Mr. Terry Tucker reports

SOUTHSTONE REPORTS OENA DIAMOND MINE Q1 2026 SALES AND RECOVERY AND SALE OF A 65.812-CARAT DIAMOND

Southstone Minerals Ltd. has released diamond sales results from the Oena diamond mine in South Africa for the quarter ended Nov. 30, 2025 (Q1 fiscal 2026), and has provided an update on Tender 273 (January, 2026) and production subsequent to quarter-end. Operations at the Sandberg section -- managed via the company's 43-per-cent-owned subsidiary, African Star Minerals Pty. Ltd., delivered an increase in both sales and realized pricing, including the recovery of several high-value diamonds greater than 10.8 carats.

Q1 2026 operational and financial highlights (September to November, 2025):

• Gross diamond sales (total tender proceeds before tender costs): approximately $1.90-million (U.S.), a 29-per-cent increase over Q4 2025;
• Sales volume: 897.24 carats sold marking a 12-per-cent rise compared with Q4 2025;
• Pricing: average price per carat was approximately $2,122 (U.S.), a 15-per-cent increase over the previous quarter;
• Recoveries: eight specials were sold, averaging 23 carats each for total proceeds of $1,274,668 (U.S.);
• Notable diamond: a 65.812-carat stone sold for $579,984 (U.S.);
• Three Q1 diamonds sold achieved prices exceeding $5,000 (U.S.) per carat.

Q2 2026 results to date (unaudited) (December, 2025, to February, 2026)

The company has continued into the current quarter as mining exploits the lower, diamond-bearing gravel layer at Sandberg:

• Recoveries: Approximately 989 carats have been recovered to date in Q2. A portion of these were sold in Tender 273 and the balance remains in inventory for future tender sale.
• January sales: Tender 273 (Jan. 22, 2026) saw the sale of 414.87 carats for gross diamond sales of $587,759 (U.S.), including two stones priced above $5,000 (U.S.) per carat.
• Unsold inventory: Five hundred seventy-four carats recovered subsequent to the Tender 273 cut-off, including 13 specials averaging 19.9 carats each, remain in inventory for future tender sale.

Historical performance of specials

Since production resumed at the Sandberg section in November, 2023 (based on internal production and tender records), specials have represented 29 per cent of recovered carats and 61 per cent of gross sales value from the Sandberg section.

Since the acquisition of Oena in 2014, the company has recorded total diamond sales of 12,356 carats with an average stone size of 2.17 carats and an average sales price of $1,660 (U.S.) per carat.

Southstone, through African Star, provides operational oversight at Oena, including diamond sales administration, contractor liaison, mining licence compliance and security. The company maintains a management and security team in South Africa, including the chief executive officer of African Star and the Oena operational site manager. The company's executive chairman, with external geological support, provides operational support for internal reporting of Oena activities and provides geological and technical support to the operations team and contractors.

Contract amendment

African Star Minerals Pty. Ltd., a 43-per-cent-owned subsidiary of Southstone, is party to a contract mining and diamond recovery agreement dated Jan. 31, 2025, which originally entitled African Star to 20 per cent of net tender proceeds after deduction of tender costs, representing an indirect economic interest of 8.6 per cent to Southstone.

On Aug. 1, 2025, African Star and Rietput Delwery BK amended the agreement, effective July 1, 2025. The amendment provides for a conditional revenue split based on tender sale value: where the gross diamond sales for any single tender is less than 10 million South African rand, revenue is distributed 85 per cent to Rietput Delwery BK and 15 per cent to African Star (representing a 6.45-per-cent indirect interest to Southstone); where the gross diamond sales equals or exceeds 10 million South African rand, the original 80-per-cent/20-per-cent split applies (representing an 8.6-per-cent indirect interest to Southstone).

The conditional structure reflects the variability in tender values at Sandberg, where the presence or absence of specials can materially influence gross diamond sales. During Q1 fiscal 2026, one of three tenders exceeded the 10 million South African rand threshold and therefore qualified for the original 80-per-cent/20-per-cent split for African Star; tenders below the threshold were subject to the 85-per-cent/15-per-cent split.

During the quarter ended Nov. 30, 2025, three tenders were completed: Tender 270 (Sept. 18, 2025) sold 353.35 carats (gross diamond sales 8,246,643 South African rand; 85-per-cent/15-per-cent split applied); Tender 271 (Oct. 16, 2025) sold 209.15 carats (gross diamond sales 18,162,179 South African rand; 80-per-cent/20-per-cent split applied); and Tender 272 (Nov. 27, 2025) sold 334.74 carats (gross diamond sales 6,470,618 South African rand; 85-per-cent/15-per-cent split applied). Subsequent to quarter-end, Tender 273 (Jan. 22, 2026) sold 414.87 carats (gross diamond sales 9,533,445 South African rand; 85-per-cent/15-per-cent split applied).

Tender 271 represented 55 per cent of Q1 2026 gross diamond sales despite accounting for only 23 per cent of carats sold, demonstrating the high-value nature of certain diamonds recovered during the quarter. This tender's gross diamond sales of 18.2 million South African rand triggered the original 80-per-cent/20-per-cent revenue split, under which African Star received 20 per cent of tender proceeds, representing an 8.6-per-cent indirect economic interest to Southstone.

Qualified person statement

The technical disclosure in this news release relating to diamond production, recovery and sales has been approved by Terry L. Tucker, PGeo (APEGBC), executive chairman, and a qualified person as defined by National Instrument 43-101 of the Canadian Securities Administrators. Mr. Tucker has verified the production and sales records disclosed in this release.

We seek Safe Harbor.