THUNDER MOUNTAIN GOLD INC.

11770 W. President Drive, Ste. F

Boise, Idaho 83713

MFD Investment Holdings SA

c/o Badertscher Rechtsanwälte AG,

Grafenauweg 6, 6302 Zug, Switzerland

Attention: Mr. Antonio Maragakis

OPTION AGREEMENT

Re: Option to earn an undivided 10% interest in THMG's South Mountain Mine

Dear Mr. Maragakis:

Further to our recent negotiations regarding the above referenced matter, this Letter will serve to outline the terms of the agreement between THMG Mountain Gold Inc. ("THMG") and MFD Investment Holdings SA. ("MFD").

WHEREAS:

A. THMG's wholly owned U.S. subsidiary, Thunder Mountain Resources Inc. ("TMR"), and / or South Mountain Mines Inc. ("SMM") (collectively TMR and SMM are referred to as "THMG U.S.") has title to the South Mountain Mine (as described herein) in respect of a mineral exploration project known as the "South Mountain Project" or the ("Project") located in Owyhee County, Idaho, USA, as more particularly described in Schedule A attached to this Agreement.

B. THMG grants an option to purchase an interest in its South Mountain Project to MFD pursuant to which MFD shall have the right, but not the obligation, to complete certain requirements in return for the acquisition of a 10% interest in the Project.

C. This Agreement sets out the terms and conditions applicable to the Option (as defined below).

NOW THEREFORE THIS AGREEMENT WITNESSETH THAT, in consideration of the premises and the mutual covenants herein contained, the Parties agree as follows:

1. INTERPRETATION

The following terms shall be defined as follows for the purposes of this Agreement:  

a) "Affiliate" means, in relation to a Party or corporation, any corporation, all of the voting securities and any other ownership interests of which, are owned directly or indirectly by (i) such Party (ii) or any one or more corporations specified in this definition.

b) "Agreement" means this option agreement and the schedules attached hereto, as the same may be amended or replaced from time to time.

c) "Authority" means any local, municipal, regional, provincial, territorial, national or supranational government or agency, authority, department, inspectorate, ministry or minister, official court or tribunal or regulatory body which has jurisdiction over matters affecting the Prospecting License Area or the Project or any of the Parties.

d) "Authorizations" any consent, authorization, registration, filing, lodgement, notification, agreement, certificate, commission, lease, license, permit, approval or exemption from, by or with any Authority as regards the Project.

e) "Business Day" has the meaning given to it in Section 20.

f) "Confidential Information" means, as regards a Party, all information in whatever form (including, without limitation, in written, oral, visual or electronic form, or on tape or disk) relating to that Party's business, operations, affairs or financial condition and/or the same in respect of the Project.

g) "Earned Interest" means the 10% legal and beneficial interest in the Project as set out in section 7.

h) "Effective Date" has the meaning set out in section 3(a).

i) "Encumbrance" means any interest or equity of any person (including, without limitation, any royalty, stream or other similar right or interest, or right to acquire, option or right of pre-emption) or any mortgage, charge (fixed or floating), pledge, lien, assignment, hypothecation, security interest of any kind, howsoever created or arising, title retention or any other security agreement or arrangement, including any contingent liability under any guarantee or indemnity.

j) "Expenditures" means all costs including all reasonable payments, expenses, obligations and liabilities of whatsoever kind or nature made or incurred, directly by MFD which relate directly to the evaluation and development of the Project or any portion thereof, but including, without limiting the generality of the foregoing, monies expended to complete a mineral resource estimate, Preliminary Economic Assessment or other technical studies and advisory services. Expenditures shall include all necessary costs, such as, travel and third-party consultant fees to the extent that THMG has not re-imbursed MFD.

k) "Hazardous Substances" has the meaning given to it in section 4(m).

l) "Land and Holding Costs" means an amount that becomes due and payable for (i) annual ground rent (section 23) and (ii) the annual mineral right fee (section 24), in each case, at the prescribed rates and in respect of an annual period commencing after execution of the Agreement and before the exercise of the Option hereunder. 

m) "Laws" means all federal, state, provincial, regional, territorial, municipal or local statutes, regulations and bylaws applicable to the Parties hereto or to the Project or to any activities thereon, including all orders, notices, rules, decisions, codes, guidelines, policies, directions, permits, approvals, licenses and similar authorizations issued, rendered or imposed by any level of government including any ministry, department or administrative or regulatory agency or authority.

n) "Manager" means the Party responsible for the day-to-day management of the Project and execution of the Project in accordance with the responsibilities of the Manager provided for in this Agreement and as determined by the Management Committee.

o) "Non-Disclosing Party" has the meaning given to it in section 15.

p) "Notice" has the meaning given to it in section 17.

q) "NSR" means a net smelter return royalty as set out in Schedule "B".

r) "Option" has the meaning given to it in section 6.

s) "Party" means THMG. THMG U.S. or MFD, and "Parties" means, collectively, THMG, THMG U.S. and MFD.

t) "Preliminary Authorizations" has the meaning given to it in section 3(a).

u) "Preliminary Economic Assessment or PEA" means the analysis completed to evaluate the potential economic viability of the Project completed in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects.

v) "Project" means the South Mountain, South Mountain Mine as described in Schedule "A" to this Agreement, and as modified and amended from time to time in accordance with this Agreement and, includes all exploration, prospecting and mining rights attached to such lands.

w) "Relevant Affiliate" means any Affiliate of a Party which holds or will hold interests, rights, obligations or titles on behalf of a Party as regards to the Project.

x) "Representatives" mean a Party's, or any of such Party's Affiliates', directors, officers, employees, consultants, agents or professional advisers.

y) "Termination Event" has the meaning given to it in section 11.

z) "Termination Notice" has the meaning given to it in section 11.

aa) "Third Party" means any person who is not a Party to this Agreement, or an Affiliate controlled by such Party.

