Mr. John Travaglini reports

CHICANE CAPITAL I CORP. AND ELTON RESOURCES CORP. ENTER INTO DEFINITIVE MERGER AGREEMENT WITH RESPECT TO QUALIFYING TRANSACTION AND BROKERED PRIVATE PLACEMENT OF SUBSCRIPTION RECEIPTS

Further to Chicane Capital I Corp.'s news release dated April 16, 2026, Chicane, Elton Resources Corp., a corporation incorporated under the laws of the Province of British Columbia, and 1589751 B.C. Ltd. (AcquisitionCo), a wholly owned subsidiary of Chicane, have entered into a binding merger agreement dated May 26, 2026, in respect of an arm's-length reverse takeover transaction of Chicane by Elton, which will constitute Chicane's qualifying transaction (as such term is defined in Policy 2.4, Capital Pool Companies, of the exchange). Upon completion of the proposed transaction, the resulting issuer will carry on the business of Elton and is expected to list as a Tier 2 mining issuer on the exchange.

The completion of the proposed transaction is subject to the satisfaction of various conditions that are customary for a transaction of this nature, including, but not limited to: (i) the completion of the private placement (as defined below) for aggregate gross proceeds of a minimum of $10-million and a maximum of $15-million, or such other amounts as are acceptable to Elton, Chicane and the agents (as defined below); (ii) the approval by the directors of Chicane and Elton of the proposed transaction and the matters related thereto; (iii) the approval by the shareholders of Chicane, if and as applicable, of the consolidation (as defined below), the continuance (as defined below), the reconstitution of the board of directors of the resulting issuer, the adoption of a new equity incentive plan by the resulting issuer and such other matters as may reasonably be requested by Elton; and (iv) the receipt of all requisite regulatory, stock exchange or governmental authorizations and consents, including the exchange.

Subject to satisfaction or waiver of the conditions precedent referred to herein and in the merger agreement, Chicane and Elton anticipate that the proposed transaction will be completed by Aug. 31, 2026. There is no assurance that the proposed transaction will be completed on the terms proposed herein or at all.

Trading in the common shares of Chicane is currently halted in accordance with the policies of the exchange and is expected to remain halted until completion of the proposed transaction.

The proposed qualifying transaction

The proposed transaction will result in Chicane acquiring all of the issued and outstanding securities of Elton in exchange for the issuance of securities of Chicane by way of a three-cornered amalgamation between Elton, Chicane and AcquisitionCo, pursuant to which the entity resulting from the amalgamation under the Business Corporations Act (British Columbia) (BCBCA) between AcquisitionCo and Elton becoming a wholly owned subsidiary of Chicane. The proposed transaction is expected to result in the existing shareholders of Elton owning a majority of the outstanding Chicane shares (after completion of the proposed transaction and consolidation, referred to herein as the resulting issuer shares) and the resulting issuer will be renamed Elton Resources Corp. or such other name as Elton may determine.

The proposed transaction will not constitute a non-arm's-length qualifying transaction (as such term is defined in the Policy 2.4) or a related party transaction pursuant to the policies of the exchange and applicable securities laws. Accordingly, it is not expected that the proposed transaction will require the approval of the shareholders of Chicane.

Prior to the effective time of the proposed transaction, it is expected that Chicane will continue from Ontario to British Columbia and complete a share consolidation in respect of the Chicane shares on the basis of 0.75 postconsolidation Chicane share for each Chicane share, such that, immediately following the consolidation, there shall be approximately 4,491,000 Chicane postconsolidation shares issued and outstanding (for avoidance of doubt, excluding any Chicane postconsolidation shares issuable pursuant to the conversion of any FT (flow-through) subscription receipts or Chicane HD (hard-dollar) subscription receipts (as such terms are defined below)). Additionally, all outstanding incentive stock options and warrants of Chicane shall be adjusted on the same basis as the consolidation in connection with the proposed transaction such that the existing Chicane options will be exercisable to acquire 354,000 resulting issuer shares and the existing Chicane warrants will be exercisable to acquire 231,600 resulting issuer shares each in accordance with their terms.

