Capella Minerals : Earnings Document

CAPELLA MINERALS LIMITED

8681 Clay Street

Mission BC

CANADA

MANAGEMENT DISCUSSION AND ANALYSIS

For the Three Months Ended August 31, 2023

1 of 30

Form 51-102F1

Management Discussion and Analysis

For

Capella Minerals Limited

("Capella", or the "Company")

The following Management's Discussion and Analysis ("MD&A") of the Company has been prepared as of October 30, 2023, and is intended to supplement and complement the Company's audited consolidated financial statements for the years ended May 31, 2023 and May 31, 2022 (the "Annual Financial Statements") and should be read in conjunction with the Annual Financial Statements, together with the notes thereto. The Annual Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS").

Unless otherwise noted, all currency amounts are stated in Canadian dollars.

NATURE OF BUSINESS

Capella Minerals Limited is incorporated under the laws of the Province of British Columbia, Canada with a registered address and records office located at 8681 Clay Street, Mission BC V4S 1E7.

The Company's activities are currently focused on the exploration and development of a portfolio of copper- cobalt projects in Norway (including the advanced exploration-stage Hessjøgruva asset), lithium-REE and gold- copper projects in Finland, and two gold Joint Venture ("JV") projects in Canada. Capella also holds a residual 49% interest in the Sierra Blanca gold-silver project in Argentina.

The Company's primary stock exchange listing is on the TSX Venture Exchange ("TSXV"), where it trades under the symbol "CMIL". The Company also has secondary listings on the United States OTCQB (trading symbol: "CMILF") and also on the Frankfurt Stock Exchange (trading symbol: "N7D2").

HIGHLIGHTS AND DEVELOPMENTS FOR THE THREE MONTHS ENDED AUGUST 31, 2023, AND TO THE DATE OF THIS REPORT

At the date of this report the Company held interests in the following exploration projects:

Scandinavian Base and Battery Metal Portfolio

2 of 30

Canadian Gold JV's and Argentine Divestiture

Key Developments Since May 31, 2023 MD&A (Filed on SEDAR September 28, 2023)

• On October 17, 2023, the Company announced that it had entered into a binding asset sale agreement with NickelX AS ("NickelX"), a private Norwegian mining company, through which it will divest its interests in the Hessjøgruva, Kjøli ,and Løkken copper-zinc-cobalt projects located in Trøndelag Province, central Norway (collectively the "Assets")(the "Transaction").
  NickelX currently holds 100% interests in 4 nickel exploration projects in northern Norway (Hamn, Palfjellet, Birgivi, and Envold), and is in the process of undertaking an Initial Public Offering ("IPO") with the Company's combined Assets on Oslo's Euronext Growth Exchange with the objective of becoming Norway's leading independent battery metals company.
  The total consideration of the Transaction to Capella, payable upon completion of the NickelX IPO, is CAD 7 million being CAD 5 million in cash and CAD 2 million in NickelX IPO shares.
• Furthermore, the Company announced on October 17, 2023, that it was canceling its previously announced non-brokered Private Placement financing (June 30, updated August 31) so that participants could be fully informed of the Transaction. A new non-brokered Private Placement financing, under the same terms as the previous Private Placement was initiated with up to 33 million units at a price of C$0.03 per unit to raise gross proceeds of up to C$1,000,000. Each unit of the Private Placement will consist of one common share in the capital of the Company and one-half of a share purchase warrant, with each whole warrant entitling the holder to purchase one additional common share at a price of C$0.06 per share at any time within two years from the date of issuance. Final TSXV Exchange approval is pending. The Company has received $421,200 in advance of the closing of the private placement.
• On October 23, 2023, the Company received a cash injection of US$150,000 by entering into a loan agreement with non-executive director Mary Little. The loan and interest of 8% per annum, compounding quarterly, is repayable in cash by October 13, 2024. Principal and interest is payable in quarterly instalments.

