Mr. Eric Jones reports

THUNDER MOUNTAIN GOLD AND MFD ESTABLISH SMALL-SCALE PRODUCTION AGREEMENT AT SOUTH MOUNTAIN

Thunder Mountain Gold Inc. and MFD Investment Holdings SA have executed a small-scale production agreement for the South Mountain project in Owyhee county, Idaho. Under the small-scale production agreement, Thunder Mountain Gold will serve as operator and MFD will finance 100 per cent of the qualifying capital required to advance to small-scale production. Following commencement of production, project revenues from small-scale production will be allocated 80 per cent to MFD and 20 per cent to Thunder Mountain Gold until MFD has recovered 1.5 times its qualifying capital investment; thereafter revenues will be shared 50/50 until 1.5 million tonnes are mined; then all revenues and production are 100 per cent allocated to Thunder Mountain Gold. Implementation remains subject to permitting, definitive budgets and customary approvals. The agreement will be implemented under the option agreement between the company and MFD dated Jan. 14, 2025, as amended by agreement dated Sept. 4, 2025. Under the option agreement, the company will grant to MFD the option to acquire a 10-per-cent interest in the South Mountain project by MFD incurring an aggregate of $1.0-million in exploration expenditures on the project by Oct. 31, 2026. Investors are referred to the Form 8-K filed concurrently for a detailed summary of the material provisions of the option agreement.

"Advancing selective small-scale production without issuing equity keeps our balance sheet intact, creates positive cash flow and positions the company to pursue resource growth. We believe this combination of non-dilutive funding, operator control and continued exploration focus best supports shareholder value over time," commented Eric T. Jones, president and chief executive officer.

Strategic rationale for Thunder Mountain Gold:

• Non-dilutive pathway to potential cash flow: MFD carries the qualifying capital through initial small-scale production; no change to Thunder Mountain Gold share capital is contemplated by the agreement.
• Operator control retained by THMG: Planning and execution remain with the company as operator.
• Parallel value creation: The framework allows Thunder Mountain Gold to focus on exploration and potential resource expansion while small-scale production may generate non-dilutive cash flow.
• No impact on full-scale project economics: The revenue waterfall applies only to small-scale production and does not alter the economics of the existing option agreement or any future full-scale development.

Principal terms -- small-scale production right:

• Operator: Thunder Mountain Gold;
• Financing: MFD finances 100 per cent of qualifying capital to achieve small-scale production;
• Term/cap: right ends at the earlier of 10 years or 1.5 million tonnes of cumulative economic ore;
• Revenue allocation: 80 per cent MFD/20 per cent Thunder Mountain Gold until 1.5 times MFD payback on qualifying capital; 50/50 thereafter until the term/cap is achieved;
• Scope: applies only to small-scale production revenues; no change to option agreement economics.

Option agreement -- unchanged, with date extension:

• Earn-in: MFD may earn a 10-per-cent equity in South Mountain Mines Inc. (SMMI) by investing $1-million (U.S.);
• Schedule: earn-in deadline extended to Oct. 31, 2026;
• Credit of project expenditures: mutually approved expenditures under the agreement will be credited toward the $1-million (U.S.) threshold;
• All other option agreement provisions remain in full force and effect.

Disclosure logistics and future clarifications

Thunder Mountain Gold's National Instrument 43-101 requirements and MFD's non-issuer disclosures are expected to be addressed with the definitive final JV (joint venture) agreement. Items such as precise small-scale production area limits, definitions of "material" budget changes and governance structures (a technical committee) may likewise be finalized at that time. The agreement is intentionally streamlined at this stage.

The South Mountain project

The South Mountain mine is a polymetallic development project containing high-grade zinc, silver, gold and copper, and is located on private land approximately 70 miles southwest of Boise, Idaho. The project is on private land; permitting has been and should remain straightforward. The project was intermittently mined from the late from 1940s to the late 1960s, most notably by Anaconda Copper, with over 4,000 feet of underground developmental workings that have been rehabilitated and re-engineered, and are MSHA compliant. Thunder Mountain Gold purchased and advanced the project from 2007 through the present, with expenditures into the project of approximately $25-million (U.S.). Historical test mining and processing at the project have mostly come from high-grade carbonate replacement deposits (CRD) and skarn zones that remain open at depth and along strike. According to historical smelter records, approximately 53,642 tons of mineralized material have been mined and direct shipped to the smelter, with average grades; 14.5 per cent zinc (Zn), 10.6 ounces per ton (oz/t) silver (Ag) (363.42 grams per tonne (g/t) Ag), 0.058 oz/t gold (Au) (1.98 g/t Au), 1.4 per cent copper (Cu) and 2.4 per cent lead (Pb) were realized (see the SK-1300 technical resource statement and National Instrument 43-101 technical report dated Dec. 31, 2023, and Dec. 15, 2023, respectively).

Technical data in this news release

The technical information in this news release was reviewed and approved by Tyson Forbush, CPG, consulting geologist with GeoTech LLC, and a qualified person as defined by the U.S. SK-1300 regulations and NI 43-101 (Canada) standards.

About Thunder Mountain Gold Inc.

Thunder Mountain Gold, a junior exploration company founded in 1935, owns interests in base and precious metals projects in the Western United States. The company's principal asset is the South Mountain mine, a historic former Anaconda Copper Company development of zinc, silver, gold, lead and copper, located on private and public lands in Owyhee county, Idaho. Thunder Mountain Gold also owns 100 per cent of the Trout Creek project, a gold exploration project located along the western flank of the Shoshone Mountain Range in the Reese River Valley, adjacent to and surrounded by Nevada Gold Mines, a Barrick and Newmont Gold Inc. joint venture.

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