Mr. Allen Sabet reports

MOGOTES SIGNS OPTION WITH RIO TINTO OVER GOLD COPPER PORPHYRY PROJECT IN USA

Mogotes Metals Inc. has entered into an option-to-joint-venture agreement with Kennecott Exploration Company (a subsidiary of the global mining company Rio Tinto) over a gold and copper discovery in Montana, United States.

Highlights:

• Large prospective claims package in the United States with preresource, exploration-stage, gold-copper porphyry project discovered by Kennecott/Rio Tinto in 2006 within the historic Copper Cliff mining district;
• Mogotes Metals used Rio Tinto drill database (25 holes totalling 32,000 metres), including seven holes within the porphyry to calculate Au-Cu intercepts (Table 1) with a best intercept to date of:
  • Hole 14CC0013 -- 1,252.5 metres at 0.41 gram per tonne gold and 0.34 per cent copper from 665 m:
    • Including 305.2 m at 0.67 g/t Au and 0.59 per cent Cu from 859.3 m;
    • Including 79.8 m at 0.51 g/t Au and 0.45 per cent Cu from 1,246 m;
    • Including 137.4 m at 0.72 g/t Au and 0.51 per cent Cu from 1,456 m;
• No exploration of the project since 2017 leaves significant potential to grow the footprint of the known porphyry mineralization with further stepout drilling;
• Mogotes Metals used existing drill intercepts to define an exploration target footprint to guide the next stages of planned drilling, with dimensions of 1,000 m vertically and a projected surface area of approximately 450 by 300 m;
• Copper Cliff exploration season is countercyclical to the exploration season for Mogotes Filo Sur project providing potential for year-round exploration and news flow for the company;
• Mogotes will provide further technical information on the Copper Cliff project in the coming days.

Chief executive officer Allen Sabet commented: "This option with Rio Tinto allows us to leverage the extensive discovery work done by one of the greatest mining companies in the world, apply our technical know-how and knowledge in copper porphyry exploration to make further discoveries in the district, and explore to expand the known mineralization footprint at the main Copper Cliffs discovery.

"We are very excited to enter into this option, which contemplates Mogotes earning up to 60-per-cent stake in the project, with all consideration for the option being in expenditure on project-related work.

"This deal leverages our company's platform in the most effective way possible, allowing us to explore for Tier 1 large-scale gold-copper porphyry systems all year round as this project will be drilled during the northern hemisphere summer months when the Filo Sur project is in winter conditions."

Location and project introduction

The Copper Cliff project is located within the U.S. state of Montana in the Garnet Range, 13 kilometres southeast of the town of Potomac, 55 kilometres northwest of the Philipsburg silver-lead-zinc skarn and 115 kilometres from the large-scale Butte copper-molybdenum (gold-silver) porphyry historic mining districts. The project covers the historic Copper Cliff mining district, which operated intermittently from the early 1890s to 1940s with estimated production of 110,000 pounds of copper 260 ounces gold and 570 ounces silver from supergene mineralization.

During 2006 to 2017, Kennecott/Rio Tinto Exploration discovered a significant body of gold-copper porphyry mineralization drilling to depth under the district-scale advanced argillic (AA) to phyllic lithocap alteration system that is host to the historic Cu-Au mineralization. The Copper Cliff porphyry and large land package are considered by Mogotes Metals to be significantly underexplored and very attractive for further discovery of Au-Cu mineralization.

Deal terms

Mogotes Copper USA Inc. (guaranteed by Mogotes Metals) and Kennecott Exploration have entered into an option-to-joint-venture agreement covering the Copper Cliff project in Granite and Missoula counties, Montana (patented and unpatented mining claims and fee mineral parcels, subject to existing third party NSR (net smelter return) royalties on certain claims). Under the agreement, Mogotes has the right to earn up to a 60-per-cent undivided interest by sole financing staged exploration expenditures: (i) a minimum commitment of $4-million (U.S.) within the first anniversary of the effective date; and (ii) a further minimum $12-million (U.S.) by the third anniversary to earn a 51-per-cent interest ($16-million (U.S.) aggregate, with at least 70 per cent of the $16-million (U.S.) attributable to drilling-related expenditures). After earning 51 per cent, Mogotes may elect to earn an additional 9 per cent (to 60 per cent ) by spending a further minimum $40-million (U.S.) by the sixth anniversary ($56-million (U.S.) aggregate).