As consideration for the acquisition of all of the outstanding securities of Elton, holders of the issued and outstanding common shares of Elton (including Elton shares issuable upon the conversion in accordance with its terms of the Elton HD subscription receipts (as defined below)) will receive one resulting issuer share for each Elton share held. Excluding any Elton shares that may be issued upon the conversion of any Elton HD subscription receipts and assuming no convertible securities of Elton are exercised prior to the effective time, it is expected that: (i) 70 million Elton shares outstanding as of the effective time held by current holders of Elton shares will be exchanged for an equal number of resulting issuer shares at a deemed price per resulting issuer share equal to the HD subscription receipt price (as defined below) for deemed consideration of $14-million; (ii) an additional number of Elton shares equal to the greater of 20 million Elton shares and such number of Elton shares so as to result in Generation Mining Ltd. holding 16 per cent of the aggregate number of resulting issuer shares on a fully diluted basis immediately following completion of the proposed transaction pursuant to the terms of a second amended and restated asset purchase agreement dated May 25, 2026, between Generation and Elton; and (iii) all Elton shares issuable upon conversion of the Elton HD subscription receipts or pursuant to the exercise of any other convertible securities of Elton prior to the completion of the proposed transaction will be exchanged for an equal number of resulting issuer shares at a deemed price per resulting issuer share equal to the HD subscription receipt price.

In addition, there are currently two million outstanding incentive stock options of Elton, each exercisable for one Elton share, and holders thereof will receive approximately an aggregate of two million incentive stock options of the resulting issuer, each exercisable to acquire one resulting issuer share, pursuant to the Exchange Ratio. The final structure of the proposed transaction is subject to the receipt of tax, corporate and securities law advice by both Chicane and Elton. The Agents' Warrants (as defined below) shall also be exchanged for warrants of the resulting issuer on substantially the same basis.

Upon closing of the proposed transaction, a finder's fee in the amount of $10,000 in cash and such number of resulting issuer shares as is equal to $15,000 divided by the HD subscription receipt price will be payable to Carlos Rigillo, an arm's-length party to both Elton and Chicane.

The private placement

Elton and Chicane have engaged Canaccord Genuity Corp. as lead agent and sole bookrunner together with a syndicate of agents in connection with a brokered private placement of a combination of: (i) subscription receipts of Elton at a price per Elton HD subscription receipt of 20 cents; (ii) flow-through subscription receipts of Chicane at a price per FT subscription receipt of 22 cents; and (iii) subscription receipts of Chicane at a price per Chicane HD subscription receipt equal to the HD subscription receipt price, for aggregate gross proceeds of up to $15-million, or such other amount as may be agreed between Elton, Chicane and the agents.

In connection with the private placement, Elton and Chicane have also granted the agents an option to increase the size of the private placement by up to 15 per cent in any combination of subscription receipts, which agents' option shall be exercisable in whole or in part at any time for a period of up to 48 hours prior to the closing of the private placement.

Each Elton HD subscription receipt will entitle the holder thereof to receive, without any further action and without payment of additional consideration, and subject to adjustments in certain circumstances, one unit of Elton, with each Elton HD unit comprising one common share of Elton share and one-half of one Elton share purchase warrant, with each whole warrant being exercisable for a period of three years from the date of issuance for one Elton share at an exercise price of 30 cents, upon the satisfaction or waiver of the Elton escrow release conditions (as defined below) prior to the termination date (as defined below). For avoidance of doubt, upon the completion of the proposed transaction, the Elton shares and warrants forming part of the Elton HD units will be exchanged for resulting issuer shares and resulting issuer share purchase warrants on the basis of the exchange ratio.

Each FT subscription receipt will entitle the holder thereof to subscribe for and receive, without any further action and without payment of additional consideration, and subject to adjustments in certain circumstances, one unit of the resulting issuer, with each FT unit comprising one flow-through resulting issuer share that will qualify as a flow-through share within the meaning of Subsection 66(15) of the Income Tax Act (Canada) and one-half of one flow-through resulting issuer warrant that will qualify as a flow-through share within the meaning of Subsection 66(15) of the tax act of the resulting issuer, with each whole FT resulting issuer warrant being exercisable for a period of three years from the date of issuance for one resulting issuer share, on a non-flow-through basis, at an exercise price of 30 cents, upon the satisfaction or waiver of the Chicane escrow release conditions (as defined below) prior to the termination date.

