Mr. Paul Parisotto reports

MOON RIVER CAPITAL LTD. ANNOUNCES ROBUST POSITIVE PRELIMINARY ECONOMIC ASSESSMENT OF DAVIDSON MOLYBDENUM PROJECT

A preliminary economic assessment (PEA) has been completed on Moon River Capital Ltd.'s Davidson molybdenum project located near Smithers, B.C.

HIGHLIGHTS:

• Pretax net present value (NPV) of $1.04-billion and internal rate of return (IRR) of 32 per cent and an after-tax NPV of $602-million and an IRR of 24 per cent at an 8-per-cent discount rate and assuming a long-term molybdenum price of $47.39 (U.S.) per kilogram or $21.50 (U.S.) per pound;
• 20-year mine life based on 7,000 tonnes of mill throughput per day or 2.5 million tonnes per year;
• Initial capital cost of $575-million, including $109-million of contingency;
• Annual average production of 4,543,000 kg or 10,015,500 pounds of Mo;
• Average cash cost of $21.68 per kg or $9.84 per lb and all-in sustaining cost (AISC) of $22.79 per kg or $10.34 per lb of Mo;
• Underground mine, with underground processing facilities, using all electric mining equipment minimizes the surface footprint, resulting in a very low carbon-emitting operation;
• A measured and indicated mineral resource of 43,896,000 tonnes grading 0.35 per cent MoS2 (molybdenum disulphide) (0.21 per cent Mo);
• A 3.3-year payback;
• Life-of-mine direct income and mining taxes in excess of $1-billion;
• Does not include potential byproduct contributions from tungsten, rare-earth elements, gallium and copper;
• Additional drilling to support metallurgical test work to determine the economic recoverability of potential byproduct metals is scheduled to commence when applicable first nations consultations have been undertaken and drill permits have been obtained. An updated PEA will follow.

Paul Parisotto, president and chief executive officer, says of the PEA results: "This study presents a very convincing case for the rapid development of the Davidson molybdenum project. Its location in British Columbia is near developed infrastructure, including roads, rail, power and the nearby town of Smithers. It would be able to take advantage of the province's hydroelectric power grid. That, together with the use of an electric mining fleet, will make Davidson one of the lowest carbon-emitting sources of molybdenum in the world. As an underground mine, with an underground processing plant and with most of the tailings used as backfill, the surface footprint of this mining operation will be minimal."

Ian McDonald, chairman, went on to state: "My involvement with this project first began 20 years ago, and I truly believe that the time for its development has arrived. These compelling robust economics together with a Tier 1 jurisdiction in a mining-friendly province, to produce a product that was included on Canada's 2021 critical mineral list by the federal government, make development of the project very attractive at this time."

Join Mr. McDonald, chairman, and Mr. Parisotto, president and CEO, for a live virtual event to learn more about this PEA, receive a broader market update, and ask questions during the interactive question-and-answer.

Date and time: week of Feb. 26, exact date and time to be determined.

The PEA was prepared by A-Z Mining Professionals Ltd. (AMPL) for Moon River. The project, located in west-central British Columbia, is approximately nine kilometres northwest of the town of Smithers. On Nov. 15, 2023, Moon River acquired all of the rights, interests and obligations of Generation Mining Ltd. under a vending agreement dated April 1, 2016, as amended, entered into with Roda Holdings Inc. and Donald Davidson, thus granting Moon River the exclusive right to access, prospect, develop and mine the Davidson property and to acquire 100 per cent of the Davidson property. The project comprises development of an underground mine with potentially economic mineralization processed in an underground, on-site processing facility, with an estimated 20-year mine life.

Project design

The Davidson deposit is located inside Hudson Bay Mountain and does not outcrop on surface. The deposit has an existing portal on the east side of the mountain and over 2,100 metres of exploration drifting. The access road and portal can be seen from the town of Smithers. The proposed underground mine access and surface facilities will be located on the west side of the mountain (out of sight of the town of Smithers) with the existing eastern portal used only for initial development.

