Auger Drilling Update for the Southern Gold Line Project, Sweden

VANCOUVER, July 12, 2021 - Capella Minerals Ltd. (TSXV: CMIL) (FRA: N7D2)(the "Company" or "Capella") is pleased to provide the following update on auger drilling and regional reconnaissance activities on its 100%-owned Southern Gold Line Project in northern Sweden. Auger drilling is currently focused on the southernmost Rötjärnen claim (Figure 1), where geochemical vectors are being utilized to determine the source of gold-bearing boulders identified on surface, whilst prioritization of the remainder of the 500 square kilometre property is being undertaken through regional geochemical surveys and mapping/sampling programs.

Highlights

• Anomalous gold and arsenic values have been returned from initial auger (Hilti) drilling of tills located up the interpreted glacial flow direction from gold-bearing boulders on the Rötjärnen claim (Figure 2). Gold values ranged from below detection limit to 110 parts per billion ("ppb") whilst arsenic values, an important pathfinder element in orogenic gold systems, ranged from below detection limit to 40 parts per million ("ppm"). A follow-up auger drill program will be initiated in late-July to continue exploration efforts to the northwest, towards an area where historical scout drilling appears to have targeted gold deposits within a major flexure in a regional structural corridor.
  
  
• A detailed review of historical scout drilling completed approximately 5km to the NW of the gold-mineralized boulder field at Rötjärnen is underway (Figure 3). A total of 15 scout holes were completed between 2003 and 2013 by third-parties and targeted gold mineralization in a major regional flexure interpreted from airborne magnetic data. Drilling intersected calc-silicate alteration and anomalous gold values in meta-greywacke, although the low tenor of the gold mineralization intersected (best intercept reported as 3m @ 0.19 grams/tonne Au) suggests that the source of the boulder field was not located.
  
  
• Regional reconnaissance-level Bulk Leach Extractable Gold ("BLEG") sampling continues over the remainder of Southern Gold Line, with >50% of the property having been covered to date. The BLEG sampling program will assist with the prioritization of areas for further detailed field evaluation and potential drill target definition.
  
  
• Planning for a high-resolution drone magnetic survey over key target areas on the Southern Gold Line property is also well advanced.
  
  
• Experienced local geologist Louise Lindskog has been appointed to manage Capella's exploration programs at the Southern Gold Line.

Eric Roth, Capella's President and CEO, commented today: "I am very pleased to be reporting these positive exploration results from our Southern Gold Line project, in addition to welcoming Louise Lindskog aboard as manager of our exploration activities going forward. Our summer 2021 work program will include further auger drilling at Rötjärnen, where we continue to vector in to the source of the gold-mineralized boulders, as well as regional reconnaissance programs over the remainder of the district-scale property. Given the large property size and the need to complete systematic exploration programs, this will be a busy summer for the field crews and is expected to lead to the definition of targets for discovery drilling in 2022."

Figure 1. Location of the Southern Gold Line claims in northern Sweden, with the three key target areas (Fäboliden North, Fäboliden South, and Rötjärnen) indicated.

Figure 2. Initial Hilti auger drill line (together with gold values) and the location of the gold-mineralized boulder field, together with the interpreted direction of glacial flow at Rötjärnen. Image background contains regional magnetic data.

Figure 3. Historical drill holes located approximately 5km NW of the gold-bearing boulder field and within a major regional flexure clearly identifiable from airborne magnetic data.

About the Southern Gold Line Project

The Company's Southern Gold Line project is located 100 km WSW of the regional administrative centre of Skellefteå in north-central Sweden, and consists of 500 square kilometres (50,000ha) of mineral claims located in the immediate vicinity of Dragon Mining Ltd's Fäboliden development project and Svartliden gold mine¹. Further to the north of Svartliden lies Agnico Eagle/Barsele Minerals's Barsele gold deposit (0.3Moz Au Indicated Resource and 2Moz Au Inferred Resource; Source - Barsele Minerals Inc. NI 43-101 Mineral Resource Estimate dated February 21, 2019).

