Montero Mining and Exploration Ltd. — Share Issue/Capital Change 2025

Apr 16, 2025

FORM 51-102F3
MATERIAL CHANGE REPORT

Item 1 Name and Address of Company
Montero Mining and Exploration Ltd. (the "Company" or "Montero")
750 West Pender Street, Suite 401
Vancouver, BC Canada V6C 2T7

Item 2 Date of Material Change
April 16, 2025

Item 3 News Release
The news release announcing the material change described herein was disseminated through the news dissemination services of GlobeNewswire on April 16, 2025.

Item 4 Summary of Material Change
On April 16, 2025, the Company announced that it has finalized its planned uses of the net proceeds received from its settlement with the United Republic of Tanzania to resolve the dispute over the expropriation of its Wigu Hill rare earth element project (the "Settlement").

The Company also provided notice that it intends to complete a consolidation (the "Consolidation") of its common shares (the "Common Shares") on the basis of six (6) pre-Consolidation Common Shares for one (1) post-Consolidation Common Share.

The Company is seeking shareholder approval to distribute approximately C$15 million to shareholders through a reduction in stated capital, consisting of a cash distribution of C$0.30 per Common Share on a pre-Consolidation basis or C$1.80 on a post-Consolidation basis.

Item 5 Full Description of Material Change

5.1 Full Description of Material Change
On April 16, 2025, the Company announced that it has finalized its planned uses of the net proceeds received from its Settlement with the United Republic of Tanzania to resolve the dispute over the expropriation of its Wigu Hill rare earth element project.

The Company also provided notice that it intends to complete a Consolidation of its Common Shares on the basis of six (6) pre-Consolidation Common Shares for one (1) post-Consolidation Common Share. As of the date hereof, there are 50,122,975 Common Shares issued and outstanding. It is expected that the Common Shares reflecting the Consolidation will commence trading on the TSXV on or around May 5, 2025. On a post-Consolidation basis, the Company shall have approximately 8,353,829 Common Shares issued and outstanding.

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The Company is also seeking shareholder approval to distribute approximately C$15 million to shareholders through a reduction in stated capital (the “Distribution”), consisting of a cash distribution of C$0.30 per Common Share on a pre-Consolidation basis or C$1.80 on a post-Consolidation basis.

Shareholders will be asked to approve the Distribution at a special meeting of shareholders to be held on June 11, 2025 (the “Meeting”). Further details on the Distribution will be included in the management information circular of the Company pertaining to the Meeting and which is expected to be mailed to Shareholders and made available on the Company’s issuer profile on SEDAR+ at www.sedarplus.ca on or around May 21, 2025. Approval of the Distribution will require the approval by at least two-thirds of the votes cast at the Meeting. The board of directors of the Company is unanimously recommending that Shareholders vote in favour of the Distribution. Completion of the Distribution is subject to certain conditions including but not limited to the receipt of all necessary shareholder and regulatory approvals including the approval of the TSX Venture Exchange (the “TSXV”).

The Distribution is expected to be completed following the completion of the Consolidation, accordingly, the cash distribution on a per Common Share basis will be adjusted to approximately C$1.80 per Common Share on a post-Consolidation basis based on the issued and outstanding Common Shares as at the date thereof.

No fractional Common Shares will be issued as a result of the Consolidation. Any fractional interest in Common Shares that is less than 0.5 of a Common Share resulting from the Consolidation will be rounded down to the nearest whole Common Share, and any fractional interest in Common Shares that is equal to or greater than 0.5 of a Common Share will be rounded up to the nearest whole Common Share.

Registered shareholders will receive a letter of transmittal from the Company’s transfer agent, Odyssey Trust Company, providing instructions on how to exchange their share certificates representing pre-Consolidation Common Shares for new share certificates or Direct Registration Advice (DRS) representing post-Consolidation common shares to which they are entitled as a result of the Consolidation. No action is required by non-registered shareholders (shareholders who hold their Common Shares through an intermediary) to affect the Consolidation.

The exercise or conversion price of, and the number of Common Shares issuable under, any convertible securities of the Company will be proportionately adjusted upon the completion of the Consolidation.

Settlement with Tanzania and Cash Position

On November 20, 2024, Montero announced that it had reached a US$27,000,000 settlement with the United Republic of Tanzania to resolve the dispute over the expropriation of its Wigu Hill rare earth element project. As part of this Settlement, the Company received an initial US$12,000,000 payment on November 20, 2024, followed by a second payment of US$8,000,000 on January 31, 2025. The final payment of US$7,000,000 was received on March 4, 2025, completing the settlement.

Following these payments, Montero now holds approximately C$18,400,000 in cash, net of litigation funding, legal fees, expenses, and current liabilities. The funds are currently kept in a high-interest bank account, and the Company is maintaining minimal general and administrative expenses to preserve its cash position.

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The Company completed a comprehensive strategic review, with the support of an independent financial advisor, Cairn Merchant Partners LP, to explore opportunities from maximizing shareholder value. The board of directors has determined the Distribution is in the best interests of Shareholders. The Company anticipates retaining over C$3,400,000 of funds following the Distribution which is expected to be used to advance its mineral exploration project in northern Chile and for general corporate and working capital purposes. These shall be kept to a minimum as has been customary in previous years.

5.2 Disclosure for Restructuring Transactions

Not applicable.

Item 6 Reliance on Subsection 7.1(2) of National Instrument 51-102

Not applicable.

Item 7 Omitted Information

Not applicable.

Item 8 Executive Officer

Dr. Tony Harwood, President and Chief Executive Officer
Telephone: (604) 428-7050

Item 9 Date of Report

April 16, 2025