Mr. James McDonald reports

KOOTENAY RESOURCES ANNOUNCES SALE OF THE TWO TIMES FRED PROPERTY

Kootenay Resources Inc. has sold its 100-per-cent interest in the mining claims known as the Two Times Fred property, located in British Columbia, to a subsidiary of Evolution Mining Ltd. in consideration for the cash payment of $1-million to the company and a 2.0-per-cent net smelter return royalty on the property granted to the company pursuant to the terms of the mineral claims purchase agreement dated Feb. 6, 2026, between the company and Evolution.

The company and Evolution have also concurrently entered into an NSR royalty agreement for Evolution to grant the Kootenay NSR royalty to the company. Up to the commencement of commercial production on the property, the company granted Evolution the option to purchase one-half of the Kootenay NSR royalty for the cash payment of $3-million to the company. If Evolution exercises the buydown option, the company will fully exercise the option to acquire and extinguish a pre-existing third party underlying 2-per-cent NSR royalty on the property, and, thereafter, the Kootenay NSR royalty will be a 1.0-per-cent net smelter returns royalty on the property payable to the company. If Evolution does not exercise the buydown option, the company may acquire the underlying NSR royalty or Evolution will be required to pay any royalty payments owing under the underlying NSR royalty, which will reduce royalty payments owing to the company under the Kootenay NSR royalty.

Evolution is at arm's length to Kootenay.

About Kootenay Resources Inc.

Kootenay Resources is an exploration company actively engaged in the exploration and discovery mineral projects in British Columbia, Canada. The company was formed as a spinout of Kootenay Silver Inc., in which prospective Canadian assets were transferred to Kootenay Resources. The transaction was completed in October, 2021; Kootenay Silver currently holds 5.4 million common shares of Kootenay Resources.

We seek Safe Harbor.