Mr. Stephen Stewart reports

METAL ENERGY COMPLETES HIGHLAND VALLEY COPPER ACQUISITION

Metal Energy Corp. has closed its acquisition of a 100-per-cent interest in the Highland Valley copper project in British Columbia following the initial announcement on Oct. 4, 2024.

Highlights:

• Metal Energy now owns 100 per cent of the Highland Valley copper project;
• Project is adjacent to Teck's Highland Valley copper (HVC) mine, Canada's largest copper mine;
• Partnering with team led by geologist Charlie Greig to introduce new exploration ideas to this historic district;
• Extensive mineralization identified in zones 1 and 2 along trend from Teck's HVC mine.

The Highland Valley project spans 240 square kilometres in Southern British Columbia, just 3.5 hours from Vancouver and 30 minutes from Merritt, with access to critical infrastructure, including roads, rail and power.

As part of the Ore Group, Metal Energy will draw on its extensive project management experience to collect, harmonize and modernize historical data, creating a comprehensive database to identify opportunities and trends for future exploration and development. The acquisition aligns with the Ore Group's strategy of capitalizing on historical data in regions with excellent infrastructure and proximity to major operating mines within established mining districts.

Located in the southern part of the Guichon Creek batholith, the Highland Valley project shares many geological features with Teck's HVC mine, particularly in two priority areas:

• Zone 1 -- contains copper-silver-molybdenum mineralization over 1,200 metres, open to the south and at depth, presenting significant expansion potential; key copper-rich minerals include chalcocite and bornite;
• Zone 2 -- hosts high-grade copper-gold-silver-molybdenum-rhenium mineralization, distinguished by its gold enrichment, rare for this region; this zone also offers expansion potential in all directions.

New ideas into an old camp -- initial work program to begin immediately

The initial work program will produce systematic ground AMT (audio magnetotelluric) geophysical coverage of a highly prospective glacially covered area along trend from Teck's HVC mine. This technique is novel for the district and appears highly effective in delineating the subtle porphyry system footprints characteristic of the district based on initial surveys at zones 1 and 2. In addition, passive seismic and hyperspectral studies will leverage accumulated geological knowledge to help vector toward new covered targets.

The project is permitted for drilling and this newly acquired, highly prospective land package brings together underexplored targets and high-potential zones, where systematic drilling will expand known areas and explore new targets within the eastern and western parts of the Highland Valley property.

Under the previous ownership of Happy Creek Minerals Ltd., the Highland Valley property was consolidated into a single extensive land package over 17 years. In 2021, Happy Creek acquired the Mystery property (438 hectares) at the northern extent of the Highland East claims.

Terms of the acquisition

The acquisition was executed pursuant to a property purchase agreement between Metal Energy and Happy Creek Minerals Ltd. dated Oct. 2, 2024, as amended pursuant to an amending agreement dated Oct. 3, 2024.

On closing of the acquisition, the company paid $300,000 and issued a total of 11,736,100 common shares in the capital of the company to Happy Creek at a deemed price per common share of two cents, resulting in Happy Creek owning a total of 9.9 per cent of the total issued and outstanding common shares. The company also granted Happy Creek a 2.5-per-cent net smelter royalty (NSR) on the project, of which 1.5 per cent may be repurchased by the company for a single payment of $5-million.

In addition, pursuant to the purchase agreement, the company has agreed to the following consideration:

• The company is required to conduct and file a minimum of $250,000 in exploration expenditures on the property by Dec. 31, 2024.
• The company shall issue common shares to Happy Creek with a value of $1-million (based on a price per common share as set out as follows) on or before the date that is 12 months from the date hereof (tranche 1 consideration shares).
• The company shall issue common shares to Happy Creek with a value of $1-million on or before the date that is 24 months from the date hereof (tranche 2 consideration shares).
• The company shall issue common shares to Happy Creek with a value of $1.5-million on or before the date that is 36 months from the date hereof (tranche 3 consideration shares).
• The company shall issue common shares to Happy Creek with a value of $2.5-million on or before the date that is 36 months from the date hereof (tranche 4 consideration shares).

The number of additional consideration shares to be issued and delivered to Happy Creek as mentioned will be determined based on the greater of: (i) the discounted market price (as defined in Policy 1.1 of the TSX Venture Exchange corporate finance manual); and (ii) the volume-weighted average price of the common shares that trade on the TSX-V for the 30 trading days prior to the date such additional consideration shares are issued, provided that, in any event, no additional consideration shares shall be issued at a price of less than one cent per common share and the aggregate number of common shares that are issued at a price or deemed price that is less than five cents in any 12-month period does not exceed 100 per cent of the number of common shares that were issued and outstanding, on a non-diluted basis, at the beginning of that 12-month period.

If the issuance of any of the additional consideration shares would result in Happy Creek holding in excess of 19.9 per cent of the issued and outstanding common shares, Metal Energy shall pay the balance of the applicable payment in cash.

In addition, provided Happy Creek continues to hold at least 5 per cent of the issued and outstanding shares, Happy Creek will have the right to nominate one director to Metal Energy's board of directors. To this effect, the company shall appoint Jason Bahnsen to the board of directors until the next annual general meeting of the company.

In addition to the NSR granted to Happy Creek, the project is subject to the following NSRs, which shall be assigned to the company in connection with the acquisition:

• A 0.5-per-cent NSR to Mike Jones on seven mineral claims on the project; the company may purchase such royalty for $1-million;
• A 2-per-cent NSR to Masco Capital Inc. on two mineral claims on the project; the company may purchase 1 per cent of such royalty for $1-million;
• A 2.5-per-cent NSR to Brian T. Malahoff on seven mineral claims on the project, payable to a maximum of $3-million; the company may purchase 1 per cent of such royalty for $2-million;
• A 2.5-per-cent NSR to Dwayne Kress on two mineral claims on the project; the company may purchase such royalty for $3-million;
• A 2-per-cent NSR to Christopher Delorme on 18 mineral claims on the project; the company may purchase such royalty for $2-million.

In accordance with the purchase agreement, Happy Creek retains the buyback rights contained in the existing NSRs.

Pursuant to the purchase agreement, the company is required to complete financings with a minimum total of $1.25-million on or before the date that is six months after the date hereof, and an additional $1.25-million on or before the date that is 12 months after the date hereof. In the event that the financing conditions are not met or if the company misses a payment or does not complete the initial exploration expenditures, then the interest in the property shall be transferred to Happy Creek in accordance with the purchase agreement.

Qualified person statement

The technical information contained in this news release has been reviewed and approved by Mike Sweeny, PGeo, technical adviser for Metal Energy and a qualified person as defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects.

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