Culico Metals Inc. press release

CULICO METALS AND KHARROUBA COPPER COMPANY ANNOUNCE MERGER TO CREATE A HIGH-GRADE MOROCCAN COPPER MINING AND EXPLORATION COMPANY

2026-09-09

TSXV - TSX Venture Exchange · Copper · Silver · Gold · Lithium · Nickel · United States · M&A / Asset Transactions

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Combines KCC's high-grade copper assets and experienced team in Morocco, with Culico's strong balance sheet and management team to create a well-capitalized, debt-free copper company with exceptional outcropping exploration potential across a highly prospective land package directly along trend from North Africa's deepest underground mine, Managem's Draa Sfar mine. Unlocks district-scale high-grade copper potential across a 158km2footprint with less than 10% explored to date, anchored by priority targets with historical outcropping vein grades of 15-25% Cu based on historical drilling and a recent 1,400t bulk sample grading 1.7% Cu. Delivers immediate cash flow potential through KCC's permitted central processing facility in Morocco. Fully funded Phase 1 exploration and growth programs with US$16.1 million in combined financial resources supported by the concurrent strategic private placement for US$3.8 million1. Offers strategic exposure to copper in Morocco, a top-ranked mining jurisdiction with established mining infrastructure, a skilled workforce and strong governmental support for sustainable resource development. Combined company to be led by Paul Andre Huet and Scott Hand.

Culico and KCC will host an investor call/webcast today (September 9, 2026) at 10:00 am EDT to discuss the Merger. North American callers please dial: 1-888-699-1199; Local and international callers please dial: 416-945-7677. For the webcast of this event click https://app.webinar.net/opqyxMExE23.

Replay access information is provided below.

(All amounts expressed in Canadian dollars unless noted otherwise)

TORONTO, Sept. 9, 2026/CNW/ -- Culico Metals Inc. (TSXV: CLCO) ("Culico") and Kharrouba Copper Company Inc. ("KCC") are pleased to announce that they have entered into a definitive agreement dated September 8, 2026 (the "Agreement") to combine their businesses in a merger of equals (the "Merger"). The Merger will be completed by way of a plan of arrangement of KCC under the _Business Corporations Act_(Ontario).

The combination of Culico and KCC will bring together KCC's high-grade copper assets and its experienced operating team with Culico's balance sheet under the leadership of proven operators with a long history of creating meaningful value for shareholders. Led by Scott Hand and Frank Marzoli, KCC successfully assembled a significant land position totaling 158km2, reopened mines previously developed at the site, constructed a new milling and concentrator facility and put in place a well-established exploration and operating team with extensive experience in Morocco. The combined company is expected to be in a strong position, with sufficient financial resources and operational expertise, to advance KCC's high-grade copper assets and pursue district-scale exploration and development opportunities.

The combined company will be led by a combined board and management team of experienced mining and business leaders, bringing together the proven cultures, strengths and capabilities of both companies. Paul Andre Huet will be Executive Chairman of the combined company and Scott Hand, the founder of KCC, will be Vice Chairman. Frank Marzoli, current President of KCC, will be President of the combined company and Carl Gernandt will be Chief Financial Officer. The Board of Directors of the combined company will consist of six (6) directors, comprised of three (3) nominees of Culico and three (3) nominees of KCC, of whom three (3) are expected to be independent. For further information regarding proposed directors and officers of the combined company, refer to "Governance and Management" below.

Under the Agreement, which the boards of directors of both companies have unanimously approved, KCC shareholders will receive 0.389 Culico common shares (each whole share, a "Culico Share") for each common share in the capital of KCC ("KCC Shares") held (the "Exchange Ratio"). Upon completion of the Merger, existing Culico and KCC shareholders will own approximately 44% and 56% of the combined company, respectively, on a fully diluted basis2,3. Based on the 5-day volume weighted average price of Culico Shares on the TSX Venture Exchange ("TSXV") as at the close of trading on September 8, 2026, the implied market capitalization of the combined company is approximately $121 million on a fully diluted basis4.

