Mogotes Metals & the Upsized Financing: Funding the Next Phase of Deep Drilling at Filo Sur

• Mogotes Metals is targeting the issuance of 38,558,817 common shares at $0.49 per share, raising $18,893,820 in gross proceeds.
• The company upsized this financing after CD Capital Fund IV L.P. exercised its pre-emptive rights to maintain a 19.9% ownership stake on a partially diluted basis.
• This capital injection provides the funding to execute the November drill program without requiring the company to issue additional equity at current market valuations.
• The expanded financial capacity enables the exploration team to drill into deep magnetotelluric (MT) geophysical anomalies at the Sol Target Cluster.
• The company is targeting these anomalies because they share the low-resistivity signatures of under 100 ohm-meters that identify the adjacent Filo del Sol deposit.

What Has Happened

Mogotes Metals (TSXV: MOG) announced an upsize to a previously announced non-brokered private placement. The company is now targeting the issuance of 38,558,817 common shares at a price of $0.49 per share to generate gross proceeds of up to $18,893,820. This expansion was triggered by CD Capital Fund IV L.P. exercising its pre-emptive rights to maintain a 19.9% ownership interest on a partially diluted basis.

This upsized financing follows a July 13, 2026 announcement regarding Rio Tinto Exploration Canada's US$15 million strategic investment. These combined financings provide the capital required to execute the planned November drill program at the Filo Sur project. By securing this capital, Mogotes Metals holds the treasury required to drill capital-intensive targets across the Vicuña district while limiting further immediate equity dilution.

Securing Funding for Multi-Hole Exploration

Junior exploration companies attempting to delineate deep porphyry systems require highly capital-intensive drill programs. When market conditions restrict access to capital, explorers often raise funds at suboptimal valuations to continue operations. The combined financial commitments from Rio Tinto & CD Capital supply Mogotes Metals with the capital base required to bypass this constraint for the upcoming drill season. The company holds a $42 million cash position following these transactions. This cash balance funds the execution of the next phase of deep step-out drilling without requiring immediate equity dilution. 

Chief Executive Officer of Mogotes Metals, Allen Sabet, noted that this funding level enables the team to transition from target generation to direct drill-testing: 

"We've got the capital; we've got the technical know-how now, and we've been doing this for a while so we're really reared up, ready to go".

Deploying Capital on the Sol Target Cluster

Mogotes Metals will allocate this upsized treasury to test the deep porphyry targets at the Filo Sur project. The immediate exploration focus centres on the Sol Target Cluster, which comprises the Luz del Sol, Meseta, and Cuenca targets. These priority zones feature magnetotelluric (MT) anomalies measuring under 100 ohm-meter, a geophysical signature that operators used to vector toward the massive porphyry centre at the adjacent Filo del Sol deposit.

The expanded treasury funds the multi-hole campaigns required to test large-scale footprints such as the Luz del Sol target, which covers a 1,600-metre-by-800-metre area situated 2.5 kilometres south of the boundary with Filo del Sol. The funding also ensures the company can aggressively evaluate the Meseta high-sulfidation epithermal gold-silver target, which presents a 1,000-metre by 400-metre footprint located 100 metres below the surface.

Validating the Systematic Exploration Model

The $18,893,820 financial backing from CD Capital indicates continued institutional support of the company's methodical exploration approach at the Filo Sur project. Over the past 4 years, the technical team has advanced the property from untested ground into a portfolio of drill-ready targets through sequential soil sampling and geophysical surveys.

This progression culminated in a high-grade discovery at the Albor target, where a drill hole intersected 86 metres grading 0.70% copper, 0.55 grams per tonne gold, 2.7 grams per tonne silver, and 169 parts per million molybdenum. The company is currently awaiting assays from the interval between 194 and 464 metres in the discovery hole to guide follow-up drilling across the target's 1.5-kilometre-by-2-kilometre footprint.

The drill core at Albor exhibits multiple phases of mineralisation and a hypogene epithermal overprint characterised by pyrite, chalcopyrite, and covellite veins. These geological indicators suggest proximity to a larger porphyry heat source, confirming the presence of economic-grade mineralisation and supporting the structural interpretation of the Macho Muerto fault zone.

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Executing a Counter-Cyclical Exploration Strategy

Single-asset exploration companies operating in the Andes typically experience a 6-month quiet period during the Southern Hemisphere winter, which often results in a stagnant news flow and a contraction in share price. Mogotes Metals mitigates this structural sector risk by deploying a portion of its treasury to fund a counter-cyclical, year-round exploration strategy.

While the Filo Sur project drills from December to May, the company advances 2 additional assets in the Northern Hemisphere summer: the Beskauga project in the Republic of Kazakhstan and the Copper Cliffs project in the United States. Beskauga is a copper-gold-silver porphyry project featuring an historical indicated mineral resource estimate of 111.2 million tonnes at 0.30% copper, 0.49 grams per tonne gold, and 1.34 grams per tonne silver. Copper Cliffs is a copper-gold-silver-molybdenum porphyry target in Montana with 42 historical drill holes.

The company holds options to enter into joint ventures (JVs) for up to 60% of both projects.  Sabet explained that this asset diversification reduces cost-of-capital constraints by generating continuous news flow during the Andean winter: 

"We've added projects that allow us to do all-season drilling that will affect our cost of capital positively in a very, I would say, relatively low-cost way to the program we run in Filasur".

Exploration & Jurisdictional Risks

While the upsized private placement secures near-term funding, the issuance of up to 38,558,817 new common shares represents direct equity dilution for existing shareholders. Furthermore, exploration at the Sol Target Cluster carries inherent geological risk. The MT anomalies driving the drill program are geophysical indicators of potential mineralisation, not guarantees of an economic porphyry discovery.

The company's operations are also subject to jurisdictional factors across Argentina, Kazakhstan, and the United States, including foreign exchange fluctuations and evolving regulatory frameworks. The execution of the upcoming drill programs depends on maintaining local permits and operating within the logistical constraints of each respective environment.

What to Watch Next

The immediate operational milestone is the formal closing of the $18,893,820 upsized financing. This transaction remains subject to customary conditions, which include a 4-month hold period on the issued shares and final regulatory approvals from the TSX Venture Exchange. Operationally, Mogotes Metals is targeting a November commencement for the Filo Sur drill season to utilise the newly secured capital. This upcoming drilling campaign will test whether the identified MT anomalies translate into a district-scale porphyry system, providing the company with the next material valuation milestone.

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