Mr. Gary Bay reports

XAU RESOURCES PROVIDES CORPORATE UPDATE ON QUARTZSTONE TRANSACTION, FORTUNA EXPLORATION PROGRAM AND NOSENO PROJECT

Xau Resources Inc. has provided a corporate update, including the TSX Venture Exchange review of the proposed acquisition of QS Holdings Inc. (QSH) and the Quartzstone gold project (April 23, 2026, news release) pursuant to a definitive business combination agreement, Fortuna Mining Corp.'s continuing exploration activities at Quartzstone (April 20, 2026, news release), and the company's work to advance the Noseno project and evaluate additional opportunities in Guyana. For further details regarding the transaction, please refer to the company's news releases dated June 10, 2026, and July 17, 2026, available on the company's SEDAR+ profile.

The TSX Venture Exchange review and trading halt

Following the announcement of the proposed transaction, the TSX-V halted trading in the company's shares pending its review (April 23, 2026, news release). The TSX-V has determined that the transaction constitutes a reverse takeover and is therefore subject to a comprehensive review against the Exchange's applicable listing requirements.

The review requires a substantial package of technical, financial, legal and corporate documentation, including:

• Updated National Instrument 43-101 technical report on the Noseno project;
• Audited financial statements and supporting financial information for Xau and QSH;
• Legal due diligence materials;
• Transaction agreements and corporate documentation;
• Valuation and fairness-opinion materials, as applicable;
• Responses to TSX-V comments and follow-up requests.

Management and the company's advisors are actively completing the outstanding submissions and responding to the TSX-V's comments. The company intends to provide further information on the remaining process and expected milestones when timing can be stated with sufficient certainty.

Although the trading halt understandably creates uncertainty, a detailed regulatory review is customary for a reverse takeover. There can be no assurance regarding the timing or outcome of the TSX-V review; however, the company remains focused on satisfying the exchange's requirements as efficiently as possible.

Quartzstone project and Fortuna

Fortuna is actively advancing the project under the previously announced earn-in agreement. The 2026 work program is under way under the direction of a joint Fortuna-Qstone Inc. technical committee, which held its first meeting on June 20, 2026. The following summary of Fortuna's 2026 work program is based on information provided by Fortuna and has not been independently verified by the company's qualified person.

The principal components of the program are:

• Data integration and targeting -- validation and integration of historical drilling, trenching, and sampling information into Fortuna's exploration systems, together with updated geological models and sections to support drill planning;
• Geophysics -- review of the previously acquired airborne magnetic and radiometric data set and planning for a higher-resolution, 100-metre line-spacing fixed-wing survey. provisional approvals have been received, with data acquisition targeted for later in the year;
• Property-wide geochemistry -- regolith mapping and a broad-spaced 500-metre-by-500-metre auger-sampling program of approximately 1,600 samples to identify additional mineralized corridors and priority targets;
• Drilling -- an initial 5,000 m diamond drilling program to verify selected historical results, test extensions of the northerly plunging shoots at Eikle, Blue and Main, and evaluate priority undrilled targets along the principal shear zone, including areas south of Eikle and north of and around the Blue pit;
• Infrastructure and logistics -- expansion of camp capacity to approximately 40 to 50 persons and upgrades to site access to support a safe, cost-effective and year-round program.

The program is supported by a 2026 working budget of approximately $5.6-million (U.S.). Fortuna has also established safety and community-engagement procedures as an early priority. The program remains at an early stage, and results will be reported as the work is completed and the information has been reviewed by a qualified person.

Fortuna's involvement brings significant technical and operational capability to Quartzstone and supports a staged, data-driven approach to evaluating the project.

Noseno project and additional acquisitions

The company is also advancing the Noseno project and is finalizing an updated independent National Instrument 43-101 technical report for filing. The report was prepared by TKT Geoscience Ltd. and has an effective date of July 24, 2026.

The report concludes that Noseno's geological setting is favourable for orogenic, greenstone-hosted gold mineralization.

Exploration completed to date includes a 2022 to 2023 program of prospecting and BLEG stream-sediment sampling, comprising 142 stream-sediment samples together with grab sampling. The grab samples were collected from outcrop, subcrop and float, and are not necessarily representative of mineralization that may be present on the property. The work returned clustered gold-in-stream anomalies and defined three principal and two secondary ranked target areas. The report characterizes Noseno as an early-stage, largely underexplored project where the bedrock beneath the weathered profile has received little modern testing. Additional details regarding data verification, sampling methodology and QA/QC (quality assurance/quality control) procedures will be provided in the updated National Instrument 43-101 technical report when filed on SEDAR+.

