Vancouver, British Columbia--(Newsfile Corp. - November 5, 2026) - Kelly Ventures Ltd. (TSXV: KKL.P) ("Kelly Ventures"), a capital pool company, and VUL Energy Ltd. ("VUL Energy"), are pleased to announce that they, together 1001799338 Ontario Ltd. ("Subco"), a wholly-owned Ontario subsidiary of Kelly Ventures, have entered into a definitive merger agreement dated November 2, 2026 (the "Definitive Agreement") pursuant to which VUL Energy will complete a reverse takeover of Kelly Ventures by way of a three-cornered amalgamation (the "RTO Transaction").

VUL Energy is also pleased to announce a best efforts, brokered private placement offering of subscription receipts of VUL Energy (the "Subscription Receipts") at a price of C$1.40 per Subscription Receipt for aggregate gross proceeds of up to C$10,000,000 (the "Offering"). As part of the Offering, certain lead investors have subscribed for, and deposited into an escrow account, approximately C$8.6 million through simple agreements for future equity (the "SAFEs"), which will convert into Subscription Receipts on the same terms and conditions as the Offering and are included in the aggregate gross proceeds of the Offering. A portion of the funds currently held in escrow under the SAFEs will be released early to VUL Energy, as described below under the Early Release Escrowed Funds.

The Definitive Agreement supersedes the binding letter of intent dated October 22, 2025 (the "Letter of Intent"), as announced in the news release of Kelly Ventures dated October 27, 2025. The RTO Transaction is intended to constitute the "Qualifying Transaction" of Kelly Ventures within the meaning of Policy 2.4 - Capital Pool Companies (the "CPC Policy") of the TSX Venture Exchange (the "Exchange"). The Offering is being led by Research Capital Corporation as sole agent and sole bookrunner (the "Agent"). In addition, VUL Energy has granted the Agent an option to offer additional Subscription Receipts for gross proceeds of up to 15% of the gross proceeds of the Offering, exercisable at any time up to 48 hours prior to the closing of the Offering (the "Agent's Option").

The net proceeds of the Offering will be used for property acquisition, geotechnical evaluations, an exploration drilling program, working capital and general corporate purposes.

Each Subscription Receipt will entitle the holder, without payment of any additional consideration and upon satisfaction or waiver of the Escrow Release Conditions (as defined below), to receive one unit of VUL Energy (a "Unit"). Each Unit will be comprised of one common share of VUL Energy (an "Underlying Share") and one common share purchase warrant of VUL Energy (an "Underlying Warrant" and, together with the Underlying Shares, the "Underlying Securities"). Each Underlying Warrant will entitle the holder to acquire one common share of VUL Energy (a "Warrant Share") at an exercise price of C$1.82 per Warrant Share until the date that is 36 months following the satisfaction or waiver of the Escrow Release Conditions, subject to acceleration as described below.

Provided that if, at any time prior to the expiry date of the Underlying Warrants, the volume weighted average trading price of the Common Shares on the Exchange, or other principal exchange on which the Common Shares are listed, is greater than C$2.73 for 10 consecutive trading days, the Company may, within 10 business days of the occurrence of such event, deliver a notice to the holders of Warrants accelerating the expiry date of the Warrants to the date that is 30 days following the date of such notice (the "Accelerated Exercise Period"). Any unexercised Warrants shall automatically expire at the end of the Accelerated Exercise Period.

Upon the closing of the RTO Transaction, the Underlying Shares and Underlying Warrants will be exchanged on a one-for-one basis for common shares (the "RI Shares") and common share purchase warrants (the "RI Warrants"), respectively, of the issuer resulting from the RTO Transaction (the "Resulting Issuer"). The RI Shares and RI Warrants issued pursuant to the Offering are not expected to be subject to a statutory hold period in Canada.

Investment Highlights - VUL Energy (Geothermal-Focused with Lithium Upside)

• Geothermal Renewable Energy Platform with Expansion Potential

  • Development of a 60 MW geothermal power project delivering 24/7 baseload energy, a key differentiator versus intermittent renewables (solar/wind).

  • Independent prospective resources evaluation by Sproule ERCE estimates an unrisked Project NPV10 of C$194.9MM (P50, best estimate), for the Company's Catamarca geothermal project, with a "free option" on significant lithium upside (see "Cautionary Note Regarding Prospective Resources and the Sproule ERCE Report" below).

  • Long-life infrastructure asset (40+ year lifespan) with stable, predictable generation profile.

  • 25,000-hectare land package, with an option to expand up to 40,000 hectares, supporting multi-phase development.

