Mr. Galen McNamara of Aero Energy reports

AERO ENERGY AND KRAKEN ENERGY COMBINE TO CREATE A PREMIER NORTH AMERICAN URANIUM DEVELOPER

Aero Energy Ltd. and Kraken Energy Corp. have entered into a definitive arrangement agreement dated April 1, 2025, whereby Aero will acquire all of the issued and outstanding shares of Kraken pursuant to a plan of arrangement.

The transaction is valued at approximately 2.754 cents per Kraken share or approximately $1.64-million. The purchase price represents a premium of 20 per cent to the 15-day volume-weighted average trading price of the Kraken shares on the Canadian Securities Exchange.

Transaction highlights and benefits to shareholders:

• Broader uranium asset footprint: combines Aero's Athabasca basin uranium assets with Kraken's U.S. uranium assets, building a robust, dual-jurisdiction portfolio that reduces risk and increases potential returns for all shareholders;
• Strategic stake in America: locks in Aero shareholders' access to U.S. uranium upside, capitalizing on the rising priority of domestic assets in a shifting energy landscape;
• Gateway to Athabasca upside: secures Kraken shareholders' access to Aero's Athabasca basin potential, tapping into a world-class uranium district amid a surging market;
• Fair premium: offers Kraken shareholders a 20-per-cent premium over the 15-day volume-weighted average price of the Kraken shares, ensuring a fair valuation as the merger seals their stake in a stronger company;
• U.S. permitting boost: leverages the Trump administration's fast-track permitting push, enabling the merged company to secure the Apex property's stalled drill approvals and potentially unleash U.S. asset value for all shareholders in 2025;
• Elevated market presence: boosts the merged company's visibility and peer standing upon closing, paving the way for stronger investor interest and share momentum;
• Strong leadership edge: combines experts with proven uranium discovery records and deep Canadian-U.S. capital market experience, fortifying the merged entity's development prospects;
• Board support: the arrangement agreement has been unanimously approved by the board of directors of each of Aero and Kraken; the Kraken board of directors has unanimously recommended that Kraken shareholders vote in favour of the transaction;
• Shareholder support: all of the directors and executive officers of Kraken, representing in aggregate approximately 8 per cent of the issued and outstanding Kraken shares, have agreed to vote in favour of the transaction.

Galen McNamara, chief executive officer and director of Aero, stated: "We're proud to merge with Kraken and create a leading uranium explorer that delivers substantial value to shareholders of both companies. By uniting Aero's Athabasca basin strengths with Kraken's U.S. assets, we're positioned to unlock permits, scale effectively and capture the uranium market's momentum with certainty."

Brian Goss, chief executive officer and director of Kraken, stated: "We welcome this merger with Aero as a decisive step to deliver strong returns for shareholders of both companies. Aero's exploration strength and capital expertise bolster our U.S. assets, notably the Apex property. Our recent permitting efforts at Apex have demonstrated our ability to work with the USFS to get to drilling in the near future. This transaction will clear the path through permitting to capitalize on the uranium market's growth with proven resolve."

Transaction details

Pursuant to the terms of the arrangement agreement, all of the issued and outstanding Kraken shares will be exchanged for Aero common shares on the basis of 0.97037 Aero share for each Kraken share. The purchase price represents a premium of 20 per cent to the 15-day volume-weighted average trading price of the Kraken shares on the Canadian Securities Exchange.

As of the date hereof, there are 59,690,981 Kraken shares issued and outstanding and 121,927,277 Aero shares issued and outstanding. Upon completion of the transaction, Aero is expected to have approximately 169,978,517 Aero shares issued and outstanding on an undiluted basis. Approximately 68 per cent of the Aero shares are expected to be held by the current shareholders of Aero, and approximately 32 per cent of the Aero shares are expected to be held by the former Kraken shareholders.

The transaction will be effected by way of a plan of arrangement under the Business Corporations Act (British Columbia), requiring the approval of: (i) at least 66-2/3rds per cent of the votes cast by Kraken shareholders; and (ii) if, and to the extent required, a majority of the votes cast by Kraken shareholders, excluding votes attached to Kraken shares held by any person as required under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) at a special meeting of Kraken shareholders expected to be convened in June, 2025. An information circular providing further information of the transaction will be provided to Kraken shareholders in connection with the Kraken meeting.

In addition to Kraken shareholder and court approvals, the transaction is subject to approval of the TSX Venture Exchange, the CSE and the satisfaction of certain other closing conditions customary in transactions of this nature. The transaction is expected to close in June, 2025.

All outstanding stock options of Kraken will be exchanged for options of Aero, and all warrants of Kraken will become exercisable to acquire Aero shares, in amounts and at exercise prices adjusted in accordance with the exchange ratio.

The arrangement agreement includes certain customary provisions, including non-solicitation provisions, as well as certain representations, covenants and conditions which are customary for a transaction of this nature. The arrangement agreement also includes provision for the payment of a break fee of $250,000 by Kraken to Aero in the event that it is terminated under certain circumstances.

