations, the acquisition of the Cominco property, and general and administrative matters.

The company will remain heavily focused on its lithium assets located in James Bay, Quebec. Lithium is not a fad but foundational to the energy transition away from fossil fuels. The company firmly believes that as the cost of electric vehicles continues to fall, adoption rates will continue to soar. Governments have implemented policies that virtually ensure widespread adoption across much of the world.

Despite new lithium mines coming on-line, demand remains relentless as growth in electric vehicles continues to outpace expectations.

The company's proposed acquisition of the Cominco property offers investors a diversification alongside its lithium portfolio to offer a truly diversified energy investment opportunity.

Qualified Person

Peter Webster, PGeo, CEO of Mercator Geological Services Ltd., is an independent qualified person as defined under National Instrument 43-101 and has reviewed and approved the technical information related to the Pomie and Yon projects disclosed in this news release.

About Hertz Energy Inc.

Hertz Energy is a British Columbia-based junior exploration company primarily engaged in the acquisition and exploration of mineral properties. The company recently entered into the definitive agreement to acquire the Cominco uranium property located in Bathurst Inlet, Nunavut, Canada. Hertz rebranded to Hertz Energy to better reflect the company's commitment to critical mineral exploration in support of the global green energy transition. The company's lithium exploration projects include the Lucky Mica lithium project, the AC/DC lithium project and the Patriota lithium project. The Lucky Mica project is 939 hectares located within the Arizona pegmatite belt in the Maricopa county of Arizona, U.S. The AC/DC project is 26,500 hectares located in the renowned James Bay lithium district in Quebec, Canada, just 26 km southeast of the Covette lithium project owned by Patriot Battery Metals and is contiguous to Rio Tinto's Kaanaayaa project claims. The Patriota lithium project is 2,963 hectares located within the eastern Brazilian pegmatite province in Minas Gerais, Brazil, and host to similar geology as Sigma's green lithium mine. The company also holds a long-term, exclusive licence for a patent-pending process for extracting lithium directly from lithium-bearing materials, including but not limited to alpha-spodumene and other hard-rock-hosted minerals. Such process was invented by researchers affiliated with Penn State and is co-owned by the Penn State Research Foundation and North Carolina State University.

We seek Safe Harbor.