Latin, Daura Gold agree to Cerro Bayo, Flora option

Executive Summary

• Latin Metals Inc. entered into a binding letter agreement with Daura Gold Corp. granting Daura the option to earn up to an 80% interest in the Cerro Bayo and La Flora projects in Santa Cruz Province, Argentina.
• To earn an initial 75% interest, Daura must pay $1.7 million in cash, assume $400,000 in vendor payments, complete specific exploration work commitments (including 1,500m of drilling by April 2026 and 28,000m total prior to exercise), and deliver a NI 43-101 technical report with a mineral resource estimate.
• Daura holds a "top-up right" to increase its stake to 80% by paying based on gold equivalent ounces in the resource estimate ($7/oz for measured/indicated; $5/oz for inferred).
• Upon exercise, a joint venture is formed. If either party's interest falls below 10%, it converts to a 2% NSR royalty. Latin Metals retains a 90-day window post-top-up expiry to convert its remaining interest into a 3% NSR royalty.

Key Details

• Transaction Structure: Binding letter agreement for an earn-in option on Cerro Bayo and La Flora projects.
• Initial Earn-In Terms (75% Interest):
  • Cash Payment: $1.7 million (U.S.) to Latin Metals.
  • Vendor Assumption: $400,000 (U.S.) to underlying vendor (Tres Cerros Exploraciones SRL).
  • Royalty Assumption: Daura assumes the right to repurchase 0.5% of the 0.75% NSR from the vendor for $1 million (U.S.).
  • Technical Requirement: Delivery of a Form 43-101F1 report containing a mineral resource estimate.
• Exploration Work Commitments:
  • By April 30, 2026: 50 line km of induced polarization profiling, 150 line km of gradient array IP, and 1,500 metres of drilling.
  • Prior to Option Exercise: Total of 28,000 metres of drilling must be completed.
• Top-Up Right (Up to 80% Interest):
  • Available concurrently with the exercise of the initial option.
  • Cost Basis: $7 (U.S.) per gold equivalent ounce of measured and indicated resources; $5 (U.S.) per gold equivalent ounce of inferred resources.
• Joint Venture Terms:
  • Initial split: 75% Daura / 25% Latin Metals (or 80/20 if top-up is exercised). Dilution Clause: If either party’s interest falls below 10%, it converts to a 2% NSR royalty. The other party has the right to purchase 1% of this royalty for $5 million (U.S.) until three months after a production decision.
• Latin Metals Royalty Option:
  • Within 90 days after the top-up right expires, Latin Metals may elect to convert its JV interest into a 3.0% NSR royalty.
  • Daura may purchase 1% of this converted royalty (reducing it to 2.0%) for $5 million (U.S.) until three months after a production decision.
• Underlying Vendor Terms:
  • Vendor retains a 0.75% NSR.
  • 0.5% of this royalty can be purchased for $1 million (U.S.), a cost assumed by Daura.
• Project Status:
  • Environmental impact assessment approved in March 2025, allowing exploration drilling.
  • Permit authorizes 21 drill pads.
  • Defined six-kilometre-wide structural corridor with multiple low-sulphidation epithermal-style vein targets.
  • Located in the Deseado massif, a prolific precious metal belt.

Notable Quotes

• Keith Henderson, CEO of Latin Metals: "Partnering with Daura Gold on the Cerro Bayo and La Flora projects demonstrates the continued success of our prospect generator model. Daura brings both financial strength and a strong technical team, enabling meaningful exploration in one of Argentina's most prolific precious metal belts. This agreement ensures our shareholders retain exposure to potential discovery while minimizing dilution."
• Mark Sumner, President of Daura Gold: "Cerro Bayo and La Flora strengthen Daura Gold's existing Peruvian portfolio with these properties in the Deseado massif, one of the most productive precious metal belts in the world. Through our agreement with Latin Metals, we're well positioned to rapidly advance drill-ready targets and unlock the projects' full potential."