Exploration Projects - Finland

Northern Finland Gold-Copper Project (Capella Initial 70% Interest)

• Capella´s Northern Finland gold-copper project consists of 6 exploration permits (5 granted, 1 application) ("EPL's") located within the world-class metallogenic province of the Central Lapland Greenstone Belt ("CLGB"). The EPL's lie immediately adjacent to the to the highly-prospective Sirkka Thrust Zone, a regional structural corridor within the CLGB which is associated with numerous occurrences of both gold and base metals. The exploration permits were applied for prior to the expiry of the original 200 sq. km Aakenus-Katajavaara reservation on December 21, 2022, with the first 5 permits granted on May 26, 2023.

3 of 30

• The five EPL´s formally granted on May 26, 2023, were:
• • Killero E (Priority 1) - former Anglo American PLC1 project with significant copper-gold Base of Till ("BoT") geochemical anomalies but never drill tested. A major NE-trending fault zone is also evident cross-cutting the copper-gold anomaly from Capella's high resolution drone magnetic data.
  • Saattopora W (Priority 1) - interpreted W-NW extensions to Outokumpu Oy's former Saattopora copper- gold mining operation
  • Keisunselka - interpreted high-grade gold hosted in deformed banded mafic volcanic target
  • Jolhikko - gold and base metal targets in complex deformation zone
  • Katajavaara - interpreted SE extension to the former Saattopora copper-gold mining operation
• An additional EPL - Killero W - remains in application and covers a second anomalous area with exceptional copper-gold values from historical BoT sampling by Anglo American PLC but never drilled.
• Capella currently anticipates the first round of scout drilling to begin at Killero E in Q1, 2024.
• The Company made its first anniversary cash payment of USD50,000 (C$67,715) to Cullen on November 10, 2022 as required under the signed letter of intent for the Northern Finland gold-copper projects. The second anniversary option payment to Cullen is due on or around October 31, 2023.

1 Historic geochemical results quoted for Killero E and W are derived from GTK datasets. Whilst Capella has not performed sufficient work to verify the published data reported, the Company believes this information to be considered reliable and relevant.

Central Finland Lithium-REEPortfolio (Capella 100%; European Energy Metals Earn-In to 80%)

• On March 20, 2023, Capella announced that it had entered into a Definitive Earn-In Agreement with Hilo Mining Ltd. (TSXV: HILO)("Hilo") in which Hilo may earn in to an 80% interest in a portfolio of five Li- REE pegmatite reservations owned by Capella in central Finland. The five reservations cover 2,300 square kilometers and target spodumene-bearing pegmatite complexes within the Järvi-Pohjanmaa and Seinäjoki lithium-permissive tracts as defined by the Geological Survey of Finland. Four of the reservations (Nabba, Lappajärvi W, Lappajärvi E, and Kaatiala) lie immediately adjacent to, and to the south of, Keliber Oy's spodumene mine development project in the Kaustinen district. Hilo announced a Corporate name change to European Energy Metals Corp. (TSXV: FIN)(¨FIN") effective April 25, 2023. The Earn-In Agreement requires FIN to invest a minimum CAD 2,500,000 in exploration expenditures and make total cash (CAD 450,000) and common share (2,000,000) payments to Capella within a 4 year period. TSXV Exchange approval for the original Capella-Hilo transaction was received on April 6, 2023.
• Field teams were mobilized to the Central Finland Li-REE portfolio in June, 2023, with systematic exploration having been undertaken on the northernmost Nabba and Lappajarvi reservations over the northern 2023 summer. Assays from sampling programs are currently pending.
• Capella´s acquisition of the Central Finland Li-REE portfolio from private group elementX Finland Oy ("elementX") was announced on October 6, 2022. TSXV Exchange approval for the elementX transaction was announced on October 31, 2022.

Perho Lithium-REEProject (Capella Initial Interest 70%)

• The Company's 50 sq. km Perho Li-REE reservation application in central-southern Finland was granted by Finnish authorities on October 5, 2022. The Perho reservation is located within the Eräjärvi pegmatite field and covers the Seppala lithium occurrence and lies adjacent to the former Viitaniemi and Juurakko feldspar-quartz mines. The Eräjärvi district is reported to contain over 70 pegmatite occurrences with little modern systematic exploration having been undertaken in the area.
• Initial systematic field evaluations of the Perho Li-REE reservation commenced in October 2023, together with technical and field support from local consulting company Geopool Oy, The initial field review at Perho is expected to build on the available geological and geophysical data related to the known spodumene-bearing pegmatites at Eräjärvi.

