Mr. Steve Vanry reports

PENDER STREET CAPITAL CORP. PROVIDES UPDATE ON PROPOSED QUALIFYING TRANSACTION AND CECILIA PROJECT

Pender Street Capital Corp. has provided an update regarding its previously announced proposed qualifying transaction with 1559239 B.C. Ltd. (Calu), as first disclosed in Pender's news release dated June 8, 2026.

Since the announcement of the proposed transaction, Calu has continued to evaluate the mineral properties proposed to form the basis of the proposed transaction. In connection with this process, Calu was presented with the opportunity to acquire an option to earn a 100-per-cent interest in the Cecilia project located in the state of Sonora, Mexico. Following its evaluation of the Cecilia project and continuing due diligence, Calu elected to proceed with the Cecilia project as its principal exploration property for purposes of the proposed transaction, in place of the La Gitana property originally contemplated in connection with the proposed transaction.

Accordingly, Calu entered into an option and earn-in agreement dated Aug. 29, 2026, with Ravena Resources Corp. and RRM Exploraciones SAPI de CV, pursuant to which Calu was granted the sole and exclusive option to acquire a 100-per-cent undivided right, title and beneficial interest in the Cecilia project, subject to the existing royalties affecting the Cecilia project and the additional royalty described below.

As a result of Calu's decision to proceed with the Cecilia project, Pender and Calu intend to revise the definitive documentation for the proposed transaction to reflect the Cecilia project as Calu's principal mineral property and the principal exploration property of the issuer resulting from the proposed transaction. The parties remain committed to completing the proposed transaction and are working collaboratively to advance the revised transaction documentation, due diligence, the preparation of a technical report in respect of the Cecilia project in accordance with National Instrument 43-101 -- Standards of Disclosure for Mineral Projects and the other materials required by the TSX Venture Exchange.

The Cecilia project

The Cecilia project is located in northeastern Sonora, Mexico, approximately 40 kilometres southwest of Agua Prieta, near the Mexico-United States border, and approximately 245 kilometres northeast of Hermosillo. The Cecilia project comprises five mineral concessions and one mineral concession application covering approximately 7,583 hectares.

The Cecilia project has been the subject of historical exploration activities by previous operators. Additional scientific and technical information regarding the Cecilia project will be disclosed in accordance with National Instrument 43-101 in connection with the proposed transaction and is expected to be included in the filing statement and related disclosure documents to be prepared in connection with the proposed transaction.

Option and earn-in terms

Under the option agreement, Calu may acquire a 100-per-cent interest in the Cecilia project by making aggregate cash or share payments of $1.2-million and financing aggregate exploration expenditures of $6.65-million over a period of four years, as shown in the attached table.

Unless otherwise indicated, all amounts in this news release are expressed in Canadian dollars.

The initial $50,000 cash payment has been made. The funding and incurrence of at least $150,000 of exploration expenditures during the first 12 months are firm commitments of Calu under the option agreement. Except for these firm commitments, the remaining payments and exploration expenditures are optional, although Calu must satisfy the applicable requirements to maintain and ultimately exercise the option.

Where a payment may be satisfied through the issuance of Calu shares, the number of shares issuable will be determined based on the 10-trading-day volume-weighted average trading price of the Calu shares on their principal stock exchange, subject to compliance with applicable securities laws and stock exchange policies.

Ravena will act as operator of all exploration programs on the Cecilia project during the option period and will be entitled to a management fee equal to 10 per cent of eligible exploration expenditures.

The Cecilia project is subject to an existing 2.0-per-cent net smelter returns royalty in favour of 1412597 B.C. Ltd., a subsidiary of Riverside Resources Inc. Upon exercise of the option, Calu will grant Ravena an additional 0.5-per-cent net smelter returns royalty. Calu will have the right to purchase the entire 0.5-per-cent royalty from Ravena for $1.5-million (U.S.) in cash at any time prior to Jan. 1, 2035.

Proposed transaction

Pender and Calu continue to work collaboratively toward the negotiation and execution of a definitive agreement in respect of the proposed transaction. The definitive agreement is expected to reflect Calu's acquisition of the option to earn a 100-per-cent interest in the Cecilia project and the resulting changes to Calu's mineral property portfolio and the business to be carried on by the resulting issuer following completion of the proposed transaction.

As previously disclosed, the proposed transaction is expected to be structured as a three-cornered amalgamation under the Business Corporations Act (British Columbia), pursuant to which a wholly owned subsidiary of Pender will amalgamate with Calu. Upon completion of the proposed transaction, it is anticipated that Pender will continue as the resulting issuer and carry on the business of Calu through the amalgamated entity. The proposed transaction is intended to constitute Pender's qualifying transaction, as that term is defined in Policy 2.4 -- Capital Pool Companies of the TSX-V Corporate Finance Manual.

The parties are continuing their due diligence review and the preparation of the definitive agreement, a filing statement, the National Instrument 43-101 technical report for the Cecilia project, and the other transaction documentation required in connection with the proposed transaction. The terms of the proposed transaction, including the securities to be issued in connection with the proposed transaction and the terms of the previously announced concurrent financing, remain subject to revision in connection with the preparation of the definitive agreement and the review and acceptance of the TSX-V.

Completion of the proposed transaction remains subject to a number of conditions, including, but not limited to, the negotiation and execution of the definitive agreement, completion of satisfactory due diligence, completion of the concurrent financing, receipt of all required corporate, shareholder, stock exchange and regulatory approvals, and the satisfaction or waiver of customary closing conditions.

Pender will provide further updates regarding the proposed transaction in accordance with the policies of the TSX-V as material developments occur.

About 1559239 B.C. Ltd.

Calu was incorporated on Oct. 2, 2025, pursuant to the Business Corporations Act (British Columbia) and is not a reporting issuer in any province or territory of Canada. Calu is a mineral exploration company based in Vancouver, B.C. Calu holds the sole and exclusive option to acquire a 100-per-cent interest in the Cecilia project, subject to the underlying and additional royalties and the other terms and conditions of the option agreement.

About Pender Street Capital Corp.

Pender was incorporated on Sept. 2, 2021, pursuant to the provisions of the BCBCA and is a capital pool company (as defined in the manual) listed on the TSX-V and a reporting issuer in the provinces of British Columbia, Alberta and Ontario. Pender has no commercial operations and no assets other than cash. Pender's only business is to identify and evaluate assets or businesses with a view to completing a qualifying transaction (as defined in Policy 2.4).

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