Mr. David Eaton reports

PENBAR CAPITAL LTD. ANNOUNCES AMENDMENTS TO THE TERMS OF ITS PROPOSED QUALIFYING TRANSACTION AND FINANCING

Further to the news release dated March 17, 2025, Penbar Capital Ltd. has amended a number of the terms of the amalgamation agreement dated March 14, 2024, with Eastport Ventures Inc., including the terms of the related financing for subscription receipts of Eastport, in connection with Penbar's proposed qualifying transaction.

The transaction will be carried out pursuant to the terms of an amended and restated amalgamation agreement, a copy of which has been filed on Penbar's SEDAR+ profile. The below summary of certain updated terms of the transaction is qualified in its entirety by reference to the full text of the amended and restated amalgamation agreement.

Updates to the terms of the transaction

Penbar's wholly owned subsidiary, 1001160772 Ontario Inc. (Subco), will on closing of the transaction continue to amalgamate with Eastport, the amalgamated entity (Amalco) will continue as a wholly owned subsidiary of Penbar and Penbar will be renamed Eastport Ventures Inc., or such other similar name as may be accepted by the relevant regulatory authorities and approved by Eastport and Penbar.

In connection with the proposed transaction, Penbar will effect a consolidation of its outstanding common shares on the basis of seven preconsolidation common shares for every one postconsolidation common share. Previously, the consolidation ratio was three preconsolidation common shares for every one postconsolidation common share.

In accordance with the terms of the amended and restated amalgamation agreement, each holder of shares of Eastport will exchange the holder's shares for common shares in the capital of the resulting issuer on the basis of 0.2941 fully paid and non-assessable resulting issuer common share for every one Eastport share held, at an updated deemed price of approximately 61 cents per Eastport share. Previously, the exchange ratio was 0.7143 resulting issuer common share for every one Eastport common share.

The transaction itself is not subject to Penbar shareholder approval. Eastport will hold a shareholder meeting or seek written shareholder consent in connection with the proposed transaction as is set out in the previous press release.

Updates to the terms of the financing of subscription receipts of Eastport

Prior to the completion of the transaction, before applying the exchange ratio, Eastport is expected to complete a non-brokered private placement financing of 18,055,556 subscription receipts for minimum gross proceeds of $3.25-million and 27,777,778 subscription receipt for maximum gross proceeds of $5-million. Each subscription receipt will be issued at a price of 18 cents per subscription receipt.

The subscription receipts will be created and issued pursuant to the terms of a subscription receipt agreement to be entered into among Olympia Trust Company as subscription receipt agent, Eastport and Penbar.

Each subscription receipt will be automatically converted, without payment of additional consideration or further action by the holder thereof, into one unit consisting of one Eastport share and one-half of one A warrant and one-half of one B warrant, subject to adjustment in certain events, immediately before the completion of the transaction upon the satisfaction or waiver of the escrow release conditions (as defined in the subscription receipt agreement). Each whole A warrant will entitle the holder thereof to acquire one Eastport share at a price of 25 cents per share for a period of 12 months following the listing of the resulting issuer shares on the TSX Venture Exchange. Each whole B warrant will entitle the holder thereof to acquire one Eastport share at a price of 50 cents per share for a period of 24 months following the listing of the resulting issuer shares on the TSX Venture Exchange.

In connection with the financing, Eastport may pay a finder's fee of up to 6 per cent of the gross proceeds from the financing introduced by the finder and up to such number of finder's warrants equal to 6 per cent of the subscription receipts issued pursuant to the financing as introduced to Eastport by the finder. Each finder's warrant is exercisable into one common share of Eastport at a price of 18 cents for a period of 12 months following the listing of the resulting issuer shares on the TSX-V. As part of the amalgamation, the finders' warrants will be exchanged for resulting issuer finders' warrants at the exchange ratio.

Resulting issuer

It is anticipated that, immediately following completion of the foregoing steps, and assuming the minimum subscription receipt financing, an aggregate of approximately 26,522,696 resulting issuer shares will be issued and outstanding on an undiluted basis, and: (a) former Penbar shareholders will hold 571,429 resulting issuer shares, representing approximately 2.15 per cent of the issued and outstanding resulting issuer shares; (b) former Eastport shareholders will hold 20,641,129 resulting issuer shares, representing approximately 77.82 per cent of the issued and outstanding resulting issuer shares; and (c) former holders of subscription receipts will hold 5,310,139 subscription receipts that, upon the closing of the transaction, will represent 20.02 per cent of the issued and outstanding resulting issuer shares.

Assuming the maximum subscription receipt financing, an aggregate of approximately 29,382,002 resulting issuer shares will be issued and outstanding on an undiluted basis, and: (a) former Penbar shareholders will hold 571,429 resulting issuer shares, representing approximately 1.94 per cent of the issued and outstanding resulting issuer shares; (b) former Eastport shareholders will hold 20,641,129 resulting issuer shares, representing approximately 70.25 per cent of the issued and outstanding resulting issuer shares; and (c) former holders of subscription receipts will hold 8,169,444 subscription receipts that, upon closing of the transaction, will represent 27.80 per cent of the issued and outstanding resulting issuer shares.

We seek Safe Harbor.