Mr. Eldur Olafsson reports

PROPOSED FUNDRAISING

Amaroq Minerals Ltd., further to its announcement on Feb. 11, 2024, intends to conduct a placing and subscription of new common shares to raise gross proceeds of approximately 30 million pounds sterling (equivalent to approximately $51-million, or 5.2 billion (Icelandic krona (ISK)) at a price of 74 pence ($1.25, 127 ISK) per new common share (the placing price), with the net proceeds being used to accelerate development and exploration activities. As announced on Feb. 11, the company has already received indications of interest from investors in excess of 30 million pounds sterling at the placing price.

Highlights:

• The approximately 30 million pounds sterling fundraising will consist of:
  • A proposed placing of new common shares (the United Kingdom placing shares) with new and existing institutional investors, at the placing price;
  • A proposed placing of new depositary receipts representing new common shares (the Icelandic placing shares) with new and existing investors, at the placing price; and
  • A proposed private placement of new common shares (the Canadian subscription shares, together with the U.K. placing shares and the Icelandic placing shares, the fundraising shares) by certain existing institutional investors and a director of the company at the placing price. The director has committed to subscribe for approximately two million pounds sterling (equivalent to $3.4-million or 343 million ISK) in the fundraising.
• Net proceeds from the fundraising will be used to accelerate mining of the target block at the company's cornerstone Nalunaq gold project, and other associated works to enable a smoother transition to nameplate capacity of 300 tonnes per day to the processing plant, installation of a flotation circuit and dry-stack tailings facility (DSTF) to increase recoveries, as well as provide financing to accelerate exploration during 2024 across the company's Vagar, Nanoq and Gardaq joint-venture (JV) licences.

Details of the fundraising:

• Stifel Nicolaus Europe Ltd. (Stifel) is acting as sole book runner and broker on the U.K. placing. Stifel is also acting as the company's nominated adviser.
• Landsbankinn hf. and Fossar fjarfestingarbanki hf. are acting as joint book runners on the Icelandic placing, and Landsbankinn is acting as underwriter.
• In relation to the U.K. placing:
  • The U.K. placing will be conducted through an accelerated bookbuild process to be conducted by Stifel, which will launch immediately following the release of this announcement, and will be made available to eligible institutional investors subject to the terms and conditions set out in the appendix to this announcement. The bookbuild is expected to close no later than 6 p.m. (London time) on Feb. 12, 2024, however Stifel and the company reserve the right to close the bookbuild earlier or later, without further notice;
  • The U.K. placing is subject to the terms and conditions set out in the appendix to this announcement;
  • The U.K. placing is conditional, amongst other things, upon the Icelandic placing not having been terminated prior to admission of the fundraising shares to trading on the AIM market of London Stock Exchange PLC and the receipt of conditional approval from the TSX Venture Exchange for the listing of the fundraising shares.
• Landsbankinn has agreed to underwrite the fundraising by up to 10 million pounds sterling, guaranteeing to the company participation in the fundraising in the maximum amount of 30 million pounds sterling, with the commitment to procure subscribers or itself subscribe for new common shares to be delivered as depositary receipts amounting to an amount equal to the difference between 20 million pounds sterling and 30 million pounds sterling, or its equivalent in ISK.
• Allocations in the U.K. placing are at the absolute discretion of Stifel, in consultation with the company. The number of fundraising shares will be determined following completion of the bookbuild by agreement between the company and Stifel. Allocations in the Icelandic placing are at the absolute discretion of the company. Details of the number of fundraising shares will be announced as soon as practicable after the close of the bookbuild.

Eldur Olafsson, chief executive officer of Amaroq, commented:

"We are investing to increase recoveries at Nalunaq and to accelerate our exploration plans in our strategic mineral acreage across southern Greenland, which has become one of the last frontiers for Western governments and companies to secure scaled supply of strategic minerals so desperately needed for the energy transition. By further derisking the development of Nalunaq, whilst also advancing exploration in both gold and strategic minerals, we believe we can deliver value for shareholders. It is a very exciting time to be the largest acreage holder in southern Greenland."

Background to and reasons for the fundraising

The company's strategy is to leverage its first-mover advantage in Greenland, underpinned by the previously producing Nalunaq project, to build a full-cycle mining company, delivering long-term shareholder value and providing significant upside potential through its land bank of high-impact gold and strategic minerals exploration assets. Amaroq has been listed on the TSX-V since July, 2017, AIM since July, 2020, First North between November, 2022, to September, 2023, and the Icelandic Exchange since September, 2023.

The company acquired the Nalunaq gold project in 2015 and has made significant progress since this time in expanding the extent of the resource base through drilling, incorporating a new geological model (the Dolerite dike model) to better understand the distribution of the high-grade ore, building a new 50-person winterized camp to allow full-year activities, and acquiring and otherwise progressing much of the infrastructure required to bring Nalunaq into production. During this time, Amaroq has also been able to acquire the largest package of mineral rights in southern Greenland, with a number of assets that are highly prospective for gold and strategic minerals. The addition of strategic minerals into the portfolio provides significant growth potential, as these metals and minerals, such as copper, nickel, titanium and graphite, are critical for increased electrification as part of the world's decarbonization strategy and as independent supply continues to become an increasing focus for nations globally.

