Axo Metals Advances San Antonio Gold Project with Fully Funded Drilling and Permits Underway

• Axo Metals Corp, rebranding from Axo Copper, has acquired the San Antonio gold project in Sonora, Mexico, a past-producing heap leach operation with a crusher, carbon column plant, heap leach pads, camp, water rights, and power infrastructure already in place, effectively inheriting a mine that is approximately 70% built.
• The project carries a current resource of 1.1 million ounces of gold modelled on a $1,700 per ounce gold price after only one year of drilling, with management indicating that both a gold price refresh and an aggressive 30,000-metre drill programme targeting entirely undrilled high-priority zones could materially grow that figure.
• Permitting for the new starter pit is being advanced with the same Sonoran state authorities that approved an open-pit permit for a comparable group assets in 2025 giving Axo a credible and demonstrated timeline reference rather than an untested regulatory pathway.
• The company has completed a C$40 million raise with warrant accelerators that could unlock a further C$28 million, covering the majority of a modest remaining capital build, with a small debt facility expected to cover the balance and a preliminary economic assessment due in the second half of 2026.
• The acquisition was structured as an all-stock deal with cash milestone payments to vendor Osisko tied to first production, aligning both parties' financial interests and removing concerns about near-term selling pressure on Axo's stock.

Axo Copper Corp, which is imminently rebranding as Axo Metals Corp, has repositioned itself from a lean exploration company into an advanced-stage gold developer following the acquisition of the San Antonio gold project in Sonora, Mexico. In a recent interview, President and CEO Jonathan Egilo outlined the rationale for the acquisition, the state of the project's existing infrastructure, the permitting timeline, the capital requirements, and the company's broader exploration ambitions.

From Exploration to Developer

San Antonio project was a past-producing copper heap leach operation that ran from 2011 to 2018 before being acquired by Osisko Mining Group around 2020. Osisko subsequently drilled the property, produced gold from stockpiles in 2021 while advancing a permit amendment, and then pivoted its corporate focus toward building the Cariboo gold project in British Columbia, effectively placing San Antonio on care and maintenance.

Axo acquired San Antonio in January 2026, with the deal structured as an all-stock transaction up front, with cash milestone payments to Osisko contingent on San Antonio reaching first production. The acquisition rationale, according to Egilo, was to identify a situation where the group could apply a repeatable competitive advantage. The same management network had recently navigated the permitting process in Sonora for Silver Tiger Metals, obtaining open-pit permits through the new Mexican administration in November 2025 after approximately one year of engagement. San Antonio sits in the same state and involves the same regulatory authorities.

Infrastructure in Place

One of the defining features of San Antonio is what is already on the ground including a crusher, a carbon column plant, existing heap leach pads, a camp, water rights, and power line access, all effectively the core physical components of a functioning heap leach mining operation.

The incremental work required to move toward production from the new starter pit, a high-grade, low-strip oxide pit that was drilled off and identified during Osisko's tenure involves a limited amount of stripping, construction of a haul road, and expansion of the heap leach pad capacity. A preliminary economic assessment is expected to be released in the latter part of this year, which will provide the market with an initial mine plan and a more formal view of capital requirements.

"It's like inheriting a heat leach mine that's already 70% built," Egilo said. "The build itself would be far less than a year, probably something like between six months and nine months."

Fully Funded for the Near Term

Axo recently completed a C$40 million capital raise. The financing included warrants with an accelerator provision, meaning that if those warrants trade in the money, the company can trigger the accelerator and bring in an additional C$28 million. Egilo indicated that the combination of existing cash and potential warrant proceeds would cover the majority of the capital required to reach production, with the remaining balance expected to be sourced through a debt instrument given the modest scale of what remains outstanding.

The company's view is that a bite-sized debt facility in the tens of millions of dollars is a straightforward financing to arrange at current gold prices, with multiple lenders already expressing interest. The overall financing picture is described as capital-light by heap leach standards, with a staged development path that would see near-term production revenues eventually funding longer-term resource expansion and potentially a carbon-in-leach or flotation plant.

Interview with Jonathan Egilo, President & CEO of Axo Metals

Resource Base and Upside Case

San Antonio currently carries a resource of 1.1 million ounces of gold, split between oxide material grading approximately 0.8 grams per tonne (g/t) and sulphide material grading approximately 1.2 to 1.3 g/t. The heap leach metallurgy on the oxides shows a 70% recovery, with sulphide recoveries modelled at 90% under leaching.