  • VUL Energy controls a land package that encompasses the entire eastern catchment area of the Lastarria volcano system and includes two salt lakes fed by the geothermal system, which show clear evidence of an active aquifer and the potential for lower-cost geothermal power generation.

  • 3-stage development plan provides clear pathway to scale generation capacity over time.

  • Strategically located in Catamarca, Argentina, in proximity to other major lithium and hard rock mining projects with collective power demand of over 500 MW, none of which are connected to the regional power grid.

  • Ability to cost-effectively supply power within a ~75 km radius, positioning VUL Energy as a regional energy hub.

• Attractive Long-Term Economics from Offtake Agreements

  • VUL Energy has entered into a non-binding letter of intent with a neighbouring lithium mining company for a long-term offtake agreement for geothermal power of 40 MW to 60 MW of capacity over a 35-year supply term. The signing of a definitive power purchase agreement ("PPA") is subject to a final investment decision being made on the VUL Energy power plant.

  • Opportunities for long-term contracted, competitive pricing revenues with adjacent mining operators that are reliant on diesel generation and are switching to ESG-focused power sources.

  • Ability to deliver lower-cost, clean energy creates a compelling economic and ESG value proposition.

• Significant Upside Potential and Strong Medium-Term Cash Flow Profile

  • Targeted power price of US$250 to US$300 per MWh drives highly attractive development economics.

  • Annual power generation

    • 60 MW: ~515,000 MWh per year

  • Annual revenue potential (60 MW)

    • US$250/MWh: ~US$129 million per year

    • US$300/MWh: ~US$155 million per year

    • Typical geothermal opex is relatively low (often ~US$20 to US$40 per MWh), implying very high operating margins.

• ESG-Aligned, Low-Carbon Energy Solution

  • Low-to-zero emissions and minimal land/water impact relative to conventional energy and lithium extraction methods.

  • Potential to generate carbon credits (REC/offset revenue stream).

• Embedded Lithium Optionality (Upside Opportunity)

  • Geothermal brines demonstrate meaningful lithium concentrations (>150 mg/L with higher surface anomalies).

  • Select results for surface precipitates (solid salt samples) range from 201 mg/L Li to 1,031 mg/L Li.

  • Potential to integrate Direct Lithium Extraction (DLE) using internally generated geothermal energy.

  • Provides free-carry style upside without reliance on lithium pricing for base-case economics.

• Infrastructure and Logistics Advantage

  • Proximity to rail infrastructure (Belgrano Cargas) and export routes via Chile.

  • Existing road access and ability to scale logistics efficiently.

• Experienced Team with Energy & Mining Track Record

  • Management with deep expertise in geothermal, oil & gas, and mining project development, including large-scale capital deployment and execution.

Overview of VUL Energy

VUL Energy has acquired mining concessions totaling approximately 25,000 hectares, with an option to expand up to 40,000 hectares upon administrative allocation, which provide VUL Energy with rights to a high-potential geothermal project and potential lithium extraction (the "VUL Energy Project"). The VUL Energy Project is located near the Lastarria volcano in Catamarca, Argentina, a lithium production and development area, and includes identified heat sources (41°C surface / 220°C deep-level temperatures), representing a promising location for eco-friendly geothermal exploration and electricity development. VUL Energy has completed preliminary temperature mapping, surface sampling and extensive operational preparation at the project site.

Geothermal energy is produced from heat generated in the Earth's interior. It is a renewable, baseload and sustainable energy source for electricity generation, ideally suited to off-grid electricity generation. Geothermal power plants typically have uptime of 98% or more, among the highest of any renewable energy source. Mines in the region of the VUL Energy Project currently rely on diesel for power generation, which costs between US$350 and US$400 per MWh at current global prices. VUL Energy's targeted pricing for reliable, clean power of US$250 to US$300 per MWh offers an attractive alternative for these power consumers.

The VUL Energy Project offers a unique combination of renewable power generation with the upside of supplying power for potential direct lithium extraction from geothermal brines known to contain lithium. The VUL Energy Project will target geothermal energy and potential geothermal lithium extraction.

VUL Energy has an experienced management team led by Warren Levy, CEO, who has significant expertise in geothermal operations and has been instrumental in raising over $1.8 billion for Latin American projects; Hernan Montoya, CFO, who has public and private company experience in the Argentine energy sector; and Fernando Figini, COO, who has over 30 years of operational experience in the oil and gas sector in Argentina. Paul Larkin, a director of Kelly Ventures, will also be a director of the Resulting Issuer and has an extensive background in geothermal energy as a founder, director, audit committee chair and chair of the M&A committee of U.S. Geothermal Inc.