To minimize the surface footprint of the whole operation, the processing plant will be located underground in specially designed and excavated openings at the top elevation of the mining zones. This eliminates having to move mineralized material from the underground to a surface processing plant eight km away. This also eliminates material for processing being trucked on surface and the need for a source of backfill material from surface as well. The mill tailings will provide a ready source of material for backfilling mined areas and significantly reduces the size of the tailings management facility on surface.

The mine will utilize already proven rubber-tired, battery-powered and automated mining equipment wherever possible to minimize manpower requirements, underground ventilation volumes, mine air heating costs and carbon dioxide emissions.

Surface infrastructure required would include:

• Upgrading of access road;
• Power line construction;
• Electrical substations and distribution;
• Site roads and materials handling area;
• Maintenance shop/offices/dry/warehouse complex (temporary);
• Two cement storage silos;
• Water supply system and water treatment plant;
• Dry stack tailings impoundment area;
• Development waste storage;
• Landfill site;
• Sewage disposal site.

The mine will employ 207 persons in the operation. During preproduction, a contractor work force will be employed, most on a fly-in/fly-out work rotation with major population centres in Canada. During production no fly-in/fly-out personnel are included in the plan. There is a history of mining in the region and many skilled workers in the area currently work from Smithers, which has a population of 5,400 people and many support services.

Mine plan

Underground mining methods will be utilized to extract the potentially economic mineralization of the deposit. An underground internal ramp from the bottom to the top of the mining zone will access mining areas and the underground processing plant facility. In total, approximately 34,000 metres of development will be required to bring the deposit into production.

The mining method to be employed would be longhole open stoping with cemented paste (densified tailings) backfill to maximize recovery of potentially economic mineralization. Dilution of 5 per cent has been included in the mined potentially economic mineralization at a grade of 0.18 per cent MoS2.

The mineralized zone is large and irregular shaped, with higher-grade concentrations toward the centre of the mineralized zones being mined. The mine would produce 7,000 tonnes per day of potentially economic mineralization. The mineralized zone geometry is highly amenable to bulk mining of large-tonnage stopes with inherent economies of scale and low mining costs. The stopes will be approximately 160,000 tonnes each.

Potentially economic mineralization removed from stopes by load-haul-dump (LHD) units will be sent by ore passes to jaw crushers at the bottom of the mine and then to a secondary cone crusher. The crushed potentially economic mineralization will be conveyed to a vertical lift conveyor system which feeds the fine ore bin connected to the underground processing facility.

Other underground facilities will include:

• Paste backfill plant;
• Equipment maintenance shops and underground warehouses;
• Explosives storage magazines;
• Refuge stations;
• Fuel bays;
• Materials storage areas;
• Main dewatering sumps;
• Offices;
• Warehousing facilities.

Processing

The processing plant, located completely underground, will be a conventional flotation plant producing a molybdenum concentrate for shipment to smelters.

The potentially economic mineralization from the mine vertical lift conveyor system would feed the grinding circuit consisting of two ball mills operating in parallel. Flotation of the molybdenum concentrate will comprise a rougher/scavenger circuit followed by two stages of concentrate cleaning, with regrind. The concentrate stream from flotation will be filtered and dried for shipment to a smelter. The processing plant is expected to have a recovery rate of 92 per cent molybdenum into concentrate.

Large processing equipment (crushers and grinding mills) will be located in individual opening rooms and interconnected with piping. Other smaller equipment will be installed in groupings in other opening rooms. The construction cost of an underground plant is not significantly different from that for a plant located on surface.

The tailings will be primarily made into paste backfill for backfilling of stopes with the balance pumped to a dry stack tailings facility where the water is removed, and tailings stacked in a near-dry form in a permanent storage facility.

mineral resources

Mineral Resources used for the PEA were based on the latest resource estimates calculated and reported in a study completed by AMPL and presented in an NI 43-101 technical report entitled "National Instrument NI 43-101 Technical Report for the Davidson Project Resources Update," dated Sept. 13, 2023, and filed on SEDAR+.