The board of directors of Aero following the closing of the transaction is expected to consist of five members with three nominees from Aero and two nominees from Kraken. Upon closing the transaction, Mr. McNamara will serve as chief executive officer and director, and Martin Bajic will serve as chief financial officer of Aero.

A copy of the arrangement agreement will also be filed on Aero's and Kraken's company profiles on SEDAR+.

Kraken shareholder support

All of the directors and executive officers of Kraken have entered into voting support agreements pursuant to which they have agreed, subject to the terms thereof, to vote their Kraken shares, representing in aggregate approximately 8 per cent of the issued and outstanding Kraken shares, in favour of the transaction.

Recommendation of the Kraken board of directors

The Kraken board, after seeking and considering advice from financial and legal advisers, has unanimously determined that the transaction is in the best interests of Kraken and the Kraken shareholders, the purchase price is fair, from a financial point of view, to the Kraken shareholders, and has unanimously recommended that Kraken shareholders vote in favour of the resolutions approving the transaction and related matters at the Kraken meeting.

Advisers and fairness opinion

Forooghian + Company Law Corp. is acting as legal adviser to Aero. McMillan is acting as legal adviser to Kraken.

Evans and Evans Inc. has provided an opinion to the Kraken board to the effect that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the purchase price is fair, from a financial point of view, to Kraken shareholders.

Aero project overview

Aero is advancing a district-scale uranium exploration effort in Saskatchewan's Athabasca basin, managing a 250,000-acre land package in the historic Uranium City district along the basin's northern rim. The company's flagship properties -- the Sun Dog project, the Strike project and the Murmac project -- are secured through separate option agreements: one with Fortune Bay Corp. for the Strike project and the Murmac project, and another with Standard Uranium Ltd. for the Sun Dog project. Aero can earn an up-to-70-per-cent interest in the Strike project and the Murmac project and a 100-per-cent interest in the Sun Dog project by making annual cash and share payments, as well as completing certain amounts of work on each property. These projects target high-grade, basement-hosted uranium deposits, leveraging modern techniques to explore graphitic shear zones largely overlooked by historical efforts focused on surface prospects. Aero's 2024 maiden drill programs across the Murmac project and the Sun Dog project underscore this potential, with a notable discovery at the Murmac project's Howland Lake North target intersecting 8.4 metres at 0.3 per cent triuranium octoxide, including a peak of 13.8 per cent U3O8 over 0.1 metre, just 64 metres below surface.

The Sun Dog project spans 48,443 acres across nine mining claims, located 15 kilometres from Uranium City, and includes the historical Gunnar uranium mine, which produced 18 million pounds of U3O8 from 1953 to 1981, once making it the world's largest uranium producer. Aero's 2024 exploration included drilling eight holes totalling 1,600 metres, targeting shallow, high-grade basement-hosted mineralization at the Wishbone area. This followed summer prospecting that returned surface assays up to 13.0 per cent U3O8. Historical exploration here chased lower-grade Beaverlodge-style deposits, missing the unconformity-related systems Aero now pursues. With over 40 km of untested electromagnetic conductors, the Sun Dog project offers significant discovery potential, bolstered by recent mapping and geophysical data identifying multiple high-priority drill targets.

The Murmac project, covering 25,607 acres in 17 claims near Uranium City, complements the Sun Dog project with its own 30 km of prospective graphitic corridors. Aero's 2024 exploration included drilling eight holes totalling 1,550 metres, hitting anomalous radioactivity in 75 per cent of them and confirming the company's thesis of the presence of untapped basement-hosted deposits. Historical showings at the Murmac project exceed 1 per cent U3O8, with grades up to 8.82 per cent U3O8, but past efforts largely focused on surface outcrops, leaving deeper graphite-rich shear zones untested. The 2024 highlight -- hole M24-017's high-grade intercept -- validates Aero's focus on shallow targets (20 to 150 metres deep), with over 70 km of graphitic horizons across the Murmac project and the Sun Dog project remaining largely unexplored.

The Strike project, spanning 24,711 acres in four claims, rounds out Aero's portfolio, located 25 km from Uranium City. It hosts the historical Tena zone, where over 1,000 tons were mined in the 1950s at grades of 0.6 per cent to 3.5 per cent U3O8. Fortune Bay's 2022 first-pass drilling intersected uranium in three of nine holes, while Cameco's earlier work identified high-quality geophysical targets along the J, K and L conductors. With 14 additional conductor targets ready and historical showings up to 27 per cent U3O8, the Strike project adds further upside. Together, Aero's projects leverage a combined 125 km of target horizons, positioning the company to capitalize on the uranium market's resurgence with a robust, multiasset strategy.