Key developments at Nalunaq since AIM admission in 2020 include:

• Infrastructure: Since admission, Amaroq has completed a significant proportion of Nalunaq's required infrastructure, with 60 per cent of major processing plant equipment procured, a 50-person all-weather exploration camp constructed and commissioned, critical surface mobile equipment purchased, and supporting infrastructure either purchased or commercially and technically evaluated.
• Third party engineering study: Halyard Inc. was engaged to complete a third party engineering study on Nalunaq's development costs, including the process plant, mobile equipment, surface infrastructure, permanent camp, and associated logistics and engineering. The study concluded that the advanced engineering of the overall project is now to feasibility study-level based on the Canadian requirements of National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.
• The Dolerite dike model: Amaroq has worked with SRK Consulting to develop a robust mineral resource estimation technique for Nalunaq. This included the development of the Dolerite dike model to account for the high-grade variability from core sampling (the nugget effect) in order to better reflect the full resource potential at Nalunaq. The model allows the geological results to be incorporated into the Halyard engineering study in order to move the project toward independent technical studies to support further development.
• Resource growth through drilling: Amaroq has drilled approximately 23,924 metres at Nalunaq since it listed on AIM and, incorporating learnings from the new Dolerite dike model, has identified two new high-grade zones, namely Valley block and Welcome block, taking the total number of identified high-grade zones at the asset to five. The Valley block is now expected to be one of the key targets for initial development. As a result of drilling in the 2020 and 2021 field seasons, Amaroq announced on Sept. 6, 2022, that it had increased its total inferred mineral resource by 30 per cent contained gold, with a 50-per-cent increase in average grade, since the previous estimate reported in 2020. The resource now sits at 355,000 tonnes at 28 grams per tonne (g/t) gold (Au) for 320,000 ounces (oz) gold, putting the project in the top 2 per cent of projects globally, in terms of reported gold resource grade.
• Debt financing: Amaroq has raised a $50.9-million (U.S.) senior secured package comprising an $18.5-million (U.S.) term loan, $22.4-million (U.S.) convertible notes and a $10-million (U.S.) overrun loan to finance the transition of the company's Nalunaq mining licence from a bulk-sample trial-mining development plan to staged, full-scale production of gold dore on site, by bringing forward construction of a processing plant and associated infrastructure.
• Mining contract awarded: Amaroq has signed a contract mining agreement with Thyssen Schachtbau GmbH, and a procurement and supply chain support agreement with Tamarack Mining Services to support the restart of Nalunaq.
• Delivering on the company's ESG (environmental, social and governance) mandate: The company has worked hard over the period to update its environmental impact assessment (EIA) and social impact assessment (SIA), and will continue to do so over the coming months, in line with the terms of its exploitation licence.

Following the company's progress outlined above, Nalunaq has transitioned to a full restart operation, with mine rehabilitation works having commenced during Q4 2023 following detailed design work, site preparation, procurement of remaining long-lead items and camp upgrades. Key contracting processes are almost complete and overall engineering for the processing plant is 85 per cent complete. During 2024, the company is expected to commence trial mining at 100 tonnes per day (tpd), which will deliver first gold from the process plant. Preparation for a phased ramp-up to 300 tonnes per day process plant design capacity will continue throughout the year. The company also recently commenced the public consultation process for the draft EIA and SIA report on Nalunaq, and is expected to close the consultation process by March 1, 2024.

Through continuing work with its internal technical management and external consultants, the company has identified several initiatives to enhance Nalunaq's restart which will require additional financing. The main initiative is accelerating development of the Target block, which will undergo trial mining in conjunction with the Mountain block. As currently designed, the Mountain block will only deliver approximately 100 tpd to the process plant, which has nameplate capacity of 300 tpd, resulting in intermittent operation of the plant. The acceleration of Target block will allow for 350 days of operations at 300 tpd, thus right-sizing mining operations for optimal plant utilization. This is expected to have a significant impact on unit costs as approximately 75 per cent to 80 per cent of process plant costs are estimated to be fixed. The company also plans to invest in infrastructure extensions to allow the two blocks to be mined concurrently, and begin preparatory works at the South and Valley blocks to ensure a smooth transition and a 300 tpd mining rate, when mining of the Mountain block is complete. This will include dewatering of the existing workings, and underground mapping and exploration.

The second major identified initiative involves the installation of the flotation circuit and the DSTF, which is expected to deliver increased recoveries from 79.5 per cent to 94 per cent.

Outside of Nalunaq development, the company also plans to accelerate certain advanced exploration at the company's high-priority gold targets, including scout drilling at the Vagar and Nalunaq satellite areas, targeting additional resources to feed the mill at Nalunaq, as well as a drill program at Nanoq to prepare for a maiden resource. In addition, proceeds will finance the company's share of the Gardaq joint venture with GCAM LP to expedite strategic metals target generation, including an aerial geophysics survey and expanded drilling program at Sava, to target copper porphyry mineralization, and a drill program at Stendalen to define the full extent of the copper and nickel mineralization.

