Mogotes Metals Closes US$15 Million Investment by Rio Tinto & Forms Strategic & Technical Alliance

• Rio Tinto Canada Inc. closed its previously announced strategic investment in Mogotes Metals Inc., subscribing for 30,387,857 units at C$0.70 per unit for gross proceeds of approximately US$15,000,000.
• The placement gives Rio Tinto an initial approximately 5% interest in Mogotes and includes 15,193,928 warrants exercisable at C$1.00 for 18 months.
• Mogotes and Rio Tinto formed a Strategic & Technical Alliance centered on the Filo Sur project, combining Mogotes' district knowledge with Rio Tinto's porphyry exploration technology.
• Rio Tinto secured 15 months of exclusivity on Filo Sur, extendable by 6 months, along with matching rights, a top-up right to 9.99% ownership, and pre-emptive participation rights.
• Proceeds will fund work programs at Filo Sur, and the parties intend to explore extending the alliance model to additional belts, including in Kazakhstan.

Company Overview

Mogotes Metals Inc. (TSXV: MOG | FSE: OY4 | OTCQB: MOGMF) is a mineral exploration company focused on copper, gold, and silver in Argentina and Chile's Vicuña district. Its principal asset, the Filo Sur project, adjoins Lundin Mining's Filo del Sol deposit and lies along the same north-south-trending belt as the Filo del Sol-Aurora deposits and NGEx Minerals' Lunahuasi and Los Helados copper and gold projects.

The Placement

Mogotes Metals Inc. has closed the previously announced strategic investment by Rio Tinto Canada Inc., an affiliate of Rio Tinto Exploration Canada Inc. Rio Tinto subscribed for 30,387,857 units at C$0.70 per unit, for gross proceeds of approximately US$15,000,000, equivalent to C$21,271,500.

Each unit consists of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to acquire one additional common share at an exercise price of C$1.00 for a period of 18 months from closing, representing potential additional proceeds to the company of up to approximately C$15,193,928 if fully exercised.

Concurrently with closing, and in connection with the exercise of existing pre-emptive rights held by other investors, the company issued an additional 7,970,945 units at the same offering price for additional gross proceeds of C$5,579,661.50.

Strategic & Technical Alliance - Filo Sur & Beyond

In connection with closing, Mogotes and Rio Tinto entered into definitive long-form agreements, including a subscription agreement, an investor rights agreement, and an exclusivity agreement, establishing a Strategic & Technical Alliance focused initially on Filo Sur in the Vicuña district of Argentina and Chile.

The alliance combines Mogotes' on-the-ground exploration team and district knowledge with Rio Tinto's global technical capability. Key elements include the formation of a joint technical committee to advise the exploration program, the application of Rio Tinto's proprietary geochemistry, geophysics, and targeting workflows across Filo Sur, and joint efforts to expand the consolidated land position in targeted, prospective areas.

With the definitive Filo Sur documentation completed, the parties intend to explore extending the alliance concept to additional mineral belts identified by both companies, including in Kazakhstan, where Mogotes holds its Beskauga gold-copper project.

Exclusivity, Top-Up & Pre-Emptive Rights

Rio Tinto has received a 15-month exclusivity period on Filo Sur, extendable by mutual agreement for a further 6 months. During this period, Rio Tinto has the right to match third-party proposals involving the Filo Sur project or its subsidiaries, and has agreed to customary standstill restrictions.

Rio Tinto also holds a top-up right entitling it to acquire up to 9.99% of common shares on a partially diluted basis at any time during the exclusivity period, exercisable at the greater of the 20-day volume-weighted average trading price and a 20% premium to the closing price on the last trading day prior to exercise, subject to TSX Venture Exchange approval. Rio Tinto has also been granted customary pre-emptive rights to participate in future Mogotes securities offerings to maintain its proportionate ownership during the exclusivity period.

President and Chief Executive Officer of Mogotes Metals, Allen Sabet, said: 

"The completion of Rio Tinto's strategic investment in Mogotes is a powerful endorsement of the prospectivity of Filo Sur and the broader Vicuña district. The Alliance gives our team access to one of the deepest exploration capabilities in the industry while preserving Mogotes' ability to deliver value to all shareholders."

Regulatory Status

The placement has received all necessary regulatory and other approvals, including conditional approval from the TSX Venture Exchange. All securities issued under the placement are subject to a statutory hold period expiring 4 months and 1 day from the date of closing, in accordance with applicable Canadian securities laws. The securities have not been, and will not be, registered under the United States Securities Act of 1933, and may not be offered or sold within the United States or to US persons absent registration or an applicable exemption.

Next Steps

Proceeds of the placement will be used to advance work programs at Filo Sur, while the newly formed joint technical committee begins applying Rio Tinto's geoscience workflows across the project. Mogotes and Rio Tinto also intend to pursue expansion of the consolidated land position in targeted prospective areas, and the parties will explore extending the alliance concept to additional prospective belts, including in Kazakhstan.

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