Mr. John Karagiannidis reports

QIMC ANNOUNCES THERMOGENIC WET-GAS SIGNATURE IN 86% OF SOIL-GAS SAMPLES AT NEW SALEM-APPLE RIVER, NOVA SCOTIA, NEXT TO ITS 30% CLEAN HYDROGEN DISCOVERY

Quebec Innovative Materials Corp. has released the C1-C4 soil-gas results from its 2026 New Salem-Apple River program in Nova Scotia and has provided an integrated interpretation of the area, following the helium and geophysical results announced on Sept. 24 and Sept. 29, 2026. The release presents the regional gravity interpretation identifying a sedimentary subbasin -- a potential new gas kitchen -- immediately west of New Salem, and sets out how the New Salem-Apple River gas corridor relates to the company's Apple River-Bennett Hill clean natural hydrogen corridor along the North Cobequid fault zone. The interpretation and geological model were prepared by Prof. Marc Richer-Lafleche, PhD, of the Institut national de la recherche scientifique, Quebec.

The New Salem-Apple River gas system:

• Source: the organic-rich lacustrine shales of the Horton group -- the horizon the oil and gas industry has historically targeted in the Cumberland basin -- with Type 2-3 kerogen at thermogenic maturity (Nova Scotia government data); uranium-thorium-bearing basement, the magnetic intrusive body beneath zones B and C, and the Devono-Carboniferous granite for helium;
• Kitchen: a regional gravity low immediately west of New Salem marks a sedimentary subbasin where the Carboniferous section thickens; C1-C4 soil-gas values rise as the gravity field falls toward the centre of this trough;
• Migration: three regional faults (F-I, F-II and F-III) rooted in Precambrian basement grain, along which gas reaches the surface today -- thermogenic wet gas on F-I and F-II (zones A and E), helium on F-III (zones B and C), and F-II (zone D);
• Candidate structures along faults F-I to F-III and the basin basement ramp, to be imaged by the 2026 seismic program;
• The Windsor group evaporites (salt and anhydrite) are the most effective regional seal; their presence beneath the fairway is to be tested by seismic and drilling;
• Footprint: a core fault-controlled fairway of 20- to 30 square kilometres within an anomalous corridor extending about 18 km from West Advocate to the eastern survey lines, at the western end of the 43-kilometre Apple River-Kirkhill corridor, on which the company's clean natural hydrogen discoveries at Bennett Hill were drilled.

Why it matters

Twelve months ago, the southwestern Cumberland basin and its transition zone toward the Cobequid highlands were frontier ground, with virtually no drilling and a very low density of geoscientific data; earlier industry exploration had concentrated on the central and eastern parts of the basin. It now has more than 1,000 independent soil-gas analyses for helium and C1-C4, Nova Scotia regional gravity, reprocessed provincial aeromagnetics, new Quebec Innovative high-resolution ground magnetics, and a new structural interpretation -- all converging on one set of structures at shallow depth, in a county with existing gas transmission infrastructure and a province that has been a net importer of natural gas.

• An active hydrocarbon charge: The dominant soil-gas signature across the survey is thermogenic, and most samples fall in the wet-gas field. This indicates that a hydrocarbon system is in the stratigraphic column beneath New Salem-Apple River -- the first condition of any conventional gas play, and the reason soil-gas surveys are run ahead of seismic.
• A candidate source kitchen: The strongest ethane anomalies lie over a regional gravity low interpreted as a thickening of the sedimentary basin, which could conceal the organic-rich Horton group lacustrine shale identified by the Nova Scotia Department of Energy as the principal geological uncertainty for the basin's conventional gas potential.
• Three gases, one structural framework: Hydrocarbons, helium and clean natural hydrogen are distinct in origin and timing, but appear to share common structures: thermogenic gas associated with the basin, helium above a deep magnetic body cut by fault F-III and hydrogen dominant toward the Cobequid highlands, where the company's Bennett Hill holes returned up to 30 per cent H2; the Nova Scotia assets no longer depend on a single commodity or a single market.
• Conventional, no fracking, no reservoir stimulation: The New Salem-Apple River frontier play is a conventional gas system alongside the company's Apple River-Bennett Hill clean natural hydrogen corridor. The company does not use and does not intend to use hydraulic fracturing or any form of reservoir stimulation in Nova Scotia.
• Independent science: All soil-gas analyses were performed by GeoFrontiers Corp. (Wichita Falls, Tex.), an independent geochemical laboratory with an analytical lineage in petroleum, natural gas and helium exploration dating to 1978. The geological and geophysical interpretation was prepared by Prof. Richer-Lafleche, PhD, INRS.