Following Mogotes's earn-in, the parties would form a joint venture with interests reflecting the earn-in level (49 per cent Kennecott/51 per cent Mogotes at 51-per-cent earn-in, or 40 per cent Kennecott/60 per cent Mogotes at 60-per-cent earn-in), subject to Kennecott's back-in rights. Within 90 days after the 51-per-cent earn-in, Kennecott may increase its interest by 2 per cent (to 51 per cent/49 per cent) by paying Mogotes $32-million (U.S.) (and the further 60-per-cent earn-in option would fall away); and, within 90 days after the 60-per-cent earn-in, Kennecott may increase its interest by 20 per cent (to 60 per cent/40 per cent) by paying Mogotes $140-million (U.S.).

About Mogotes Metals Inc.

Mogotes Metals is a mineral exploration company exploring for copper, gold and silver around the world, including in the United States and in the prospective Vicuna district of Argentina and Chile. Mogotes flagship project, Filo Sur, adjoins the large Filo del Sol copper-gold-silver discovery and is along the same north-south-trending belt as the Filo Del Sol-Aurora deposit and NGEx Minerals' Lunahuasi and Los Helados copper-gold deposits.

Sampling and analytical procedures

All Rio Tinto drilling through the mineralized intervals of the Copper Cliff porphyry were drilled as PQ, HQ and NQ diamond core, with hole diameters varying depending on depth of hole. Hole depths ranged from 655 m to 2,019.6 m. Drill core was boxed and transported to the Rio Tinto core logging facility in the nearby town of Potomac for logging and sampling. Core recoveries were generally very good, with an average recovery of 93.1 per cent for the reported holes. Core was logged and sample intervals were selected by Rio Tinto geoscientists. Sample intervals were typically two m in length but ranged from 0.13 m to seven m depending on geological boundaries determined by the geologist.

Drill core was photographed dry and wet before core was cut in half with a diamond saw blade. Half core was placed in a sample bag with a unique sample ID for assaying. Samples were dispatched to ALS Laboratories in the United States, which is an accredited analytical laboratory. Samples were dried, crushed and pulverized prior to analysis. Au was analyzed by a 30-gram fire assay with atomic absorption (AA) or ICP-AES finish. Cu, Ag and Mo were analyzed by four-acid digestion with ICP-AES or ICP-MS finish, and over-detection Cu results were reanalyzed using an ore-grade ICP method.

Rio Tinto assay quality assurance and quality control (QA/QC) protocols included routine insertion of proprietary certified reference material (CRM), blanks and duplicates. CRMs were officially certified and certificates were provided to Mogotes by Rio Tinto. The combined CRM-plus-blank insertion rate averaged 12.1 per cent for the Copper Cliff project, which is at or above industry standards for exploration-stage drilling. Duplicate samples, including field, coarse reject and pulp duplicates, were inserted at a rate of 17.5 per cent, which is at or above industry standards.

Validation of the Rio Tinto supplied drill database was completed by Mogotes. Assays for Au, Cu, Ag and Mo were cross-referenced to certified laboratory certificates, with no inconsistencies between the drill hole database and laboratory certificates identified.

Mogotes completed a systematic cross-check analysis of Rio Tinto CRM performance. No material issues were identified, confirming accurate and repeatable analytical results within industry-accepted standards.

Mogotes's verification of the Copper Cliff project is continuing at this time. Mogotes has relied on geological information, collar co-ordinates, azimuth and downhole survey information provided in the Rio Tinto drill hole database and geological reports.

Drill hole intercepts reported by Mogotes Metals were defined using 0.3-per-cent and 1.0-per-cent copper equivalent cut-off with no metal recovery factor applied. A maximum internal dilution of 20 m below the stated cut-off grade was allowed. All mineralized intercepts are reported as downhole intervals of Au-Cu-Ag-Mo metal with no metal equivalent grades reported. Insufficient information is currently available for true width determinations.

Qualified person

The scientific and technical disclosure for the Filo Sur project included in this news release have been reviewed and approved by Stephen Nano, who is the qualified person as defined by National Instrument 43-101. Mr. Nano is a director and technical adviser of the company and is not considered independent for the purposes of NI 43-101.

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