Mr. Joseph van den Elsen of Pampa Metals reports

PAMPA METALS TO ACQUIRE RUGBY RESOURCES AND PURSUE ASX LISTING, CREATING A LEADING SOUTH AMERICAN PORPHYRY COPPER EXPLORER

Pampa Metals Corp. and Rugby Resources Ltd. have executed a binding letter agreement contemplating the acquisition by Pampa Metals of 100 per cent of Rugby's shares.

Highlights:

• Transaction to create a leading South American focused copper explorer holding two significant discoveries on the world's premier copper-producing belt;
• Focused strategy to create substantial shareholder value through:
  • Rapid exploration and advancement of Pampa Metals' flagship Piuquenes copper-gold porphyry project in Argentina, where significant drill results to date include (refer to Pampa's Dec. 5, 2023, and March 18, May 6 and May 23, 2024, news releases):
    • PIU01-2024DDH -- 422 metres at 0.48 per cent copper and 0.61 gram per tonne gold (198 m to 620 m):
      • Including 132 m at 0.71 per cent Cu and 0.85 g/t Au (220 m to 352 m);
      • Including 80 m at 0.60 per cent Cu and 0.77 g/t Au (468 m to 548 m);
    • PIU02-2024DDH -- 448 m at 0.42 per cent Cu and 0.46 g/t Au (214 m to 662 m):
      • Including 188 m at 0.59 per cent Cu and 0.63 g/t Au (450 m to 638 m);
      • Including 126 m at 0.66 per cent Cu and 0.74 g/t Au (450 m to 576 m);
    • PIU03-2024DDH -- 801 m at 0.40 per cent Cu and 0.51 g/t Au (54 m to 855 m (end of hole)):
      • Including 518 m at 0.53 per cent Cu and 0.73 g/t Au (192 m to 710 m);
      • Including 176 m at 0.71 per cent Cu and 0.74 g/t Au (192 m to 368 m);
    • PIU16-01DDH -- 558 m at 0.38 per cent Cu and 0.42 g/t Au (362 m to 920 m (end of hole)):
      • Including 130 m at 0.81 per cent Cu and 0.6 g/t Au (362 m to 492 m);
  • Recommencing drilling at Rugby's Cobrasco copper-molybdenum porphyry discovery in Colombia, where the only three holes ever drilled reported wide intercepts of highly significant mineralization (refer to Rugby's Jan. 17, 2023, and Feb. 9, 2023, news releases):
    • CDH001 -- 808 m at 0.42 per cent Cu and 79 parts per million molybdenum (184 m to 992 m):
      • Including 138 m at 0.77 per cent Cu and 164 ppm Mo (768 m to 906 m);
      • Including 82 m at 0.90 per cent Cu and 199 ppm Mo (774 m to 856 m);
    • CDH002 -- 754 m at 0.46 per cent Cu and 76 ppm Mo (152 m to 906 m):
      • Including 172 m at 0.74 per cent Cu and 78 ppm Mo (474 m to 646 m);
    • CDH003 -- 144.6 m at 0.69 per cent Cu and 155 ppm Mo (156 m to 300.6 m (end of hole));
  • Initial assessment of the prospective Mantau IOCG (iron oxide copper/gold) copper project in Chile;
• Company intends to pursue a posttransaction dual listing on the Australian Securities Exchange and the TSX Venture Exchange;
• Significant corporate and technical synergies available through multiasset approach;
• Refreshed board and management team to drive shareholder value creation;
• Strong year-round multiasset news flow;
• All-share transaction reflects compelling value for both sets of shareholders;
• Prior to closing of the transaction, Rugby shareholders will receive an interest in a newly formed company (Rugby Spinco), to which Rugby will transfer certain assets for the purpose of separating these assets from Rugby.

