Mr. Juan Giron Jr. reports

CANSTAR EXPANDS PLATFORM WITH PROPOSED ACQUISITION IN SWEDEN'S GOLD-RICH SKELLEFTE VMS DISTRICT

Canstar Resources Inc. has executed a non-binding letter of intent (LOI) with Lithological Opportunities Ltd. (LithOps) to acquire a 100-per-cent interest in three exploration licences in the northern Skellefte district of Sweden, covering approximately 310 square kilometres (31,000 hectares) of the volcanic belt. Sweden holds a top-10 ranking within the Fraser Institute's global Mining Investment Attractiveness Index.

The transaction marks a significant strategic step in Canstar's evolution as a focused volcanogenic massive sulphide (VMS) exploration company, adding exposure to one of the most endowed and historically productive VMS belts in Europe.

Strategic highlights

Entry into a premier VMS camp

The Skellefte district is one of Europe's premier VMS belts, hosting more than 150 known deposits and prospects and over 100 years of polymetallic production. Thirty deposits have been mined and four mines are currently in production: two VMS deposits, one Au-Te (gold-tellurium), VMS-related deposit and one Au (gold) deposit. The district is particularly notable for:

• High grades, especially gold, relative to global VMS averages;
• Polymetallic systems containing copper, zinc, lead, silver and gold;
• The presence of exceptionally gold-rich VMS deposits, including the historic Boliden deposit, which reported multimillion-ounce gold endowment at very high grades.

Skellefte is one of the VMS districts globally recognized for hosting auriferous VMS systems, providing exposure to both critical metals and precious metals within the same deposit type.

References to other deposits and districts are provided for context and are not necessarily indicative of mineralization on the project.

Underexplored northern extension under cover

The project is located in the northern portion of the district, an area characterized by:

• Favourable volcanic stratigraphy consistent with known VMS-hosting sequences;
• Limited modern integrated exploration;
• Extensive glacial till cover that historically limited traditional boulder-based prospecting and earlier airborne geophysical targeting.

This combination of high geological prospectivity and lower exploration maturity aligns directly with Canstar's and LithOps' project selection philosophy.

Technical leadership with deep district expertise

Canstar has worked with Dr. Rodney Allen, a globally recognized VMS expert and former chief geologist with Boliden, in evaluating this opportunity. Dr. Allen has been a key technical adviser to Canstar on its Mary March and Buchans projects in Newfoundland, Canada, and brings extensive experience in the Skellefte district, where he has lived and worked for over 20 years.

Dr. Allen is also a co-author, alongside Dr. Harold Gibson, of the widely cited modern integrated VMS exploration model, which emphasizes 3-D geological reconstruction, structural interpretation, lithogeochemistry and geophysics integration as core targeting tools.

Canstar expects Dr. Allen to remain actively involved in advancing the project.

Exploration strategy: disciplined, high-ROI (return of investment) phase 1

Subject to execution of a definitive agreement, TSX Venture Exchange acceptance, and, where required, the grant of the exploration permits and other applicable permissions, the company intends to commence phase 1 work designed to generate and prioritize drill-testable targets efficiently.

Initial phase 1 work is expected to include:

• Moraine/till geochemical sampling to vector toward concealed mineralization;
• Modern reinterpretation of historical geophysical data;
• Integration of structural and stratigraphic controls;
• Rapid ranking of target corridors for follow-up geophysics and drilling.

The company expects phase 1 screening costs to be modest and designed to generate drill-testable targets without committing to large upfront expenditures.

Strategic context

Canstar has consistently communicated its intention to pursue disciplined strategic growth aligned with its geology-first philosophy.

The addition of the Skellefte project:

• Expands Canstar into a second globally recognized VMS district;
• Maintains exposure to gold within a VMS framework;
• Builds technical depth and advisory capacity;
• Adds scale while remaining operationally manageable.

This transaction complements Canstar's recently finalized exploration joint venture with VMS Mining Corp. (VMSC), which was founded by John Burzynski, Patrick Anderson, Jose Vizquerra Benavides and Bernardo Alvarez Calderon as a technically focused exploration venture targeting new, high-grade VMS discoveries in proven districts. The company expects to commence drilling at its Mary March project in Newfoundland's Buchans district in summer of 2026, subject to permitting and final program design. Together, these initiatives position Canstar with exposure to two high-grade VMS districts supported by leading VMS expertise.

Chief executive officer commentary

Juan Carlos Giron Jr., president and CEO of Canstar, commented:

"This transaction sharpens Canstar's identity. Over the past year, through our partnership with VMS Mining Corp. and the technical leadership of Dr. Harold Gibson, we have built a clear, geology-first VMS exploration strategy. Skellefte represents a natural extension of that strategy into one of the most endowed VMS districts in the world.

"The LithOps principals bring extensive experience in district-scale project generation, with a strong operational presence in Sweden and experience with the Skellefte belt. Their disciplined approach -- targeting high-prospectivity areas with relatively low exploration maturity and advancing them through rigorous, data-driven integration -- has been applied across leading global mining camps and has contributed to multiple discoveries. We look forward to advancing this project in close collaboration.

"Skellefte's northern sector presents a compelling exploration thesis: the right volcanic setting, underexplored ground beneath cover and modern tools capable of seeing what earlier programs could not. This is precisely the kind of setting where integrated geological thinking can unlock discovery.

"Following the recently announced binding LOI regarding Golden Baie, which is expected (subject to TSX-V acceptance and definitive documentation) to strengthen our balance sheet and reduce near-term holding costs, we believe we are well positioned to advance this new opportunity alongside our VMSC-funded program in the Buchans district. Together, these initiatives define Canstar as a focused VMS exploration company pursuing discoveries in some of the world's best districts."

Transaction terms

Under the terms of the LOI, Canstar may acquire a 100-per-cent interest in the project by:

• Issuing 15 million common shares of the company to LithOps;
• Paying $50,000 upon signing of a definitive agreement;
• Paying $100,000 12 months following execution.

The project will be subject to a 2.5-per-cent net smelter return (NSR) royalty, with Canstar retaining the right to repurchase a 0.5-per-cent royalty for $1-million and a further 0.5-per-cent royalty for $2-million, reducing the royalty to 1.5 per cent.

The LOI is non-binding except for customary provisions, and remains subject to due diligence, definitive documentation, TSX Venture Exchange acceptance and applicable Swedish regulatory decisions. Any securities issued will be subject to TSX-V acceptance and applicable resale restrictions.

There can be no assurance that a definitive agreement will be executed or that the transaction will be completed as proposed or at all.

Canstar will provide additional information, including technical information and property maps, in subsequent news releases.

Qualified person statement

Bob Patey, BSc (honours), vice-president for exploration for Canstar and a qualified person as defined in National Instrument 43-101, has reviewed and approved all scientific and technical information disclosed in this news release.

Acknowledgement

Canstar acknowledges the financial support of the junior exploration assistance (JEA) program from the government of Newfoundland and Labrador Department of Industry, Energy and Technology, which has been a valuable contribution to the exploration programs on the company's Buchans-Mary March and Golden Baie projects.

About Canstar Resources Inc.

Canstar Resources is an exploration company focused on critical minerals and gold. The company's 100-per-cent-owned Golden Baie project (489.5 square kilometres) hosts high-grade gold and antimony showings along a major mineralized structure that also hosts a large number of gold deposits. The Buchans and Mary March projects (142.1 square kilometres) are located within the world-class, past-producing VMS zinc-, copper-, gold- and silver-rich Buchans mining camp, and boast high-grade zinc and copper discoveries.

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