bb) "Transfer" means sell, grant, assign, encumber, pledge or otherwise commit or dispose of.

cc) "TSXV" means the TSX Venture Exchange and includes any replacement or successor stock exchange.

dd) "Work Costs" means all costs including all reasonable payments, expenses, obligations and liabilities of whatsoever kind or nature made or incurred, directly by the Manager which relate directly to the exploration, evaluation, development and operation of the Project or any portion thereof, but including, without limiting the generality of the foregoing, monies expended:

a. to determine the existence, location, extent or quality of a mineral resource within the Project;

b. to carry out any survey or do any geophysical, geochemical or geological work or drilling, assaying, testing or bulk sampling within the Project;

c. to pay for all proper taxes, fees, charges, rentals paid to governmental authorities related to the Project; and

d. to pay the fees, wages, salaries, travelling expenses and fringe benefits of persons engaged in work in respect of or for the benefit of the Project or any portion thereof and in paying for the food, lodging and other reasonable needs of such persons.

Any reference in this Agreement to gender shall include all genders and words importing the singular number only shall include the plural and vice versa.

2. THE PROJECT

This Agreement, including the Option (as defined below) granted hereunder, shall apply to the mineral rights of the Project, set out in Schedule A hereto, and shall include any renewals, extensions, replacements  or substitutions thereof and any other form of successor or substitute title thereto or tenure derived therefrom and any rights, licenses, claims, leases or other form of mineral tenure which may replace the same, and any and all surface, water, access and other non-mineral rights of and to any land within the boundaries of such mineral rights or claims including surface rights held in fee or under lease, license, easement, right of way or other rights of any kind and all renewals, extensions and amendments thereof or substitutions therefor.

3. PRELIMINARY MATTERS

a) This section 3, and sections 4, 5, 9 to 26, inclusive, of this Agreement come into effect immediately. Subject thereto, the remainder of the Agreement and the schedule for making any payments pursuant to section 7 come into effect subject to the following conditions:  all Authorizations have been received; approval of this Agreement by the TSXV;  approval of this Agreement by the board of THMG and MFD respectively, as evidenced by a signed written consent resolutions approving this Agreement; (collectively, the "Preliminary Authorizations") and that such approvals are obtained on conditions acceptable to all Parties or otherwise waived by the Parties in writing. The date upon which all Preliminary Authorizations have been obtained and Parties confirmed in writing that any conditions thereof are acceptable in accordance with section 3 shall hereinafter be referred to as the "Effective Date".

b) Each Party shall use its best endeavours and do all things and sign all documents required to ensure that the Preliminary Authorizations are obtained, and shall bear its own expenses.

c) Either Party shall give notice to the other Party that the conditions of a Preliminary Authorization (if any) are acceptable, or unacceptable, to it within ten (10) Business Days after receiving a notice of the grant of the Preliminary Authorizations.

4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF MFD

MFD represents, warrants and covenants to THMG that:

a) MFD is a corporation incorporated pursuant to the laws of Switzerland;

b) MFD has the full power and capacity to enter into this Agreement and to carry out all the terms hereof;

c) MFD has the full power, capacity and authority to own its rights and interests in the Project, to subsequently acquire and hold an equity interest in, and in each case, to enter into or otherwise agree to be bound by and to carry out all the terms of this Agreement;

d) MFD shall engage a qualified consultant with the full power and capacity to prepare 43-101 compliant reports and disclosures for the Project. The engagement of such consultant shall be subject to pre-approval by THMG.

5. REPRESENTATIONS AND WARRANTIES BY THMG

THMG represents and warrants to MFD that:

a) THMG is organized under the laws of the state of Nevada, USA and is listed on the TSXV, with the symbol "THM", and on the OTCQB with the symbol "THMG";

b) THMG has the full power and capacity to enter into this Agreement and to carry out all the terms hereof, subject to the Underlying Royalty Agreement attached in Schedule B.

c) THMG U.S. has full power and capacity to acquire and to hold its interest in the Project;

d) THMG U.S. has not directly or indirectly caused, permitted or allowed any contaminants, pollutants, wastes or toxic substances (collectively "Hazardous Substances") to be released, discharged, placed, escaped, leached or disposed of on, into, under or through the lands (including watercourses, improvements thereon and contents thereof) comprising the Project or the Prospecting License Area or nearby areas and, so far as THMG is aware, no Hazardous Substances or underground storage tanks are contained, harbored or otherwise present in or upon such lands (including watercourses, improvements thereon and contents thereof) or nearby areas;

e) There are no actions, suits, investigations or proceedings before any court, arbitrator, administrative agency or other tribunal or governmental authority, whether current, pending or threatened, which directly or indirectly relate to or affect the Project (including the ownership and existing or past uses thereof and the compliance with Laws of the lands comprising the Project nor is THMG aware of any facts which would lead THMG or THMG U.S. to suspect that the same might be initiated or threatened.

6. GRANT OF OPTION TO EARN INTEREST

THMG hereby gives and grants to MFD the exclusive and irrevocable option (the "Option") to acquire, directly or indirectly through an Affiliate, free of all Encumbrances:

a) an undivided 10% interest in the Project (the "Earned Interest"), by MFD incurring a total of US$1,000,000 in Expenditures before October 31^st 2025; and

b) a 0.5% Net Smelter Royalty (NSR) resulting from the sale of any rock, gravel or sand from the lands that comprise the Project.