The company has also advanced geophysical work at Noseno:

• Legacy data acquisition -- A total of 5,257 line kilometres of legacy airborne magnetic and radiometric geophysical data have been purchased from the Guyana Geology and Mines Commission (GGMC).
• Reprocessing -- the data have undergone reprocessing by Global Venture Consulting, which is also undertaking new surveys across Guyana to improve geophysical coverage and support exploration. The company has not independently verified the legacy geophysical data or the reprocessing results.
• Further analysis -- The data set will be independently validated, analyzed, reimaged, and interpreted to improve geological and structural understanding and assist exploration targeting.

The report recommends a staged exploration program with an estimated total budget of approximately $2.4-million (U.S.), including the following principal field components:

• Phase I -- target generation (approximately $550,000 (U.S.)) -- work up and interpretation of historical geophysical data, completion of stream sediment sampling, soil sampling, geological mapping, and rock sampling;
• Phase II -- trenching (approximately $410,000 (U.S.)) -- approximately 5,000 m of trenching to evaluate geochemical and geological targets;
• Phase III -- drilling (approximately $1.12-million (U.S.)) -- approximately 3,000 m of diamond drilling, contingent on the results of phase II.

Subject to financing, permitting and seasonal and logistical considerations, the company intends to advance the recommended program in stages during the 2026 to 2027 field season. As with any early stage exploration project, there is no assurance that a mineral resource will ultimately be defined.

Xau is also evaluating additional acquisition opportunities in the same gold camp, with the objective of building a larger, consolidated land position with geological continuity. There can be no assurance that any opportunity under review will result in a definitive transaction. Further updates will be provided if and when material developments occur.

Concurrent private placement

QSH has engaged ECM Capital Advisors Ltd. as its exclusive financial adviser in connection with a non-brokered private placement of subscription receipts for aggregate gross proceeds of a minimum of $10-million and a maximum of $20-million.

The offering will consist of subscription receipts of QSH, each of which will entitle the holder thereof to receive, for no additional consideration, one common share in the capital of QSH upon satisfaction of the escrow release conditions and immediately prior to completion of the transaction. The QSH common shares will then be immediately exchanged for common shares of Xau pursuant to, and based on the exchange ratio under, the business combination agreement. The subscription receipts will be issued at a price of $700 per subscription receipt (the equivalent of 50 cents per Xau common share, based on the exchange ratio under the business combination agreement).

Closing of the offering is conditional upon receipt of conditional acceptance by the TSX-V of the transaction. The gross proceeds of the offering will be held in escrow until the satisfaction of certain escrow release conditions, including the listing of the common shares issuable on conversion of the subscription receipts and the satisfaction of all other conditions to closing of the transaction. Upon satisfaction of the escrow release conditions, the subscription receipts will convert into common shares of QSH immediately prior to the completion of the transaction, and subscribers will receive common shares of Xau pursuant to the exchange ratio under the business combination agreement.

ECM is registered as a securities dealer with the Securities Commission of The Bahamas. ECM will not directly or indirectly solicit sales or act as a dealer in respect of the company's securities in Canada. Any distributions conducted in Canada will be completed on a fully regulated basis through a registered investment dealer or exempt market dealer acceptable to the company.

The net proceeds of the offering will be used by QSH and, following the transaction, by Xau to finance regional exploration, property payments and transaction expenses related to the transaction, and for general corporate and working capital purposes.

The completion of the offering is a condition to the closing of the transaction.

Forward outlook

The company remains focused on four priorities:

1. Completing the TSX-V review and advancing the transaction;
2. Completing the offering;
3. Supporting Fortuna's exploration program at Quartzstone;
4. Advancing Noseno and evaluating complementary acquisition opportunities.

The company will continue to communicate material developments through its public disclosure channels as key milestones are achieved.

Qualified person

The scientific and technical information in this news release relating to the Noseno project is derived from and supported by an independent National Instrument 43-101 technical report prepared by TKT Geoscience Ltd. with an effective date of July 24, 2026. The report is being finalized for filing on SEDAR+. Tania Ilieva, PhD, PGeo, of TKT Geoscience Ltd., is the independent qualified person responsible for that report and has approved the technical disclosure relating to the Noseno project in this news release.

The scientific and technical information in this news release relating to the Quartzstone project is supported by the NI 43-101 technical report titled "NI 43-101 Technical Report, Quartzstone Gold Project, Guyana," with an effective date of June 1, 2026, prepared by SLR Consulting (Canada) Ltd. and filed on SEDAR+.

The summary of Fortuna's current 2026 work program in this news release is based on information provided by Fortuna and has not been independently verified by a qualified person on behalf of the company.

We seek Safe Harbor.