Proposed transaction terms

Pursuant to the binding letter agreement dated Feb. 17, 2025, Pampa Metals is proposing to acquire all the issued and outstanding common shares of Rugby in exchange for common shares of Pampa Metals by way of a statutory plan of arrangement, under the Business Corporations Act (British Columbia), on the basis of one Pampa Metals share for every 6.4 Rugby shares. Upon closing of the transaction, the Rugby shareholders will hold approximately 38 per cent of the outstanding shares of Pampa, subject to adjustment for any private placement financing transactions completed prior to closing. Based on the current number of issued and outstanding common shares of Rugby, Pampa would issue approximately 49,472,403 shares in exchange for all of the outstanding Rugby shares. The deemed value per Pampa share is 16 cents, being equal to the financing price announced Feb. 5, 2025.

On closing, Bryce Roxburgh, the president and chief executive officer of Rugby, will be appointed to the board of directors of Pampa and the current board of Rugby will resign.

Prior to the closing, Rugby will transfer to Rugby Spinco the following assets:

1. A 20-per-cent joint venture interest in the Cobrasco project, which is free carried to completion of a feasibility study;
2. The El Zanjon and Venidero gold-silver projects in Argentina;
3. A joint venture interest in the Georgetown project, a copper-gold exploration project in Australia;
4. A 1.5-per-cent net smelter return (NSR) royalty over the Mantau IOCG project, subject to right to buy back a 0.5-per-cent NSR royalty at fair market value within 12 months of completing a preliminary feasibility study recommending advancing to a full feasibility study.

Subject to regulatory and shareholder approval, Rugby intends to distribute all of the shares of Rugby Spinco to the existing Rugby shareholders on closing and Rugby Spinco will cease to be a subsidiary of Rugby. There is no current intention to list the shares of Rugby Spinco on a stock exchange.

The proposed transaction is and will be subject to a range of conditions, including, but not limited to, Pampa Metals and Rugby entering into a definitive agreement relating to the transaction containing terms and conditions outlined in the letter agreement, as well as representations and warranties, conditions and other provisions all customary for transactions of this nature. The letter agreement creates a binding obligation of Rugby and Pampa Metals to take reasonable best efforts to complete due diligence and enter into the definitive agreement during a 45-day exclusivity period. The entering into of the definitive agreement is subject to, among other things, completion of the parties' respective due diligence, the receipt by Rugby of a favourable opinion as to the fairness, from a financial point of view, of the transaction to the Rugby shareholders and approval of the boards of Pampa Metals and Rugby. In the event the definitive agreement is entered into, the closing of the proposed transaction will be subject to additional conditions precedent, including, but not limited to, the receipt of all regulatory, court and shareholder approvals. There is no certainty that the parties will enter into the definitive agreement or conclude the proposed transaction.

During the exclusivity period, both parties are subject to certain non-solicitation covenants subject to standard fiduciary duty exceptions.

Prior to execution of the definitive agreement, all directors of Rugby will be required to enter into voting and support agreements with Pampa Metals, pursuant to which they will agree to vote Rugby shares held by them in favour of the transaction.

Board and management changes

Upon closing, Mr. Roxburgh, president and chief executive officer and a current director of Rugby, will join the board of Pampa Metals. Joseph van den Elsen will remain as executive chairman and chief executive officer of Pampa Metals.

Mr. Roxburgh

Mr. Roxburgh, a founding shareholder of Rugby, graduated with a bachelor of science in geology and geophysics from Sydney University in 1971 and has 50 years of experience in the exploration and mining industry.

Between 1971 and 1989, he worked for Amoco Minerals Australia Company and Cyprus Mines Corp. as Regional manager for eastern Australia and Southeast Asia, responsible for the exploration teams that discovered the Selwyn, Red Dome and Junction Reef orebodies. Between 1989 and 1998, he was exploration manager for Arimco NL and Climax Mining Ltd. in eastern Australia, Southeast Asia and South America, where he was responsible for the teams that discovered the Didipio gold-copper orebody in the Philippines and the Don Sixto gold deposit in Argentina. In 2003, he established Exeter Resource Corp., from which Extorre Gold Mines Ltd. was spun out. Extorre held the Cerro Moro gold deposit discovery in Argentina until it was acquired by Yamana Gold in 2012 and Exeter Resource Corp. held the Caspiche copper gold porphyry discovery in Chile until it was acquired by Goldcorp in 2017.

