Mr. Jamie Beck reports

FILO REPORTS Q2 2023 RESULTS

Filo Corp. has released its results for the three and six months ended June 30, 2023.

Jamie Beck, president and chief executive officer, commented: "We are continuing with our current drilling campaign through the South American winter with great success so far. There are nine rigs currently drilling at the project and we have exceeded our planned metres through the end of Q2 2023. Our results were comprised of a mix of both large and small stepouts to the north and south of our current interpretation of the Aurora zone, including the Filo and Bonita zones, and preliminary results have indicated that the Bonita zone is a continuous part of the system, rather than a separate zone. Our exploration results continue to expand the footprint and demonstrate the potential of the project as one of the most significant copper-gold-silver discoveries of its generation. Additionally, our recent $130-million at-market private placement sets Filo up well for the next phase of drilling."

Q2 2023 highlights

• On June 14, 2023, the company closed a non-brokered private placement, whereby the company sold 6,161,138 common shares at a price of $21.10 per common share for gross proceeds of $130.0-million, less share issuance costs of $800,000 (net proceeds of $129.2-million).
• Continued exploration success, highlighted by:
  • The release of assays from multiple holes drilled into the Aurora, Filo and Bonita zones across large intervals with consistently strong mineralization. Several of the holes reported are entirely outside the company's existing resource pit shell and serve to expand the size of the mineralized zones and improve the geological interpretation of the deposit.
  • A magnetotelluric geophysical survey was completed and supports the interpretation of a geological connection between Aurora and Bonita. Modelling of the survey data shows a zone of elevated conductivity trending north-northeast along the length of the Filo del Sol and Aurora zones and continuing strongly as far as holes FSDH060 and FSDH075 at the Bonita zone. Combined with the geology seen in recent holes, this provides strong evidence that the system is continuous along at least 3.5 kilometres and that the Bonita zone is the northern part of the system, rather than a separate zone.
  • Drilling results continue to demonstrate growth of the Aurora zone toward the Bonita zone. Multiple holes are currently drilling which will provide critical information on the potential continuity of mineralization between these two zones.
  • Results from the first two holes drilled into the Gemelos target. Despite low grades of gold and copper encountered, results indicate a high-sulphidation epithermal system. The Gemelos alteration zone is roughly equivalent in size to the Filo del Sol alteration zone and remains a high-potential target warranting additional exploration.
  • Results from the second hole drilled into the Flamenco target, an area over three kilometres to the south of the Aurora zone. The hole was collared 723 m southwest of FSDH077, the first Flamenco hole which was reported in the company's news release dated March 16, 2023. This hole expanded the area of moderate grade mineralization intersected in hole FSDH077 and continued to support Flamenco as a high-quality exploration target which requires significant additional exploration.
  • The Aurora zone, the Bonita zone and the high-grade Breccia 41 area remain open to expansion in several directions and drilling to further define them is continuing.
• On June 19, 2023 Filo's inaugural sustainability summary report was published and is available on the company's website. The report outlines Filo's sustainability framework and commitments to guide the company moving forward, discloses Filo's baseline data and provides transparency to the company's stakeholders. The report also highlights the positive work and activities the company has already undertaken on the company's sustainability journey.

Q2 2023 drilling and assay results

Drilling and assay results disclosed by the company during and subsequent to the first two quarters of 2023 are summarized in Appendix 1 to the original version of this news release.

Outlook

Drilling continues to be the company's primary focus with nine drill rigs at site. Drilling will remain a mix of both large and small stepouts to the north and south of the Aurora zone, as well as resource definition drilling within it. The company continues to maintain a strong focus on improving drill productivity through a variety of initiatives and is continuing its drilling and field operations throughout the South American winter.

Data collected from the current campaign are being used to develop a comprehensive geological model which will guide further exploration and form the basis of an eventual update to the mineral resource estimate. The company is continuing preliminary metallurgical testwork on the sulphide mineralization, as well as environmental and social baseline programs in support of future project permitting.

The company's plans and timelines are subject to equipment and staff availability, along with being able to operate safely and effectively throughout the winter and in accordance with the company's health and safety protocols.

For the three and six months ended June 30, 2023, Filo incurred net losses of $29.7-million and $59.6-million, respectively (2022 -- $13.5-million and $27.9-million) including operating losses of $39.4-million and $78.7-million (2022 -- $23.7-million and $40.7-million) and net gains of $9.0-million and $17.3-million from the use of marketable securities (2022 -- $10.6-million and $12.6-million). Exploration and project investigation costs are generally the most significant expenses for the company and for the three and six months ended June 30, 2023, they accounted for approximately 91 per cent and 89 per cent of the operating losses, respectively (2022 -- 94 per cent and 91 per cent). The company expenses its exploration costs through the consolidated statement of comprehensive loss, except for mineral property option payments and mineral property acquisition costs, which are capitalized.

Liquidity and capital resources

As at June 30, 2023, the company had cash and cash equivalents of $165.5-million and net working capital of $140.8-million, compared with cash and cash equivalents of $74.9-million and net working capital of $60.3-million as at Dec. 31, 2022. The increase in the company's cash and cash equivalents and net working capital is due the non-brokered private placement completed in June, 2023, which resulted in net proceeds of $129.2-million, plus the net $1.1-million BHP Top-Up and $4.2-million in gross proceeds received by the company in relation to the exercise of stock options during the six months ended June 30, 2023. These cash inflows were offset by funds used in operations and for general corporate purposes, plus amounts used in the acquisition of mineral properties and equipment and facilities for the Filo del Sol project.

The company will continue to deploy the majority of its treasury to finance continuing advancement of the Filo del Sol project, and to a lesser extent, for working capital and general corporate purposes.

About Filo del Sol

Filo del Sol is a high-sulphidation epithermal copper-gold-silver deposit associated with one or more large porphyry copper-gold systems. Overlapping mineralizing events combined with weathering effects, including supergene enrichment, have created several different styles of mineralization, including structurally controlled and breccia-hosted gold, manto-style high-grade silver (plus/minus copper) and high-grade supergene-enriched copper within a broader envelope of disseminated, stockwork and breccia-hosted sulphide copper and gold mineralization. This complex geological history has created a heterogeneous orebody which is characterized by zones of very high-grade copper plus/minus gold plus/minus silver mineralization within a large envelope of more homogeneous, lower-grade mineralization.

Technical information

Copper equivalent is calculated based on $3.00 (U.S.)/pound Cu, $1,500 (U.S.)/ounce Au and $18 (U.S.)/oz Ag, with 80-per-cent metallurgical recoveries assumed for all metals. The formula is: CuEq per cent equals Cu per cent plus (0.7292 multiplied by Au g/t) plus (0.0088 multiplied by Ag g/t).

Details on assay procedures and the drill intersections provided in Appendix 1 can be found in the company's news releases dated Jan. 10, 2023, Feb. 2, 2023, March 16, 2023, April 13, 2023, April 13, 2023, May 30, 2023, July 4, 2023, and July 11, 2023.

Qualified persons and technical notes

The scientific and technical disclosure for the Filo del Sol project included in this news release have been reviewed and approved by Bob Carmichael, PEng, and Jamie Beck, PEng. Mr. Carmichael is Filo's vice-president of exploration and a qualified person under National Instrument 43-101 -- Standards of Disclosure of Mineral Projects. Mr. Beck is Filo's president and CEO and is also a qualified person under NI 43-101.

About Filo Corp.

Filo is a Canadian exploration and development company focused on advancing its 100-per-cent-owned Filo del Sol copper-gold-silver deposit located in San Juan province, Argentina, and adjacent Region III, Chile.

We seek Safe Harbor.