Mr. Tony Reda reports

TECTONIC METALS CLOSES FIRST TRANCHE OF PRIVATE PLACEMENT

Tectonic Metals Inc. has closed the first tranche of a private placement initially announced on May 9, 2023, for aggregate gross proceeds of $3,346,784.76, consisting of the issuance of 30,425,316 units of the company at a price of 11 cents per unit. The brokered portion of the offering was completed pursuant to an agency agreement with Canaccord Genuity Corp. and Research Capital Corp. The financing was led by Tectonic's largest shareholder, Crescat Capital, maintaining its 19.56-per-cent ownership of the issued and outstanding common shares of Tectonic.

The offering

Each unit (including both LIFE (listed issuer financing exemption) units and hold units, as defined herein) comprises one common share in the capital of the company and one-half common share purchase warrant. Each warrant entitles the holder thereof to purchase one common share for a period of 24 months following the closing date of the offering at an exercise price of 15 cents.

The units issued under the offering were offered to purchasers pursuant to: (i) the listed issuer financing exemption under Part 5A of National Instrument 45-106 for gross proceeds of $2,788,987.30, in all provinces of Canada, except Quebec; and (ii) the accredited investor exemption under NI 45-106 for gross proceeds of $557,797.46. The LIFE units are not subject to resale restrictions, pursuant to applicable Canadian securities laws, subject to the rules of the TSX Venture Exchange. The hold units are subject to a statutory hold period of four months, in accordance with applicable Canadian securities laws. Securities issued to United States investors under the offering are subject to a six-month hold period. Purchasers under the offering received a fixed ratio of LIFE units to hold units, being 5:1. Each subscriber purchased one hold unit for every five LIFE units purchased. Crescat Portfolio Management LLC, Tectonic's largest shareholder, who prior to the offering held 19.56 per cent of the issued and outstanding common shares of Tectonic, subscribed for 5,987,880 units for aggregate gross proceeds of $658,666.80 in the offering.

Pursuant to the agency agreement, the agents received a 6-per-cent cash commission and non-transferrable compensation warrants of the company to acquire that number of common shares equal to 6 per cent of the total number of units sold under the offering. Sales of units to purchasers on the president's list of the company are subject to a reduced cash commission and warrant commission of 1 per cent and 1 per cent, respectively. The agents received a cash commission of $83,522.56, and a total of 759,296 compensation warrants were issued to the agents and selling group members.

In addition, the company agreed to pay National Bank Financial Inc. (NBF) a finder's fee on purchasers solicited by NBF. The finder's fee consists of: (i) a 5-per-cent cash commission on units purchased by subscribers introduced to the company by NBF; and (ii) the issuance of non-transferrable common share purchase warrants in the company equal to 5 per cent of the number of units purchased by subscribers introduced to the company by NBF. NBF received $9,240 in cash commissions and a total of 84,000 finders' warrants.

The net proceeds of the offering will be used to advance the company's Flat gold project and for general working capital.

The offering is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the final approval of the TSX-V.

The offering and the issuance of the units referenced in this press release involve related parties (as such term is defined under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions) and, therefore, constitutes a related party transaction under MI 61-101. This transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101, pursuant to sections 5.5(b) and 5.7(1)(a) of MI 61-101, as the company is not listed or quoted on any of the stock exchanges or markets listed in Subsection 5.5(b) of MI 61-101, and the fair market value of the securities to be distributed and the consideration to be received for the securities issued to related parties under the offering does not exceed 25 per cent of the company's market capitalization. The related party participating in the offering subscribed for 5,987,880 units for aggregate gross proceeds of $658,666.80.

We seek Safe Harbor.