"QIMC has approached its Nova Scotia clean hydrogen discovery and now helium and wet/condensate gas systematically, with independent data, and with each stage gating the next," said John Karagiannidis, president and chief executive officer. "In 12 months, we have moved from a single 28-station traverse to a frontier play with an active thermogenic charge, a candidate gas kitchen and the faults along which gas reaches the surface today -- supported by more than 1 000 independent helium and C1-C4 soil-gas analyses, regional gravity, aeromagnetics, and new ground magnetics, and interpreted by one of Canada's leading academic geoscientists. The result is a conventional, shallow, multigas play on the same 43-kilometre basement structure as our clean natural hydrogen discoveries at Bennett Hill, in a jurisdiction with existing gas infrastructure and a structural supply deficit. We are advancing it with the discipline the asset deserves and with 50 line kilometres of 2-D seismic designed to image the structures beneath the anomalies. Step back and look at what QIMC now holds in Nova Scotia: two districts, one basement structure, three gases. In the east, five holes across two drill centres and up to 30 per cent clean natural hydrogen at Bennett Hill. In the west, at New Salem-Apple River, the highest helium concentrations in our program, a wet thermogenic gas signature across an 18-kilometre corridor over a regional gravity low, and multiple structural targets that the seismic is now testing. Together they form a 43-kilometre multigas corridor."

Multigas system in the New Salem-Apple River area

Following 2025 hydrogen exploration work suggesting the possible presence of C1-C4 hydrocarbons in the terrains of the Cumberland basin and in the transition zone toward the Cobequid highlands, a C1-C4 soil-gas survey was carried out in the New Salem and Apple River sectors. The survey was designed to verify the likely presence of hydrocarbons in the southwestern part of the basin and to assess whether an organic-rich, thermally mature source rock might be present at depth within the Carboniferous sedimentary sequence.

C1-C4 soil-gas geochemistry is widely used in the industry because it allows direct detection of hydrocarbon microseepage from the subsurface. It is typically employed during the prospect generation stage, ahead of seismic surveys. A soil-gas anomaly indicates the presence of a hydrocarbon charge -- in other words, that a petroleum system is active somewhere in the stratigraphic column.

In the present case, biogenic and mixed signatures together account for approximately 2 per cent of classified samples. This low proportion is consistent with the nature of the sampling sites, which are located predominantly on glacial tills poor in organic matter. Given the large number of samples and their clustering, the data strongly suggest that the dominant signature in this part of the Cumberland basin is thermogenic. The wetness index is a semi-quantitative indicator of the type of fluid potentially present at depth (dry gas, wet gas or oil). Here, the data point to a dominant wet-gas signature (86 per cent of samples). Dry gas accounts for 8.7 per cent, and a small number of samples (3.4 per cent) fall within the condensate-to-oil range.

The southwestern subbasin: gravity locates the kitchen

To capture the significance of the strong C1-C4 hydrocarbon concentrations found in the soils of the New Salem-Apple River area, ethane (C2) was used because, unlike methane, it is a gas essentially produced by thermogenic reactions in rock.

In a sedimentary basin setting, where an older, denser basement is juxtaposed against less dense sedimentary rocks, gravity lows most often reflect a thickening of the sedimentary sequence, which in turn increases, among other things, the likelihood of organic-rich source rocks being present. In the Cumberland sector, this basin thickening could conceal at depth the organic-rich lacustrine shale unit that is the missing element in current models evaluating the hydrocarbon potential of this part of the basin (for example, Hayes et al., 2017).

Hydrogen, helium and wet/condensate gas in a single geological system

The southwestern part of the Cumberland basin and its transition zone toward the Cobequid highlands form a complex geological and structural setting in which hydrocarbons, hydrogen and helium may co-exist. They likely share common structures, but their origins differ in time and space. Understanding the geology and the formation of the gases observed in the study area therefore requires a 4-D approach (3-D plus time).

Natural hydrogen is thought to originate mainly from the oxidation of ferrous iron (Fe2+) by groundwater. This reaction affects ferromagnesian minerals (olivine, pyroxenes, amphiboles and biotite) and magnetite in the mafic rocks of the Cobequid highlands, such as the gabbros and basalts associated with the intrusions and bimodal volcanic sequences (Pe-Piper and Piper, 2002). As water oxidizes Fe2+ to Fe3+, it is reduced and releases H2. Fluid circulation along faults and fractures promotes this reaction by continuously exposing fresh mineral surfaces. A second mechanism may also contribute: water radiolysis, the breakdown of water by radiation emitted from uranium, thorium and potassium in nearby granitoids (Sherwood Lollar et al., 2014, and Klein et al., 2020). Hydrogen generation is recent on the geological time scale and, according to some hypotheses, may operate as an open system, continuously supplying gas to the subsurface over long periods (Zgonnik, 2020).

In contrast, crustal helium is almost entirely radiogenic, produced by the decay of uranium and thorium concentrated in accessory minerals (zircon, monazite and apatite) of felsic intrusive and metamorphic rocks, particularly those of the basement (Ballentine and Burnard, 2002). A uranium- and thorium-rich source rock accumulates helium over several hundred million years. A structural, magmatic or metamorphic event can then release it, after which it migrates through the crust and may accumulate, notably in hydrocarbon reservoirs within the basin (Danabalan et al., 2022, and Cheng et al., 2023).

