Mr. Mark Tommasi reports

CANARY GOLD COMMENCES 20,000-METRE DUAL-RIG DRILLING PROGRAM AT MADEIRA PROJECT

Canary Gold Corp. is mobilizing its 2026 exploration program at the Madeira project, marked by the arrival of the first drill rig on site. The company has engaged Geosol, a leading drilling services contractor, to execute a comprehensive, multirig drilling campaign focused on defining near-surface mineralization.

The exploration program is designed with a dual-rig strategy, combining specialized drilling for geological definition with rapid regional coverage.

Screw auger drilling (under way)

The first drill rig has arrived on site and is currently mobilizing to initial collar locations. The rig utilizes a screw auger drilling system, a specialized technique that represents a variation of diamond drilling optimized for unconsolidated ground conditions. This method is specifically designed to recover high-quality samples from the favourable Mocururu geologic horizon and associated prospective gravel beds.

Key highlights of the screw auger program include:

• Targeting: definition of high-priority geological zones (Mocururu and gravel beds);
• Total drilling: approximately 5,000 metres across roughly 100 drill holes;
• Spacing: initial grid of 200 metres by 100 metres, with flexibility to tighten spacing based on visual observations and assay results;
• Depth: shallow drilling to a maximum depth of approximately 50 metres per hole.

Reverse circulation (RC) drilling (commencing late January)

The company expects the arrival of a second drill rig -- a reverse circulation (RC) unit -- during the second half of January. While the screw auger program is focused on defining specific near-surface geological units, the RC rig will be deployed to sweep the broader land package included in the original agreement with New Frontiers.

This phase of drilling is intended to rapidly assess regional geological continuity and identify new priority targets across the property. Drilling of the additional land package associated with the agreement with Talisman is not contemplated at this stage.

Key highlights of the RC program include:

• Objective: regional reconnaissance drilling to test the broader extent of the property and identify new geological anomalies;
• Total drilling: approximately 15,000 metres across roughly 300 drill holes;
• Spacing: wide-spaced reconnaissance grid of approximately 2,000 metres by 1,000 metres;
• Depth: consistent testing of the oxide profile to a maximum depth of approximately 50 metres.

Website and investor materials update

In parallel with the mobilization of its 2026 exploration program, the company has completed a comprehensive update of its corporate website and investor presentation. These refreshed materials are designed to more clearly communicate the geological framework, exploration strategy and scale of the company's land position, while ensuring consistent and accessible disclosure for investors.

The updated website and investor materials reflect the company's transition into an active execution phase, providing shareholders with improved technical context and a more structured overview of Canary's exploration objectives at the Madeira project and across the broader Madeira River region.

Mark Tommasi, president of Canary Gold, commented:

"As we move into an active drilling phase, it was important that our public-facing materials evolve alongside our operations. The updated website and investor presentation better reflect where the company is today and support clear, consistent communication as we move into what is expected to be a very productive year of exploration."

Option issuance

The company also announces that it has granted an aggregate of 6,107,500 stock options to certain directors, officers and consultants of the company pursuant to the company's omnibus equity incentive plan. The options have an exercise price of 27 cents per common share for a period of five years from the date of grant. All securities are subject to a statutory hold period of four months and one day from the date of grant, in compliance with applicable stock exchange policies.

The grant of stock options to certain directors and officers constitutes a related party transaction pursuant to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The company is relying on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, respectively, as the fair market value of the stock options granted to related parties does not exceed 25 per cent of the company's market capitalization. The company did not file a material change report 21 days before the grant of the stock options, which is reasonable for a grant of stock options given the exemptions being relied upon.

Qualified person statement (National Instrument 43-101)

The scientific and technical information contained in this news release has been reviewed and approved by Andrew Lee Smith, PGeo, executive director of Canary Gold, who is a qualified person as defined under National Instrument 43-101, Standards of Disclosure for Mineral Projects. Mr. Smith is not independent of the company, as he holds an executive and board position.

Data verification

In verifying the scientific and technical information disclosed herein, the qualified person has reviewed all available geological logs, field notes, sampling documentation, heavy mineral concentrate reports, analytical certificates, laboratory procedures and other relevant technical records associated with the company's 2025 exploration program. Verification included assessment of sampling methods, chain-of-custody protocols, security of samples from collection through transport to the laboratory and a review of the analytical methods used by Overburden Drilling Management Ltd. (ODM), an independent Canadian laboratory specializing in heavy mineral evaluation. Where applicable, drill core photographs, stratigraphic profiles and field observations were compared against laboratory findings to confirm consistency.

Limitations and stage of exploration

The information disclosed herein relates to early-stage exploration results, including heavy mineral indicator mineral data, reconnaissance sampling and preliminary geological interpretations. Heavy mineral analyses and field-based observations do not provide quantitative gold grades and cannot be used to estimate mineral resources. Additional drilling, systematic sampling and assay verification are required to determine the significance of the geological features described.

Visible gold caution

The qualified person notes that visible gold described in this news release is a qualitative field observation only. Visible gold does not confirm grade, continuity or the presence of economic mineralization. Quantitative determination of gold content requires fire assay analysis and appropriate QA/QC (quality assurance/quality control) procedures. Early-stage occurrences of visible gold should not be interpreted as indicative of a mineral resource or economic viability.

Exploration target and geological interpretation caution

Any reference to potential mineralization, sediment-hosted or paleoplacer systems, or regional metal enrichment is conceptual in nature. There has been insufficient exploration to define a mineral resource and it is uncertain whether further exploration will result in the delineation of a mineral resource. Geological models, including interpretations of the Mocururu horizon, sediment provenance, placer maturity and basin-scale transport mechanisms, are interpretive hypotheses based on limited data sets and should not be considered definitive.

Historical or third party information

Where the news release refers to historical information, academic references or third party geological interpretations (including ODM's technical commentary), such data have not been independently verified by the qualified person and may not be representative of mineralization within Canary Gold's current tenement boundaries.

About Canary Gold Corp.

Canary Gold is a Canadian public exploration company focused on the acquisition and advancement of gold projects in Brazil. The company holds an option to earn up to a 70-per-cent undivided interest in the Rio Madeira project through a series of staged exploration expenditures and milestone payments.

In August, 2025, Canary further expanded its regional strategy by entering into a definitive agreement to acquire a 100-per-cent interest in ten additional mineral tenements totalling approximately 94,700 hectares from Talisman Venture Partners Ltd., a private British Columbia corporation. The total consideration of $1.7-million is being satisfied through staged cash and share payments, a portion of which remains outstanding in accordance with the terms of the agreement.

Talisman retains a 1.0-per-cent net smelter return (NSR) royalty on future production from the acquired tenements, one-half of which (reducing the NSR to 0.5 per cent) may be repurchased by the company at any time for $1.0-million.

Together, these interests provide Canary Gold with a dominant and strategically consolidated land position in the Madeira River region of Rondonia state -- one of Brazil's most prospective yet underexplored gold provinces.

We seek Safe Harbor.