7. EXERCISE OF OPTION AND JOINT VENTURE

a) Upon the conditions in section 7 being fulfilled, the Option shall be and shall be deemed to have been fully and properly exercised and without further action by the Parties, MFD shall have earned and shall be irrevocable entitled to the Earned Interest such that MFD will be the owner of an undivided beneficial interest in the Project equal to a 10% participating interest in the Project, free and clear of any Encumbrances, and immediately following such exercise of the Option THMG shall make or cause to be taken all actions and do or cause to be done all things  necessary to do so.

b) In the event that MFD earns the Earned Interest and the Project has not been sold or joint ventured to a third party within 7 business days of MFD having earned the Earned Interest, a joint venture shall be formed and a formal joint venture agreement (the "Joint Venture Agreement") will be prepared and executed which shall include the following terms:

The respective interest of each party at the time of the formation of the Joint Venture shall be:

 THMG U.S.: 90%, and

 MFD:  10%.

and the deemed expenditures of the parties shall be as follows:

THMG U.S.: $9,000,000
MFD: $1,000,000.

c) The Joint Venture Agreement shall include the following terms:

(i) At the time of formation of the Joint Venture, THMG shall be the Operator of the Joint Venture and all decisions regarding further exploration and development of the Project will be determined by a Management Committee, to include one director or officer from each of THMG or THMG US (as THMG decides in its sole discretion) and MFD who will vote in accordance with their respective interest;

(ii) exploration and development budgets will be determined and signed off by the Management Committee, at which time both parties then have one hundred and twenty (120) days to provide funds toward the Project or be diluted;

(iii) if one Party declines or fails to provide all or part of its required funding (based upon its then proportionate legal and beneficial interest), the other Party can increase its funding to the amount budgeted;

(iv) THMG shall continue to be the Operator of the Joint Venture so long as it maintains at least a 50% Participating  Interest;

(v) standard dilution will apply to the Joint Venture as follows:

Participating Contribution to Total Costs by a Party
Interest of a    = (including deemed expenditures)
Party Contribution to Total Costs by all Parties (including deemed expenditures).

(vi) upon formation of the Joint Venture any Net Smelter Royalty payments made in accordance with the Underlying Royalties shall be made to the Parties pro rata to their respective Participating Interests at the time the payment is made;

(vii) In the event that the Operator determines not to propose a project program or fails to do so within 6 months of completion of the previous project program, the non-operator can propose and operate a project program;

(viii) in the event that MFD elects not to participate or fails to fund its share of cash calls, the other party shall have the option to purchase MFD's interest for $1,000,000; and

(ix) MFD agrees to contribute up to $500,000 to maintain its initial 10% Participating Interest for the first $5,000,000 contributed by THMG U.S. to the Joint Venture by MFD engaging qualified consultants with the full power and capacity to conduct services as required. The engagement of such consultant shall be subject to pre-approval and mutual agreement of the Management Committee.

d) The Manager shall maintain proper books and records to reflect all Work Costs and Land Holding Costs incurred by the Operator and same shall be available for inspection by the non-Operator, its servants and agents, during normal business hours from time to time. The Operator shall provide copies of such books and records and any related supporting documents, at the request of non-Operator.

e) THMG and THMG U.S. are entitled to sell, option, or joint-venture the Project with a third party at the discretion of THMG. If such sale, option or joint-venture occurs once MFD has acquired its Earned Interest, MFD shall be automatically entitled to receive 10% of any cash or shares resulting from the third-party transaction. Additionally, in such events, MFD shall have the right to elect to participate in the transaction (the "Tag-Along Right") on the same terms and conditions as THMG U.S., allowing MFD to sell or transfer up to its entire interest in the Project or participate in the joint venture on a pro-rata basis. THMG and THMG U.S. shall provide MFD with written notice of any proposed transaction, including the material terms and conditions thereof. MFD shall have thirty (30) days from the date of receipt of such notice to elect to exercise its Tag-Along  Right by providing written notice to THMG. If MFD chooses to exercise this right, it will participate in the transaction on the same terms as THMG or THMG U.S., in addition to its entitlement under the exercised Option. 

f) If MFD has not completed all the Expenditures to acquire its Earned Interest when it receives notice of the proposed transaction, it may:

(i) pay to THMG in cash the difference between $1,000,000 and the Expenditures within 25 days of the notice to acquire the Earned Interest and the Tag-Along Right, or

(ii) Subject to agreement between Parties, transfer the services corresponding to the difference of the unspent portion of the $1,000,000 to a new owner.

For the purposes of the agreement with the third-party, THMG and MFD shall be deemed to be one party. THMG and MFD agree that THMG shall act as MFD's agent in respect of the agreement with the third-party, including the receipt of any Notices thereunder, save and except with respect to the receipt of any payments or share issuances thereunder.

8. BONUS SHARES

Subject to approval of the TSXV, THMG shall issue to MFD common shares of THMG based on results as follows:

a) 1,000,000 common shares upon THMG reaching a $50,000,000 market cap for at least 30  consecutive trading days; and another

b) 2,000,000 common shares upon THMG reaching a $100,000,000 market cap for at least 30 consecutive trading days; and another

c) 3,000,000 shares upon THMG reaching a $200,000,000 market cap for at least 30 consecutive trading days.

9. TRANSFER OF INTEREST BY MFD

a) MFD shall not:

(i) create, incur, assume or suffer to exist, or permit any of its Affiliates to create, incur, assume or suffer to exist, any Encumbrance on any of its respective interest in the Project or the assets of the Project; and

(ii) sell, assign, Transfer or otherwise dispose of its interest in the Project or the assets of the Project except as specifically contemplated in this Agreement, without the prior written consent of THMG, such consent not to be unreasonably withheld.

b) MFD may at any time, either before or after the exercise of the Option, elect to abandon the Project by giving notice to THMG of such intention. 