KCC is a private corporation incorporated pursuant to the laws of the Province of Ontario. KCC's principal operating and exploration assets are located near Marrakech in the Kingdom of Morocco and are held through its operating subsidiary, Kharrouba Copper Mining S.A.R.L ("KCM"), a limited liability company existing under the laws of the Kingdom of Morocco. As of December 31, 2025, KCC had approximately $25.8 million in total assets, approximately $5.2 million in total liabilities, and a net loss of approximately $1.4 million based on KCC's unaudited, non-consolidated financial statements as at and for the years ended December 31, 2025 and 2024. KCC's investment in KCM is accounted for as an investment in a subsidiary for the purposes of such non-consolidated financial statements and represents non-current assets of approximately $25.6 million through a combination of equity and debt.

Paul Andre Huet, Culico's Chief Executive Officer, stated, "Since our inception in 2024, we've diligently reviewed numerous opportunities in pursuit of building Culico into a premier base metals-focused company. Today, we are thrilled to announce our proposed merger with KCC which controls highly prospective high-grade copper exploration and development properties across a large 158km2land package in Morocco. Our diligence has highlighted exceptional targets at KCC's Koudiat El Harcha property including the Aouinet Feddah target. Aouinet Feddah features a 4km outcropping shear zone demonstrating evidence of a copper-rich quartz vein hosting 15-25% copper mineralization over widths of 3 to 5 metres. A 1,400t bulk sample taken from around the vein suggests potential for grades of 1-2% copper over widths of 5 to 10 metres. With less than 10% of the combined property explored to date, we are very excited to see what a modern exploration program can uncover.

We've watched the KCC team make substantial progress at the Kharrouba complex since our initial investment in 2025. In particular, the KCC team has developed the mine and processing facility into a compelling cash flow opportunity with the potential to fund future exploration activities. We are excited to pair KCC's excellent team and highly prospective land package with Culico's strong capitalization and management team.

We are looking forward to executing an aggressive and discovery-focused exploration program across KCC's properties with funding from Culico's assets and KCC's ongoing operations, where we will also be analyzing opportunities to optimize and expand existing mining and milling efforts."

Scott Hand, Executive Chairman of KCC stated, "We welcome the coming together of KCC and Culico to continue the development of the copper mining and processing project we at KCC have pursued in the Kingdom of Morocco for over a decade. Culico's significant investment confirms the great prospects we see for KCC going forward. Our land position is extensive, the work done to date in exploration, in mining and in processing our copper ores and also copper, gold and antimony ores from third parties offer great opportunities for the company and our shareholders. Our experience in Morocco has been exceptionally positive, supported by the strong partnership and commitment of the Government of the Kingdom of Morocco and the availability of highly skilled mining, processing and exploration professionals. Together, these strengths provide the foundation for growing a safe, efficient and environmentally responsible operation of which both we and our shareholders can be very proud."

| | | 1Pro forma combined financial resources amount reflects Culico's cash balance of ~US$0.5 million as of June 30, 2026, plus approximately US$7.0 million in gross proceeds from KCC offerings to date in 2026 (including the Concurrent Financing described herein) and the market value of Americas Gold and Silver Corporation ("AGS") shares owned by Culico (approximately US$12.5 million based on the closing price of AGS shares on the TSX as of September 8, 2026), less the existing KCC shareholder loan with a principal of ~US$3.9 million. | | 2Pro forma ownership percentages are calculated on a fully diluted basis using the Treasury Stock Method (TSM) for all outstanding in-the-money options and are calculated based on Culico's last closing price on the TSXV as of September 8, 2026. Restricted Share Units and Director Share Units are included on a 1-for-1 basis (assuming achievement of conditions). KCC shares to be issued under the Concurrent Financing (as described herein) are included in KCC's pro forma ownership percentage. | | 3Upon completion of the Merger and the Concurrent Financing, the combined company is expected to have approximately 232.8 million issued and outstanding shares, of which existing Culico shareholders, KCC shareholders, and concurrent financing subscribers are expected to hold approximately 80.7 million, 140.1 million, and 12.0 million shares, respectively, on an undiluted basis. | | 4Pro forma market capitalization calculated on a fully diluted basis using the TSM method for all outstanding in-the-money options. |

Strategic Rationale for the Merger

Key strategic, financial and operational advantages of the combined business include:

High-grade copper opportunity at KCC's Koudiat El Harcha exploration property: Potential to delineate high-grade copper mineralization at district scale. The exploration team has identified three primary targets to be drill-tested in 2026 as part of a plan to systematically advance the targets. A surface bulk sample taken in 2024 from the Aouinet Feddah target, the most advanced of the three targets at Koudiat El Harcha, returned 1,400 tonnes at an average grade of 1.7% Cu when processed at the Kharrouba mill. Notably, the bulk sample tonnage was sourced around a high-grade vein (15-25% Cu) that had previously been extracted over a small footprint during mining activities dating back to the Roman era.