Pampa Metals' flagship project

Piuquenes copper-gold porphyry project -- San Juan, Argentina

In 2024, Pampa Metals successfully transitioned from early-stage copper and gold exploration to the assessment and acquisition of more advanced-stage copper project(s). The acquisition of an interest in the company-making, high-grade Piuquenes copper-gold porphyry project in San Juan, Argentina, has laid a strong foundation for significant shareholder value creation through the discovery and delineation of an economic copper-gold deposit(s).

Piuquenes is a newly discovered, gold-rich copper porphyry deposit located immediately adjacent to the north of Aldebaran Resources' giant Altar porphyry copper system. Other large porphyry copper projects in the San Juan Miocene porphyry belt include El Pachon (Glencore), approximately 30 kilometres to the south, the operating Los Pelambres copper mine (60 per cent Antofagasta PLC) in Chile and Los Azules (McEwen Mining) 50 km to the northeast. Corporate and exploration activity along the belt remains high, with major companies including Rio Tinto, South 32, BHP and Teck also active.

In 2024, Pampa Metals completed a maiden three-hole drill program for 2,592 m.

Each of the three drill holes from Pampa Metals' initial drill program intersected significant intervals of copper, gold and silver mineralization as follows:

• PIU01-2024DDH -- 422 m at 0.48 per cent Cu, 0.61 g/t Au and 2.9 g/t silver (198 m to 620 m):
  • Including 132 m at 0.71 per cent Cu, 0.85 g/t Au and 4.3 g/t Ag (220 m to 352 m);
  • Including 80 m at 0.60 per cent Cu, 0.77 g/t Au and 3.2 g/t Ag (468 m to 548 m);
• PIU02-2024DDH -- 448 m at 0.42 per cent Cu, 0.46 g/t Au and 2.44 g/t Ag (214 m to 662 m):
  • Including 188 m at 0.59 per cent Cu, 0.63 g/t Au and 3.49 g/t Ag (450 m to 638 m);
  • Including 126 m at 0.66 per cent Cu, 0.74 g/t Au and 3.94 g/t Ag (450 m to 576 m);
• PIU03-2024DDH -- 801 m at 0.40 per cent Cu, 0.51 g/t Au and 2.87 g/t Ag (54 m to 855 (end of hole)):
  • Including 518 m at 0.53 per cent Cu, 0.73 g/t Au and 3.45 g/t Ag (192 m to 710 m);
  • Including 176 m at 0.71 per cent Cu, 0.74 g/t Au and 4.86 g/t Ag (192 m to 368 m);
  • Including 64 m at 0.75 per cent, 1.2 g/t Au and 4.60 g/t Ag (554 m to 618 m);
  • Including 32 m at 0.64 per cent Cu, 0.71 g/t Au and 4.54 g/t Ag (642 m to 674 m).

Key technical findings from this program include:

• Delineation of a continuous body of high-grade porphyry copper-gold mineralization from surface to depths of greater than 800 m at Piuquenes Central;
• High-grade copper-gold mineralization remains open to depth and to the northeast;
• Confirmation of a multiphase porphyry system, with strongly developed porphyry A-type quartz stockwork veining hosting extensive chalcopyrite and bornite mineralization carrying significant copper and gold grades;
• Abundant bornite mineralization encountered both centrally and within the outer margins of the porphyry system, highlight significant potential for an underlying bornite-rich core;
• Low average arsenic and other deleterious elements reported in assays.

Pampa Metals continues to make excellent progress on its 2024/2025 follow-up drill program (refer to Jan. 21, 2025, and Feb. 3, 2025, news releases).

Rugby projects

Cobrasco copper-molybdenum project -- Colombia

The Cobrasco project is located along the underexplored Choco copper belt of the Western Cordillera, a continuation of the prolific Andean porphyry belt that extends through Chile, Peru and Ecuador to the south and Panama to the north. The project extends across 30 square kilometres and is defined by strong rock, stream sediment and soil geochemical anomalies supported by strong geophysical evidence. Drilling to date has only tested a small portion of the large system outlined by surface exploration work.