10. TERMINATION EVENTS

a) Either Party shall have the right to terminate this Agreement at any time by serving notice in writing to the other Party (a "Termination Notice") on the occurrence of any one of the following events (each, a "Termination Event"):

(i) in the event that MFD fails to pay, fund or invest the total amount required to exercise the Option and acquire the Earned Equity Interest on or before October 31^st, 2025; or

(ii) if a Party retains zero interest in the Project howsoever held.

b) In the event the Project is uneconomic, with an Internal Rate of Return of less than 10%, THMG may buyout MFD interest for 150% (clawback) with 30-day notice. 

c) Unless otherwise stated therein, the date of termination shall be the date of the Termination Notice.

d) Notwithstanding the termination of this Agreement:

(i) each Party shall remain responsible for any obligations or liabilities owed at or arising out of circumstances and transactions occurring prior to the date of termination until satisfied pursuant to the terms of this Agreement as though this Agreement had not been terminated; and

(ii) the provisions contained in sections 1 and 10 to 26 shall survive termination.

11. ARBITRATION

All disputes which arise between the Parties hereto in connection with this Agreement which, in the opinion of either party, cannot be resolved informally between them, shall be settled by arbitration pursuant to the provisions of the laws of the state of Idaho, or its successor legislation, except as otherwise provided in this section.  Any Party desiring arbitration shall make a written demand for the same and within thirty (30) days after such written demand is received by the other party, the Parties hereto shall agree upon and appoint a single arbitrator. In the event the Parties shall fail to agree upon and appoint a single arbitrator within the time period set forth herein, each Party shall within seven (7) days thereafter designate an arbitrator and both arbitrators shall within thirty (30) days after their designation, jointly designate a third arbitrator satisfactory to them who shall be chairman of the arbitration panel.  If a Party fails to appoint an arbitrator or the arbitrators designated by the Parties are unable to agree upon the selection of the third arbitrator within the time periods set forth above, such arbitrator shall be appointed by the Fourth District Court in Idaho, or another mutually agreed arbitration institution, in accordance with its rules for the appointment of arbitrators. The expenses of the arbitrators shall be paid as the arbitrators shall decide in the award.  The decision of the arbitrators shall be final and binding on the Parties hereto and judgment upon any award rendered may be entered in any court of competent jurisdiction.

12. CONFIDENTIALITY AND ANNOUNCEMENTS

a) The Parties shall and shall procure that their respective Affiliates shall:

(i) treat the terms, the subject matter of and the negotiations relating to, this Agreement and all other Confidential Information that they receive (whether before, on or after the date of this Agreement) in respect of each other and the Project as confidential at all times;

(ii) not disclose any Confidential Information to any professional adviser, Affiliate or to any Third Party, except as expressly permitted in this Agreement; and

(iii) only use Confidential Information provided to it for purposes of exercising or performing its rights and obligations under this Agreement.

b) Notwithstanding any other provision of this Agreement, the Parties shall not be obliged to keep confidential or to restrict its use of any information that:

(i) is or becomes generally available to the public (other than as a result of its disclosure in breach of this Agreement); or

(ii) was, is, or becomes available to the receiving Party on a non-confidential basis from a Third Party who, to the receiving Party's knowledge, is not bound by a confidentiality agreement with the disclosing Party or otherwise prohibited from disclosing the information to the receiving Party and where such Third Party has not received the information as a direct or indirect result of a breach of any obligation of confidentiality.

c) Either Party may disclose Confidential Information:

(i) to those of its employees, officers, consultants, representatives or professional advisers (or to those of any of its Affiliates) who need to know such information to enable them to advise on or exercise its rights or perform its obligations under this Agreement, or the Transactions contemplated hereunder provided that the Party making the disclosure:

(A) informs the recipient of the confidential nature of such information before disclosure and procures that each recipient shall, in relation to any such information disclosed, comply with the obligations set out in this clause as if they were that Party; and

(B) shall, at all times, be liable for the failure of its recipients to comply with the obligations of confidentiality set out in this clause; or

(ii) with the prior written consent of the Party to which the Confidential Information relates; or

(iii) to the extent that the disclosure is required:

(A) by the laws of any jurisdiction to which that Party is subject;

(B) by the rules and regulations of any securities exchange on which that Party (or an Affiliate of that Party) is quoted;

(C) by an order of any court of competent jurisdiction, or any Authority of competent jurisdiction; or

(D) to make any filing with, or obtain any authorisation from, any Authority or securities exchange of competent jurisdiction; or

(E) to the extent required to enable a Party to enforce the provisions of this Agreement or for the purposes of defending any judicial proceedings brought against that Party.

d) Where any disclosure of Confidential Information is required pursuant to Section 12(c)(iii), the Party making the disclosure shall:

(i) to the extent legally permissible to do so:

(A) give the other Party (the "Non-Disclosing Party") prior written notice of such disclosure, which shall include the full circumstances of the disclosure and the information that will be disclosed;

(B) take all such steps as are reasonable and practicable in the circumstances to agree the timing and contents of such disclosure with the Non-Disclosing Party before making the disclosure;

(C) to the extent reasonable and practicable in the circumstances, consult with the Non-Disclosing Party as to possible steps to avoid or limit disclosure and take those steps where they would not result in significant adverse consequences to the disclosing Party;

(D) ensure that only the minimum Confidential Information required to comply with the applicable law, order or requirement is disclosed; and

(E) to the extent reasonable and practicable in the circumstances, gain assurances as to confidentiality from the body to whom the information is to be disclosed.

So far as legally permissible to do so from the date of this Agreement and for so long as it remains in force between the Parties, the Parties shall not make or permit any person to make any public announcement, communication or circular in respect of the Agreement or the Project without receiving the prior approval of the other, which shall not be unreasonably withheld or delayed. The Parties shall agree the form of announcement so as to allow for its release immediately following the execution of this Agreement.

