Headwater Gold Announces Commencement of Centerra-Funded Drilling at Crane Creek Project, Idaho

Executive Summary

• Centerra Gold Inc. has commenced drilling at Headwater Gold’s Crane Creek Project in western Idaho, marking the first drill program under their earn-in partnership and the first drilling at the site since the 1990s.
• The initial program involves approximately 3,000 meters of reverse circulation (RC) and diamond core drilling, representing an estimated US$1.7 million in exploration expenditures toward Centerra’s US$2.5 million minimum commitment for 2026.
• The drilling aims to test historical gold mineralization, verify shallow intercepts, and explore deeper, previously untested basalt-hosted epithermal vein targets, following recent geological and geophysical work that expanded the project's target footprint.

Key Details

• Drilling Program Scope: Approximately 3,000 meters of drilling, consisting of up to 15 RC holes and five diamond core holes.
• Financial Commitment: The current program represents ~US$1.7 million of Centerra’s US$2.5 million minimum commitment required within the first three years of the earn-in agreement.
• Historical Context: This is the first drilling at Crane Creek since the 1990s. Historical drilling (1984–1996) was predominantly shallow RC drilling.
• Historical Intercepts: Historical drilling identified broad low-grade zones and localized high-grade veins, including:
  • Hole 96-24: 62.5 m grading 1.21 g/t Au, including 8.14 g/t Au over 3.0 m.
• Technical Objectives:
  • Follow up on shallow historical gold mineralization.
  • Test below outcropping gold-bearing veins.
  • Step out along strike away from known mineralized zones.
  • Verify historical intercepts and understand the relationship between gold mineralization and the underlying basalt unit.
• Recent Exploration Work: Headwater recently completed airborne magnetic/radiometric surveys and ground gravity data, defining a 4 km x 2 km potassium anomaly (interpreted as illite-adularia alteration) and multiple north-northwest-trending structural breaks.
• Earn-In Agreement Structure (Announced Dec 3, 2025):
  • Minimum Commitment: US$2.5 million over 3 years (0% interest).
  • Stage 1: US$10 million (inclusive of minimum) over 4 years for 51% interest.
  • Stage 2: Additional US$15 million over 4 years for 60% interest (+1-2% NSR to Headwater).
  • Stage 3: Completion of Preliminary Economic Assessment (PEA) for 70% interest (requires PEA reflecting ≥1,000,000 oz gold equivalent).
• Project Location: Western Idaho, ~18 km NE of Weiser, ~90 km NW of Boise.
• Project Tenure: ~1,240 hectares, including 123 unpatented federal mining claims, a 640-acre State of Idaho minerals lease, and a private lease.
• Permitting: Fully permitted for drilling under BLM Notice of Intent and Idaho Department of Lands Plan of Operation.
• Geological Setting: Low-sulfidation epithermal system with characteristics similar to the nearby Nutmeg Mountain gold project (owned by NevGold Corp, ~8 km NW).

Notable Quotes

• Caleb Stroup, President and CEO of Headwater: “We are very pleased to see Centerra drilling this high-priority project. This program represents the first major test of the Project under our earn-in partnership and is expected to account for approximately US$1.7 million of partner-funded exploration toward Centerra’s US$2.5 million minimum commitment... This is exactly the kind of partnership we seek at Headwater: meaningful discovery exposure for shareholders, funded by a technically strong partner, while preserving capital for continued generative exploration.”