Canary Gold Provides Exploration update on Madeira River Project, Rondonia, Brazil

Exploration Update and Drilling Progress

• Canary Gold Corp. released analytical results from its inaugural exploration program at the Madeira River Project in Rondonia, Brazil.
• Assay results from 63 shallow screw auger drill holes (1,289 metres total) showed gold values ranging from 10ppb to 109ppb Au.
• The company has transitioned to reverse circulation (RC) drilling to test deeper, more mature sedimentary horizons potentially reaching granite bedrock.
• Current exploration represents approximately 5% of the total planned program covering an interpreted 80km prospective strike length.

Operational and Strategic Context

• A second centrifuge was installed at the Porto Velho sampling facility in April 2026 to boost processing capacity for expanding reconnaissance drilling programs.
• The company secured an extension on the Rio Madeira Property Option Agreement, extending the exploration-expenditure deadline to July 1, 2026.
• Management confirmed commitment to meet payment obligations ($200,000 cash + 800,000 shares) under the option agreement with New Frontiers Gold Mineração Ltda.

Technical Interpretation

• Results confirm gold within shallow, immature sand-gravel horizons within a potential paleochannel system extending approximately 10km east of the active Madeira river system.
• The company is prioritizing deeper, more mature sedimentary horizons characterized by rounded quartz clasts and iron enrichment.

Comparison to Historical Expectations

• March 24 Update: Previously reported "Elevated Gold Grain Counts" (>105 grains) which generated higher excitement regarding placer potential. The May 6 update provides assay values (ppb) rather than grain counts, representing a shift in reporting methodology but confirming the geological model.
• January 2026 Program: The drilling program was announced in January with a target of 20,000m. The May news confirms only ~1,300m has been completed (screw auger), indicating the RC phase is just commencing. This aligns with expectations for an early-stage exploration update rather than a discovery announcement.
• Price Action: The stock has declined significantly from its October 2025 high of $0.46 to current levels around $0.22. While positive, this news does not materially alter the valuation thesis given the lack of economic grade definitions (ppb vs g/t) and the early stage of the program.

Market Reaction Potential

• Positive Sentiment: Confirms the paleochannel system exists, validating the geological model and previous capital deployment. Prevents the narrative from shifting to "failed exploration."
• Limited Upside Catalyst: The transition to RC drilling implies shallow auger results were insufficient for economic definition, suggesting further spend is required before resource estimation can occur.
• Routine Nature: Exploration updates on a 20,000m program are expected milestones. Without a resource estimate or significant grade increase (e.g., g/t gold), this remains incremental progress rather than a material re-rating event.

Project Description

• Flagship Asset: Madeira River Project, Rondonia, Brazil.
• Target Type: Sediment-hosted gold (Paleochannel system).
• Land Position: Over 160,000 hectares across the Madeira River Gold Province, including tenements acquired from Talisman Venture Partners (~94,700 ha) and Rio Madeira Option Agreement land.
• Geological Model: Mocururu Formation lithologies with iron-cemented gravels rich in quartz and ilmenite, sourced from Andean-derived gold.

Development Stage

• Exploration Phase: Early-stage reconnaissance drilling (Screw Auger and RC).
• Infrastructure: In-country sample preparation facility established in Porto Velho; second centrifuge installed to increase capacity.
• Drilling Program: Planned 20,000m program (5,000m screw auger + 15,000m RC) across 80km strike length.