13. FORCE MAJEURE

Notwithstanding any term in this Agreement, if a Party hereto is at any time delayed in carrying out any action under this Agreement or its performance is prevented by any cause, whether foreseeable or unforeseeable, beyond its reasonable control, including, without limitation, labour disputes (however arising and whether or not employee demands are reasonable or within the power of the Party to grant); acts of God; epidemics, pandemics (including without limitation, COVID-19); laws, regulations, orders, proclamations, instructions or requests of any government or governmental entity; judgments or orders of any court; inability to obtain on reasonably acceptable terms any public or private licence, permit or other authorization, curtailment or suspension of activities to remedy or avoid an actual or alleged, present or prospective violation of federal, provincial, or local environmental standards; acts of war or conditions arising out of or attributable to war, whether declared or undeclared; riot, civil strike, insurrection or rebellion; fire, explosion, earthquake, storm, flood, sink holes, drought or other adverse weather condition; delay or failure by suppliers or transporters of materials, parts, supplies, services, or equipment or by contractors' or subcontractors' shortage of, or inability to obtain, labour, transportation, materials, equipment, supplies, utilities or services; accidents; breakdown of equipment, machinery or facilities; or any other cause where similar or dissimilar to the foregoing, then the obligations of such Party shall be suspended to the extent and for the period of any such delay, and the period of any such delay will be excluded in computing, and will extend, the time within which such Party may exercise its rights and/or perform its obligations under this Agreement. The affected Party shall promptly give notice to the other Party of the suspension of performance, stating therein the nature of the suspension, the reasons therefor, and the expected duration thereof.  The affected Party shall resume performance as soon as reasonably possible.

14. NOTICES

Any notice, commitment, election, consent or any communication required or permitted to be given hereunder by either Party hereto to the other party, in any capacity (hereinafter called a "Notice") shall be in writing and shall be deemed to have been well and sufficiently given if mailed by prepaid registered mail return receipt requested, telefaxed, emailed or delivered, to the address of such other Party hereinafter set forth:

If to THMG:

Thunder Mountain Gold Inc.

11770 W. President Drive, Ste. F

Boise, ID  83713

Attention:  Eric T. Jones

Email: [email protected]

If to MFD:

MFD Investment Holdings SA

c/o Badertscher Rechtsanwälte AG,

Grafenauweg 6, 6302 Zug, Switzerland

Attention:  Antonios Maragakis

Email: [email protected]

or to such substitute address as such Party may from time to time direct in writing, and any such Notice shall be deemed to have been received, if mailed, on the date noted on the return receipt, if telefaxed or emailed, on the first Business Day after the date of transmission, and if delivered, upon the day of delivery.

15. FURTHER ASSURANCES

Each Party hereto shall promptly do and provide all acts and things and shall promptly execute and deliver such deeds, bills of sale, assignments, endorsements and instruments and evidences of transfer and other documents and shall give such further assurances as shall be necessary or appropriate in connection with the performance of this Agreement.

16. AMENDMENTS

No alteration, amendment, modification or interpretation of any provision of this Agreement shall be binding unless in writing and executed by each of the Parties hereto.

17. BUSINESS DAYS

In the event that any date on or by which any payment is required to be made or any action is required to be taken hereunder by any of the Parties hereto is not a "Business Day", being a day other than a Saturday, Sunday or a day on which banks in Boise, Idaho are generally authorized or obligated by law to close, such payment shall be required to be made or such action shall be required to be taken on the next succeeding day which is a Business Day.

18. SCHEDULES

All Schedules attached to this Agreement are deemed to form part of this Agreement.

19. COUNTERPARTS AND HEADINGS

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument and may be delivered by facsimile or by any other electronic means or formats, including in PDF by email or by DocuSign. Section headings and subheadings are inserted for convenience only and are not to be taken into account in interpreting this Agreement.

20. CURRENCY

Unless otherwise indicated, all dollar amounts ("$") referred to in this Agreement are in lawful money of United States of America.

21. GOVERNING LAW

This Agreement shall be governed by and interpreted and construed in accordance with the laws of the state of Idaho. 

22. TIME OF ESSENCE

Time shall be of the essence of this Agreement.

23. ENUREMENT

This Agreement shall enure to and be binding upon the Parties hereto and their respective successors and assigns.

24. ENTIRE AGREEMENT

This Agreement contains the entire understanding between the Parties hereto dealing with the subject matter hereof and supersedes all negotiations, correspondence, letters of intent, letters of agreement, and prior agreements or understandings relating thereto.

25. RELATIONSHIP OP PARTIES

Nothing contained herein, nor the holding of any interest acquired hereunder, shall be deemed to constitute THMG, or MFD to be the partner, agent or legal representative of the other or to create any fiduciary relationship between them for any purpose whatsoever.

26. SEVERABILITY/LEGALITY

If one or more provisions of this Agreement shall be invalid, illegal or unenforceable in any respect under any applicable Law, the validity, legality and enforceability of the remaining terms or provisions hereof shall not be affected or impaired by reason thereof.

Agreement with the terms recited herein is hereby acknowledged this 14^th day of January, 2025

MFD INVESTMENT HOLDINGS SA

Per:

__________________________________

Antonios Maragakis

Director

THUNDER MOUNTAIN GOLD INC.

Per:

____________________________________________________________________

Eric T. Jones - President and Chief Executive

Thunder Mountain Gold Inc.

Schedule A

Thunder Mountain Gold Inc.

SOUTH MOUNTAIN MINES PROPERTY DESCRIPTION AND LOCATION

The South Mountain property is located in southwestern Idaho in Owyhee County, approximately 70 air miles SW of Boise, Idaho and approximately 24 miles SE of Jordan Valley, Oregon.  The Property is situated wholly within Idaho approximately six miles east of the Idaho-Oregon border (Latitude 42^○ 44' 41.65" N, Longitude 116^○ 55' 13.48" W).