The VUL Energy Project is backed by established industry players in Argentina's world-renowned lithium triangle, including its founders in 2022, Silvio Duport and Diego Zuckerberg, who are expected to be considered control persons of the Resulting Issuer under the policies of the Exchange.

Further Details on Subscription Receipt Equity Financing

In connection with the RTO Transaction, it is intended that, among other things: (i) the Subscription Receipts will be converted into Underlying Shares and Underlying Warrants; (ii) all of the outstanding common shares of VUL Energy (including the Underlying Shares) will be exchanged for RI Shares at an agreed exchange ratio (the "Exchange Ratio") of one RI Share for each common share of VUL Energy; (iii) the Underlying Warrants and the Broker Warrants (as defined below) will be exchanged for warrants of the Resulting Issuer on equivalent terms; and (iv) Kelly Ventures will change its name to "VUL Energy Ltd." (the "Name Change"). The RI Shares are expected to begin trading on the Exchange under the ticker symbol "VEN".

The gross proceeds of the Offering, less the Agent's expenses and 50% of the cash commission, will be deposited with and held by a licensed Canadian trust company or other escrow agent mutually acceptable to the Agent, VUL Energy and Kelly Ventures (the "Escrow Agent") in an interest-bearing account (the "Escrowed Funds") pursuant to the terms of a subscription receipt agreement to be entered into on the Closing Date (as defined below) among VUL Energy, the Agent and the Escrow Agent. The Escrowed Funds (less the remaining 50% of the cash commission and any remaining costs and expenses of the Agent) will be released from escrow to the Resulting Issuer upon the satisfaction or waiver of the following conditions (collectively, the "Escrow Release Conditions") on or before the 90^th day following the Closing Date, or such other date as may be mutually agreed in writing among VUL Energy, Kelly Ventures and the Agent (the "Escrow Release Deadline"):

(A) the completion of the Name Change;

(B) the completion, satisfaction or waiver of all conditions precedent to the RTO Transaction in accordance with the Definitive Agreement, to the satisfaction of the Agent;

(C) the receipt of all required shareholder and regulatory approvals, including, without limitation, the conditional approval of the Exchange for the listing of the RI Shares and the RTO Transaction;

(D) the Resulting Issuer securities issued in exchange for the Underlying Securities not being subject to any statutory or other hold period in Canada;

(E) the representations and warranties of VUL Energy and Kelly Ventures contained in the agency agreement to be entered into in connection with the Offering being true and accurate in all material respects, as if made on and as of the escrow release date; and

(F) VUL Energy, Kelly Ventures and the Agent having delivered a joint notice and direction to the Escrow Agent, confirming that the conditions set forth in (A) to (E) above have been met or waived.

As a condition precedent to the execution by the Agent of the joint notice and direction referred to in (F) above, the chief executive officer of each of VUL Energy and Kelly Ventures (or such other officers as may be acceptable to the Agent, acting reasonably) will certify to the Agent that the Escrow Release Conditions (other than that set out in (F) above) have been satisfied or waived.

During the period commencing upon the issuance of the Subscription Receipts and ending at the earlier of the time of satisfaction or waiver of the Escrow Release Conditions and the Termination Time (as defined below), with the prior written consent of the Agent, VUL Energy may use (and the Escrow Agent will be authorized to release to VUL Energy) up to C$3,000,000 of the Escrowed Funds to advance the VUL Energy Project, specifically for the completion of the access road, the installation of the work camp, the completion of certain geotechnical studies, and working capital and general corporate purposes (the "Early Release Escrowed Funds").

If (i) the Escrow Release Conditions are not satisfied or waived on or prior to the Escrow Release Deadline, or (ii) VUL Energy advises the Agent or the public that it does not intend to proceed with the RTO Transaction (in each case, the earlier of such times being the "Termination Time"), then all of the issued and outstanding Subscription Receipts will be cancelled and the Escrowed Funds will be used to pay to holders of Subscription Receipts an amount equal to the issue price of the Subscription Receipts held by them, plus their pro rata share of any interest or other income earned on the Escrowed Funds. If the Escrowed Funds (including as a result of the release of the Early Release Escrowed Funds) are not sufficient to satisfy such aggregate amount, it will be the sole responsibility and liability of VUL Energy and Kelly Ventures to contribute such amounts as are necessary to satisfy any such shortfall.

The Offering is expected to close on or about the week of November 30, 2026, or such other date as agreed upon between VUL Energy and the Agent (the "Closing Date") and is subject to certain conditions set out in the agency agreement. In connection with, and as a condition to, the completion of the RTO Transaction, the RI Shares (including those issued in exchange for the Underlying Shares and issuable pursuant to the warrants and options of the Resulting Issuer) will be listed on the Exchange.

