Mr. Peter Bell reports

KERMODE REPORTS CONCEPTUAL ESTIMATE FOR RYE PATCH SILVER PROJECT, NEVADA

Kermode Resources Ltd. has released a conceptual estimate for the Rye Patch project. This estimate is compliant with Canadian National Instrument 43-101 Section 2.3(2)(a) where Kermode discloses the potential quantity and grade, expressed as ranges, of a target for further exploration. Kermode notes that the potential quantity and grade is conceptual in nature. There has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource. This news release states the basis on which the disclosed potential quantity and grade has been determined.

The Rye Patch project contains two principal target areas, which Kermode refers to as the North and South zones. The South zone includes the historic Rye Patch mine and the location where Kermode reported fire assay results on July 26, 2022, that returned 24,438 grams per tonne silver and two grams per tonne gold. The North zone covers an area of extensive quartz stockwork veining similar to that seen in the mine workings of the South zone but has no mine development. Historic surface samples of exposed mineralization in the North zone have returned values ranging from 0.041 to 0.118 ounce of gold per ton and 1.8 to four ounces of silver per ton (1.27 to 3.67 g/t Au and 55.99 to 124.41 g/t Ag).

Based on lidar scanning of the Rye Patch mine workings in 2022, both the North and South zones are interpreted to comprise large, chutes of mineralization raking down southerly in the plane of the subvertical to steeply east-dipping Alpha vein. Periodically mineralization is seen to bleed out from the Alpha vein into favourable sedimentary beds forming subhorizontal mineralized bodies extending off of the Alpha vein for short distances.

The Rye Patch property contains Canadian National Instrument 43-101 Section 2.3 (2)(a) compliant resources conceptually estimated to contain from 142,237,621 ounces of silver and 409,362 ounces of gold to 546,753 ounces of silver and 3,755 ounces of gold in two principal target zones on the property as tabulated and discussed in more detail herein. Additional information is provided in this news release and a supplementary report available on SEDAR+ and Kermode's website.

Kermode chief executive officer Peter Bell comments: "I believe this type of estimate is helpful for the public to understand the potential significance of an exploration project. I am grateful for the opportunity to publish a comprehensive review of the Rye Patch project that provides details of potential volume, tonnage, grade and metal endowment."

Historical production

Known production at the Rye Patch mine averaged just over 36 ounces silver recovered per ton using chloride leaching and amalgamation. Recovery with these methods was typically 75 per cent or less.

As reported in the news release from Dec. 15, 2021, Kermode reports that lidar scans of the stopes accessible from the 5506 level of the Rye Patch mine have shown an indicated volume of more than 5,547 cubic yards indicating that more than 16,000 metric tonnes or roughly 18,000 imperial tons of ore were extracted from just this one stope. These results were calculated by sectioning the lidar scan of the workings and creating approximately 200 different cross-sections on one-metre intervals to estimate the volume of the stopes, excluding access and haulage drifts in the old workings. Initial results for part of this one stope from this one level exceed the total life-of-mine production reported for the Rye Patch mine from 1871 to 1881, which is when Kermode believes the stope it has scanned was mined. The Rye Patch mine was reported to have produced 13,605 imperial tons with a recovered value of $644,626 between the years of 1871 and 1881.

Mineral targets and resources -- discussion

Read a summary of the exploration concept for each target area below.

The deposit is modelled in two separate zones or chutes called the North zone and South zone. Both zones rake down to the south-southwest and have a combined measured strike at the surface of 2,930 feet. Each is projected down dip half the distance of its measured strike at 715 feet for the North zone and 750 feet for the South zone.

1. North zone:
   • The North zone is the gold-dominated zone where surfaces samples run from 0.04 to 0.118 opt Au and one to four opt Ag.
2. South zone:
   • The South zone includes the Rye Patch mine where all of the historic production came from and the location where a dump sample assayed 24,438 grams per tonne silver, two grams per tonne gold by fire assay. This zone includes the Alpha patent, which covers approximately four acres at the Rye Patch mine. The Alpha patent includes extralateral mining rights for approximately 300 metres of strike around the Rye Patch mine.

The reader is reminded the estimate is conceptual. Although historic data confirm silver and gold mineralization at Rye Patch, there are insufficient data to define mineral resources of any category and there can be no assurance that further exploration will delineate one. There are no representations with respect to amenability to, or recoverability of, any resources that may be developed with further exploration as there have been no metallurgical studies or investigations on mineralized material from the Rye Patch project.