The Property consists of:

• 18 patented mining claims encompassing approximately 346 acres (TABLE 1),
• 1 Fee Simple / Private land parcel of approximately 36 acres (not listed below), contiguous with the Boulder #2 patented claim,
• 21 unpatented mining claims covering approximately 290 acres owned by THMG (Table 2), and
• 489 acres of leased private land at the Mine (Table 3), and
  • 1,000 + acres in discussion with Lequerica Brothers, same terms as others, and
• 360 acres of private land (millsite), with easement from the County Road, located 1 mile past the Williams Creek Road, just north off of the County Road; and

The patented and unpatented claims are wholly owned by THMG through SMMI Lease/Purchase of the real property through subsidiary OGT LLC (settlement from previous partner in OGT LLC).  All surface rights are included with the patented and leased private land.  The unpatented claims require annual holding fees to be paid to the Bureau of Land Management (BLM), plus filings with Owhyee County.  Any surface disturbance on land managed by the BLM will require approval through the BLM's regulations. 

TABLE 1.  Patented Claims Included in the South Mountain Project.

Table 2.      Unpatented Claims Included in the South Mountain Project.

Annual payments and acreage for the leases for the South Mountain Project are listed in Table 3.  The lease agreements include a 3% net smelter royalty, with the exception of the OGT LLC Lease/Purchase.  This has a 3% Net Returns Royalty, capped at $5M, payable at a rate of 5% Net Profits from the mining.

Table 3.    Annual Expenses for Leases and Claims at the South Mountain Project

Millsite Property:  360 Acres +/-

Description:

Township 7 South, Range 5 West Boise Meridian, Owyhee County Idaho

Section 14:  Southwest Quarter of the Northeast Quarter, Southeast Quarter

Section 23:  Northeast Quarter

Purchased from Morgan Ranches in 2013

Schedule B

Royalty Agreements

1. Raven Royalty Agreement

2. South Mountain Mineral Property Gross Rock Royalty Agreement

3. South Mountain Mineral Property NSR Agreement

AMENDMENT NO. 1 TO OPTION AGREEMENT

THIS AMENDMENT NO. 1 (the "Amendment") is made and entered into as of September 5, 2025, by and between:

THUNDER MOUNTAIN GOLD INC., 11770 W. President Drive, Ste. F, Boise, Idaho 83713 ("THMG")

and

MFD Investment Holdings SA, c/o Badertscher Rechtsanwälte AG, Grafenauweg 6, 6302, Zug, Switzerland ("MFD")

each a "Party" and collectively the "Parties."

WHEREAS:

A. THMG and MFD are parties to the Option Agreement dated 17^th of January 2025 (the "Option Agreement"), pursuant to which MFD may earn an interest in the South Mountain Project (the "Project") on the terms and conditions set forth therein;

B. The Parties desire to amend the Option Agreement to extend certain timelines and incorporate additional terms relating to small-scale production rights, revenue sharing, expenditure approvals, and the overall life-of-mine (LoM) parameters, all on the terms and conditions set forth in this Amendment; and

C. The Parties desire that all other terms and provisions of the Agreement remain in full force and effect except as expressly modified herein.

NOW THEREFORE THIS AMENDMENT TO OPTION AGREEMENT WITNESSETH THAT, in consideration of the mutual covenants and agreements contained herein, the Parties agree as follows:

1. INTERPRETATION

1.1 Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Option Agreement.

1.2 For purposes of this Amendment:  

a) "Economic Ore" means ore from the Project capable of being mined and processed profitably under prevailing market conditions, applying mutually agreed cut-off grades, metallurgical recoveries, and processing assumptions.

b) "Life of Mine" or "LoM" means the ten (10) year period commencing on the date commercial small-scale production is first achieved under this Amendment, unless earlier terminated pursuant to the Agreement as amended.

c) "Net Proceeds (Small-Scale Production)" means gross proceeds actually received from the sale of ore, concentrate, or other mineral products produced under Section 6(c) (as added herein), less (without duplication) third-party royalties payable on production, smelting/refining/treatment and assaying charges, transportation and insurance to point of sale, sales/withholding/value-added taxes on such sale (excluding income taxes), and marketing fees actually incurred and paid to unaffiliated third parties.

d) "Payback Threshold" means an aggregate amount equal to one and one-half (1.5×) of MFD's Total Qualifying Investment.

e) "Project Area" means the same geographic scope as "the Project," being the South Mountain Project lands covered by the Option Agreement. The Parties may further define "Project Area" explicitly in the Definitive Agreement to avoid any ambiguity.

f) "Small-Scale Production" means production activities authorized under new Section 6(c) (as added herein).

g) "Total Qualifying Investment" means all Expenditures and other mutually approved capitalized costs incurred by MFD under the Agreement and this Amendment that are expressly designated in writing by the Parties as qualifying toward Payback Threshold (including, without limitation, agreed exploration, permitting, development, mine rehabilitation, site infrastructure, and production start-up costs).

1.3 Amended "Expenditures": The definition of "Expenditures" in Section 1 is amended to clarify that, for the avoidance of doubt, Expenditures may include exploration, permitting, development, mine rehabilitation, site infrastructure, and production start-up activities, to the extent jointly approved in writing by the Parties.

2. EXTENSION OF TIMELINE

2.1 Section 6(a) Date Extension.

Section 6(a) of the Agreement is amended by replacing "October 31st 2025" with "October 31st 2026".

2.2 General Savings (Other Fixed Dates).

To the extent any other fixed calendar dates appear in Section 6 of the Agreement for earn-in or related milestones, each such date is hereby extended by one (1) year on the same terms and conditions. This Section 2.2 is intended as a clarifying extension and shall not be construed to introduce new milestones where none exist.

3. SMALL-SCALE PRODUCTION RIGHTS; LOM/VOLUME CAP

3.1 New Section 6(c) - Small-Scale Production.

The Agreement is amended to add the following Section 6(c):

6(c) Small-Scale Production.

Subject to obtaining and maintaining all required permits and approvals, and subject to the Operator's (as defined in the Agreement) coordination of activities to avoid material interference with ongoing exploration and development, MFD shall have the right, during the Option Period, to undertake Small-Scale Production within the Project Area.

