Mr. Chris McLeod reports

PACIFIC IMPERIAL ENTERS INTO AN OPTION AGREEMENT TO ACQUIRE FENTON PROPERTY IN BRITISH COLUMBIA

Pacific Imperial Mines Inc. has entered into an option agreement dated Jan. 26, 2026, with Hudbay Minerals Inc., pursuant to which Hudbay has granted the company the option to acquire a 100-per-cent interest in the Fenton property in British Columbia.

The property has road access and is situated 30 kilometres south of Houston, B.C. The approximately 1,700-hectare property is extensively covered by glacial till and is accessible by a network of logging roads. Past exploration on the property includes geochemistry, airborne and ground geophysics, and limited drilling. Mineralization on the property is an epithermal, high-to-low-sulphidation, precious metal system hosted within felsic volcanic rocks of the Kasalka formation. The age, mineralization and alteration characteristics of the property are similar to those of Artemis's Blackwater deposit, which lies to the southeast along a southeast-northwest regional trend, which hosts a majority of the gold-silver prospects and deposits in the region. The past-producing Equity silver mine is 40 kilometres east of the property.

The transactions contemplated by the option agreement are subject to the company obtaining the approval of the TSX Venture Exchange.

Under the option agreement, in order to exercise the option, the company must complete all of the following earn-in requirements on or before the sixth anniversary of the date that the exchange provides approval for the transactions contemplated by the option agreement:

1. Incur an aggregate of $5.25-million in exploration expenditures on the property in staged amounts for each anniversary ending on the sixth anniversary date;
2. Make a one-time initial cash payment to Hudbay in the amount of $25,000 within 180 days following the date that the company receives exchange approval for the option agreement;
3. Make cash payments to Hudbay in the aggregate amount f C$2,175,000, or, alternatively, issue to Hudbay an equivalent number of common shares of the company, in staged amounts for each anniversary ending on the sixth anniversary date and based on the applicable market price for such shares, as further described below.

The company may elect to accelerate any of the earn-in requirements under the option agreement at its discretion.

Any share issuance to Hudbay under the option agreement will have an issue price per share equal to the volume weighted average trading price of the shares on the exchange during the 10 trading days ending on the third trading date preceding the date any shares are issued under the agreement, subject to a minimum issue price of five cents per share.

If any share issuance to Hudbay under the option agreement would result in Hudbay holding greater than 9.99 per cent of the shares, the company will be required to settle the applicable payment in cash instead of shares. The shares issuable under the option agreement will be subject to a hold period ending four months and one day after the date of issuance in accordance with applicable securities laws and the policies of the exchange.

Upon the exercise of the option, the company will acquire a 100-per-cent interest in the property and Hudbay will be granted a 1.25-per-cent net smelter return (NSR) royalty on the property. Within 10 days following the company's receipt of all required governmental permits to construct and operate a mine on the property after exercise of the option, the company will make a one-time cash payment of $5-million to Hudbay, which payment will constitute an advance payment of the Hudbay NSR. In addition, following the exercise of the option and within 10 days after the company publicly announces the commencement of commercial production on the property, the company will make an additional one-time cash payment of $10-million to Hudbay, which payment will also constitute an advance payment of the Hudbay NSR. The company has also granted Hudbay a right of first refusal in respect of the sale of any future metals or ore production from the property.

In addition to any Hudbay NSR that may be granted on the property following the exercise of the option by the company, the property is currently subject to a 2-per-cent net smelter return royalty, payable to a third party after the commencement of commercial production, which underlying NSR would be assumed by the company if the option is exercised. The company will have the right to purchase 50 per cent of the underlying NSR (a 1-per-cent net smelter return royalty) for a cash payment of $700,000.

The technical disclosure in this news release has been reviewed and approved by Peter Holbek, MSc, PGeo, a director of the company and a qualified person as defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects.

About Pacific Imperial Mines Inc.

Pacific Imperial is a mineral exploration company based in Vancouver, Canada, engaged in the acquisition, exploration, evaluation and development of mineral properties in an acceptable risk environment. The company's current focus is on the Brownell property in Saskatchewan and the Babine property in British Columbia.

We seek Safe Harbor.