Highland Critical Minerals Corp. Enters into Arrangement Agreement for Spin-Out of Highland Red Lake Gold Corp.

Toronto, Ontario--(Newsfile Corp. - August 20, 2025) -  Highland Critical Minerals Corp. (CSE: HLND) (FSE: U8X) ("Highland" or the "Company") is pleased to announce that further to its press release dated July 22, 2025, that it has entered into a definitive arrangement agreement dated August 19, 2025 (the "Agreement") with Highland Red Lake Gold Corp., Highland's wholly-owned subsidiary ("Highland Red Lake"), pursuant to which the Company will distribute its class A common voting shares in the capital of Highland Red Lake (the "Highland Red Lake Shares") and share purchase warrants of Highland Red Lake exercisable to acquire Highland Red Lake Shares at a price of $0.15 per share for a period of five years from the date of issuance (the "Highland Red Lake Warrants") to securityholders of the Company, pursuant to a statutory plan of arrangement (the "Arrangement"), to be effected under the Business Corporations Act (British Columbia) (the "BCBCA").

The Agreement

Pursuant to the Agreement, the Company will convene a meeting of shareholders ("Meeting") and recommend to the holders of class A common shares in the capital of the Company without par value ("Highland Common Shares") to vote in favour of the Arrangement and all other resolutions referred to in the management information circular. Following receipt of shareholder approval for the Arrangement at the Meeting, the Company will complete amendments to its articles whereby: (i) all of the issued and unissued Highland Common Shares shall be renamed (the "Pre-Arrangement Common Shares") and each Pre-Arrangement Common Share shall have two votes attaching to each share; and (ii) create a new class of shares (the "Class A Common Shares") with terms and restrictions identical to those of the Highland Common Shares (the "Article Amendments").

After implementing the Article Amendments, the Arrangement will be completed, whereby: (i) the Pre-Arrangement Common Shares outstanding as of the final record date of the Arrangement (the "Distribution Record Date") shall be exchanged for one Class A Common Share, 0.5 of a Highland Red Lake Share, and 0.5 of a Highland Red Lake Warrant; (ii) restricted share units ("RSU") in the capital of Highland ("Highland RSUs") that have not been exchanged for the underlying Pre-Arrangement Common Shares as of the date the Plan of Arrangement (as defined herein) becomes effective (the "Effective Date") shall receive a RSU to acquire one Class A Common Share and one RSU in the capital of Highland Red Lake to acquire 0.5 of a Highland Red Lake Share and 0.5 of a Highland Red Lake Warrant on the Distribution Record Date; and (iii) each Highland Warrant outstanding as of the Distribution Record Date that has not been exercised for the Pre-Arrangement Common Shares prior to the Effective Date shall receive one Class A Common Share for each Pre-Arrangement Common Share that was issuable upon exercise of the Highland Warrant, and 0.5 of a Highland Red Lake Share and 0.5 of Highland Red Lake Warrant for each Pre-Arrangement Common Share that was issuable upon exercise of the Highland Warrant.

The Company expects that this will result in an aggregate of 15,635,416 Highland Red Lake Shares and 15,635,416 Highland Red Lake Warrants being distributed to the Highland securityholders, and an aggregate of approximately 2,614,584 Highland Red Lake Shares retained by the Company, in each case assuming that the number securities of Highland remain unchanged between today and the Distribution Record Date.

Subject to the approval at the Meeting, the Arrangement will be affected by way of a court approved plan of arrangement ("Plan of Arrangement") under the provisions of the Business Corporations Act (British Columbia). Assuming receipt of the requisite approval of the Highland's shareholders and regulatory approvals, the Company intends that the Distribution Record Date will be August 26, 2025. There will be no change in Highland shareholders' proportionate ownership in the Company as a result of the Plan of Arrangement.

Closing Conditions

Further information concerning the Plan of Arrangement and the Meeting will be provided in subsequent news releases, and the management information circular of the Company which will be filed on SEDAR+.

Closing of the Arrangement is subject to a number of conditions, including (i) approval of the Highland shareholders at the Meeting; (ii) court approval of the Plan of Arrangement; and (iii) certain other customary conditions as further set out in the Agreement. Securityholders of Highland are cautioned that final details of the Plan of Arrangement are subject to change and that there is no certainty that the Arrangement will be completed as currently proposed or at all.