For clarity, the ten (10) year Life of Mine period shall commence only once Small-Scale Production achieves at least eighty percent (80%) of the agreed nameplate capacity, excluding permitting and construction time. The Small-Scale Production right shall end at the earlier of (i) ten (10) years from such commencement, or (ii) cumulative extraction of 1,500,000 metric tonnes, at which point this Amendment expires and the Project reverts to the Option Agreement, with MFD holding ten percent (10%) of SMMI and a net smelter return royalty of 0.5%.

3.2 New Section 6(d) - LoM/Volume Limitation.

The Agreement is amended to add the following Section 6(d):

6(d) LoM/Volume Limitation. Small-Scale Production shall be limited to the earlier of: (i) a ten (10) year Life of Mine based on current resources; or (ii) cumulative extraction of 1,500,000 metric tonnes of Economic Ore.

3.3 Operator; Coordination.

THMG remains the Operator under the Agreement unless otherwise agreed in writing or modified under a future joint venture agreement. The Operator will schedule and coordinate activities to ensure compliance with permits and to mitigate conflicts between exploration, development, and Small-Scale Production.

4. REVENUE ALLOCATION FOR SMALL-SCALE PRODUCTION

4.1 New Section 6(e) - Allocation of Net Proceeds.

The Agreement is amended to add the following Section 6(e):

6(e) Allocation of Net Proceeds (Small-Scale Production).

Net Proceeds (Small-Scale Production) shall be allocated as follows:

i. Eighty percent (80%) to MFD and twenty percent (20%) to THMG until MFD has achieved the Payback Threshold; and thereafter

ii. Fifty percent (50%) to MFD and fifty percent (50%) to THMG for the remainder of the LoM or until the volume limit in Section 6(d) is reached, whichever is earlier.

For clarity, Net Proceeds may be negative in certain periods where deductions exceed revenues. Nothing in this Amendment obligates either Party to fund negative balances. The treatment of such negative balances, including any carry-forward mechanism, shall be further defined in the Definitive Agreement.

4.2 No Change to Third-Party Royalties. Nothing in this Amendment alters any third-party royalty obligations disclosed in the Agreement and its schedules, which continue to be borne in accordance with the Agreement.

5. JOINT DISCRETION OVER EXPENDITURES; BUDGETS

5.1 Communal Discretion.

The Parties reaffirm that Expenditures and other material Project costs during the Option Period shall be subject to mutual written approval, including any annual budgets and any material changes thereto.

5.2 Documentation.

The Operator shall maintain books and records as required by the Agreement. Upon reasonable notice, the non-Operator may review supporting documentation in accordance with the Agreement.

6. PERMITTING; COOPERATION

6.1 Permitting Support.

The Parties shall cooperate in good faith to obtain and maintain permits, licenses, authorizations, and approvals necessary for Small-Scale Production. THMG, as Operator, will lead regulatory engagement, with MFD providing reasonable technical, financial, and administrative support as mutually agreed.

7. SUCCESSORS; CONTINUITY

7.1 Binding Effect.

This Amendment shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns.

7.2 Continuity on Transfer.

If THMG or its relevant subsidiary sells, farms-out, options, or otherwise transfers any interest in the Project, THMG shall ensure that any acquirer or JV counterparty assumes the obligations in this Amendment that run with the Project interest conveyed, such that MFD's rights under Sections 3-5 of this Amendment continue in full force (or are replaced with substantially equivalent rights and benefits).

8. JV PATH; NO WAIVER OF EXISTING RIGHTS

8.1 JV.

The Agreement's provisions regarding joint venture formation and operation remain in effect and are not waived or modified except as expressly set forth herein.

8.2 No Waiver; Conflicts.

Except as expressly amended by this Amendment, all terms of the Agreement remain unmodified and in full force and effect. In the event of a conflict between this Amendment and the Agreement, the terms of this Amendment shall control with respect to the subject matter hereof. 

9. MISCELLANEOUS

9.1 Governing Law; Counterparts.

This Amendment is governed by the same governing law as the Agreement and may be executed in counterparts (including electronically), each deemed an original and all together one and the same instrument.

9.2 Further Assurances.

Each Party shall execute and deliver such further documents and take such further actions as may be reasonably necessary to give effect to this Amendment.

IN WITNESS WHEREOF, the Parties have executed this Amendment No. 1 as of the Amendment Effective Date.

MFD INVESTMENT HOLDINGS SA

THUNDER MOUNTAIN GOLD INC.

Per:

/s/  Eric T. Jones

___________________________________

Eric T. Jones - President and Chief Executive

Thunder Mountain Gold Inc.

THUNDER MOUNTAIN GOLD INC.

TSX-V:    THM OTCQB:   THMG	11770 W. President Dr., Ste. F Boise, Idaho 83713 phone: (208) 658-1037

News Release

Thunder Mountain Gold and MFD Establish Small-Scale Production
Agreement at South Mountain

THMG to operate while MFD Investment Holdings SA to fund 100%

in a non-dilutive Venture

Boise, Idaho  USA and Zug, Switzerland - September 8, 2025 - Thunder Mountain Gold, Inc. (OTCQB: THMG; TSX-V: THM) ("Thunder Mountain Gold" or the "Company") and MFD Investment Holdings SA ("MFD") have executed a small-scale production agreement (the "Agreement") for the South Mountain Project in Owyhee County, Idaho (the "Project"). Under the small-scale production Agreement, Thunder Mountain Gold will serve as operator (the "Operator"), and MFD will fund 100% of the qualifying capital required to advance to small-scale production. Following commencement of production, project revenues from small-scale production will be allocated 80% to MFD and 20% to THMG until MFD has recovered 1.5× its qualifying capital investment; thereafter revenues will be shared 50/50 until 1.5 million tonnes are mined; then all revenues and production are 100% allocated to Thunder Mountain Gold. Implementation remains subject to permitting, definitive budgets, and customary approvals. The Agreement will be implemented under the option agreement between the Company and MFD dated January 14, 2025 (as amended, the "Option Agreement"), as amended by agreement dated September 4, 2025 (the "Amendment"). Under the Option Agreement, the Company will grant to MFD the option to acquire a 10% interest in the South Mountain Project by MFD incurring an aggregate of $1.0 million in exploration expenditures on the Project by October 31, 2026 (the "Option").  Investors are referred to the Form 8-K filed concurrently for a detailed summary of the material provisions of the Option Agreement.

