Mr. Steve Hanson reports

SURFACE METALS ANNOUNCES AMENDMENT TO CLAYTON VALLEY OPTION AGREEMENT

Surface Metals Inc. has entered into an amendment to its existing option agreement with GeoXplor Corp. related to certain mineral claims at the company's Clayton Valley lithium brine property, located in Esmeralda county, Nevada. The property hosts an inferred resource of approximately 302,900 tonnes lithium carbonate equivalent (LCE) adjacent to Albemarle's Silver Peak mine.

"We are very pleased to have reached this amendment with GeoXplor," said Steve Hanson, chief executive officer of Surface Metals. "Our team has invested significant capital and technical effort toward advancing the Clayton Valley project from exploration, to discovery, to resource. This amendment recognizes the work completed to date while providing a clear path to earning our 100-per-cent interest and continuing to unlock the potential of one of North America's premier lithium jurisdictions."

"The claims in Clayton Valley are the result of many years of exploration, land assembly, technical work and project stewardship by GeoXplor Corp., which established a strong foundation for the project. GeoXplor is pleased to see Surface Metals advancing the project toward its next major technical milestone, including a preliminary economic assessment (PEA), and recognizes the commitment and positive momentum Surface is bringing to the project. We believe Surface's efforts represent an important step toward unlocking the value of this strategic lithium asset in Clayton Valley, one of North America's most significant lithium districts," said GeoXplor principal Clive Ashworth.

The original option agreement, dated March 2, 2021, granted the company the exclusive right to acquire a 100-per-cent interest in the CC, CCP, SX and JR placer mineral claims.

The amendment reflects the substantial progress made by Surface Metals on the property and establishes a revised framework designed to support the continued advancement of the Clayton Valley project toward economic evaluation and development.

Under the terms of the amendment, the parties acknowledged that Surface Metals has satisfied all cash payments, share issuances and expenditure commitments required under the original earn-in provisions of the option agreement. The company has incurred aggregate qualifying expenditures of approximately $4.12-million (U.S.) on the property, exceeding the original expenditure requirement by approximately $1.37-million (U.S.).

The amendment further provides that Surface Metals will earn its 100-per-cent interest in the property upon the earlier of: the delivery of a National Instrument 43-101-compliant preliminary economic assessment for the property, subject to GeoXplor's reasonable review and acceptance; or the company incurring an additional $3.0-million (U.S.) in qualifying expenditures on the property, provided that either event occurs on or before Oct. 1, 2028.

Upon the occurrence of this earn-in milestone, GeoXplor will be entitled, at its election, to receive additional consideration valued at $500,000 (U.S.), payable in cash, Surface Metals common shares or a combination thereof.

The amendment also revises certain post earn-in obligations, including extending the deadline for delivery of a prefeasibility study to Oct. 1, 2032, and providing for an additional payment of $500,000 (U.S.) in cash and/or common shares upon the earlier of delivery of the prefeasibility study or Oct. 1, 2032.

In addition, the amendment formalizes Surface Metals' role as operator of the property and establishes enhanced reporting and consultation provisions between the parties. Surface Metals will continue to manage and finance all exploration and development activities while providing GeoXplor with regular technical, permitting and expenditure updates.

As consideration for entering into the amendment, Surface Metals has agreed to issue GeoXplor 500,000 common shares of the company, subject to acceptance by the Canadian Securities Exchange.

Mr. Hanson added: "The revised terms align the interests of both parties as we advance the project through the next phase of technical evaluation. Our focus remains on further defining the project's economic potential through continued exploration, hydrogeological work and the completion of a preliminary economic assessment."

The amendment also revises and reduces the advance royalty provisions. Following exercise of the option, Surface Metals will be required to make annual advance royalty payments to GeoXplor for a period of up to three years. If the PEA concludes that production from the property is capable of generating an internal rate of return of at least 15 per cent, the annual advance royalty payment will be $100,000 (U.S.), for aggregate payments of $300,000 (U.S.) over the three-year period. If the PEA concludes that the property does not achieve a 15-per-cent internal rate of return and the company elects to continue advancing the project, the annual advance royalty payment will be $50,000 (U.S.), for aggregate payments of $150,000 (U.S.) over the same period. Any advance royalty payments made by the company will be credited against future royalty payments otherwise payable under the existing royalty arrangement.

All other terms of the original option agreement remain in full force and effect.

About Surface Metals Inc.

Surface Metals is a North American mineral exploration company focused on advancing a diversified portfolio of gold and lithium projects in Nevada. The company's Cimarron gold project is located in Nye county, Nevada, in a historically productive gold district. Surface's Clayton Valley lithium brine project hosts an inferred resource of approximately 302,900 tonnes LCE adjacent to Albemarle's Silver Peak mine. Surface Metals is also advancing a sedimentary claystone lithium project in Fish Lake Valley in Nevada.

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