Headwater Gold Inc. announced the commencement of an up to 2,000 metre ("m") drill program at the Mahogany project in Oregon and Idaho, to be wholly funded by Newcrest Mining Limited ("Newcrest") pursuant to the option and earn-in agreement announced on August 16, 2022. The program is designed to follow-up on Headwater's 2021 drill results which intercepted 1.47 grams per tonne gold ("g/t Au") over 12.25 m including 9.37 g/t Au over 0.73 m. The 2023 drill program is expected to consist of up to 2,000 m to test two target areas. Main Ridge Fault Target: Drilling will target the source of high-grade vein material within the Main Ridge Fault, which has yielded up to 170.0 g/t Au from surface sampling and 1.47 g/t Au over 12.25 m in drilling, including 9.37 g/t Au over 0.73 m. The current drill program will test depths of approximately 200 m to 250 m along the Main Ridge Fault and at orientations identified during the Company's initial oriented core program.

Drill targeting also leverages results from a controlled-source audio-frequency magnetotelluric ("CSAMT") resistivity survey totaling 11.3 line-kilometres completed by Headwater in 2022. Vent Breccia Target: Drilling will target vein-style mineralization in feeder structures inferred from geology and new CSAMT resistivity data beneath intensely silicified hydrothermal breccias containing silica sinter and quartz vein fragments. Results from the Company's CSAMT survey support the existence of a major northeasterly structure and associated clay alteration envelope surrounding the outcrop exposures of hydrothermal breccia.

Shallow historic drilling and trenching was completed on Breccia Hill by Manville Exploration in the 1980's, but no known drilling exceeded depths of 50 m. Headwater plans to test for high-grade epithermal veins in an inferred boiling horizon approximately 150 m to 225 m beneath the vent breccias. Vent Breccia Target: Drilling will target vein-style mineralization in feeder structures inferred from geology and new CSAMT resistivity data beneath intensely silicified hydrothermal breccias containing silica sinter and quartz vein fragments. Results from the Company's CSAMT survey support the existence of a major northeasterly structure and associated clay alteration envelope surrounding the outcrop exposures of hydrothermal breccia.

Shallow historic drilling and trenching was completed on Breccia Hill by Manville Exploration in the 1980's, but no known drilling exceeded depths of 50 m. Headwater plans to test for high-grade epithermal veins in an inferred boiling horizon approximately 150 m to 225 m beneath the vent breccias.