Headwater signs Crane Creek earn-in deal with Centerra

Executive Summary

• Headwater Gold Inc. has entered into a definitive earn-in agreement with a subsidiary of Centerra Gold Inc. to explore the Crane Creek Gold Project in Idaho.
• Centerra can earn up to a 70% interest in the project through staged exploration expenditures totaling up to $25 million USD and the completion of a Preliminary Economic Assessment (PEA).
• The agreement includes an initial cash payment of $87,000 USD and annual payments of $50,000 USD, with specific milestones for ownership stakes (51%, 60%, and 70%) tied to funding and technical deliverables.

Key Details

• Transaction Structure: Centerra earns up to 70% interest via three stages of expenditures and assessments.
• Initial Payments: Centerra pays $87,000 USD upon execution and $50,000 USD annually thereafter; these count toward exploration expenditures.
• Stage 1 (51% Interest): Centerra must finance $10 million USD in exploration within four years, including a minimum commitment of $2.5 million USD in the first three years. Centerra acts as the initial operator.
• Stage 2 (60% Interest): Centerra may earn an additional 9% (total 60%) by financing $15 million USD within four years following Stage 1 completion.
  • Royalty Trigger: Upon Stage 2 completion, Headwater cedes a 2% Net Smelter Return (NSR) royalty on royalty-free claims and a 1% NSR royalty on land with existing underlying royalties.
• Stage 3 (70% Interest): Centerra may earn an additional 10% (total 70%) by completing a PEA within two years of Stage 2 completion.
  • PEA Requirement: Must reflect a mineral resource of not less than one million ounces of gold equivalent.
  • Extension: Centerra can extend the Stage 3 period via annual payments or incremental exploration expenditures.
• Fallback Provision: If Centerra completes Stage 1 but not Stage 2, its interest reduces to 49%, which Headwater has the right to purchase at a mutually agreed price or fair value.
• Project Status: Crane Creek is fully permitted for drilling under a BLM Notice of Intent and Idaho Department of Lands plan of operation.
• Exploration Plan: Partners intend to initiate Phase 1 drilling as early as Spring 2026, targeting high-grade vein mineralization at depth and near-surface bulk-tonnage potential based on recent geophysical surveys.

Notable Quotes

• Caleb Stroup, Headwater's President and CEO: "Since becoming a strategic Headwater shareholder last year, Centerra has been an engaged and supportive partner. We are very excited to expand that relationship into a fully aligned exploration partnership on the project level at Crane Creek. Centerra's commitment to a substantial multistage earn-in underscores the scale of the opportunity at this project and allows us to properly test what we believe is a large, underexplored epithermal system with high-grade potential at depth as well as near surface, bulk-tonnage potential."