Red Metal Signs Mining Agreement at Carrizal IOCG Project

Red Metal Resources, through its Chilean subsidiary Polymet, has signed a 5-year renewable mining lease agreement with Minera KMT SpA for the Farellon 1/8 mineral concession, part of the Carrizal Property. The agreement provides Red Metal with a 10% revenue royalty on copper, silver, and gold sales, and a 15% revenue royalty on cobalt sales (both net of a 1.5% existing royalty). KMT must maintain minimum monthly production of 2,500 tonnes of ore following a 7-month development period. Operations will target Level 7, which historically produced 5,080 tonnes at grades of 1.97% Cu, 9.62 g/t Ag, and 0.14 g/t Au between 2016-2017.

This is a game-changing announcement for Red Metal Resources. The company has effectively transitioned from a pure exploration play to a near-term producer with a recurring revenue stream—without having to spend its own capital on mining operations. The historical data provides confidence in the ore body: prior production from the same area (Level 7) ran at nearly 2% copper, which at current record copper prices (as referenced in prior news) translates to substantial cash flow potential.

A simple calculation illustrates the impact: 2,500 tonnes per month at 1.97% Cu equates to ~108,000 lbs of copper per month. At $4.50/lb copper, that's ~$486,000 in contained copper value monthly. Red Metal's 8.5% net royalty (10% minus 1.5%) would generate ~$41,300 per month, or ~$495,000 annually, from copper alone. Adding silver and gold byproducts increases this further. For a company that just raised $997,298 in total financing at $0.06 per unit, a ~$500,000+ annual royalty stream is materially transformative.

The progression of news from January 2026 through May 2026 shows a company methodically executing: financing secured, LiDAR survey completed, IP survey mobilized and underway, and now a production agreement that turns the project from an exploration expense into a cash-generating asset. The market has responded to this chain of derisking events, with the stock rising from $0.05 in late December 2025 to $0.14-$0.16 in May 2026. This production agreement validates the entire thesis and provides non-dilutive funding for ongoing exploration.

Red Metal Resources is a Canadian-listed junior mining company focused on the Carrizal Copper-Gold-Cobalt Property in Chile's Atacama Region. The 3,278-hectare property hosts a structurally controlled, vein-style Iron Oxide Copper-Gold (IOCG) system with surface veins extending over 12 km in strike length. Known mineralization extends to approximately 200 m depth. The property contains the Farellon project area, which includes the Farellon 1/8 concession now under lease to Minera KMT SpA. The company also holds the Point Piche Property in Quebec, though this appears to be a secondary, earlier-stage hydrogen exploration asset.