Management believe the resource estimate figure is a conservative starting point for two reasons. First, the resource was modelled using a gold price of US$1,700 per ounce, and a straightforward price refresh using current market inputs would be expected to add ounces without any additional drilling. Second, the resource was generated after only one year of drilling by Osisko which makes the maiden estimate based on limited coverage of what both Osisko and Axo view as a substantially larger gold system:

"The project already, as it stands, is quite substantially bigger than 1.1 million ounces," Egilo said. "That resource was kind of a first pass put together off one year of drilling, and there's a lot of room to grow, not just on refreshing the gold price, but through the drill bit."

Drilling Running in Parallel

To test that upside thesis, Axo has committed to a 30,000-metre drill programme running concurrently with permitting and engineering work. At an estimated cost of approximately $200 per metre, the programme is being funded from the existing C$40 million raise, with Egilo noting that the company deliberately over-funded the raise to provide flexibility to expand the drill programme by a further 20,000 to 30,000 metres if early results warrant it, without needing to return to capital markets.

Several high-priority target areas within the San Antonio project remain entirely undrilled, having never received a drill hole during the asset's history. These untested zones are described as the primary focus of the 2026 exploration campaign.

In parallel, the company continues to advance its La Huerta copper project in Jalisco State, where deeper drilling in 300-450 metre range is underway to understand the vertical extent of the system. La Huerta exploration has continued at a low per-metre cost with a single drill rig and has not required significant capital reallocation away from San Antonio.

The Investment Thesis for Axo Metals

• Brownfield restart with existing infrastructure: San Antonio is not a greenfield project requiring full capital expenditure. With a crusher, heap leach pads, carbon column plant, camp, water, and power already in place, the incremental build cost is a fraction of a new development, reducing execution risk and time to first cash flow.
• Proven permitting playbook in the same jurisdiction: The same group secured an open-pit permit in Sonora in approximately twelve months under the current Mexican administration. San Antonio sits in the same state with the same regulatory counterparties, offering investors a credible and demonstrated permitting reference point rather than an unknown pathway.
• Funded position with limited dilution risk ahead: A C$40 million raise and potential C$28 million warrant accelerator, combined with a modest remaining capital build, means the company has a clear and largely funded route to production without the need for large additional equity raises.
• Resource upside is material and near-term: The current 1.1 million ounce resource was built on a US$1,700 gold price assumption after one year of drilling. Refreshing the gold price alone is expected to add ounces, and an aggressive 30,000-metre drill programme is targeting entirely undrilled high-priority areas in 2026.
• Deal structure aligns vendor and developer: Osisko's retention of equity with production-linked cash payments removes overhang concerns and signals that the vendor views San Antonio's upside in the same terms as Axo management.
• Heap leach economics are robust across gold price cycles: At 0.8 g/t with low strip ratio, the San Antonio starter pit has operated economically through multiple gold price environments. Current gold prices provide additional margin.

Gold Heap Leach Developers in Proven Jurisdictions

The investment case for gold heap leach developers has strengthened materially as the gold price has sustained levels that generate meaningful margins even on lower-grade open-pit oxide deposits. Heap leach operations are structurally capital-light compared to conventional milling and carbon-in-leach circuits, and where existing infrastructure, pads, crushers, plant, and camp, is already in place from prior production, the economics become considerably more attractive. This dynamic has renewed institutional and retail interest in brownfield restarts that were previously shelved during lower gold price environments.

Mexico, and Sonora State in particular, has historically been a productive jurisdiction for heap leach gold and silver operations. The current Mexican administration's engagement with the mining sector as evidenced by the issuance of open-pit permits to multiple projects in Sonora over the past twelve months which has partially addressed the permitting uncertainty that weighed on the jurisdiction during the preceding regulatory cycle. While risks remain, companies with established relationships with state authorities and recent permitting success in the region are relatively better positioned than those approaching Sonora for the first time.

The broader theme of capital efficiency in gold development is driving investor preference toward advanced-stage brownfield assets over longer-dated discoveries. With capital costs for new builds rising and construction timelines extending across the sector, assets that can demonstrate a six-to-nine month build timeline and a small remaining capital requirement attract a different class of investor than traditional exploration-stage plays. Near-term production in this gold price environment generates cash flow that can fund both resource expansion and future plant upgrades without reliance on ongoing equity markets.

TL;DR

Axo Metals has made a strategically coherent acquisition in acquiring San Antonio, a heap leach gold asset with most of its physical infrastructure already in place, located in a jurisdiction where the management group has recently demonstrated the ability to navigate permitting. The company enters 2026 well-capitalised, with a 30,000-metre drill programme running in parallel with engineering and permitting, a modest remaining capital build, and a deal structure that aligns vendor and acquirer. The combination of an undervalued existing resource, meaningful upside through both gold price recalibration and the drill bit, and a clear and funded path to production positions Axo Metals as a near-term development story worth monitoring across the key milestones expected this year.

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