Substantial and highly prospective land package:Total footprint of 158km2across the Kharrouba Complex and Koudiat El Harcha. Less than 10% of the district has been historically explored with over 12km of confirmed strike to the vein system at Kharrouba and approximately 4km of strike to the vein system at Aouinet Feddah, the highest priority target at Koudiat El Harcha.

Established mining and processing operations at the Kharrouba Complex: KCC's current operations include 5 shafts, which are set to be deepened, 2 ramps and an open-cast mine (T112) at the Kharrouba Complex delivering minerals to a central processing plant. The operation produces a clean, arsenic-free concentrate which is sold to European and Asian markets. Low-cost power is provided via direct access to the Moroccan grid. Immediate cash-flow generation opportunity from toll processing operations:KCC has the opportunity to capitalize on significant demand for processing capacity in Morocco. KCC has the flexibility to process and market third-party gold, copper and antimony mineralized material through outright purchases of mineralized material, toll processing or under a partnership model. This capability is in addition to processing mineralized material from the Kharrouba Complex. The facility is currently capable of processing approximately 400 tpd of mineralized material. Leadership team with a strong track record: The combined company will be supported by a strong board and experienced management team who have a demonstrated track record of transforming vision into value and significant in-country experience. Morocco is a premier mining jurisdiction: Morocco is a mining-friendly country with a long and successful history in mining and a favourable tax regime. Notably, it is ranked as the 2ndbest country in Africa for investment attractiveness according to the Fraser Institute's rankings and ranks in the top quartile globally. Despite an established regime with strong local operators, Morocco has only just begun to attract attention from international companies.5 Strong balance sheet to fund near-term growth:The combined company is expected to be well capitalized with US$16.1 million in available liquidity to finance its exploration and investment programs1.

| _ | | 5United Nations Conference on Trade and Development,_World Investment Report 2026: International Investment in a Turbulent Era_(United Nations publication, Geneva, 2026). |

Exploration & Growth Strategy

The combined company holds a total footprint of 158km2across the prospective Kharrouba Complex and Koudiat El Harcha properties which were assembled by the KCC team over a number of years. The exploration program is designed to systematically evaluate near-mine targets at the operating Kharrouba Complex while simultaneously advancing high-grade discovery targets across the broader portfolio, including the Koudiat El Harcha property.

Koudiat El Harcha

The Koudiat El Harcha property covers a 47km2land package located approximately 50km from the Kharrouba Complex. Preliminary information indicates exploration potential for high-grade copper mineralization across three key targets:

_Aouinet Feddah:_4km of outcropping shear zone with historical Roman workings down to depths of approximately 25 metres Historical drilling in two holes by KCC at Aouinet Feddah intersected copper-rich quartz veins grading from 15% to 25% Cu over core lengths ranging from 3 to 5 metres. The true thickness of these veins has not been determined. The historical data has not been verified by Culico's qualified person and should not be relied upon. KCC recently completed a 1,400 tonne surface bulk sample which returned an average grade of 1.7% Cu despite the vein core having been historically mined by the Romans.

_Sidi Makhlouf (Iron Hat):_Features metalliferous vein outcrops with a strike length of over 2km before dipping under shallow cover. A 2025 drillhole (SC-CF03) intersected 0.4 metres (true widths unknown) of copper-oxide mineralization grading 36.49% Cu before encountering mined-out historical workings.

_Stanton-_Craig: The shear zone exhibits multi-kilometre strike along surface. The zone of intense stockwork quartz veining ranges from 10 to 50 metres wide with individual quartz veins reaching up to 3 metres in thickness. The area was historically strip-mined by French prospectors in the 1940s and 1950s but has never been drill-tested.

Kharrouba

The Kharrouba property demonstrates strong prospectivity, highlighted by high-grade copper mineralization defined across more than 12km of strike length. The high-grade mineralization profile is supported by historical production records which confirm average grades of 1-3% Cu extracted from 1m to 3m thick quartz-chalcopyrite veins starting at surface down to depths of 100m. With approximately 20% of the trend tested to date, the system remains wide open along strike and at depth.