4 of 30

Exploration Projects - Norway

Hessjøgruva-KjøliCu-Co-Zn District, Trøndelag County, Norway (100% Capella)

• Drill permits have been received for a 4,000m / 8 hole diamond drill program at the Hessjøgruva copper- cobalt-zinc VMS project. Initial planning is based on a mixture of both infill and step-out drilling on the Hessjøgruva Lens A deposit. This drill program was originally scheduled to be executed during the 2023 summer season, however, as a direct result of financial considerations this program has necessarily been postponed to summer 2024.
• The Company filed an NI 43-101-compliant technical report for the Hessjøgruva project on September 8, 2022. This technical report was prepared by GeoVista Aktiebolag ("GeoVista") and provided a summary of all exploration activities completed to date at Hessjøgruva, including the 12,035m of historical diamond drilling that was undertaken during the 1970's. A copy of this technical report is available under Capella's profile on SEDAR (www.sedar.com) and on the Company's website (www.capellaminerals.com).
• Capella expanded its claim holdings in the Hessjøgruva district through the staking of 43 sq. km of new exploration claims over the adjacent, past-producing Kongensgruve district. The central portion of the Kongensgruve claim block lies approximately 6km east of the Hessjøgruva project and contains a series of known copper-zinc-cobalt occurrences (including Rødalen, Fjellsjoen, Kongensgruve, and Muggruva), in addition to a former mineral processing facility and tailings dam.
• On January 23, 2023, the Company announced the initiation of a scout diamond drill program at its Kjøli copper-cobalt-zinc VMS project, which is located approximately 20km NE of the Hessjøgruva project. A total of 1,412m drilling was completed in initial testing of the Kjøli Deeps, Kjøli Mine Extension, and Guldalsgruva areas. Initial assay results reported on May 23, 2023 confirmed the existence of limited thicknesses of high-gradeCu-Co-Zn mineralization. The drilling was accompanied by downhole electromagnetic (DHEM) and surface-loop electromagnetic (SLEM) surveys designed to identify potential buried massive sulfide bodies in the vicinity of drill holes.

Løkken Cu-Co-Zn District, Trøndelag County (100% Capella)

• Permitting has been completed for a scout diamond drill program at the Åmot copper-cobalt-zinc VMS prospect, which is located 5km due E of the former Løkken mining operations. As for Hessjøgruva, the original drill plan for Åmot had contemplated a summer 2023 drill program, however, this program has now also been postponed to summer 2024.
• The primary target at Åmot is an undrilled, 1.5km-long geophysical (electromagnetic and ground magnetic) anomaly situated approximately 150m below surface and associated with coincident surface soil geochemical anomalies. A scout program of 1,250m / 4-6 holes is proposed to test Åmot.
• The Åmot and adjacent Høydal targets were the focus of the Company´s extensive summer 2022/2023 field programs which included ground magnetic surveys and systematic soil (Ionic Leach) geochemical sampling. Results derived from these field programs formed the basis for drill hole targeting at Åmot.
• An advance royalty payment of $25,000 was made in Q4, 2022, to EMX Royalty Corp (TSXV/NYSE: EMX) as per the terms of the amended (November, 2020) acquisition agreement for the Løkken project.

Vaddas-BirtavarreCu-Co District, Northern Norway (50% Capella)

• Capella and Teako Minerals Corp (CSE: TMIN)("Teako") have agreed to a strategic partnership covering exploration collaboration and communication in the northern Scandinavia copper belt. As part of this agreement, Teako has acquired a 50% interest in the combined Vaddas-Birtavarre properties for a consideration of 1,000,000 Teako common shares and retains the option to acquire a 100% interest in the projects in return for a minimum exploration expenditure of CAD 100,000 with the first year and further issuances of 250,000 common shares to Capella in both Years 1 and 2.