In connection with the Offering, the Agent will receive an aggregate cash fee equal to 8.0% of the gross proceeds of the Offering, subject to a reduction for certain purchasers on a "president's list". In addition, VUL Energy will grant the Agent, on the Closing Date, non-transferable broker warrants (the "Broker Warrants") equal to 8.0% of the total number of Subscription Receipts sold under the Offering, subject to a reduction for certain purchasers on a "president's list". Each Broker Warrant will entitle the holder to purchase one Unit (or, following completion of the RTO Transaction, one RI Share and one RI Warrant) at an exercise price of C$1.40 per Unit for a period of 36 months following the satisfaction or waiver of the Escrow Release Conditions.

The securities offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and may not be offered, sold or delivered, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from such registration requirements. This news release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful.

Proposed Management Team and Directors

Upon completion of the RTO Transaction, the following individuals will comprise the management and board of directors of the Resulting Issuer:

Warren Levy, Chief Executive Officer

Mr. Levy, a Canadian national, brings over 28 years of experience in developing natural resource projects globally. He is the owner of Frontier Advisory Hul'che, focusing on sustainable project development and capital deployment in Latin America. Previously, he served as CEO of Jaguar Energy, Mexico's leading private natural gas company, and held leadership roles at President Energy and Pentanova Energy. As the founder and CEO of Estrella International Energy Services, Mr. Levy grew the company from startup to a workforce of over 2,500 employees with 45 rigs across seven Latin American countries. Before Estrella, he held senior management positions with Schlumberger.

Mr. Levy's extensive experience spans over 20 countries, with expertise in unconventional, remote, hostile and geothermal operations. At Frontier, he was instrumental in raising over $1.8 billion for the energy, mining, geothermal, technology and digital media sectors in Latin America. He has also served as Chairman of Quad Energy and on the boards of various companies in Argentina, Peru, Vietnam and Thailand, as well as technology, consulting, security and educational institutions.

Hernan Montoya, Chief Financial Officer

Mr. Montoya is a seasoned financial and sales executive with over 20 years of experience in the oil & gas services industry, logistics, and auditing. He is currently the Sales Director for Argentina, Chile, and Bolivia at Estrella International Energy Services Ltd., where he has been instrumental in coordinating sales strategies and managing key relationships with clients since March 2017. Reporting directly to the Corporate CEO, Mr. Montoya plays a critical role in driving business development across the region.

Prior to this role, Mr. Montoya held various key positions at Estrella, including Finance Director from 2012 to 2017, overseeing the financial activities of the company across its branches in Argentina, Bolivia, Chile, Colombia and Peru. During his tenure as Finance Director, he guided the company through a successful sale to the investment fund Southern Cross Group, ensuring a smooth transition during the acquisition. His extensive experience and leadership in finance, sales and project management across Latin America make him a distinguished figure in the industry.

Fernando Figini, Chief Operating Officer

Mr. Figini is a highly experienced operations manager with a proven track record of leading diverse teams. He has strong technical and business qualifications, with extensive hands-on experience in strategic planning, business development and operations management, and is skilled in analyzing business requirements, identifying opportunities and developing cost-effective solutions to enhance competitiveness and increase revenues. Mr. Figini graduated as a civil engineer in Buenos Aires and has over 30 years of experience in the oil industry. He has held various technical and non-technical management positions in national and international locations, gaining a deep understanding of the upstream oil industry. He completed an MBA at IAE University in 2000.

Diego Zuckerberg, Chair of the Board, Co-Founder

Mr. Zuckerberg is an accomplished executive with over 25 years of experience in the international finance and service industries. He has served as a Director at Credit Suisse AG, Switzerland, and Managing Director for Latin America at BHI AG, Zurich. Mr. Zuckerberg has developed businesses in foreign trade, financing, advisory and asset management. An entrepreneur, he co-founded VUL Energy, Lupag S.A. and Belag S.A., investment firms specializing in copper, lithium brine and REE mining. Additionally, he co-owns Dienst Consulting S.A., a leader in Argentina's health sector, and Diginet Servicios S.A., an applied technology services company.

Henrik Lundin, Director

Mr. Lundin has 20 years of technical and business experience in the natural resource sector and has held various executive and board roles with both private and public companies in the mining and oil and gas sectors. He previously served as Chairman of Gold Line Resources Ltd., one of the predecessor companies to First Nordic Metals, which was recently acquired by Mawson Finland Limited to create a leading Nordic gold developer named Goldsky Resources (approximately $700 million market capitalization). At Gold Line, Mr. Lundin was involved in the initial consolidation of its belt-scale project package in Sweden, as well as the acquisition of the Oijärvi greenstone belt project in Finland from Agnico Eagle Mines Ltd. Mr. Lundin was also Chief Operating Officer of TAG Oil Ltd., responsible for global operations. He also worked for Lundin Energy AB in Norway prior to moving to Aker BP ASA, where he currently serves as an Advanced Reservoir Engineer. Mr. Lundin is a Swedish citizen and holds a B.Sc. in Petroleum Engineering from the Colorado School of Mines in Colorado, USA.