Wet gas and condensate depend on the evolution of the sedimentary basin. The most likely source rock is the organic-rich lacustrine shale of the Horton group (lower Carboniferous) (Hayes et al., 2017), deposited in rift lakes and buried into the oil window, and then into the wet-gas window. The Albert formation in the Moncton basin of New Brunswick is a recognized analogue (Mukhopadhyay, 1995; Nova Scotia Department of Energy, 2017). The system also requires reservoir rocks, structural traps and an impermeable seal. The evaporites of the Windsor group (Visean), composed of salt and anhydrite, form the most effective seal in the region and have low permeability to helium and hydrogen, two particularly mobile gases. In the Cumberland basin, salt mobility has produced diapirs and minibasins (Waldron et al., 2013). These structures create traps, but also salt welds and faults that may act as leakage pathways.

In such a setting, gas mixing can be expected, along with reservoirs containing natural gas (with condensate), hydrogen and helium together. Southward, toward the Cobequid highlands, the Carboniferous sedimentary cover thins and eventually disappears, and with it the petroleum system: source rock, reservoirs and evaporite seal. The system then becomes predominantly hydrogen-dominated. This is corroborated by thousands of soil-gas analyses and by water and mud analyses from the five Quebec Innovative boreholes drilled in 2026 in the West Advocate and Bennett Hill areas.

Geological and historical background of hydrocarbon exploration in the Cumberland basin

The Cumberland basin is a Carboniferous subbasin of the Maritimes basin. Since the 1970s, it has been the subject of several oil and gas exploration campaigns, none of which ever reached commercial production. An initial phase, led by Chevron in the 1970s and 1980s, assessed its conventional potential through seismic surveys and a handful of wells. In the 1990s and 2000s, attention shifted to the coalbed methane potential of the coal-rich units of the Cumberland group. In 2014, the adoption of a provincial moratorium on hydraulic fracturing froze all unconventional activity for more than a decade, until the legislative reopening that began in 2025.

Exploration work to date has concentrated on the central and eastern parts of the basin, particularly around the Springhill coalfield and the Amherst-Nappan-Pugwash corridor. The southwestern sector, where Quebec Innovative has been active since 2025, has been largely overlooked. The earliest conventional wells (1970s to 1980s) were located farther north and east, toward the Northumberland Strait coast and the Amherst area. The Springhill, River Hebert and Joggins area accounted for most of the coalbed methane exploration (Resources Enterprises in 1994, followed by Stealth Ventures and Contact Exploration from 2005 to 2009). This is also the part of the basin where coal was mined commercially, notably at Springhill and Joggins, from the 19th century through the latter half of the 20th century.

By contrast, the southwestern part of the basin, in the Apple River-New Salem area, had seen virtually no drilling or detailed surveying before Quebec Innovative's arrival. This sector lies closer to the Cobequid highlands and the Bay of Fundy. It is a frontier play area where data are extremely scarce, and the play concept therefore relies mainly on the extrapolation of regional data and models rather than on well control. In this sector, the absence of drilling explains, among other things, why the presence of organic-rich shales in the Horton group (the source rock) cannot be confirmed. According to NSDOE report 2017-03 (Hayes et al., 2017), this lack of exploration, combined with the absence of confirmation, constitutes the principal geological uncertainty for the Cumberland basin's conventional natural gas potential.

No hydraulic fracturing, no reservoir stimulation

The gases identified at New Salem-Apple River -- helium, thermogenic hydrocarbons and, elsewhere on the corridor, clean natural hydrogen -- are migrating naturally through faults and along the basement interface to the surface today. The exploration model is therefore conventional. Quebec Innovative does not use hydraulic fracturing or any other form of reservoir stimulation, and has no intention of doing so in Nova Scotia. This is a natural-flow, low-footprint exploration model, consistent with the company's approach to clean natural hydrogen at Apple River-Bennett Hill.

Qualified person

The scientific and technical information in this news release has been reviewed and approved by Prof. Richer-Lafleche, PhD, PGeo, of the Institut national de la recherche scientifique, a qualified person as defined by National Instrument 43-101. Prof. Richer-Lafleche led the geological and geophysical interpretation described in this release.

The geological and geophysical data underlying this release were interpreted, and the integrated New Salem-Apple River model prepared, by Prof. Richer-Lafleche, PhD, of the Institut national de la recherche scientifique, Quebec, who has advised the company on the Cumberland basin since the inception of the program.

About Quebec Innovative Materials Corp.

Quebec Innovative is a North American exploration and development company advancing a portfolio of natural hydrogen and critical mineral projects. The company is advancing its district-scale hydrogen exploration model across Quebec, Ontario, Nova Scotia and Minnesota, leveraging its proprietary R2G2 framework.

Quebec Innovative is committed to responsible exploration, technical innovation and sustainable development, with the objective of supporting clean energy and decarbonization initiatives.

We seek Safe Harbor.