Highland Exploration Projects

As previously announced on July 11, 2025, the Company, through Highland Red Lake entered into an option agreement to acquire a 100% interest in mining claims in the Red Lake gold district, comprised of 3,366 hectares of mining claims and has since then added an additional adjacent 1400 hectares through staking.

Highland Red Lake has budgeted and commenced a $150,000 initial exploration program focussed on demonstrating lode gold potential through mapping, prospecting and rock sampling, airborne magnetics and soil survey locations to evaluate till covered terrain for the lode gold structure relationships, with the objective to complete the program before year end. The Arrangement will result in Highland Red Lake becoming a separate "reporting issuer" in each of British Columbia and Ontario and will allow it to focus on the development of the Highland Red Lake gold district properties. Additionally, Highland Red Lake will undertake one or more private placement offerings of securities to raise proceeds to finance its exploration activities and to fund its working capital requirements.

This expanded summer exploration project is in addition to the previously announced summer lithium exploration on the Company's Church Property in the Quetico District of Ontario, Canada (the "Church Property") consisting of a mobile metal ions soil sampling program designed to identify lithium anomalies on areas of the Church Property where field crews have established there is no exposed bedrock.

Activities are also underway to design and evaluate an initial exploration program on the Company's recently acquired Sy Property located in the Yathkyed Lake Greenstone Belt in Nunavut, Canada.

"We are always looking for ways to deliver value to our shareholders. The Arrangement aims to enhance shareholder value, offering stakes in two new highly prospective gold properties located in two established gold production areas of Canada and we are hopeful that continued exploration work would result in future gold discoveries. Shareholders will retain proportionate ownership in the Company and receive a stock dividend consisting of Highland Red Lake Shares and Highland Red Lake Warrants, allowing stakeholders the opportunity to benefit from potential successes and value appreciation in both companies each in diverse and distinct environments." says Ted Yew, the Company's CEO.

ABOUT HIGHLAND CRITICAL MINERALS CORP.

Highland is a mineral exploration and development company. Its activities consist of acquiring and exploring, mining properties to enhance shareholder value as it proceeds with the exploration work on the Church Property among other mining properties it may acquire and develop.

For more information, please visit https://highlandcritical.com.

Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. "Forward-looking information" includes, but is not limited to, statements with respect to the completion of the Agreement and the Arrangement; the anticipated timing of the Meeting, closing of the Arrangement, and Distribution Record Date; the anticipated benefits of the Plan of Arrangement for securityholders of Highland; the satisfaction or waiver of the closing conditions set out in the Agreement, including receipt of all regulatory approvals; the future exploration and development plans of the Company and Highland Red Lake; and the satisfaction final approval of the Agreement by the Canadian Securities Exchange and other activities, events or developments that the Company expects or anticipates will or may occur in the future. Generally, but not always, forward-looking information and statements can be identified by the use of words such as "plans", "expects", "intends", "estimates", "intends", "anticipates", or "believes" or the negative connotation thereof or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative connotation thereof. Such forward-looking information and statements are based on numerous assumptions, including the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court and shareholder approvals; the anticipated Distribution Record Date; the ability of the parties to satisfy, in a timely manner, the other conditions to the completion of the Agreement and the Arrangement; that general business and economic conditions will not change in a material adverse manner. Although the assumptions made by the Company in providing forward-looking information or making forward-looking statements are considered reasonable by management at the time, there can be no assurance that such assumptions will prove to be accurate. Forward-looking information and statements also involve known and unknown risks and uncertainties and other factors, which may cause actual events or results in future periods to differ materially from any projections of future events or results expressed or implied by such forward-looking information or statements, including, among others: the diversion of management time on Arrangement-related issues; reliance on key management and other personnel; potential downturns in economic conditions; actual, and risks generally associated with the biotechnology or nutritional supplement industry, changes in laws and regulations, community relations and delays in obtaining governmental or other approvals.

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information or implied by forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to update or reissue forward-looking information as a result of new information or events except as required by applicable securities laws. Additional information relating to the Company, including its long-form prospectus dated May 9, 2025, can be located on SEDAR+ at www.sedarplus.ca.

None of the securities to be issued pursuant to the Arrangement have been or will be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and any securities issuable in the Arrangement are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws.

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities.

Contacts

Disclaimer

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, including the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any securities laws and may not be offered or sold in the United States unless registered under the 1933 Act and any applicable securities laws of any state of the United States or an applicable exemption from such registration requirements is available.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/263211