Each Chicane HD subscription receipt will entitle the holder thereof to receive, without any further action and without payment of additional consideration, and subject to adjustments in certain circumstances, one unit of the resulting issuer, with each Chicane HD unit comprising one resulting issuer share and one-half of one resulting issuer warrant, with each whole resulting issuer warrant being exercisable for a period of three years from the date of issuance for one resulting issuer share at an exercise price of 30 cents, upon the satisfaction or waiver of the Chicane escrow release conditions (as defined below) prior to the termination date.

The subscription receipts will be issued under one or more subscription receipt agreements to be entered into by Elton and/or Chicane, as applicable, and a subscription receipt agent to be determined by Elton, Chicane and the lead agent.

The aggregate gross proceeds in respect of the subscription receipts, less the agents' reasonable out-of-pocket expenses, and the reasonable fees and disbursements of the agents' legal counsel incurred prior to the closing date of the private placement, will be held in escrow pursuant to the subscription receipt agreements in an interest-bearing account pending the earlier of: (i) the satisfaction of the Elton escrow release conditions or the Chicane escrow release conditions, as applicable; and (ii) the occurrence of a termination event (as defined below).

Upon satisfaction of the Elton escrow release conditions and the Chicane escrow release conditions on or prior to the termination date, the subscription receipt agent will release the deposited agents' fee (as defined below) together with all interest earned thereon and all expenses of the agents not previously paid to the agents, to or as directed by the lead agent on behalf of the agents from the escrowed funds and the balance of the escrowed funds, together with all interest earned thereon, shall be released to Elton or the resulting issuer, as applicable.

If (i) the applicable escrow release conditions have not been satisfied prior to 5 p.m. Vancouver time on that date that is 120 days following the closing date of the private placement; (ii) the proposed transaction is terminated at any earlier time; or (iii) Elton or Chicane, as applicable, advises the lead agent, on behalf of the agents, or announces to the public that it does not intend to satisfy the applicable escrow release conditions, the subscription receipt agent shall return to the holders of the subscription receipts an amount equal to the aggregate HD subscription receipt price or FT subscription receipt price, as applicable, of the subscription receipts held by each such holder and their pro rata portion of interest and other income earned on the escrowed funds and the subscription receipts shall be cancelled. Elton agrees that it shall be responsible and liable to the holders of the subscription receipts for any shortfall between the aggregate offering price paid by the original purchasers of the subscription receipts and the escrowed funds.

For the purposes hereof, the term Elton escrow release conditions shall mean:

1. The receipt of all required corporate, shareholder and regulatory approvals in connection with the private placement, the proposed transaction and the exchange listing;
2. The completion or the satisfaction of all conditions precedent to the proposed transaction, substantially in accordance with the definitive agreements relating to the proposed transaction, to the satisfaction of the agents;
3. Such other customary escrow release conditions requested by the Lead agent, acting reasonably;
4. Elton and the lead agent, on behalf of the agents, having delivered a joint notice to the subscription receipt agent confirming that the conditions set forth in (1) through (3), inclusive, above have been met or waived.

For the purposes hereof, the term Chicane escrow release conditions shall mean:

1. The receipt of all required corporate, shareholder and regulatory approvals in connection with the private placement, the proposed transaction and the exchange listing;
2. The completion of the proposed transaction, substantially in accordance with the definitive agreements relating to the proposed transaction;
3. Such other customary escrow release conditions requested by the lead agent, acting reasonably;
4. Chicane and the lead agent having delivered a joint notice to the subscription receipt agent confirming that the conditions set forth in (1) through (3), inclusive, above have been met or waived.

Escrow release conditions shall mean, collectively, the Elton escrow release conditions and the Chicane escrow release conditions.

The gross proceeds from the issuance of the FT resulting issuer shares and the FT resulting issuer warrants will be used to incur Canadian exploration expenses, as defined in Subsection 66.1(6) of the tax act, which qualify as flow-through critical mineral mining expenditures, as defined in Subsection 127(9) of the tax act. The qualifying expenditures will be incurred on or before Dec. 31, 2027, and will be renounced by the resulting issuer to the initial purchasers of the FT resulting issuer shares and the FT resulting issuer warrants with an effective date no later than Dec. 31, 2026, in an aggregate amount not less than the gross proceeds raised from the issue of the FT resulting issuer shares and the FT resulting issuer warrants.

