Mr. Christopher van Tienhoven reports

PATAGONIA GOLD ANNOUNCES ASTRA'S EXERCISE OF EARN-IN OPTION AT LA MANCHURIA

Astra Exploration Inc. has exercised its first earn-in option under the binding letter agreement dated July 8, 2024, between Astra, Patagonia Gold Corp. and Patagonia Gold S.A. in respect of the company's La Manchuria gold and silver property in Santa Cruz province, Argentina.

Astra exercised the first earn-in by delivering written notice to Patagonia on Aug. 11, 2026, following the completion of exploration and development expenditures on the property in excess of $3.0-million (U.S.), thereby earning an 80-per-cent interest in the property. Patagonia retained a 20-per-cent interest.

Patagonia and Astra are working to establish the joint venture structure contemplated by the option agreement, including transferring the property and additional mining claims within the agreed area of interest to a jointly owned Argentine mining company (NewCo). Once the transfers are complete, Astra will own 80 per cent of NewCo and Patagonia will own 20 per cent.

La Manchuria and Patagonia's retained interest

La Manchuria is a gold and silver project covering more than 5,600 hectares in the prospective Deseado Massif geological region of Santa Cruz province, Argentina. The property hosts known gold and silver mineralization and provides further exploration potential within one of Argentina's most significant precious metals districts.

Patagonia's retained 20-per-cent interest gives the company and its shareholders continued exposure to La Manchuria's future growth and advancement as Astra progresses the property under the option agreement.

Under the option agreement, Patagonia's interest will be carried until a technical report prepared in accordance with National Instrument 43-101 -- Standards of Disclosure for Mineral Projects (NI 43-101) defines at least one million gold equivalent ounces (AuEq) in the inferred mineral resource category, the indicated mineral resource category or a combination of both. After this milestone is achieved, the parties will finance expenditures in proportion to their respective interests in NewCo.

Astra may acquire a further 10-per-cent interest, increasing its ownership to 90 per cent and reducing Patagonia's interest to 10 per cent, by paying Patagonia $5.0-million (U.S.) in cash within two years after completion of the first earn-in, subject to Astra's extension rights under the option agreement. If either party's interest is subsequently diluted below 10 per cent, such interest will be converted into a 1-per-cent net smelter return royalty.

Christopher van Tienhoven, chief executive officer of Patagonia Gold, commented: "Astra's exercise of the first earn-in at La Manchuria represents another important step in Patagonia's strategy of maximizing the value of its project portfolio through strategic partnerships, while retaining meaningful exposure to the future upside of these assets.

"This approach allows projects within our portfolio to be advanced through third party investment and expertise while preserving significant potential value for Patagonia's shareholders. It is consistent with the strategy we have pursued across our portfolio, including at the Tornado and Huracan project in Santa Cruz which are under an option agreement with Newmont, while allowing the company to remain focused on advancing its core projects."

About Patagonia Gold Corp.

Patagonia Gold is a South America-focused, publicly traded mining company listed on the TSX Venture Exchange. The company seeks to grow shareholder value through the exploration and development of gold and silver projects in the Patagonia region of Argentina. The company is primarily focused on the Calcatreu project in Rio Negro and the development of the Cap-Oeste underground project. Patagonia, indirectly through its subsidiaries or under option agreements, has mineral rights to over 375 properties in an extensive portfolio of properties in several provinces of Argentina and is one of the largest landholders in the province of Santa Cruz, Argentina.

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