Capital expenditures

The estimated project total preproduction capital expenditure, inclusive of contingencies and working capital, is approximately $575-million. A summary of project preproduction capital expenditures is presented in the attached table.

Operating costs

The estimated total average operating cost (excluding smelting and refining) for the mine is approximately $38.24 per tonne of potentially economic mineralization. This equates to $21.68 per kg of Mo ($9.84 per lb). The attached table presents a summary of life-of-mine average operating costs per tonne.

Economic analysis

The expected cash flow estimates are calculated using the forecast mine plan, operating costs and capital expenditures incorporating expected long-term metal prices based on the two-year trailing average of molybdenum on the London Metals Exchange of $47.39 (U.S.) per kg or $21.50 (U.S.) per pound.

A summary of the expected parameters used for the financial analysis is presented herein.

The overall level of accuracy of this study is approximately plus or minus 40 per cent.

The project's expected investment and returns based on the base case cash flow parameters for the project are shown herein.

Sensitivity analysis

Sensitivity analyses were performed for capital expenditures, operating costs, mined grades, metal prices and currency exchange rates using 25-per-cent positive and negative variations. The project is most sensitive to the mined grade, metal price and the exchange rate and less sensitive to capital and operating costs. The results of the sensitivity analysis for positive and negative changes of 25 per cent in key project parameters are presented in the attached tables.

Potential byproduct opportunity

As disclosed in the company's press release dated Jan. 24, 2024, the company plans to undertake preliminary metallurgical studies and obtain fresh samples from drill core to begin detailed metallurgical testing, when applicable first nations consultations are undertaken and drill permits obtained, to determine whether the rare-earth elements (REEs), tungsten, gallium and copper contained in the project are economically recoverable and can contribute to the economics of the project.

REEs comprise 17 nearly indistinguishable silvery-white soft heavy metals. Compounds containing REEs have diverse applications in electrical and electronic components, lasers, glass, magnetic materials, and industrial processes. They are deemed important for the world energy transition, being used in wind turbines, electric vehicles, photovoltaic cells and fluorescent lighting. They are also used in LED (light-emitting diode) lights, colour monitors and medical equipment. REEs were included on the government of Canada's critical mineral list released in 2021, and more recently were listed along with five other metals as potentially qualifying for the draft critical minerals tax credit for new mine construction. Several of the REEs are on the U.S. Department of Energy's and European Union's critical mineral lists. Most of the world's REEs are produced in China, with the United States and Australia each supplying smaller amounts.

Tungsten has a wide variety of uses, mainly in the production of hard materials -- namely tungsten carbide, in steel alloys and as a lubricant. Gallium is a key component of semi-conductors and LED lights. Both metals are on the critical mineral lists in the United States, Canada and the European Union.

Next steps

The company will commence additional metallurgical test work when applicable first nations consultations are undertaken and drill permits are obtained, to determine the economic recoverability of potential byproduct contributions, followed by an updated PEA.

Technical report and qualified persons

A technical report on the PEA will be filed on SEDAR+ under the company's profile within 45 days of the date of this news release. Readers are encouraged to read the technical report in its entirety, including all qualifications, assumptions and exclusions that relate to the mineral resource. The technical report is intended to be read as a whole, and sections should not be read or relied upon out of context.

Qualified persons

The scientific and technical content of this news release was reviewed, verified and approved by Brian LeBlanc, PEng, president of AMPL and a qualified person as defined by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects. Mr. LeBlanc is the QP responsible for the scientific and technical information contained in this press release.

About Moon River Capital Ltd.

Moon River is a Canadian-based resource company focused on the acquisition, exploration and development of mineral projects. Moon River is focused on the development of the Davidson property which hosts a large molybdenum-tungsten deposit and is located near Smithers, B.C.

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