The combined company has a defined exploration plan in place to advance the property:

Phase 1A – Geological Studies / Targeting: Baseline geology and target generation including: property-wide geophysics, soil sampling, vein mapping and trenching across exposed shear-hosted veins at all three targets. Phase 1B – Maiden Drill Campaign: Maiden drill campaign to test highest priority targets. Phase 1C – Follow-up Drill Campaign: Follow-up drilling to support potential future mineral resource delineation, subject to results from prior phases.

Board of Directors' Recommendations

After consultation with its outside financial and legal advisors, the Board of Directors of Culico has unanimously approved the Merger. The Board of Directors of Culico recommends that Culico shareholders vote in favour of the Merger.

After consultation with its outside financial and legal advisors, the Board of Directors of KCC has unanimously approved the Merger. The Board of Directors of KCC recommends that KCC shareholders vote in favour of the Merger.

Blair Franklin Capital Partners Inc. has provided an independent fairness opinion to the KCC Board of Directors to the effect that, as of the date thereof, and based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the consideration to be received by holders of KCC Shares pursuant to the Merger is fair, from a financial point of view, to such shareholders.

Financing Transactions

Prior to and concurrent with the announcement of the Merger, KCC entered into subscription agreements with certain investors pursuant to which the subscribers have purchased, on a private placement basis, an aggregate of 30,720,721 KCC Shares from treasury at a price of US$0.125 per KCC Share for aggregate gross proceeds of approximately US$3.8 million (the "Concurrent Financing"). KCC intends to use the net proceeds of the Concurrent Financing for the advancement of the combined company's assets following completion of the Merger and for general corporate purposes.

Pro forma the Merger, and including the Concurrent Financing, it is expected that the combined company will have access to approximately US$16.1 million in cash and available liquidity1.

Culico's Ownership Interest in KCC

As at the date hereof, Culico owns 34,000,000 KCC Shares, representing approximately 8% of the issued and outstanding KCC Shares, comprised of 30,000,000 KCC Shares subscribed for by Culico in 2025 and 4,000,000 KCC Shares subscribed for by Culico in 2026.

The following officers and directors of Culico, as a group, own an aggregate of 6,253,333 KCC Shares, representing approximately 1.5% of the issued and outstanding KCC Shares, as follows: (i) Paul Huet, CEO of Culico, 2,793,333 KCC Shares (or approximately 0.68% of the issued and outstanding KCC Shares); (ii) Carl Gernandt, CFO of Culico, 1,460,000 KCC Shares (or approximately 0.36% of the issued and outstanding KCC Shares), and (iii) Peter Goudie, Director of Culico, 2,000,000 KCC Shares (or approximately 0.49% of the issued and outstanding KCC Shares).

Other than Culico's ownership of KCC Shares and the ownership of KCC Shares by certain officers and directors of Culico as described above, Culico is not aware of any relationship between Culico or any Non-Arm's Length Party of Culico and KCC, the Kharrouba Complex, the Koudiat El Harcha property or any vendor of KCC securities that would cause the Merger not to be considered an arm's length transaction under the policies of the TSXV.

Transaction Summary and Timing

The Merger will be effected by way of a plan of arrangement of KCC under the _Business Corporations Act_(Ontario). At closing, all KCC Shares will be exchanged for Culico Shares based on the Exchange Ratio through an amalgamation of KCC and a to-be-formed wholly-owned subsidiary of Culico. The arrangement will require the approval of at least 66 2/3% of the votes cast by the shareholders of KCC at a special meeting of KCC's shareholders. Completion of the proposed Merger will, pursuant to the policies of the TSXV, result in a Change of Business and may also constitute a Reverse Takeover (each as defined in the policies of the TSXV) of Culico. As a result of the Change of Business and/or the Reverse Takeover, completion of the Merger will be subject to the approval of a simple majority of the votes cast by Culico shareholders, including, if applicable, disinterested shareholder approval, at a special meeting of Culico's shareholders to be held in accordance with the policies of the TSXV and applicable Canadian securities laws. Culico expects that the combined company will apply to the TSXV to list as a hybrid mining and investment issuer pursuant to the policies of the TSXV upon completion of the Merger.