Paul Larkin, Director

Mr. Larkin has been President of the New Dawn Group, based in Vancouver, British Columbia, for over 42 years. New Dawn is an investment and financial consulting firm specializing in corporate finance, merchant banking and the administrative management of public companies. Mr. Larkin has an extensive background in geothermal energy as a founder, director, audit committee chair and chair of the M&A committee of U.S. Geothermal Inc. (NYSE American: HTM), a leading geothermal renewable energy company that was acquired by Ormat Technologies Inc. (NYSE: ORA) in 2018 for an enterprise value exceeding US$200 million. Mr. Larkin currently serves as a director and audit committee member of Renewable Energy Royalties Corp. (TSXV: RE), Rev Exploration Inc. (TSXV: REVX) and Condor Resources Inc. (TSXV: CN).

Derek Chubb, Director

Mr. Chubb is a professional engineer with over 36 years of experience creating value through the integration of sustainability across the lifecycle of mining assets and mining companies. His experience spans multiple commodities (including diamonds, potash, iron ore, gold, copper, lithium and heavy oil), jurisdictions (including Canada, the USA, South Africa, Peru, Chile, Argentina, Brazil, Suriname, Guyana and Mexico) and settings, having worked in industry at the corporate and asset levels and as a consultant. Mr. Chubb is a Canadian currently based in Argentina and is the mining industry lead for the Latin America region for the global consultancy firm ERM. He couples strategic acumen with deep functional experience to drive business results by leveraging ESG drivers.

Technical Advisors

Tony Pink - Drilling Advisor

Mr. Pink holds a B.Sc. in Geology from the University of Wales and completed the GMP at Harvard Business School. He has over 30 years of experience in drilling technology and automation and is the former CTO of NOV Wellbore Technologies and former VP of Automated Drilling Applications. He served as Task Force Chairman for Drilling for the U.S. DOE GEODE Project, and is currently Director of Well Construction at Mazama Energy and CTO of Eden Geothermal (UK). Mr. Pink holds five U.S./EU patents in closed-loop and directional drilling automation and is a globally recognized expert in geothermal drilling.

Guillaume Borrel - Geothermal Advisor

Mr. Borrel is currently the CEO of GoWell, a Singapore-based technology provider to the energy sector. Prior to that, he was the CEO of Lithium de France, a pioneer in combining geothermal energy and direct lithium extraction. He started his career with Schlumberger, where his 20 years of experience spanned 12 countries and included a variety of management and technology development positions, including roles with global responsibility. He is an engineering graduate of the École Polytechnique in France.

Dr. Alejandro Conde Sierra - Geological Advisor

Dr. Conde Sierra holds a B.Sc. in Geological Sciences from the University of Buenos Aires and has over 35 years of expertise in economic geology and geothermal resource exploration. He is a former Exploration Manager for geothermal prospects in Argentina and has served as a scientific coordinator and consultant at the Argentine Mining Geological Service. He is the author of VUL Energy's headline geological endorsement.

Doug Glaspey - Geothermal Advisor

Mr. Glaspey has over 40 years of experience in the mining and geothermal industries. He started his resource career in the mining industry with ASARCO at the Glover Lead Smelter in Missouri, followed by Earth Resources Company at the DeLamar Silver Mine in Idaho, Asamera Minerals at the Cannon Gold Mine in Washington, and Atlanta Gold Corporation at the Atlanta Project in Idaho. He formed and served as an executive officer of several private resource companies in the U.S. and then founded U.S. Cobalt Inc. in 1998, taking the company public on the TSX Venture Exchange in March 2000. In December 2003, he led a reverse takeover that transformed the company into U.S. Geothermal Inc., changing the business from mineral exploration to geothermal development. At U.S. Geothermal, he served as CEO, President and COO while the company explored, developed, constructed and operated three utility-scale binary cycle geothermal power plants in the western United States over 15 years. The company was acquired by Ormat Technologies Inc. in 2018. Mr. Glaspey continues to consult on geothermal development projects. He holds a B.S. in Mineral Processing Engineering and an Associate of Science in Engineering Science.