Kraken project overview

Kraken's 100-per-cent-owned Apex property, situated 280 km east of Reno, Nev., covers the past-producing Apex uranium mine. The 14,892-acre project targets a 17.5-kilometre mineralized trend identified through advanced radon surveys and geophysical data. Discovered in September, 1953, by prospectors, the project was initially explored as a silver prospect before uranium became the focus, with Apex Minerals Corp. leasing the site in August, 1954. Operations commenced with shallow open-pit mining and later expanded to underground workings, extracting an estimated 45 metric tonnes of U3O8 equivalent to roughly 100,000 pounds until closure in 1968, driven by declining uranium demand as federal incentives waned. The uranium mineralization occurs along a contact zone between Jurassic quartz monzonite (the Austin stock) and folded Paleozoic metasediments, including quartzites and shales, with orebodies enriched by fractures and brecciated zones near east-trending rhyolite dikes. Production peaked in the 1950s and 1960s, with ore shipped to processing facilities in Utah and Oregon.

Early efforts by Apex Minerals and subsequent operators involved extensive shallow rotary and core drilling in close proximity to the Apex mine, with records indicating intercepts such as 34.1 metres at 0.37 per cent U3O8 and 15.2 metres at 0.51 per cent U3O8, as noted in Nevada Bureau of Mines files from 1959 by mining geologist Harry Hughes. Other standout results included intersections of 25.6 metres at 0.23 per cent U3O8 and 17.7 metres at 0.36 U3O8.

Since 2021, Kraken has been working diligently with the Humboldt-Toiyabe National Forest to secure drill permits for its Apex property, navigating a thorough process shaped by the HTNF's development of a new forest-wide uranium safety management plan. Kraken submitted a revised plan of operations in spring 2023 and completed comprehensive archeological and biological studies in 2023 and 2024, including a productive site visit with HTNF officials in September, 2024. The introduction of the safety plan reflects the HTNF's commitment to responsible resource management, and Kraken appreciates the collaborative effort to ensure all standards are met. With the Trump administration's March 20, 2025, executive order emphasizing domestic mineral production, permitting timelines are expected to align more swiftly with national priorities, and Kraken anticipates drill permit approvals by late third quarter or early fourth quarter of this year with drilling potentially resuming immediately as permits are received.

The Apex property presents significant exploration upside beyond the historically mined zones of the 1950s and 1960s. The 13.5-kilometre-long mineralized trend, identified through advanced radon surveys and geophysical data, stretches across the property, with the original Apex mine workings representing only a small, localized portion of this system. Recent geological mapping and surface sampling have pinpointed multiple untested targets, including parallel fault zones and brecciated contacts between the Jurassic quartz monzonite and Paleozoic metasediments, where grab samples have returned values up to 0.12 per cent U3O8 across broad, undrilled areas. These results underscore the opportunity for fresh uranium discoveries beyond the historically mined areas.

Qualified persons

All scientific and technical information in this news release relating to the mineral projects of Aero has been prepared by or reviewed and approved by Galen McNamara, PGeo, chief executive officer of Aero. Mr. McNamara is a qualified person for the purposes of National Instrument 43-101 (Standards of Disclosure for Mineral Projects).

All scientific and technical information in this news release relating to the mineral projects of Kraken has been prepared by or reviewed and approved by Garrett Ainsworth, PGeo, chairman of Kraken. Mr. Ainsworth is a qualified person for the purposes of National Instrument 43-101 (Standards of Disclosure for Mineral Projects).

About Aero Energy Ltd.

Aero Energy is a mineral exploration and development company advancing a district-scale 250,000-acre land package in Saskatchewan's historic Uranium City district within the Athabasca basin. Aero is focused on uncovering high-grade uranium deposits across its flagship optioned properties: the Sun Dog project, the Strike project and the Murmac project -- in addition to its fully owned properties. Aero is led by an award-winning technical team responsible for discoveries along the prolific Patterson corridor that include the Gryphon, Arrow and Triple-R deposits. With over 50 shallow drill-ready targets identified and 125 kilometres of target horizon, Aero is tapping into the Athabasca basin's emerging potential for high-grade, unconformity-style mineralization.

About Kraken Energy Corp.

Kraken is an energy company advancing its portfolio of high-grade uranium properties in the Unites States. Kraken is advancing its 100-per-cent-owned Apex uranium property, located 280 km (174 miles) east from Reno, Nev., which is recognized as Nevada's largest past-producing uranium mine. Kraken has an option to earn 100 per cent of the Garfield Hills uranium property. The past-producing Garfield Hills uranium property covers 1,238 hectares (3,060 acres) and is located 19 km (12 miles) east of Hawthorne in Mineral county, Nevada. Kraken has also staked the Huber Hills uranium property, located 136 km (85 miles) north of Elko, Nev., which covers 1,044 hectares (2,580 acres) and encompasses the historic Race Track open-pit mine. Kraken has an option to earn 75 per cent of the Harts Point uranium property. The Harts Point uranium property covers 2,622 hectares (6,480 acres) and is located 49 km (30 miles) northwest of Monticello in San Juan county, Utah.

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