In the event the resulting issuer is unable to renounce qualifying expenditures effective on or prior to Dec. 31, 2026, for each FT resulting issuer share and the FT resulting issuer warrant in an aggregate amount not less than the gross proceeds raised from the issue of FT resulting issuer shares and the FT resulting issuer warrants, and/or the qualifying expenditures are otherwise reduced by the Canada Revenue Agency, the resulting issuer will indemnify each subscriber for the additional taxes payable by such subscriber as a result of the resulting issuer's failure to renounce the qualifying expenditures or as a result of the reduction as agreed.

In connection with the private placement and upon satisfaction of the escrow release conditions, the agents will: (i) be paid a cash commission equal to 6.0 per cent of the gross proceeds raised under the private placement, except in respect of certain sales of up to $4-million of subscription receipts comprising Elton's president's list for which a reduced commission of 3.0 per cent shall be payable; and (ii) be issued such number of Elton share or resulting issuer share purchase warrants as is equal to 6.0 per cent of the subscription receipts sold under the private placement, except in respect of sales comprising the president's list for which a reduced number of agents' warrants equal to 3.0 per cent of the subscription receipts sold under the private placement shall be payable. Each agent's warrant entitling the holder to acquire an Elton share will be exchanged for an agent's warrant exercisable to acquire a resulting issuer share in connection with the proposed transaction. Each agent's warrant will be exercisable at an exercise price of 30 cents per Elton share or resulting issuer share, as applicable, for a period of three years following the date the escrow release conditions are satisfied.

Resulting issuer capitalization

On completion of the proposed transaction, assuming: (a) no changes to the capitalization of either Chicane or Elton prior to the effective time (including no exercise of any convertible securities); (b) the subscription receipts are converted into Elton HD units, FT units and Chicane HD units, as applicable, prior to the Escrow release deadline; and (c) the exchange of all securities of Elton for securities of the resulting issuer on the basis of the exchange ratio, the expected capitalization of the resulting issuer is detailed in an attached table.

The completion of the proposed transaction is subject to the satisfaction of various conditions as are standard for a transaction of this nature, including, but not limited to: (i) the receipt of shareholder approval in respect of the continuance, the name change, the consolidation and/or such other matters related to the proposed transaction to the extent required by applicable law and policies of the exchange; (ii) the receipt of regulatory and exchange approval for the proposed transaction to the extent required by applicable law and policies of the exchange; (iii) the filing with the applicable securities regulatory authorities of a filing statement regarding the proposed transaction; and (iv) the completion of the private placement, continuance, name change, consolidation and other matters as may be agreed to between Elton and Chicane. There can be no assurance that the proposed transaction will be completed on the terms proposed above or at all.

Information about Elton

Elton was incorporated under the BCBCA on March 26, 2022, under the name Elton Resources. Elton is a mineral exploration company focused on the acquisition and exploration of mineral properties focused on its flagship Darnley Bay property (as defined below).

Darnley Bay property

Elton's interest in the Darnley Bay property, its sole material property, was acquired pursuant to an asset purchase agreement dated Dec. 20, 2022, between Generation and Elton, which has been amended and restated by the property agreement. Pursuant to the property agreement, Elton acquired, among other things, the rights and obligations of Generation pursuant to a concession agreement dated Dec. 22, 2009, between the Inuvialuit Regional Corp. (IRC), the Inuvialuit Land Corp. (ILC) and Darnley Bay Resources Ltd., which are to be replaced by a new agreement with the IRC and ILC. In consideration for the property agreement, Elton agreed to: (i) pay $1-million in cash, of which (a) $150,000 has been paid; and (b) $850,000 will be paid to Generation at or immediately following the completion of the proposed transaction; and (ii) immediately prior to the completion of the proposed transaction, issue that number of Elton shares equal to the greater of the number that is: (a) a fraction, the numerator of which is $4-million and the denominator of which is the HD subscription receipt price; and (b) 16 per cent of the total number of issued and outstanding resulting issuer shares, as determined on a fully diluted basis, immediately following the closing of the proposed transaction.