Summary of the Definitive Agreement and Transaction Structure

Prior to the effective time of the RTO Transaction, VUL Energy will complete a series of share exchange transactions (the "Pre-Closing Transactions") pursuant to which (i) VUL Energy Latam Corp., a British Virgin Islands corporation ("VELC"), will acquire all of the issued and outstanding shares of Belag from its shareholders in exchange for shares of VELC, and (ii) VUL Energy will acquire all of the issued and outstanding shares of VELC in exchange for common shares of VUL Energy ("VUL Shares"), following which VELC will be a wholly-owned subsidiary of VUL Energy and Belag will be a wholly-owned subsidiary of VELC.

Pursuant to the Definitive Agreement, the RTO Transaction will be completed by way of a "three-cornered" amalgamation under section 174 of the Business Corporations Act (Ontario) (the "OBCA"), whereby VUL Energy will amalgamate with Subco to form one corporation ("Amalco"), to be named "VUL Energy Inc.", which will become a wholly-owned subsidiary of Kelly Ventures (the "Amalgamation"). At the effective time of the Amalgamation, among other things:

(a) Kelly Ventures will consolidate its common shares (the "KKL Shares") on the basis of one post-consolidation KKL Share for every 7.69115 pre-consolidation KKL Shares (the "Consolidation"), based on a deemed pre-transaction valuation of Kelly Ventures of C$1,400,000;

(b) each SAFE will convert into Subscription Receipts in accordance with its terms, and each Subscription Receipt will be exchanged for one Unit;

(c) each holder of VUL Shares (including the Underlying Shares) will receive one post-Consolidation KKL Share for each VUL Share held, and each holder of Underlying Warrants and Broker Warrants (as defined below) will receive one equivalent warrant or broker warrant of Kelly Ventures for each such security held;

(d) Kelly Ventures will change its name to "VUL Energy Ltd." or such other similar name as requested by VUL Energy (the "Name Change").

Completion of the RTO Transaction is subject to a number of conditions, including, among others: (i) conditional acceptance of the RTO Transaction by the Exchange as the Qualifying Transaction of Kelly Ventures and conditional approval for the listing of the RI Shares (including those issuable on exercise of the RI Warrants and broker warrants); (ii) satisfaction of any sponsorship requirements imposed by the Exchange; (iii) completion of the Offering and satisfaction or waiver of the Escrow Release Conditions (other than completion of the RTO Transaction and delivery of the joint notice and direction to the Escrow Agent); (iv) the Amalgamation becoming effective on or before February 28, 2027, or such later date as agreed by Kelly Ventures and VUL Energy with the consent of the Agent; (v) receipt of all required securityholder, regulatory and third-party approvals, including approval of the Amalgamation by the securityholders of VUL Energy in accordance with the OBCA; (vi) the Resulting Issuer meeting the initial listing requirements of the Exchange; (vii) completion of the Consolidation, the Name Change and the Pre-Closing Transactions; (viii) execution of all escrow agreements required by the Exchange; (ix) the resignation of the directors and officers of Kelly Ventures (other than Paul Larkin, as a director) and the appointment of the nominees of VUL Energy; (x) Kelly Ventures and Subco having no liabilities at closing other than those incurred in connection with the RTO Transaction; and (xi) other conditions customary for a transaction of this nature, including the accuracy of representations and warranties, performance of covenants and the absence of any material adverse effect.

Subject to the satisfaction or waiver of these conditions, the RTO Transaction is anticipated to close on or about January 31, 2027. There can be no assurance that the RTO Transaction will be completed as proposed or at all.

Pro Forma Ownership

As noted above, the RTO Transaction will be completed by way of a three-cornered amalgamation, and each issued and outstanding VUL Share will be exchanged for one post-consolidation KKL Share at a deemed price of C$1.40 per share, and no cash consideration will be paid by KKL to VUL Energy shareholders under the amalgamation. The pro forma ownership of the Resulting Issuer is set out in the following table:

Shareholder and Regulatory Approvals

The RTO Transaction is not a "Non-Arm's Length Qualifying Transaction" within the meaning of the CPC Policy and, accordingly, Kelly Ventures is not required by the Exchange to obtain shareholder approval of the RTO Transaction. The articles of Kelly Ventures also permit the Consolidation and the Name Change to be effected by resolution of its board of directors and, accordingly, Kelly Ventures will not seek shareholder approval of those items. The Amalgamation must be approved by the securityholders of VUL Energy in accordance with the OBCA, either at a meeting of shareholder or by written consent. The RTO Transaction remains subject to the acceptance of the Exchange. Kelly Ventures will prepare a filing statement (the "Filing Statement") in accordance with the CPC Policy, which will be filed on SEDAR+ (www.sedarplus.ca) at least seven business days prior to the closing of the RTO Transaction.