The Southern Gold Line concessions cover areas with similar geologic and structural settings to known gold deposits within the broader Gold Line belt (orogenic gold deposits located at, or near, granitoid-greenstone contacts). Host rocks to the gold mineralization are Paleoproterozoic in age.

Reconnaissance sampling and mapping programs are underway over the entire claim block, with Bulk Leach Extractable Gold ("BLEG") samples having been collected across portions of the licenses and showing multiple areas with enrichment of gold in stream sediments. Auger drilling is also underway on the southern Rötjärnen claim - where gold mineralized boulder trains have been identified on surface - and is expected to continue through summer 2021.

The Company acquired its 100% interest in the Southern Gold Line Project from EMX Royalty Corp (NYSE:EMX; TSXV:EMX) in late-2020.

Quality Assurance and Quality Control (QAQC)

Analytical work for auger geochemical samples is carried out by the independent ALS Laboratory Group ("ALS"; ISO/IEC 17025:2017). Auger samples are received and then prepared at ALS's facility in Mala (Sweden) using method PREP-41 (where samples are dried at <60^oC and sieved to -180 micron/80 mesh), before being sent to their Loughrea (Ireland) laboratory for analysis using the low-level Au-ST43 method (gold by aqua regia extraction with ICP-MS finish). ALS's internal QAQC program is complemented by the Company's own internal blank/standard/duplicate program which includes every 30^th sample being a field duplicate together with the regular insertion of blanks and certified gold standards.

Qualified Persons and Disclosure Statement

The technical information in this news release relating to the Southern Gold Line project has been prepared in accordance with Canadian regulatory requirements set out in NI 43-101, and approved by Eric Roth, the Company's President & CEO, a Director, and a Qualified Person under NI 43-101. Mr. Roth holds a Ph.D. in Economic Geology from the University of Western Australia, is a Fellow of the Australian Institute of Mining and Metallurgy (AusIMM) and is a Fellow of the Society of Economic Geologists (SEG). Mr. Roth has 30 years of experience in international minerals exploration and mining project evaluation.

On Behalf of the Board of Capella Minerals Ltd.

"Eric Roth"
___________________________
Eric Roth, Ph.D., FAusIMM
President & CEO

About Capella Minerals Ltd

Capella is engaged in the acquisition, exploration, and development of quality mineral resource properties in favourable jurisdictions with a focus on high-grade gold and copper deposits. The Company's copper focus is currently on the discovery of high-grade VMS-type deposits within 100%-owned, district-scale land positions around the past-producing Løkken and Kjøli copper mines in central Norway. The Company's precious metals focus is on the discovery of high-grade gold deposits on its 100%-owned Southern Gold Line Project in Sweden, in addition to its active Canadian Joint Ventures with Ethos Gold Corp. at Savant Lake (Ontario) and Yamana Gold Inc. at Domain (Manitoba). The Company also retains a residual interest (subject to an option to purchase agreement with Austral Gold Ltd) in the Sierra Blanca gold-silver project in Santa Cruz, Argentina.

Field activities are ongoing on all projects, with the primary focus being to advance priority targets through the permitting process and onwards to drilling and discovery.

The Company also holds marketable securities in Cerrado Gold Inc. (TSXV:CERT; 833,334 common shares) and Ethos Gold Corp. (TSXV:ECC; 2 million common shares), providing Capella shareholders with indirect exposure to both exploration and operational success by these Companies.

Cautionary Notes and Forward-looking Statements
This news release contains forward-looking information within the meaning of applicable securities legislation. Forward-looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. Such statements include, without limitation, statements regarding the future results of operations, performance and achievements of Capella, including the timing, completion of and results from the exploration and drill programs described in this release. Although the Company believes that such statements are reasonable, it can give no assurances that such expectations will prove to be correct. All such forward-looking information is based on certain assumptions and analyses made by Capella in light of their experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. This information, however, is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Important factors that could cause actual results to differ from this forward-looking information include those described under the heading "Risks and Uncertainties" in Capella's most recently filed MD&A. Capella does not intend, and expressly disclaims any obligation to, update or revise the forward-looking information contained in this news release, except as required by law. Readers are cautioned not to place undue reliance on forward-looking information.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

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SOURCE Capella Minerals Ltd.