Mr. Gary Bay reports

XAU RESOURCES INC. ANNOUNCES LETTER OF INTENT TO ACQUIRE QS HOLDINGS INC.

Xau Resources Inc. has entered into a non-binding letter of intent (LOI), pursuant to which Xau has proposed to acquire all the issued and outstanding common shares of QS Holdings Inc., a corporation incorporated under the laws of Barbados, in consideration of the issuance of common shares of Xau. The LOI contemplates an indicative value or purchase price for the acquisition that is based on a deemed aggregate purchase price of $70-million for the shares of QS Holdings, with the value of Xau shares to be calculated based on the market price (as defined under the policies of the TSX Venture Exchange) of the Xau shares on the TSX Venture Exchange immediately preceding the execution of a definitive agreement.

Trading of the common shares of the company has been halted and will remain halted pending receipt and review from the TSX-V. A comprehensive news release will be issued by the company setting out the terms of the proposed Acquisition upon the entering into of a definitive transaction agreement.

Completion of the acquisition would be subject to a number of conditions, including, but not limited to: (i) satisfactory completion of confirmatory corporate, legal, land and technical/environmental due diligence by each party; (ii) approvals by the boards of directors (and their independent directors) of each of Xau and QS Holdings; (iii) approval by Xau shareholders in accordance with applicable securities laws; (iv) stock exchange approvals, regulatory approvals and any required approvals pursuant to Canadian securities laws; (v) the satisfaction by Xau of any requirements pursuant to Multilateral Instrument 61-101; and (vi) the negotiation and execution of a definitive transaction agreement.

QS Holdings holds a 100-per-cent interest in Qstone Inc., a private Guyanese company, which is the registered owner of the mining permits known as the Quartzstone gold project, covering approximately 296 square kilometres across 83 contiguous medium-scale mining permits in Guyana. The Quartzstone gold project is subject to an earn-in agreement with Fortuna Mining Corp., pursuant to which Fortuna may earn up to a 70-per-cent interest in the Quartzstone gold project. Fortuna may earn an initial 51-per-cent interest in the Quartzstone gold project by completing a minimum of 60,000 metres of drilling within four years, while paying all license fees and financing all related expenditures. Upon exercise of the first option, Fortuna will form a joint venture with Qstone. Fortuna may earn an additional 19-per-cent interest in the Quartzstone gold project, for an aggregate 70-per-cent interest, by solely financing a feasibility study within three years of exercising the first option and continuing to pay all licence fees.

In addition to royalties payable to the government of Guyana on gold production, the Quartzstone gold project is subject to a 4.5-peer-cent net smelter return royalty in favour of a prior owner, which may be repurchased at any time at a price to be determined by the parties.

Certain directors and officers of Xau also hold interests in QS Holdings. Peter Hambro and Gary Bay are directors and officers of Xau and are also shareholders of QS Holdings. Accordingly, the acquisition may constitute a related party transaction or business combination under MI 61-101. Xau's special committee of independent directors are overseeing the negotiation of the acquisition. The parties will determine the applicability of specific MI 61-101 and TSX-V requirements during negotiations of the terms of the proposed acquisition and related definitive transaction agreement. The management and board of directors of Xau are expected to remain the same both before and after giving effect to the acquisition.

The LOI was entered into on March 26, 2026, and was amended by an amending and extension agreement dated April 10, 2026, and a second amending and extension agreement dated April 22, 2026. There can be no assurance that a definitive transaction agreement will be entered into or that the acquisition will be completed as proposed or at all. Investors are cautioned that, except as disclosed in any information circular of Xau to be prepared in connection with the acquisition, any information released or received with respect to the acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of Xau should be considered highly speculative. The TSX-V has in no way passed upon the merits of the proposed acquisition and has not approved or disapproved of the contents of this news release.

We seek Safe Harbor.