Escrow and Resale Restrictions

Securities of the Resulting Issuer held by Principals (as defined in the policies of the Exchange), including certain securities issued to the shareholders of VUL Energy pursuant to the RTO Transaction, will be subject to escrow in accordance with Exchange Policy 5.4 - Capital Structure, Escrow and Resale Restrictions and the CPC Policy. The seed shares of Kelly Ventures currently subject to escrow under its existing CPC escrow agreement will remain subject to escrow in accordance with the CPC Policy. In addition, pursuant to the Definitive Agreement, certain shareholders of Kelly Ventures will enter into lock-up agreements with Kelly Ventures and VUL Energy (the "Lock-Up Agreements") in respect of an aggregate of 3,165,000 pre-Consolidation KKL Shares (representing approximately 411,509 post-Consolidation KKL Shares), which will be released as follows: 15% on the date the RI Shares first commence trading on the Exchange (the "Listing Date"); an additional 15% on each of the dates that are three, six, nine, 12 and 15 months following the Listing Date; and the remaining 10% on the date that is 18 months following the Listing Date. The Lock-Up Agreements will be in addition to, and not in substitution for, any escrow or resale restrictions required by the Exchange or applicable securities laws. Certain securities of the Resulting Issuer may also be subject to seed share resale restrictions imposed by the Exchange. The RI Shares and RI Warrants issued in exchange for the Underlying Securities are not expected to be subject to a statutory hold period in Canada, which is a condition of the release of the Escrowed Funds. Further details of applicable escrow, lock-up and resale restrictions will be included in the Filing Statement.

Further Information

Further details regarding the RTO Transaction, VUL Energy and the Resulting Issuer will be included in the Filing Statement to be prepared in accordance with the policies of the Exchange and filed on SEDAR+ under the profile of Kelly Ventures, and in subsequent news releases. Kelly Ventures will issue a news release concurrently with the filing of the Filing Statement disclosing the scheduled closing date of the RTO Transaction.

Trading Halt

In accordance with the policies of the Exchange, trading in the KKL Shares is currently halted and will remain halted pending, among other things, the Exchange's acceptance of this comprehensive news release and receipt by the Exchange of a Personal Information Form or Declaration from each person who will be a director, officer or insider of the Resulting Issuer, together with any other documentation required by the Exchange. It is uncertain whether trading in the KKL Shares will resume prior to completion of the RTO Transaction.

About Kelly Ventures

Kelly Ventures is a capital pool company incorporated under the laws of the Province of British Columbia and is a reporting issuer in British Columbia and Alberta. The KKL Shares are listed on the Exchange under the symbol "KKL.P". Kelly Ventures has not commenced commercial operations and has no assets other than cash. Its business is the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction.

Cautionary Note Regarding Forward Looking Information

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. Any statements contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends", "expects" and similar expressions which are intended to identify forward-looking information or statements. More particularly and without limitation, this news release contains forward-looking statements and information concerning: the RTO Transaction; the proposed structure by which the RTO Transaction is to be completed, including the Pre-Closing Transactions, the Amalgamation and the Consolidation; the anticipated capitalization of the Resulting Issuer; the anticipated closing date of the RTO Transaction; the receipt of all approvals related to the Offering and the RTO Transaction, including Exchange acceptance and any sponsorship exemption; the closing of the Offering; the exercise of the Agent's Option; the satisfaction of the Escrow Release Conditions and the release of the Escrowed Funds, including the Early Release Escrowed Funds; the intended use of proceeds from the Offering; the listing of the RI Shares on the Exchange and the resumption of trading; the Name Change; the proposed management and board of the Resulting Issuer; the development, capacity, power generation, pricing, revenue, operating costs and internal rates of return of the VUL Energy Project; estimates of prospective resources, gross power production capacity, net present value, internal rate of return and multiple of invested capital contained in the Sproule ERCE Report (as defined below), and the assumptions underlying such estimates, including assumptions regarding reservoir properties, reservoir recharge, well count, capital and operating costs, electricity pricing and asset life; the entering into of a definitive PPA; and the potential for lithium extraction and carbon credit revenue. VUL Energy and Kelly Ventures caution that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of VUL Energy and Kelly Ventures, including expectations and assumptions concerning VUL Energy, Kelly Ventures, the RTO Transaction, the timely receipt of all required Exchange and regulatory approvals and exemptions (as applicable) and the satisfaction of other closing conditions in accordance with the terms of the Definitive Agreement. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of VUL Energy and Kelly Ventures. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

The forward-looking statements contained in this news release are made as of the date of this news release, and neither VUL Energy nor Kelly Ventures undertakes any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities laws.