"Advancing selective small-scale production without issuing equity keeps our balance sheet intact, creates positive cash flow, and positions the Company to pursue resource growth. We believe this combination of non-dilutive funding, operator control, and continued exploration focus-best supports shareholder value over time." commented Eric T. Jones, President & CEO.

Strategic Rationale for Thunder Mountain Gold

• Non-dilutive pathway to potential cash flow: MFD carries the qualifying capital through initial small-scale production; no change to THMG share capital is contemplated by the Agreement.

• Operator control retained by THMG: Planning and execution remain with the Company as Operator.

• Parallel value creation: The framework allows THMG to focus on exploration and potential resource expansion while small-scale production may generate non-dilutive cash flow.

• No impact on full-scale project economics: The revenue waterfall applies only to small-scale production and does not alter the economics of the existing Option Agreement or any future full-scale development.

Principal Terms - Small-Scale Production Right

• Operator: Thunder Mountain Gold (THMG).

• Funding: MFD funds 100% of qualifying capital to achieve small-scale production.

• Term/Cap: Right ends at the earlier of 10 years or 1.5 million tonnes of cumulative economic ore.

• Revenue Allocation: 80% MFD / 20% THMG until 1.5× MFD payback on qualifying capital; 50/50 thereafter until the Term/Cap is achieved.

• Scope: Applies only to small-scale production revenues; no change to Option Agreement economics.

Option Agreement - Unchanged, with Date Extension

• Earn-in: MFD may earn 10% equity in South Mountain Mines, Inc. (SMMI) by investing US$1,000,000.

• Schedule: Earn-in deadline extended to October 31, 2026.

• Credit of Project Expenditures: Mutually approved Expenditures under the Agreement will be credited toward the US$1,000,000 threshold.

• All other Option Agreement provisions remain in full force and effect.

Disclosure Logistics and Future Clarifications

THMG's NI 43-101 requirements and MFD's non-issuer disclosures are expected to be addressed with the definitive final JV agreement. Items such as precise small-scale production area limits, definitions of "material" budget changes, and governance structures (e.g., a technical committee) may likewise be finalized at that time. The Agreement is intentionally streamlined at this stage. 

The South Mountain Project

The South Mountain Mine is a polymetallic development project containing high-grade zinc, silver, gold, and copper, and is located on private land approximately 70 miles southwest of Boise, Idaho (See Figure 1 above). The Project is on private land, permitting has been, and should remain straightforward. The Project was intermittently mined from the late from 1940s to the late 1960s, most notably by Anaconda Copper, with over 4,000 feet of underground developmental workings that that have been rehabilitated, re-engineered, and are MSHA compliant. Thunder Mountain Gold Inc. purchased and advanced the project from 2007 through Present, with expenditures into the project of approximately US$25 million. Historic test mining and processing at the Project has mostly come from high-grade Carbonate Replacement Deposits (CRD) and skarn zones that remain open at depth and along strike. According to historical smelter records, approximately 53,642 tons of mineralized material have been mined and direct shipped to the smelter, with average grades; 14.5% Zn, 10.6 o.p.t. Ag (363.42 g/t Ag), 0.058 o.p.t. Au (1.98 g/t Au), 1.4% Cu, and 2.4% Pb were realized (See SK-1300 Technical Resource Statement, and NI 43-101 Technical Report: Updated Mineral Resource Estimate for the South Mountain Project, dated December 31, 2023, and December 15, 2023, respectively. More details are available on the Thunder Mountain Gold Inc. website and at www.SEC.gov, and www.sedar.com).

Technical Data in this Release

The technical information in this news release was reviewed and approved by Tyson Forbush, C.P.G., consulting geologist with GeoTech LLC, and a "Qualified Person" as defined by the U.S. SK-1300 regulations & National Instrument 43-101 (Canada) standards. 

Regarding Thunder Mountain Gold, Inc.

Thunder Mountain Gold Inc., a junior exploration company founded in 1935, owns interests in base and precious metals projects in the western U.S. The Company's principal asset is The South Mountain Mine, a historic former Anaconda Copper Company development of zinc, silver, gold, lead, and copper, located on private and public lands in Owyhee County Idaho. Thunder Mountain Gold also owns 100% of the Trout Creek Project - a gold exploration project located along the western flank of the Shoshone Mountain Range in the Reese River Valley, adjacent to and surrounded by Nevada Gold Mines, a Barrick and Newmont Gold, Inc. joint venture. For more information on Thunder Mountain Gold, please visit the Company's website at www.Thundermountaingold.com.

Forward-Looking Statements

This press release contains forward-looking statements that are based on the beliefs of management and reflect the Company's current expectations. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative connotation thereof.  The forward-looking statements are based on certain assumptions which could change materially in the future. By their nature, forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Investors should refer to THMG's Form 10-K, and Form 10-Q reports, for a more detailed discussion of risks that may impact future results. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on forward-looking information. Forward-looking information is provided as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required in accordance with applicable laws.

Cautionary Note to Investors

This news release is intended for release in the United States only. Neither the TSX Venture Exchange, the OTCQB, nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information, please contact:

Thunder Mountain Gold, Inc.

Eric T. Jones
President and Chief Executive Officer

[email protected]
Office: (208) 658-1037