Highland Critical signs definitive deal for spinout

Mr. Edward Yew reports HIGHLAND CRITICAL MINERALS CORP. ENTERS INTO ARRANGEMENT AGREEMENT FOR SPIN-OUT OF HIGHLAND RED LAKE GOLD CORP. Highland Critical Minerals Corp., further to its news release dated July 22, 2025, has entered into a definitive arrangement agreement dated Aug. 19, 2025, with Highland Red Lake Gold Corp., Highland's wholly owned subsidiary, pursuant to which the company will distribute its Class A common voting shares in the capital of Highland Red Lake and share purchase warrants of Highland Red Lake, exercisable to acquire Highland Red Lake shares at a price of 15 cents per share for a period of five years from the date of issuance, to securityholders of the company, pursuant to a statutory plan of arrangement, to be effected under the Business Corporations Act (British Columbia) (BCBCA). The agreement Pursuant to the agreement, the company will convene a meeting of shareholders and recommend to the holders of Class A common shares in the capital of the company without par value to vote in favour of the arrangement and all other resolutions referred to in the management information circular. Following receipt of shareholder approval for the arrangement at the meeting, the company will complete amendments to its articles, whereby: (i) all of the issued and unissued Highland common shares shall be renamed and each prearrangement common share shall have two votes attaching to each share; and (ii) a new class of shares with terms and restrictions identical to those of the Highland common shares will be created. After implementing the article amendments, the arrangement will be completed, whereby: (i) the prearrangement common shares outstanding as of the final record date of the arrangement shall be exchanged for one Class A common share, 0.5 of a Highland Red Lake share and 0.5 of a Highland Red Lake warrant; (ii) holders of restricted share units (RSUs) in the capital of Highland that have not been exchanged for the underlying prearrangement common shares as of the date the plan of arrangement (as defined herein) becomes effective shall receive an RSU to acquire one Class A common share, and one RSU in the capital of Highland Red Lake to acquire 0.5 of a Highland Red Lake share and 0.5 of a Highland Red Lake warrant, per RSU on the distribution record date; and (iii) holders of Highland warrants outstanding as of the distribution record date that have not been exercised for the prearrangement common shares prior to the effective date shall receive one Class A common share for each prearrangement common share that was issuable upon exercise of the Highland warrant, and 0.5 of a Highland Red Lake share and 0.5 of Highland Red Lake warrant for each prearrangement common share that was issuable upon exercise of the Highland warrant. The company expects that this will result in an aggregate of 15,635,416 Highland Red Lake shares and 15,635,416 Highland Red Lake warrants being distributed to the Highland securityholders, and an aggregate of approximately 2,614,584 Highland Red Lake shares retained by the company, in each case assuming that the number securities of Highland remain unchanged between today and the distribution record date. Subject to the approval at the meeting, the arrangement will be affected by way of a court-approved plan of arrangement under the provisions of the Business Corporations Act (British Columbia). Assuming receipt of the requisite approval of the Highland's shareholders and regulatory approvals, the company intends that the distribution record date will be Aug. 26, 2025. There will be no change in Highland shareholders' proportionate ownership in the company as a result of the plan of arrangement. Closing conditions Further information concerning the plan of arrangement and the meeting will be provided in subsequent news releases, and the management information circular of the company, which will be filed on SEDAR+. Closing of the arrangement is subject to a number of conditions, including: (i) approval of the Highland shareholders at the meeting; (ii) court approval of the plan of arrangement; and (iii) certain other customary conditions as further set out in the agreement. Securityholders of Highland are cautioned that final details of the plan of arrangement are subject to change, and that there is no certainty that the arrangement will be completed as currently proposed or at all. Highland exploration projects As previously announced on July 11, 2025, the company, through Highland Red Lake, entered into an option agreement to acquire a 100-per-cent interest in mining claims in the Red Lake gold district, comprising 3,366 hectares of mining claims and has since then added an additional adjacent 1,400 hectares through staking. Highland Red Lake has budgeted and commenced a $150,000 initial exploration program focused on demonstrating lode gold potential through mapping, prospecting and rock sampling, airborne magnetics, and soil survey locations to evaluate till covered terrain for the lode gold structure relationships, with the objective to complete the program before the year-end. The arrangement will result in Highland Red Lake becoming a separate reporting issuer in each of British Columbia and Ontario, and will allow it to focus on the development of the Highland Red Lake gold district properties. Additionally, Highland Red Lake will undertake one or more private placement offerings of securities to raise proceeds to finance its exploration activities and to finance its working capital requirements. This expanded summer exploration project is in addition to the previously announced summer lithium exploration on the company's Church property in the Quetico district of Ontario, Canada, consisting of a mobile metal ions soil sampling program designed to identify lithium anomalies on areas of the Church property, where field crews have established there is no exposed bedrock. Activities are also under way to design and evaluate an initial exploration program on the company's recently acquired Sy property, located in the Yathkyed Lake greenstone belt in Nunavut, Canada. "We are always looking for ways to deliver value to our shareholders. The arrangement aims to enhance shareholder value, offering stakes in two new highly prospective gold properties located in two established gold production areas of Canada, and we are hopeful that continued exploration work would result in future gold discoveries. Shareholders will retain proportionate ownership in the company, and receive a stock dividend consisting of Highland Red Lake shares and Highland Red Lake warrants, allowing stakeholders the opportunity to benefit from potential successes and value appreciation in both companies each in diverse and distinct environments," says Ted Yew, the company's chief executive officer. About Highland Critical Minerals Corp. Highland is a mineral exploration and development company. Its activities consist of acquiring and exploring mining properties to enhance shareholder value as it proceeds with the exploration work on the Church property among other mining properties it may acquire and develop. We seek Safe Harbor.