The VUL Energy Project is subject to the risk that an adequate geothermal resource may not be confirmed to justify the commercial development of a power plant.

Cautionary Note Regarding Prospective Resources and the Sproule ERCE Report

The estimates of prospective resources, gross power production capacity, net present value ("NPV"), internal rate of return and multiple of invested capital referred to in this news release are derived from the report prepared for VUL Energy by Sproule B.V. ("Sproule ERCE"), an independent qualified evaluator specializing in geoscience evaluation, engineering and economic assessment. aa

The Sproule ERCE Report was prepared with reference to the standards for classification and reporting set out in the June 2018 SPE Petroleum Resources Management System ("PRMS"), modified where necessary to reflect the specific evaluation requirements of a geothermal project, including the estimation of thermal resources rather than petroleum resources. Geothermal resources are not oil and gas activities within the meaning of National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and are not a mineral project within the meaning of National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"), and the Sproule ERCE Report has not been prepared in accordance with either instrument. The disclosure in this news release has nonetheless been presented with reference to the disclosure principles of NI 51-101 applicable to resources other than reserves.

"Prospective resources" are those quantities estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. The low (P90), best (P50) and high (P10) estimates represent at least a 90%, 50% and 10% probability, respectively, that the quantities actually recovered will equal or exceed the estimate. Sproule ERCE estimates gross power production capacity for the VUL Energy Project of 21.25 MWe (P90), 49.64 MWe (P50) and 77.86 MWe (P10), and a Project NPV discounted at 10% of US$(77.1) million (P90), US$139.2 million (P50) and US$353.4 million (P10).

Sproule ERCE estimates the chance of geologic discovery for the VUL Energy Project at 60%, based on surface expressions of an active hydrothermal system and proximity to volcanic activity, and the chance of development at 50%, resulting in an estimated chance of commerciality of 30%. The NPV and other financial estimates set out in this news release have not been adjusted for the chance of commerciality and are therefore unrisked. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. An estimate of net present value of prospective resources is preliminary in nature and is provided to assist the reader in reaching an opinion on the merit and likelihood of the VUL Energy Project proceeding with the required investment. It includes prospective resources that are considered too uncertain with respect to the chance of discovery and chance of development to be classified as reserves. There is uncertainty that the net present value will be realized.

The NPV estimates are forward-looking and are based on a number of material assumptions, including: a 30-year asset life; a 10% discount rate; a fixed electricity price of US$250 per MWh derived from a non-binding letter of intent contemplating 40 MWe of contracted capacity, with power sales as the sole source of revenue; approximately 9.5 MWe of generated capacity being consumed for self-powering a potential future direct lithium extraction plant; a seventeen-well production field with four injection wells; total capital expenditures of approximately US$319.3 million, including a 30% contingency, which are subject to an expected variability of ±30%; operating expenditures of US$40 per MWh; annual management and overhead costs of approximately US$3.4 million, with no allowance for inflation; and the project being funded entirely by equity, with no financing costs. Sproule ERCE did not benchmark the electricity price against market rates, did not validate the creditworthiness of the letter of intent counterparty, and did not independently validate VUL Energy's operating expenditure assumptions. NPV does not represent fair market value.

No exploration or production wells have been drilled on the VUL Energy Project, no site visit was undertaken by Sproule ERCE, and reservoir properties have been estimated from surface sampling, regional geology and analogue geothermal systems. The principal uncertainties identified by Sproule ERCE include reservoir temperature and chemistry, structural controls on permeability, the depth and geometry of the reservoir, the extent of the clay cap and heat source, and whether reservoir recharge will be sufficient to sustain reservoir pressure at the estimated production rates. The Sproule ERCE Report relied on ownership, geological, cost, contractual and other information supplied by VUL Energy without independent verification. The estimates may be revised, upward or downward, as additional data become available. The Sproule ERCE Report does not estimate any lithium resource, and no mineral resource or mineral reserve has been estimated for the VUL Energy Project under NI 43-101.

The Sproule ERCE Report was prepared solely for the benefit of VUL Energy, and no third party is entitled to rely on it. The summary of the Sproule ERCE Report in this news release does not purport to be complete and is qualified in its entirety by reference to the Sproule ERCE Report. Readers are cautioned not to place undue reliance on the estimates set out in the Sproule ERCE Report. Further information regarding the VUL Energy Project and the Sproule ERCE Report will be included in the Filing Statement.

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE U.S. SECURITIES ACT OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

Completion of the RTO Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and, if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the RTO Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the RTO Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection with the RTO Transaction, any information released or received with respect to the RTO Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed RTO Transaction and has neither approved nor disapproved the contents of this news release.

Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES OF AMERICA.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/322680

Source: VUL Energy Ltd.