5 of 30

• Capella successfully staked its first exploration claims in the past-producingVaddas-Birtavarre copper- cobalt+/-zinc VMS district of northern Norway in July 2022. The Vaddas-Birtavarre district is located in the Finnmark og Troms Province, some 60km E of the regional centre of Trømso and immediately to the west of the former Boliden -Norden Crown (TSXV: NOCR) copper exploration JV at Burfjord.
• Reconnaissance field evaluations of the Vaddas-Birtavarre districts were undertaken during late summer 2022, with results from these initial mapping/sampling programs being utilized to prioritize areas for follow-up field programs. Land holding fees for 2023 were paid for a core group of priority exploration claims covering 90 sq. km at Vaddas and 30 sq. km at Birtavarre.

Exploration Project - Sweden

Southern Gold Line

• Capella returned 90% of its Southern Gold Line Project in Sweden to EMX Royalty Corp (TSXV, NYSE: EMX) in Q4, 2022. The decision to suspend exploration activities on the 7 claims hosting gold targets was made in response to Dragon Mining Ltd (HK: 1712), owner of the adjacent Fäboliden gold development project, having had its environmental permit for the commencement of full-scale gold mining at Fäboliden rejected by the Swedish Court. However, Capella has retained a 100% interest in an eighth mineral claim, Fäboliden Sodra 103, which hosts base metal (copper) targets.
• Capella is currently reviewing alternatives for its Swedish subsidiary, Capella Minerals Sweden AB.

Exploration Projects - Canadian Gold Joint Ventures

Savant Gold Joint Venture (Capella 100%; Prospector Metals Earn-Into 70%)

• Capella's Savant Gold JV project in Ontario is subject to an Earn-In Agreement through which Prospector Metals Corp. (TSXV: PPP) may acquire a 70% interest in the project in return for completing CAD 2M of exploration expenditures prior to November 15, 2024. In addition, Prospector is required to make staged cash and share payments to Capella totalling CAD 200,000 and 2,666,666 common shares, respectively.
• During the year ended May 31, 2023, the Company received an anniversary cash payment of $50,000 and 666,666 Prospector Metal shares as required under the Earn-In Agreement. The Prospector shares received were subject to a four month hold period until March 15, 2023. The third anniversary date of the Savant JV agreement will fall on November 15, 2023.
• Prospector's summer 2022 field work program successfully identified high-grade gold grades in two main structural corridors: i) a first-order deformation zone named the Wiggle Deformation Zone (and which passes through the previously recognized Wiggle Creek gold prospect) and ii) the newly defined Snowbird- Shoal Deformation Zone (which passes through the Snowbird, Horseshoe, and Shoal gold prospects). Adjacent, undrilled fold hinges in iron-formation were also identified as high-priority targets for gold mineralization. A new LiDAR survey was also completed over the Savant Gold project with data derived from this survey having now been processed and integrated in to targeting activities.
• The Savant Gold JV project is drill-ready, with the precise timing for the commencement of drilling to be determined by both market / financing conditions and access agreements. Prospector notified Capella on July 6, 2023 that it wished to invoke force majeure due to a delay in work and access created by a local First Nations group. Alternative discussions are underway.

Domain Gold Joint Venture (Agnico Eagle Mines Ltd 70.4% / Capella 29.6%)

• Agnico Eagle Mines Ltd (TSX-NYSE: AEM)("Agnico") formally became Capella´s Joint Venture (JV) partner at the Domain Gold project on March 31, 2023, upon completion of the acquisition by Agnico of all of Yamana Gold Inc´s ("Yamana") former Canadian gold assets.

6 of 30

• No significant field activities were undertaken by Agnico during the current reporting period. Accordingly, Agnico and Capella have agreed to review strategic alternatives for the Domain Gold JV during Q4, 2023.
• The Domain Gold JV is an advanced exploration-stage gold project with 62 holes / 9,660m of historic core drilling. Domain is a 70.4%-29.6% contributing JV between Agnico and Capella, with Agnico being the project operator.

Argentine Project Divestiture

Sierra Blanca Gold-Silver Project (Austral Gold 51% / Capella 49%)

• Austral Gold Ltd (ASX: AGD; TSXV: AGLD) ("Austral") has completed its minimum Years 1 and 2 exploration expenditures (total USD 300,000) on the Sierra Blanca gold-silver project in Santa Cruz Province, Argentina and has therefore earned-in to a 51% interest in the project.
• Austral was required to invest a further USD 400,000 during Year 3 (before September 15, 2023, and including a minimum of 2,000m of core drilling) in order to increase its interest in Sierra Blanca to 80%. At the date of this report, Austral had requested an extension until December 31, 2023, in order to compete the required Year 3 drilling; discussions between Austral and Capella are ongoing.
• In the event that Austral completes its Year 3 exploration commitments and earns-in to 80% of the Sierra Blanca project, Austral subsequently would have the option the acquire the remaining 20% through a series of staged work commitments and cash payments to Capella during Years 4 and 5 (see Company News Release dated April 1, 2020, and notes in the Annual Financial Statements).