Sources and uses of proceeds

The net use of proceeds from the fundraising will be used to finance the accelerated development of the Target block, infrastructure investment to allow for the mining of two blocks simultaneously, preparatory works at the South and Valley blocks, installation of the flotation circuit and DSTF, and accelerated exploration at Vagar/Nanoq and the Gardaq joint venture. By further derisking the development of Nalunaq and advancing exploration activities across Amaroq's gold and strategic minerals portfolio, the company intends to enhance value creation in anticipation of delivering shareholder returns.

As a result of the fundraising, the company will become net debt free.

In case of oversubscription of the fundraising, the company may increase the offer size, with the use of additional proceeds to be focused on further exploration at Vagar and Nanoq, and a capital injection into its Gardaq joint venture.

Bookbuild

Stifel is acting as sole book runner and broker on the U.K. placing. Stifel is also acting as the company's nominated adviser. Landsbankinn and Fossar are acting as joint book runners on the Icelandic placing, and Landsbankinn is acting as underwriter.

The bookbuild for the U.K. placing will launch immediately following the release of this announcement. The bookbuild is expected to close no later than 6 p.m. (London time) on Feb. 12, 2024, but Stifel and the company reserve the right to close the bookbuild earlier or later, without further notice.

The U.K. placing is subject to the terms and conditions set out in the appendix to this announcement.

The number of fundraising shares will be determined following completion of the bookbuild by agreement between the company and Stifel. Allocations in the U.K. placing are at the absolute discretion of Stifel, in consultation with the company, and will be confirmed orally or by e-mail following the close of the bookbuild. Details of the fundraising shares will be announced as soon as practicable after the close of the bookbuild.

By choosing to participate in the U.K. placing, and by making an oral and legally binding offer to acquire U.K. placing shares, investors will be deemed to have read and understood this announcement in its entirety (including the appendices), and to be making such offer on the terms and subject to the conditions of the U.K. placing contained here, and to be providing the representations, warranties and acknowledgements contained in the appendix.

Applications will be made for admission of the fundraising shares to trading on (a) AIM; (b) the Nasdaq Iceland Main Market; and (c) the TSX-V, with listing subject to the conditional approval of the TSX-V and the company satisfying all of the requirements of the TSX-V. It is currently expected that admission will become effective, and that dealings in the fundraising shares will commence, on AIM at 8 a.m. GMT on Feb. 23, 2024, on the Icelandic exchange at 9:30 a.m. UTC on Feb. 23, 2024, and on the TSX-V at 9:30 a.m. ET on Feb. 23, 2024 (or, in each case, such other date as may be agreed between the company and Stifel).

Related-party transaction

Directors of the company have indicated their intention to participate in the Canadian subscription for approximately two million pounds sterling (equivalent to $3.4-million or 343 million ISK) in aggregate. As such, the Canadian subscription will constitute a related-party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions, and within the meaning of Policy 5.9 of the TSX-V rules.

Related-party transactions require the company to obtain a formal valuation and minority shareholder approval unless exemptions from these requirements are available under applicable Canadian securities laws. With respect to the Canadian subscription, the company is relying on the exemption from the formal valuation and minority approval requirements in sections 5.5(a) and 5.7(1)(a), respectively, of MI 61-101, as the fair market value of the securities distributed to, and the consideration received from, interested parties does not exceed 25 per cent of the company's market capitalization. The company did not file a material change report at least 21 days prior to the expected closing of the Canadian subscription as participation of the insiders had not been confirmed at that time, and the company wishes to close on an expedited basis for business reasons.

Unless stated otherwise, all amounts are based on ISK:pounds sterling of 173.34 and Canadian dollars:pounds sterling of 1.6996, as at Feb. 9, 2024.

About Amaroq Minerals Ltd.

Amaroq Minerals' principal business objectives are the identification, acquisition, exploration and development of gold and strategic metal properties in Greenland. The company's principal asset is a 100-per-cent interest in the Nalunaq project, an advanced exploration-stage property with an exploitation licence, including the previously operating Nalunaq gold mine. The corporation has a portfolio of gold and strategic metal assets in southern Greenland covering the two known gold belts in the region. Amaroq Minerals is incorporated under the Canada Business Corporations Act and wholly owns Nalunaq AS, incorporated under the Greenland Public Companies Act.

Qualified person statement

The mineral resource estimate was prepared by Dr. Lucy Roberts, MAusIMM (CP), principal consultant (resource geology), SRK Consulting (U.K.), an independent qualified person in accordance with the requirements of NI 43-101. Dr. Roberts has approved the disclosure herein.

The technical information presented in this press release has been approved by James Gilbertson, CGeol, vice-president of exploration for the company and a chartered geologist with the Geological Society of London, and, as such, is a qualified person as defined by NI 43-101.

Use of a standard

The resource information included within this announcement is reported in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards on Mineral Resources and Mineral Reserves (May, 2014) as required by CIM Definition Standards.

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