Rugby completed a drilling program in 2022, which included two holes, CDH001 and CDH002, and the upper portion of a third hole, CDH003. All holes intersected significant copper and molybdenum mineralization:

• CDH001 -- 808 m at 0.42 per cent Cu and 79 ppm Mo (184 m to 992 m);
  • Including 138 m at 0.77 per cent Cu and 164 ppm Mo (768 m to 906 m);
  • Including 82 m at 0.9 per cent Cu and 199 ppm Mo (774 m to 856 m);
• CDH002 -- 754 m at 0.46 per cent Cu and 76 ppm Mo (152 m to 906 m);
• • Including 172 m at 0.74 per cent Cu and 78 ppm Mo (474 m to 646 m);
• CDH003 -- 144.6 m at 0.69 per cent Cu, 155 ppm Mo and 1.4 g/t Ag (156 m to 300.6 m (end of hole)).

Hole CDH001 drilled beneath the central part of a strong coherent copper soil geochemical target, intersected strong porphyry copper-molybdenum mineralization. Drill hole CDH002 was collared approximately 250 m diagonally south of the section drilled by CDH001 and was terminated in a fault zone before hitting target depth. CDH003 was drilled at approximately 90 degrees to CDH002 from the same drill site. The hole was suspended at 300.6 m due to mechanical problems, well short of the target depth of more than 1,000 m.

Hole CDH001 intersected 82 m at 0.90 per cent Cu and 199 ppm Mo within a broader interval of 808 m of 0.42 per cent Cu and 79 ppm Mo.

Hole CDH002 collared 250 m south of the section tested by hole CDH001 intersected 172 m of 0.74 per cent Cu and 78 ppm Mo within a broader interval of 754 m of 0.46 per cent Cu and 76 ppm Mo from a downhole depth of 152 m. A near-surface mineralized zone of 70 m of 0.29 per cent Cu and 50 ppm Mo was also intersected from 18 m.

Hole CDH003 was suspended at 300.6 m in strong porphyry mineralization and intersected 144.6 m of 0.69 per cent Cu and 155 ppm Mo from 156 m to 300.6 m. Importantly, the final 2.6 m of this intersection to the bottom of hole assayed 2.69 per cent Cu, 151 ppm Mo and 7.3 ppm Ag; 148 m of 0.20 per cent Cu and 65 ppm Mo, including 60 m of 0.27 per cent Cu and 57 ppm Mo, were also intersected from eight m depth. This shallow intercept is interpreted as the continuation of the same shallow mineralization intersected in hole CDH002 (70 m of 0.29 per cent Cu and 50 ppm Mo).

Cobrasco mineralization is bornite dominant with lesser chalcopyrite and molybdenite. Penalty elements (particularly arsenic) are low in drill hole assays. Such mineralization would be expected to be amenable to the production of a high-grade copper concentrate using traditional mineral processing.

Initial drilling results, combined with mapping, geochemical and geophysical data, reinforce interpretation that Rugby has identified a very significant copper-molybdenum porphyry system at Cobrasco. Evidence to date strongly suggests a cluster of porphyry centres aligned within a northwesterly trending structural corridor, a characteristic commonly observed in other porphyry systems in the Western Andean Cordillera.

Approximately one kilometre north of the currently drilled porphyry mineralization, bornite-molybdenite veining within porphyritic rocks was mapped and sampled in an area of highly elevated molybdenum in soil geochemistry, indicating proximity to the core of a porphyry system.

Additionally, a large magnetic-low geophysical anomaly (indicative of magnetite destruction from a mineralizing porphyry system) was identified approximately two kilometres east of the drilled porphyry. Streams draining this feature contain copper-gold-rich breccia boulders, suggesting the potential for another substantial porphyry body.

Mantau copper-gold project -- Chile

The Mantau project covers an area of 45 square kilometres and is located 70 kilometres northeast of Antofagasta and 40 kilometres east of the port of Mejillones in northern Chile. The project benefits from a highly favourable location, offering excellent year-round access and low elevation.

Mantau is situated in the Coastal belt of northern Chile, which hosts several large copper deposits genetically and spatially related to the Atacama fault system. This metallogenic belt includes manto-type copper-silver, porphyry copper and iron oxide copper/gold (IOCG) orebodies. Mantos Blancos and Antucoya are the largest mines with annual production of approximately 70,000 tonnes of copper. Marimaca Copper Corp. has also outlined a significant copper oxide resource nearby with recent drilling extending high-grade copper mineralization in the underlying sulphide zone.

