Fredonia plans early warrant exercise incentive program

Mr. Estanislao Auriemma reports FREDONIA MINING INC. ANNOUNCES INTENTION TO AMEND PRICE OF PREVIOUSLY ISSUED WARRANTS AND IMPLEMENT EARLY WARRANT EXERCISE INCENTIVE PROGRAM Fredonia Mining Inc. proposes to amend the exercise price of certain outstanding common share purchase warrants and implement an early warrant exercise incentive program with respect to certain other outstanding warrants of the company to encourage their exercise and provide proceeds for continuing corporate development activities. The company currently has three series of warrants outstanding, as described in the attached table. Important note about the presentation of the effective number of warrants in the table * The company's outstanding common shares were consolidated on a one-new-for-five-old basis on Nov. 12, 2024, resulting in corresponding adjustments to the exercise price and the exchange ratio of outstanding warrants, but not the number of outstanding warrants. As a result with respect to each series of warrants that are outstanding, five warrants are required to be exercised and a payment of five times the original exercise price is required to be made to acquire one common share. For simplicity with respect to presenting the number of shares issuable on the exercise of warrants and to match the company's continuous disclosure, the number of warrants and exercise prices in this news release are presented on an effective basis, as if the number of warrants was also adjusted to reflect the consolidation. The company's warrant registers and any notice of adjustment sent to warrantholders in connection with the consolidation reflect the effective number of warrants presented in this release multiplied by five and a correspondingly adjusted exchange ratio. The number of warrants presented herein may not total exactly in terms of numbers or percentages due to rounding. Proposed exercise price reduction for $1.40 warrants On April 27, 2022, the company completed a private placement of 22,683,750 units at a price of 28 cents per unit, with each unit consisting of one common share and one common share purchase warrant, exercisable at a price of 28 cents ($1.40 on a postconsolidation basis) until April 27, 2027. Four million eight hundred eighteen thousand nine hundred thirty-two $1.40 warrants are outstanding on an effective basis as at the date hereof. To encourage their eventual exercise, the company proposes to reduce the exercise price of the $1.40 warrants to 45 cents. As the applicable market price of the common shares (as determined in accordance with the policies of the TSX Venture Exchange) at the time of issuance of the $1.40 warrants was greater than the proposed amended exercise price of 45 cents, the TSX-V requires that the term of the reduced $1.40 warrants also be amended to include an accelerated expiry clause such that the exercise period of the $1.40 warrants will be reduced to 30 days if, for any 10 consecutive trading days during the unexpired term of the $1.40 warrants the closing trading price of the common shares is 57 cents or more (being approximately 25 per cent more than the reduced exercise price), with such reduced exercise period to begin no more than seven calendar days after the 10th such trading day. The company will seek the consent of relevant warrantholders for the amendment to the term in accordance with the warrant indenture governing the $1.40 warrants between the company and TSX Trust Company, dated April 27, 2022, as soon as possible. The lead agent in the private placement in which the $1.40 warrants were issued agreed to accept units on the same terms as investors in the offering in lieu of cash compensation and therefore to the knowledge of the company, holds 297,042 $1.40 warrants on an effective basis. The $1.40 warrants issued to the lead agent will not be subject to the proposed amendments and the terms of such $1.40 warrants will remain as is. Proposed exercise price reduction for 50-cent warrants On Feb. 16, 2024, the company completed a private placement of 17,554,480 units at a price of five cents per unit, with each unit consisting of one common share and one-half of one common share purchase warrant, with each warrant exercisable at a price of 10 cents (50 cents on a postconsolidation basis) until Feb. 16, 2026. One million seven hundred fifty-five thousand four hundred forty-eight 50-cent warrants are outstanding on an effective basis as at the date hereof. The company proposes to reduce the exercise price of the 50-cent warrants to 45 cents. As the applicable market price of the common shares at the time of issuance of the 50-cent warrants was greater than the proposed amended exercise price of 45 cents and as the 50-cent warrants expire on Feb. 16, 2026, no corresponding accelerated exercise amendment to the term is proposed. Four hundred fifty-six thousand eight hundred twenty four 50-cent warrants are held by insiders of the company on an effective basis, representing more than 10 per cent of the outstanding 50-cent warrants. The company proposes to only reduce the price of up to 175,544 50-cent warrants (representing 10 per cent of the total number of outstanding 50-cent warrants on an effective basis) held by insiders, on a pro rata basis, and proportionally not reduce the price with respect to the remainder of the insider-held 50-cent warrants. Proposed early warrant exercise incentive program for 30-cent warrants On Sept. 26, 2024, the company completed a financing pursuant to which it issued 33,333,333 units, with each unit consisting of one common share and one common share purchase warrant, exercisable at six cents per common share until Sept. 26, 2027. Six million six hundred sixty-six thousand six hundred sixty-seven 30-cent warrants are outstanding on an effective basis as at the date hereof. The company intends to implement a program to encourage the early exercise of all outstanding 30-cent warrants during a 30-day period commencing on Dec. 18, 2025, and expiring at 4 p.m. on Jan. 19, 2026 (as the date that is 30 days from Dec. 18, 2025, is a Saturday). Under the program, the company proposes to offer an incentive to each holder who exercises 30-cent warrants during a designated incentive period by issuing one additional common share purchase warrant for each 30-cent warrant exercised. Each incentive warrant will entitle the holder to acquire one additional common share at an exercise price of 60 cents per common share for a period of 24 months from the date of issuance. All incentive warrants will be issued to participating holders promptly following the expiry of the incentive period. The incentive warrants, and any common shares issued upon exercise thereof, will be subject to a statutory hold period of four months and one day from the date of issuance of the incentive warrants, in accordance with applicable Canadian securities laws and, where applicable, TSX Venture Exchange policies. Thirty-cent warrants that remain unexercised after the incentive period will continue to be exercisable on their original terms until Sept. 27, 2027, however, no incentive warrants will be issued in respect of any such 30-cent warrants exercised after Jan. 19, 2026. The incentive program is subject to certain conditions, including the receipt of all necessary regulatory approvals, including the final approval of the TSX-V. Eight hundred fifty-three thousand three hundred thirty-three 30-cent warrants are held by insiders on an effective basis, representing more than 10 per cent of the outstanding 30-cent warrants. The company proposes to only incentive the exercise of up to 666,667 30-cent warrants, representing 10 per cent of the total number of outstanding 30-cent warrants and proportionally not incentivize the exercise of the remainder of the insider-held 30-cent warrants. If the incentive program is approved by TSX-V and the incentive program is taken advantage of in full, an additional 6,480,001 common shares would be issuable upon the exercise, if any, of the incentive warrants. About Fredonia Mining Inc. Fredonia holds gold and silver license areas totalling approximately 18,300 hectares in the prolific Deseado Massif geological region in the province of Santa Cruz, Argentina, including its flagship advanced El Dorado-Monserrat project (approximately 6,200 hectares), located close to AngloGold Ashanti's 300,000-ounce-per-year Au-Ag (gold-silver) Cerro Vanguardia mine, the El Aguila project (approximately 9,100 hectares) and the Petrificados project (approximately 3,000 hectares). We seek Safe Harbor.