Mr. Errol Farr reports

LOYALIST ANNOUNCES SHARES FOR DEBT TRANSACTION AND PROVIDES CORPORATE UPDATE

Loyalist Exploration Ltd. has agreed issue up to an aggregate of 11,028,300 units of the company to certain individuals, including an officer of the company, a director of the company, three lenders and a service provider in exchange for the cancellation of an aggregate amount of up to $110,283 of outstanding debt. The debt units are being issued at deemed price of one cent per debt unit. Each unit consists of one common share of the company and one common share purchase warrant exercisable at a price of five cents for 36 months following the date of issuance. The board of directors of the company has determined that the shares for debt transaction is in the best interests of the company in that is preserves cash and with the settlement helps to align the individuals with the company's shareholders.

Of the total $110,283 debt being converted, $59,255 represents amounts owed to Errol Farr, the chief executive officer of the company, for outstanding management fees as of May 31, 2025, and $11,014 represents principal ($10,000) and accumulated interest at 8 per cent per annum owing to a company controlled by Stephen Balch, a director, of the company, and $24,000 represents principal ($20,000) and a commitment fee of $4,000 owing to a company controlled by a shareholder who will become an insider of the company upon completion of this transaction, who are participating in the shares for debt transaction.

The participation of certain insiders, being related parties of the company means that the shares for debt transaction is considered to be a related party transaction of the company for purposes of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions (MI 61-101). The company may, however, complete the shares for debt transaction in reliance on exemptions available under MI 61-101 from the formal valuation and minority approval requirements of MI 61-101. The company is relying on the exemptions from the formal valuation and minority approval requirements found in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of the shares for debt transaction (as it relates to the insiders' participation) is not more than 25 per cent of the company's market capitalization.

All of the securities issued and issuable in connection with the shares for debt transaction are subject to a hold period expiring four months and one day after the date of issuance of the securities. Completion of the shares for debt transaction is subject to the receipt of all required regulatory approvals, including the approval of the Canadian Securities Exchange.

Corporate update

The company is also pleased to provide the following corporate update. In the 2025 calendar year, the company has issued an aggregate of 46.5 million common shares, composed of: (i) 3.5 million common shares issued in connection with the acquisition of the option to acquire the Gold Rush property near Timmins, Ont.; (ii) 10 million common shares issued in connection with the acquisition of the Loveland property near Timmins, Ont.; and (iii) 33 million common shares issued in connection with the offering of units first announced on Feb. 12, 2025.

About Loyalist Exploration Ltd.

Loyalist Exploration is a mineral exploration company concentrating on acquiring, exploring and developing quality mineral properties in Canada. The company is focused on the Loveland nickel/copper/gold property and the Gold Rush gold/silver property, as well as completing due diligence and financing of the Tully gold property, all located in the Timmins, Ont., mining district.

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