No environmental or community issues are known to exist within this historical mining area. There is no record of recent previous systematic exploration within the project area although there has been previous small-scale mining of oxide copper mineralization. Most of the project is covered by regolith with only limited outcrops.

Early work by Rugby geologists has identified mineralized hydrothermal breccias, widespread alteration and area of veining. Sampling of old workings returned values up to 16.7 per cent Cu and 5.91 g/t Au. Geologists also noted extensive specularite alteration of the host rock, which is typical of IOCG deposits in the region.

Next steps

Subject to satisfaction of the agreement conditions, the parties will act reasonably to finalize and enter into the definitive agreement as soon as practicable, but in any event no later than the end of the exclusivity period.

In parallel, Pampa Metals will continue to advance exploration at the Piuquenes project.

The entering into of the definitive agreement is subject to the agreement conditions. There is no certainty that the parties will enter into the definitive agreement or conclude the proposed transaction.

Rugby and Pampa Metals will issue further information about the proposed transaction in the near future.

Mr. van den Elsen, Pampa Metals' president and chief executive officer, commented: "This is an exciting time to be a Pampa Metals shareholder as we rapidly advance the Piuquenes project and pursue significant value through the discovery and delineation of an economic deposit(s) on the property. This season we have significantly expanded the footprint of the Piuquenes Central porphyry system and intersected bornite-rich mineralization indicative of a high-grade core. Drilling at Piuquenes East has intersected porphyry mineralization and quartz vein stockwork on the first hole and we continue to advance several other targets at Piuquenes through surface exploration. Securing the Cobrasco and Mantau projects via the acquisition of Rugby adds an exciting pipeline of high-quality, advanced-stage South American copper exploration projects to our portfolio. Rugby has already demonstrated Cobrasco to be an exceptional exploration opportunity based on the potential size and grade of the porphyry system outlined to date, and we look forward to continuing to explore this potential for a world-class copper deposit discovery on the property."

About Pampa Metals Corp.

Pampa Metals is a copper-gold exploration company listed on the Canadian Securities Exchange, Frankfurt Stock Exchange and the OTCQB exchange.

In November, 2023, Pampa Metals announced it had entered into an option and joint venture agreement for the acquisition of an 80-per-cent interest in the Piuquenes copper-gold porphyry project in San Juan province, Argentina.

About Rugby Resources Ltd.

Rugby is an exploration company conducting discovery-stage exploration on a portfolio of copper, gold and silver targets in Colombia, Argentina and Chile. The Colombian Cobrasco project is located along the Western Cordillera belt, which hosts large-scale copper-molybdenum mines in Chile, Peru and Panama (and more recent significant projects discovered in Ecuador). This belt has not been subjected to modern exploration in Colombia. Rugby looks to advance the Cobrasco project to demonstrate the economic potential of a major discovery for Colombia. The discovery of significant new copper opportunities is essential for the mining industry to supply the copper necessary to transition from fossil fuels to advanced electrification.

Rugby benefits from the experience of its directors and management, a team that has either been directly responsible for world-class mineral discoveries or has been part of the management teams responsible for such discoveries. Prior companies under their management included Exeter Resource Corp. and Extorre Gold Mines Ltd., which held significant projects in South America. These companies were taken over by Goldcorp (Newmont) and Yamana, respectively.

Qualified person

Technical information in this news release pertaining to the Piuquenes project has been approved by Mario Orrego. Mr. Orrego is a geologist, a registered member of the Chilean Mining Commission and a qualified person as defined by National Instrument 43-101. Mr. Orrego is a consultant to the company.

Technical information in this news release pertaining to the Cobrasco and other Rugby projects has been approved by Paul Joyce, Rugby's chief operating officer, director and a qualified person within the definition of that term in NI 43-101, Standards of Disclosure for Mineral Projects, has verified the scientific and technical information that forms the basis for this news release. Mr. Joyce is a fellow of the Australian Institute of Geoscientists (registered member No. 1908).

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