Corporate Developments

• Definitive Agreement for Sale of Central Norway Copper-Gold-Copper assets: On October 17, 2023 the Company announced that it had entered into a binding asset sale agreement (the "Agreement") with NickelX AS ("Nickel X"), a private Norwegian mining company, through which it will divest its interests in the Hessjøgruva, Kjøli,and Løkken copper-zinc-cobaltprojects located in Trøndelag Province, central Norway (collectively the "Central Norway Copper Projects" or the "Assets")(the "Transaction").
  NickelX currently holds 100% interests in 4 nickel exploration projects in northern Norway (namely Hamn, Palfjellet, Birgivi, and Envold), and is in the process of undertaking an Initial Public Offering ("IPO") with the combined Assets on Oslo's Euronext Growth Exchange with the objective of becoming Norway's leading independent battery metals company.
  The total consideration of the Transaction to Capella, payable upon completion of the NickelX IPO, is CAD $7 million via a combination of cash and NickelX shares.
  Main Terms of the Transaction
  Capella has agreed to sell its 100% interests in the Assets to NickelX under the following main terms:
  •

•

• Private placement: Concurrently with the Transaction, the Company also announced that to allow fair dissemination of the news of the Transaction, the Company has determined to cancel its previously announced private placement (June 13, updated August 31, 2023) to ensure that participants in the private placement can be fully informed of the Transaction.

The Company announced a new non-brokered private placement, under the same terms as the previous financing of up to 33 million units at a price of C$0.03 per unit to raise gross proceeds of up to C$1,000,000. Each unit of the Private Placement consisting of one common share in the capital of the Company and one-half of a share purchase warrant, with each whole warrant entitling the holder to purchase one additional common share at a price of C$0.06 per share at any time within two years from the date of issuance. The warrants shall also be subject to an accelerated exercise clause in the event the Company's share price exceeds C$0.15 for 10 consecutive trading days.

• Hilo Mining Ltd (European Energy Metals Corp.) earn-in:On March 20, 2023 the Company announced it had entered into a Definitive Earn-InAgreement (the "Earn-InAgreement") with Hilo Mining Ltd. ("Hilo") (TSXV: HILO) to earn up to an 80% interest in a portfolio of five lithium (lithium-cesium-tantalum, or "LCT") and rare-earthelement ("REE") pegmatite reservations held by Capella in central Finland (the "Property"). Hilo announced a Corporate name change to European Energy Metals Corp. (TSXV: FIN) effective April 25, 2023.
  The Property consists of five reservations covering a total area of 2,300 square kilometers and which are focused on LCT pegmatite complexes located within the Järvi-Pohjanmaa and Seinäjoki lithium-permissive tracts as defined by the Geological Survey of Finland ("GTK"). Four of the reservations (Nabba, Lappajärvi W, Lappajärvi E, and Kaatiala) lie immediately adjacent to, and to the south of, Keliber Oy's spodumene mine development project in the Kaustinen district. Key terms of the Earn-In Agreement include:
• • Hilo has the option to earn a 51% interest in the Property (the "Initial Option") by (i) making a cash payment of $100,000 and issuing 100,000 common shares to Capella upon receiving TSX Venture Exchange approval of the Earn-In Agreement; (ii) completing $500,000 in expenditures on the Property and issuing 150,000 common shares to Capella on before the first anniversary of the Earn-In Agreement; and (iii) completing an additional $500,000 in expenditures on the Property, paying $100,000 in cash and issuing 250,000 common shares to Capella on or before the second anniversary of the Earn-In Agreement. Upon exercise of the Initial Option, Hilo will become the operator of the Property.
  • Following exercise of the Initial Option, Hilo will have a further option to earn an additional 29% interest in the Property (the "Final Option") by (i) completing $500,000 in expenditures on the Property, paying $150,000 in cash and issuing 750,000 common shares to Capella on or before the third anniversary of the Earn-In Agreement; and (ii) completing $1,000,000 in expenditures on the Property, paying $150,000 in cash and issuing 750,000 common shares to Capella on or before the fourth anniversary of the Earn-In Agreement.
  • If, on the date of the exercise of the Final Option, the Property hosts a mineral resource equal or greater than 10 million metric tons with a minimum average grade of 1.0% Lithium Oxide (Li2O) the Company will make a bonus cash payment of $500,000 and issue 1,000,000 common shares to Capella.
  • The parties have the option to form a joint venture upon exercise of the Initial Option or to defer the joint venture formation until the exercise of the Final Option.
  • TSX Exchange approval for the transaction was received on April 6, 2023.
• elementX Finland Oy Acquisition: On October 6, 2022, the Company announced it had entered into a binding letter agreement (the "Agreement") with elementX Finland Oy ("elementX") for the acquisition of a 100% interest in a portfolio of lithium-cesium-tantalum ("LCT") pegmatite and rare-earth element ("REE") reservations in central/southern Finland. The elementX projects are predominantly focused on LCT pegmatite complexes located within the Järvi-Pohjanmaa and Seinäjoki lithium-permissive tracts as

