Mr. Paul Wood reports

BTU ANNOUNCES AGREEMENTS WITH KINROSS GOLD CORPORATION: PRIVATE PLACEMENT, ASSET PURCHASE AGREEMENT AND OPTION AGREEMENT

BTU Metals Corp. has entered into a series of transactions with Kinross Gold Corp. that will strengthen the exploration effort on the significant properties of BTU in the Great Bear gold area southeast of the main Red Lake gold camp area of Northwestern Ontario (the Dixie Halo project). The Dixie Halo project is located adjacent to Kinross's Great Bear project that Kinross, on Feb. 13, 2023, headlined in a press release, "Kinross announces robust initial mineral resource of 2.7 Moz indicated and 2.3 Moz inferred for Great Bear project."

The transactions include: (i) a purchase agreement pursuant to which Great Bear Resources Ltd. (GBR), a wholly owned subsidiary of Kinross, acquired from BTU certain unpatented mining claims located in the Kenora district of Ontario, with BTU continuing to participate in those lands through a newly created royalty payable to BTU; (ii) an option agreement, which provides GBR with an option to earn a 70-per-cent interest in certain unpatented mining claims held by BTU located in the Kenora district of Ontario; and (iii) a subscription agreement pursuant to which Kinross purchased 25 million common shares of BTU at a purchase price of five cents per common share.

BTU chief executive officer Paul Wood commented: "We are very pleased to enter into this series of transactions with Kinross, which will: provide $2.8-million in cash to the company by way of a private placement and property sale; accelerate the exploration of BTU's properties through an earn-in agreement of up to $4.7-million; and, in all cases, leave substantial upside for BTU shareholders through a royalty package and its at least 30-per-cent interests in the optioned properties of the Dixie Halo project. BTU will fully support Kinross as they commence their exploration work on the optioned properties and we are very pleased to have Kinross as a partner. The company is also in the process of sourcing, accepting and assessing new and complementary minerals exploration projects to add to and diversify our property portfolio."

Kinross commented, "We are pleased to be working with the BTU Metals team to advance the Dixie Halo property, which is adjacent to Kinross's 100-per-cent-owned Great Bear project."

Subscription

The company has entered into a subscription agreement with Kinross for gross proceeds of approximately $1.25-million in an arm's-length private placement of its common shares, comprising 25 million common shares at a purchase price of five cents per common share. The net proceeds of the private placement will be used by the company for investments, general and working capital purposes.

The private placement closed on Feb. 22, 2023, subject to the satisfaction of customary closing conditions, including the final approval of the TSX Venture Exchange. Kinross became an insider of the company upon the closing of the private placement, and holds 25 million common shares, representing 17.5 per cent of the issued and outstanding common shares.

The common shares will have a hold period of four months and one day from the closing date of the private placement.

Asset acquisition

The company has also entered into a purchase agreement with GBR, a wholly owned subsidiary of Kinross, for the purchase of certain unpatented mining claims located in the Kenora district of Ontario. The acquisition properties have a total area of 2,637 hectares, and consist of 39 boundary-cell mining claims and 76 single-cell mining claims located to the south of the Great Bear project, as well as two multicell mining claims located to the north of the Great Bear project. BTU will hold net smelter royalties from 1.5 per cent to 2.5 per cent on these properties as well as underlying royalty buyback rights.

The consideration payable by GBR pursuant to the acquisition is: (i) $1.55-million in cash, with $1.25-million due immediately on closing and an additional $300,000 due on the one-year anniversary of the closing date, and (ii) GBR issued to the company a variable 1.5-per-cent-to-2.5-per-cent NSR royalty on the acquisition properties, such that each acquisition property will have a cumulative total 4-per-cent NSR royalty attached to it upon the grant of the royalty, once combined with the existing royalties payable over and in respect of the acquisition property. BTU will maintain any existing third party royalty buyback rights in respect of the acquisition properties.

The acquisition is an arm's-length transaction pursuant to the policies of the TSX-V and closed on Feb. 22, 2023, subject to satisfaction of customary closing conditions, including the final approval of the TSX-V.

Option agreement

The company is also pleased to announce that it has entered into a property option agreement with GBR, pursuant to which GBR has been granted the right to acquire an undivided 70-per-cent interest in and to 757 mining claims (12 Boundary-cell mining claims, three multicell mining claims and 742 single-cell mining claims) covering approximately 16,410 hectares of land, located in the Kenora district of Ontario.

Pursuant to the terms of the option agreement, GBR has the option to acquire the 70-per-cent interest in the optioned properties in consideration for completing cash payments or exploration expenditures on the optioned properties, being: (i) $2.7-million in expenditures, to be incurred by GBR on or before the date that is 36 months from the effective date of the option agreement, and (ii) a further $2-million of expenditures, to be incurred by GBR in its sole discretion within 48 months from the effective date of the option agreement.

The option agreement will constitute a reviewable transaction under TSX-V Policy 5.3 -- Acquisitions and Dispositions of Non-Cash Assets as it will, if completed, result in a disposition of more than 50 per cent of the company's assets. As such, the option agreement will be subject to the approval of the majority of the shareholders of the company and the company intends to call a meeting of shareholders as soon as practicable for the purposes of approving the option agreement. The closing of the private placement and the acquisition are independent of, and not conditional upon, the closing of the option agreement. Further details will be provided in a subsequent press release.

The option agreement will also be subject to satisfaction of customary closing conditions, including the final approval of the TSX-V.

During the term of the option agreement, GBR will be the operator of the optioned properties.

No new control person will be created as a result of the transactions and no finders' fee is payable by any party with respect to the transactions.

Early warning disclosure

In connection with the private placement, Kinross acquired 25 million common shares. Kinross now holds an aggregate of 25 million common shares, representing approximately 17.5 per cent of the then issued and outstanding common shares on a non-diluted basis, requiring disclosure pursuant to the early warning requirements under applicable securities laws. Kinross does not have any current intentions to significantly increase or decrease its beneficial ownership of, or control or direction over, any additional securities of the company. Kinross may, from time to time, and depending on market and other conditions, acquire common shares through market transactions, private placements, treasury issuances or convertible securities, or otherwise sell all or some portion of the common shares owned or controlled, or may continue to hold the common shares.

Kinross's head office is location at 25 York St., 17th floor, Toronto, Ont., M5J 2V5.

The forgoing disclosure is being disseminated pursuant to the requirements of National Instrument 62-103 -- The Early Warning System and related Take-Over Bid and Insider Reporting Issues of the Canadian Securities Administrators, which also requires an early warning report to be filed with the applicable securities regulators containing additional information with respect to the forgoing matters. A copy of the early warning report in respect of the private placement will be available on the company's profile on SEDAR.

About BTU Metals Corp.

BTU Metals is a junior mining exploration company focused on the Dixie Halo project located in Red Lake, Ont., immediately adjacent to the Great Bear project.

We seek Safe Harbor.