Further to the property agreement, Elton entered into a concession agreement with IRC and ILC on Dec. 23, 2022, as may be amended from time to time. Under the concession agreement, ILC granted Elton a combined metals and diamond concession providing Elton with mining rights to explore for, assess, mine, extract, treat, market and otherwise dispose of metals and rough diamonds on or under the subsurface of the Darnley Bay property, which forms part of the Inuvialuit 7(1)(a) lands in the vicinity of Paulatuk in the Northwest Territories.

The Darnley Bay property is host to a large gravity and magnetic anomaly and is considered to be one of the strongest isolated gravity anomalies in the world. The anomaly exhibits a measured gravity amplitude of 132 mGal, with dimensions of 80 kilometres (km) by 100 km, and a coincident magnetic anomaly with an amplitude of 1,350 nT2. The anomaly is considered prospective for nickel-copper-platinum group elements (Ni-Cu-PGE). Its source has drawn favourable comparisons to the prolific mining camps of Sudbury (Canada), Noril'sk (Russia) and the Bushveld complex (South Africa) by the Geological Survey of Canada, geological consultants and major mining companies. In July, 2018, a magnetotelluric survey was completed by Quantec Geoscience over a 40 by 50 km area on the anomaly. The results identified several targets that are expected to be followed up through Elton's future drill program.

Elton financial information

Set forth in another table is certain financial information derived from Elton's unaudited financial statements, with all amounts in Canadian dollars.

Insiders and non-arm's-length parties of the resulting issuer

Upon completion of the proposed transaction, it is anticipated that the board of directors of the resulting issuer will consist of five directors: Carson Phillips, Michael Galego, Frederic Leigh and two additional directors to be determined by Elton. It is anticipated that the senior management of the resulting issuer will comprise Carson Phillips as chief executive officer, and a chief financial officer and a corporate secretary to be determined by Elton and acceptable to the exchange.

Carson Phillips, chief executive officer and director

Mr. Phillips is a mining executive with over a decade of experience with a focus on precious metals. He was also an initial founder and director of Ecuador Gold & Copper Corp., which was subsequently acquired by Lumina Gold Corp. in 2016. Carson has a degree in business administration from the University of British Columbia (Okanagan), as well as a degree in international business from Hogeschool Zeeland in the Netherlands. Mr. Phillips has also completed a master of engineering in mine economics and finance from the University of British Columbia in 2014.

Michael Galego, director

Mr. Galego is a lawyer with extensive M&A (merger and acquisition) and corporate finance experience. Mr. Galego serves as CEO of Apolo Capital Advisory Corp. Mr. Galego is also on the board of the directors of several public and private companies, including Allied Critical Metals Inc. and Farm Lending Canada Inc. Mr. Galego was a member of the board of directors of LNG Energy Group Corp., CGX Energy Inc., Western Atlas Resources Inc. and Woulfe Mining Corp. (sold to Almonty Industries Inc.). Mr. Galego began his legal career as an associate in the business law department of Osler, Hoskin & Harcourt LLP. Mr. Galego is a graduate of York University (honours BA) and the University of Windsor (LLB). Mr. Galego is a resident of Toronto, Ont.

Frederic Leigh, director

Mr. Leigh is the principal of a private British Columbia company that provides advisory services to publicly listed companies. He has over 20 years of experience with companies in the mining and technology sectors, and currently serves as a director for Golden Harp Resources Inc.

Generation Mining -- insider

Generation is a mining issuer listed on the Toronto Stock Exchange (symbol GENM) focused on developing the Marathon project, a large undeveloped copper-palladium deposit in Northwestern Ontario, Canada.

Other than the individuals as disclosed above, the resulting issuer has no other anticipated principals or insiders, as defined in Policy 1.1, Interpretation of the Exchange.

About Chicane Capital I Corp.

Chicane was incorporated under the Business Corporations Act (Ontario) on Feb. 23, 2022, and is a capital pool company (as such term is defined in Policy 2.4) listed on the exchange. Chicane has no commercial operations and no assets other than cash.

Qualified person

The scientific and technical content of this news release was reviewed, verified and approved by David White, PGeo, and a qualified person as defined by Canadian Securities Administrators' National Instrument 43-101, Standards of Disclosure for Mineral Projects.

We seek Safe Harbor.