8 of 30

defined by the Geological Survey of Finland ("GTK"). TSXV Exchange approval for the acquisition was announced on October 31, 2022. Key terms of the agreement include:

• Capella acquired 100% interests in seven fully granted reservations (Kaatiala, Lappajarvi West, Lappajarvi East, Nabba, Kovela, Rakokivenmaki, and Kaldo) in south-central Finland. Subsequent to the acquisition the Company applied for the cancellations of the Kaldo reservation (effective date December 9, 2022) and the Rakokivenmaki reservation (effective date October 13, 2023).

- In consideration for the acquisition, Capella issued elementX's shareholders a total of 15.1M Capella common shares ("Transaction Shares"). The Transaction Shares were subject to a minimum 4 month hold period as per TSXV Exchange regulations, in addition to a further voluntary 3 month hold period. In addition, the original elementX shareholders will retain a 1% Net Smelter Royalty ("NSR") on any potential future metal production from the acquired portfolio.

• European Energy Metals Corp. Shareholding: The Company received 100,000 European Energy shares as detailed in the Earn-in Agreement in April, 2023; these shares were subject to a four-month hold. To the date of this report, the Company had sold these shares to fund ongoing exploration and corporate activities.

OUTLOOK

The Company expects to continue managing and advancing exploration activities on its Scandinavian portfolio of base and battery metal projects (copper-cobalt projects in Norway, lithium-REE and copper-gold projects in Finland). Joint Venture partners will continue to manage work programs at both the Savant and Domain gold projects in Canada and the Sierra Blanca gold-silver project in Argentina.

The volatility of stock markets and precious and base metals have eroded investor confidence to the extent that both advanced and junior companies have had a difficult time obtaining equity financing on reasonable terms. The Company is currently evaluating all financing options available to the Company at both the corporate and project level. The Company is seeking additional equity funding or alternative financing options to fund its ongoing exploration activities and to meet its current and ongoing general and administrative costs. The Company cannot guarantee it will be successful in raising additional funding or securing alternative financing options.

EXPLORATION ASSETS AND ACTIVITIES

SCANDINAVIAN PROJECTS

The Company's current focus is on the advancement of a portfolio of base and battery metals in Scandinavia together with three precious metals Joint Venture projects in Canada and Argentina.

Exploration Projects

Northern Finland Gold-Copper Project (Capella Initial 70% Interest)

Capella´s Northern Finland gold-copper project (formerly known as Aakenus-Katajavaara) is located within the highly prospective Central Lapland Greenstone Belt ("CLGB"). The project area lies immediately adjacent to the to the productive Sirkka Thrust Zone, a regional structural corridor within the CLGB which is associated with numerous occurrences of both gold and base metals.

