Mogotes Metals Draws US$15 Million Rio Tinto Investment, Proposes Vicuña Alliance

• Rio Tinto Exploration Canada Inc. will subscribe for 30,387,857 units of Mogotes Metals at C$0.70 per unit for gross proceeds of approximately US$15,000,000, equivalent to C$21,271,500, taking an initial interest of approximately 5%.
• Each unit consists of one common share and one-half of one common share purchase warrant, with 15,193,929 warrants in aggregate exercisable at C$1.00 for 18 months from closing, representing potential additional proceeds of up to approximately C$15,193,929.
• Proceeds of the placement will be used to advance work programmes at the Filo Sur project.
• On closing, Mogotes and Rio Tinto will form a Strategic & Technical Alliance focused initially on Filo Sur and the broader Vicuña portfolio, with definitive long-form agreements still to be negotiated.
• Rio Tinto will receive a 15-month period of exclusivity over Filo Sur, extendable by mutual agreement for a further 6 months, together with a top-up right to acquire up to 9.99% of the common shares on a partially diluted basis.
• Closing of the placement is subject to conditions, including approval of the TSX Venture Exchange (TSXV).

Company Overview

Mogotes Metals (TSXV: MOG | FSE: OY4 | OTCQB: MOGMF) is a mineral exploration company advancing the Filo Sur project in the Vicuña district spanning Argentina and Chile, one of the copper-gold-silver belts targeted by major mining companies. The company is headquartered in Toronto, Ontario.

The Placement

Mogotes Metals has entered into a binding term sheet with Rio Tinto Exploration Canada Inc. under which Rio Tinto or an affiliated company will subscribe for 30,387,857 units at a price of C$0.70 per unit. Gross proceeds are approximately US$15,000,000, equivalent to C$21,271,500. The investment gives Rio Tinto an initial interest of approximately 5% in Mogotes.

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. The 15,193,929 warrants issued in aggregate represent potential additional proceeds of up to approximately C$15,193,929 to the company. Proceeds of the placement will be used to advance work programmes at the Filo Sur project.

The company has a number of investors with existing pre-emptive rights. The exact number of units that will be taken up when those pre-emptive rights are exercised is not known at this time, and to accommodate their full exercise, the company may issue up to an additional 17,000,000 units at the offering price.

Strategic & Technical Alliance

Upon the placement's close, Mogotes and Rio Tinto will enter into a strategic and technical alliance focused initially on the Filo Sur project in the Vicuña district of Argentina and Chile. The alliance is intended to combine the on-the-ground exploration team and district knowledge of Mogotes with Rio Tinto's global technical capabilities across one of the most prospective copper-gold-silver belts in the world.

The proposed alliance includes the formation of a joint technical committee to advise the exploration programme at Filo Sur, drawing on the porphyry discovery and development track record of Rio Tinto. It also provides for the application of proprietary geoscience tools, including advanced geochemistry, geophysics, and targeting workflows, across the project, and joint efforts to expand the consolidated land position in targeted prospective areas across the broader Vicuña district. Subject to completion of definitive Filo Sur documentation, the parties intend to explore extending the alliance concept to additional prospective mineral belts, including in Kazakhstan.

Commenting on the investment, President and Chief Executive Officer of Mogotes Metals, Allen Sabet, framed the arrangement plainly:

"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."

Exclusivity & Ownership Rights

Conditional on completion of the placement, Rio Tinto will receive a 15-month period of exclusivity with respect to the Filo Sur project, extendable by mutual agreement for a further 6 months. During the exclusivity period, Rio Tinto will have the right to match third-party proposals involving the Filo Sur project or the subsidiaries that hold it.

Rio Tinto will also have a top-up right entitling it to acquire up to 9.99% of the common shares on a partially diluted basis at any time during the exclusivity period. The top-up right is exercisable at a price per share equal to 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, in each case subject to TSX Venture Exchange (TSXV) approval. Rio Tinto will be granted customary pre-emptive rights to maintain its proportionate ownership during the exclusivity period and has agreed to customary standstill restrictions applicable during that period.

Next Steps

Mogotes and Rio Tinto will negotiate definitive long-form agreements, including a subscription agreement, an investor rights agreement, and an exclusivity agreement, establishing the Strategic & Technical Alliance covering Filo Sur and the broader Vicuña portfolio. Closing of the placement is subject to certain conditions, including receipt of all necessary regulatory and other approvals, including approval from the TSXV.

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