“We Own a 4% NSR Royalty on a Growing Gold Deposit (2.55 Moz @ 5.47 g/t)” -Kenorland CEO Zach Flood

Kennland Minerals Update: A Deep Dive into the Froet Project & Exploration Strategy

Key Concepts:

• NSR (Net Smelter Return Royalty): A percentage of the revenue generated from a mine, paid to the royalty holder (Kennland in this case) after smelting costs are deducted.
• Inferred Mineral Resource Estimate: An initial estimate of the quantity and grade of mineral deposits, based on limited geological data. It’s the lowest category of resource confidence.
• Grassroots Exploration: Early-stage exploration involving geological mapping, geochemical sampling, and initial drilling to identify potential mineral deposits.
• Derisking: Reducing the uncertainty and risk associated with a mining project through exploration, studies, and permitting.
• Tier One Jurisdiction: A politically stable country with a well-established mining regulatory framework and infrastructure.
• Operator Ship: The company responsible for the day-to-day management and operation of a mining project.

I. The Froet Project & Sumitomo Partnership – A Major Gold Discovery

The core of the discussion revolves around Kennland Minerals’ flagship asset: the Froet project, currently 100% owned and operated by Sumitomo Metal Mining. Kennland retains a significant 4% NSR royalty on the project. A maiden inferred mineral resource estimate has been established at over 2.5 million ounces of gold at an average grade of 5.5 grams per ton (g/t). This represents a major milestone, particularly for an exploration company.

Zack Flood, CEO of Kennland, emphasized the rarity of a grassroots gold discovery evolving into a multi-million ounce, high-grade system. The discovery originated from a partnership with Sumitomo, initiated in 2018 with two years of grassroots exploration leading to the initial find. Kennland initially held a 20% minority interest, which was strategically converted into the current 4% NSR royalty. Flood stated, “any any new grassroots gold discovery that turns into a multi-million ounce high-grade you know gold system um is is is very rare”.

The current resource estimate is based on approximately 130,000 meters of drilling, but the system remains “wide open” with significant upside potential indicated by drill intercepts exceeding the current model’s boundaries. This suggests the potential for substantial growth in the overall resource estimate. The value of the royalty is expected to increase as the project progresses towards potential production and becomes further derisked. Leverage to gold prices is also a key factor in the royalty’s value.

II. Valuation & Market Response

Kennland’s share price has increased by 150% since the last interview, demonstrating a positive market response to the maiden resource estimate. A simplified valuation approach involves multiplying the current gold price by the 2.5 million ounce resource and the 4% NSR (potentially reduced to 3.25% if Sumitomo exercises a buy-down option).

Flood cautioned that this is a “good starting point” for estimating potential future revenues, acknowledging the inherent uncertainties and risks. He highlighted the importance of considering the potential for resource growth, stating, "I could see you know the system growing quite substantially."

III. Sumitomo’s Role & Future Disclosures

Sumitomo has assumed operatorship of the Froet project. While the significance of the project to Sumitomo’s overall portfolio is unknown, Kennland expects to continue receiving updates and material results due to the strength of the data rights embedded in their royalty agreement.

A key upcoming milestone is a decision point regarding the construction of a decline and bulk sample, which represents a significant derisking event. Permitting for this decline and bulk sample was underway during the transition of operatorship to Sumitomo, and ongoing engineering studies are also being conducted.

IV. Beyond Froet: Exploration Portfolio & Partner Funding

Kennland maintains an active exploration portfolio beyond the Froet project. Key projects include:

• South Uchi Project (Ontario): A recently completed 7,000-meter drill program with assays expected in early 2024. Emerging targets are being developed.
• Oronova Project (Ontario): Ongoing work with Santara, with promising regional targets identified.
• James Bay Region & Abatibby: Early-stage exploration programs are underway.

Kennland’s business model centers on generating exploration targets and partnering with companies that can earn a majority interest and fund development. In 2023, partner-funded exploration totaled approximately $35 million CAD across 10 drill programs. While partner spend is expected to decrease in 2024, a “significant component” of exploration will still be funded by partners, focusing on early-stage surveys and target generation.

V. Financial Position & Equity Holdings

As of the end of 2023, Kennland’s treasury is approximately $15 million CAD. The company also holds a portfolio of equities, valued at approximately $10 million CAD, including private investments incubated by Kennland. These equity positions provide non-dilutive capital and support the company’s exploration strategy. Flood emphasized the importance of balancing exploration with minimizing dilution, particularly given the value of the Froet royalty.

VI. Future Milestones & Outlook

Looking ahead to 2024, key milestones to watch include:

• South Uchi & Oronova: Assay results from the recent drill programs and further development of emerging targets.
• Santara Partnership: Drilling of regional targets in Ontario.
• Froet Project: Continued updates from Sumitomo and potential progress towards a decision on the decline and bulk sample.

Kennland’s strategy remains focused on project generation and leveraging its royalty assets while continuing to explore for new discoveries. Flood stated, "that's our bread and butter and that's what led us here today, you know, with the royalty on on the Renault gold system that we found."

Kennland Minerals trades on the TSX Venture Exchange under the ticker KLD and on the OTC QX in the United States under the ticker KLDCF.