A total of six exploration permit licence applications ("EPL's") were submitted prior to the expiry of the original 200 sq. km Aakenus-Katajavaara reservation on December 21, 2022. The EPL´s were submitted over priority gold-copper target areas defined from both the Company´s high-resolution drone magnetic survey (completed in April 2022) and historical geological / geochemical data acquired from the Finnish Geological Survey ("GTK").

Five of the EPL´s were formally granted on May 26, 2023, these being:

9 of 30

• Killero E (Priority 1) - former Anglo American PLC1 project with significant copper-gold Base of Till ("BoT") geochemical anomalies but never drill tested. A major NE-trending fault zone is also evident cross-cutting the copper-gold anomaly from Capella's high resolution drone magnetic data.
• Saattopora W (Priority 1) - interpreted W-NW extensions to Outokumpu Oy's former Saattopora copper- gold mining operation
• Keisunselka - interpreted high-grade gold hosted in deformed banded mafic volcanic target
• Jolhikko - gold and base metal targets in complex deformation zone
• Katajavaara - interpreted SE extension to the former Saattopora copper-gold mining operation

An additional EPL - Killero W - remains in process and covers a second anomalous area with exceptional copper-gold values from historical BoT sampling by AngloAmerican PLC but never drilled.

As winter conditions are preferred for drilling in this area, the Company currently expects the first round of scout drilling to begin at Killero E in Q1, 2024.

Capella will retain a 70% interest in Cullen Finland Oy (the local owner of the Northern Finland Au-Cu and Perho projects) in return for a USD250,000 investment in exploration by September 2023, and staged cash payments to Cullen totalling USD225,000 over a three-year period. Capella may subsequently increase its interest in Cullen Finland Oy by an additional 10% (for a total 80% interest) by investing an additional USD 750,000 in exploration over a further two-and-a-half years.

The Company made its first anniversary cash payment of USD50,000 (C$67,715) to Cullen on November 10, 2022 as required under the signed letter of intent for the acquisition of the Northern Finland gold-copper projects. The second anniversary option payment to Cullen of USD75,000 is due on or around October 31, 2023.

Central Finland Li-REEPortfolio (Capella 100%; European Energy Metals Earn-In to 80%)

On March 20, 2023, Capella announced that it had entered into a Definitive Earn-In Agreement with Hilo Mining Ltd. (TSXV: HILO)("Hilo") in which Hilo may earn in to an 80% interest in a portfolio of five Li-REE pegmatite reservations owned by Capella in central Finland. The five reservations cover 2,300 square kilometers and target spodumene-bearing pegmatite complexes within the Järvi-Pohjanmaa and Seinäjoki lithium-permissive tracts as defined by the Geological Survey of Finland. Four of the reservations (Nabba, Lappajärvi W, Lappajärvi E, and Kaatiala) lie immediately adjacent to, and to the south of, Keliber Oy's spodumene mine development project in the Kaustinen district. Hilo announced a Corporate name change to European Energy Metals Corp. (TSXV: FIN)(¨FIN") effective April 25, 2023.

The Earn-In Agreement requires FIN to invest a minimum CAD 2,500,000 in exploration expenditures and make total cash (CAD 450,000) and common share (2,000,000) payments to Capella within a 4 year period (further details given in Corporate Developments section). TSXV Exchange approval for the original Capella-Hilo transaction was received on April 6, 2023.

Field teams were mobilized to the Central Finland Li-REE portfolio in June, 2023, with systematic exploration having been undertaken on the northernmost Nabba and Lappajarvi reservations over the northern 2023 summer. Assays from sampling programs are currently pending.

Capella´s acquisition of the Central Finland Li-REE portfolio from private group elementX Finland Oy ("elementX") was announced on October 6, 2022. TSXV Exchange approval for the elementX transaction was announced on October 31, 2022. Two of the original seven reservations acquired from elementX (Kaldo & Rakokivenmaki) were subsequently cancelled by the Company as they contain non-core targets with respect to the portfolios focus on Li-REE pegmatites.

The acquired subsidiary elementX had nil fair value of net assets at the effective date of acquisition being October 31, 2022. The Company will account for the remaining reservations acquired as one project known as Project- Eurolithium due to their geographical proximity.

During the period, the Company also changed the name of the acquired subsidiary from ElementX Finland Oy to Eurothium Oy.

10 of 30