Centerra Bets $25M on Headwater's Untapped Idaho Gold Prospect

VANCOUVER, BC – December 03, 2025 – In a move that speaks volumes about both strategic patience and geological potential, major producer Centerra Gold has committed up to US$25 million to explore Headwater Gold’s Crane Creek project in Idaho. The definitive earn-in agreement gives Centerra a path to acquiring a 70% stake in the project, providing a significant capital injection and powerful validation for the junior explorer's strategy. This isn't just another transaction; it's a prime example of how capital is flowing into the resource sector, favoring savvy partnerships that de-risk the high-stakes game of mineral discovery.

The Anatomy of the Deal: A Phased Bet on Discovery

The agreement between Centerra and Headwater is a masterclass in structured exploration financing. Rather than an outright acquisition, Centerra is funding the project's advancement in stages, mitigating its own risk while providing Headwater with the non-dilutive capital it needs to test a promising asset.

The deal is structured in three phases. Initially, Centerra has a firm commitment to spend US$2.5 million on exploration over the next three years. This initial investment gets the drills turning without requiring Centerra to go all-in from day one. To earn a majority 51% interest (Stage 1), Centerra must spend a total of US$10 million within four years.

Should the initial results prove promising, Centerra can elect to proceed to Stage 2, investing an additional US$15 million to increase its stake to 60%. A crucial component of this stage is that Headwater will be granted a 1-2% Net Smelter Return (NSR) royalty on the project. This ensures that Headwater shareholders retain long-term upside from any future production, even after ceding a majority interest.

The final stage allows Centerra to reach a 70% ownership by completing a Preliminary Economic Assessment (PEA) that defines a resource of at least one million gold-equivalent ounces. This structure aligns both parties' interests: Centerra gains control of a potentially significant deposit, while Headwater is carried through the most capital-intensive exploration and study phases, ultimately retaining a meaningful royalty and a minority stake in a development-ready project.

Headwater's Playbook: The Art of the Strategic Partnership

This agreement is not an isolated event for Headwater Gold; it is the cornerstone of its corporate strategy. The company operates as a sophisticated prospect generator, leveraging its technical team's expertise to identify and acquire high-potential projects in the Western US, and then partnering with major mining companies to fund their advancement.

This model has proven effective. Headwater already has similar earn-in agreements with industry giants Newmont Corporation and OceanaGold Corporation on several of its Nevada-based projects. The addition of Centerra to this roster of partners further cements Headwater’s reputation as a go-to source for quality exploration assets. The market has taken notice, with Headwater's stock (CSE: HWG) seeing a more than 150% increase over the past year, reflecting investor confidence in this partnership-driven approach.

The relationship with Centerra was cultivated over time. The major producer first took a strategic 9.9% equity stake in Headwater in September 2024, signaling its confidence in the junior’s management and portfolio. This earn-in agreement on a specific project is the logical next step, transforming a passive investment into an active exploration partnership. As Headwater’s President and CEO, Caleb Stroup, noted in the announcement, "Centerra has been an engaged and supportive partner. We are very excited to expand that relationship into a fully aligned exploration partnership on the project level."

This model is not without its risks, as exploration is an inherently uncertain business. Headwater has seen partners like Newmont walk away from certain projects after fulfilling minimum spending commitments. However, the ability to continually attract new, well-capitalized partners like Centerra demonstrates the strength and resilience of the underlying strategy and the quality of the projects in its portfolio.

Unearthing Potential: The Geological Promise of Crane Creek

Behind the financial engineering lies a compelling geological story. The Crane Creek project is situated in western Idaho, a jurisdiction with a rich mining history that is increasingly viewed as a favorable and underexplored region for new discoveries. The project itself is fully permitted for drilling, a significant advantage that bypasses potential permitting delays and allows work to commence quickly.

Geologically, Crane Creek is a low-sulfidation epithermal system, a type of deposit known for hosting high-grade gold and silver veins. The project lies just eight kilometers along trend from the Nutmeg Mountain deposit, which boasts a resource of over one million ounces of gold, providing a powerful regional analogue.

What makes Crane Creek particularly intriguing is its untapped potential at depth. Historical drilling on the property between 1984 and 1996 was overwhelmingly shallow, with an average depth of just 71 meters. Most drill holes stopped shortly after hitting a basalt unit, leaving the potential for high-grade, Midas-style veins hosted within the basalt completely untested. These are precisely the kinds of targets that can transform a prospect into a world-class mine.

Headwater has not been idle. Recent airborne magnetic and radiometric surveys have revealed a large, 4-kilometer-long potassium anomaly—often an indicator of the alteration associated with gold mineralization. These modern geophysical techniques have delineated a series of previously unknown structural breaks that are prime targets for hosting high-grade veins, extending well beyond the historically drilled areas. This integration of historical data with new technology has defined multiple high-priority targets for both near-surface bulk-tonnage potential and the deeper high-grade zones that have attracted Centerra’s attention.

A Capital Current: Earn-Ins as the New Exploration Engine

The Headwater-Centerra agreement is emblematic of a larger shift in the mining industry's capital allocation strategy. For major producers, maintaining a pipeline of new projects is critical for long-term survival, yet in-house grassroots exploration can be expensive, inefficient, and a drag on quarterly earnings. By partnering with junior explorers through earn-in agreements, majors can effectively outsource the high-risk, early-stage discovery phase. They gain access to a curated portfolio of projects and can deploy capital surgically on the most promising assets, only taking on full ownership and development risk after significant value has been demonstrated.

For junior companies like Headwater, this model provides a lifeline. In a market where raising capital for grassroots exploration can be challenging, these partnerships offer a non-dilutive source of funding, technical collaboration, and a clear path to development. It allows the junior to do what it does best—generate ideas and make discoveries—while the major provides the financial muscle to test and build them.

This symbiotic relationship is reshaping the exploration landscape, creating a more efficient ecosystem for resource discovery and development. The US$25 million commitment from a respected producer like Centerra not only funds the next phase of work at Crane Creek but also sends a powerful signal to the market about the project's perceived value. With a joint exploration plan now being finalized, all eyes will be on Idaho in the spring of 2026, when the first drills are slated to turn, putting this promising partnership and its compelling geological thesis to the ultimate test.