About the Rye Patch project

The Rye Patch project is situated in the Mill City Hills of Pershing county in western Nevada along the I-80 corridor and within the highly productive, northeast-trending, structural and gold lineament commonly known as the Humboldt structural lineament (HSL) or Midas Trough. Numerous other nearby major mines deposits and districts are found within the HSL, including the Coeur Rochester, Florida Canyon, Standard, Hycroft Lewis, Rosebud, Midas, Fire Creek, Hollister, Getchel, Twin Creeks, Sleeper, and other mines and deposits. The property has excellent access to nearby transportation, electrical, natural gas and communications together with a highly skilled and experienced work force in the nearby towns of Reno, Lovelock and Winnemucca. The property lies directly on trend with the Florida Canyon and Standard mines, and is a structural, geological and lithological extension of the highly mineralized and very productive Humboldt Range. Historic exploration indicates the property has excellent exploration potential to develop sediment-hosted gold, porphyry and hot-spring-related gold mineralization similar to nearby mines and deposits in the Humboldt Range.

Deal terms for the Rye Patch project

The option provides Kermode with the right but not the obligation to undertake a cash lease of the property. The property comprises patented and unpatented mining claims in Pershing county, Nevada, owned by Gold Range LLC.

Kermode will not issue any shares under the transaction at any time.

The first phase of the deal is the option, where Kermode begins with a one-year term that can be renewed for additional one-year periods by mutual consent of the counterparties so long as Kermode is paying or causing to be paid all annual claim maintenance fees and holding costs.

During the first phase, Kermode may carry out certain predrilling mineral exploration activities including but not limited to mapping, rock, soil and geochemical sampling, geophysical surveys, and other exploration activities. Kermode will not conduct drilling activities of any kind or nature whatsoever including auger, core, rotary, reverse circulation or other without first entering into the lease agreement contemplated in this option agreement.

The second phase of the deal is a lease, where Kermode commits to these cash payments:

• On signing the lease: $5,000 (U.S.);
• On the first anniversary: $5,000 (U.S.);
• On the second anniversary: $10,000 (U.S.);
• On the third anniversary: $50,000 (U.S.);
• On the fourth anniversary: $100,000 (U.S.);
• On the fifth and sixth anniversaries: $150,000 (U.S.);
• On the seventh and eighth anniversaries: $200,000 (U.S.);
• On the eighth anniversary and thereafter: $250,000 (U.S.).

The lease has a 10-year term and is renewable for 10-year increments so long as exploration or mining activity is continuing.

The proposed transaction includes additional terms as follows:

• Royalty: There shall be a 5-per-cent net smelter return (NSR) royalty. The royalty is subject to the following buydown conditions: the first 1 per cent of the NSR may be bought down for $1-million, the second 1 per cent of the NSR may be bought down for $2-million and the third 1 per cent of the NSR may be bought down for $2-million leaving at least a 2-per-cent NSR to Gold Range.
• Advance royalty payments: The cash payments are minimum advance royalties and the total over any previous five-year period shall be recoupable from production royalty (NSR) payments.
• Inflation index: All cash payments and buydowns for year 5 and beyond indexed to CPI with 2022 base year.
• Future sales interest: An amount equal to 10 per cent of gross value of any transaction will be payable by Kermode to the Gold Range if Kermode sells the leasehold interest, subject to consent by Gold Range.

Qualified person statement

The technical information in this news release has been reviewed and approved by Robert Carrington, professional geologist and professional engineering geologist, and a qualified person as defined in Canadian NI 43-101 responsible for the scientific and technical information contained herein. Mr. Carrington is not an independent qualified person in respect to the Rye Patch property or Gold Range Company, the owner of the Rye Patch property.

This news release relies on information obtained through a review of public and private files, documents, reports and data dating from 1989 through 2022 together with Mr. Carrington's personal experience and knowledge of the subject property and other nearby and/or similar properties. Verification of the presence of mineralization was made by Mr. Carrington during site visits in 2022. Claim title was verified by Mr. Carrington by examining documents filed with the Bureau of Land Management and Pershing County.

About Kermode Resources Ltd.

Kermode is a junior mining company hunting for exploration opportunities around the world.

We seek Safe Harbor.