Mogotes Metals firms up Beskauga project option

Mr. Allen Sabet reports MOGOTES METALS SECURES OPTION TO ACQUIRE ADVANCED BESKAUGA COPPER-GOLD-SILVER PROJECT Mogotes Metals Inc. has entered into a definitive option agreement to acquire a 100-per-cent interest in the Beskauga copper-gold-silver porphyry project, located in Pavlodar province, Republic of Kazakhstan. Transaction and project highlights: Near surface, potentially low cost: The higher-grade gold-copper-silver core of the resource starts at approximately 40 metres below surface, beneath clay overburden, potentially amenable to open-pit mining. Highlight drill intercepts within the MRE (mineral resource estimate) include (Table 2): BG21001: 957.0 metres at 0.58 gram per tonne Au, 0.34 per cent Cu and 1.92 g/t Ag from 44 m: Including 203.0 m at 1.12 g/t Au, 0.67 per cent Cu and 3.70 g/t Ag from 48 m; BG-033: 751.5 m at 0.56 g/t Au, 0.25 per cent Cu and 1.86 g/t Ag from 48.5 m; BG-064: 616.2 m at 0.46 g/t Au, 0.23 per cent Cu and 1.14 g/t Ag from 47.7 m. Significant existing resource: The Beskauga main deposit has a 2022 National Instrument 43-101 MRE within a conceptual pit shell at a gross metal value (GMV) cut-off of $20 (U.S.) per tonne (Table 1): Indicated: 111.2 million tonnes at 0.30 per cent Cu, 0.49 g/t Au and 1.34 g/t Ag (containing 333,600 tonnes Cu, 1.8 million ounces Au and 4.8 million ounces Ag); Inferred: 92.6 million tonnes at 0.24 per cent Cu, 0.50 g/t Au and 1.14 g/t Ag (containing 222,200 tonnes Cu, 1.5 million ounces Au and 3.4 million ounces Ag); This represents a robust starting-point resource with expansion potential. Favourable deal terms -- deferred consideration under option agreement: Mogotes has the right to purchase a 100-per-cent interest in the Beskauga project with an initial $2.5-million (U.S.) payment (of which $1.5-million (U.S.) will be in cash and $1-million (U.S.) will be in cash or shares), followed by annual payments of $1-million (U.S.) in 2027, 2028 and 2029, with each payment up to 50 per cent paid in common shares of Mogotes, and a final payment of $19.2-million (U.S.) on or before Feb. 8, 2029, for total consideration of $24.7-million (U.S.) ($17.2-million (U.S.) in cash and up to $7.5-million (U.S.) of value in common shares of Mogotes). Considerable resource expansion potential: Mogotes's initial analysis suggests the higher-grade mineralization within the MRE defines a large southeast-plunging shoot that remains open at depth. Post-MRE drilling totalling 18,657 metres in 28 holes has returned significant new mineralized intercepts extending outside of the 2022 resource, confirming the potential to grow the deposit with further drilling. Postresource drilling highlights include (Table 3): BG21007: 1,124.1 m at 0.40 g/t Au, 0.25 per cent Cu and 1.69 g/t Ag from 46 m: Including 107.0 m at 0.68 g/t Au, 0.52 per cent Cu and 3.86 g/t Ag from 50 m; BG22015: 955.0 m at 0.29 g/t Au, 0.12 per cent Cu and 0.97 g/t Ag from 45 m: Including 17.0 m at 1.05 g/t Au, 0.37 per cent Cu and 1.70 g/t Ag from 337 m. District-scale exploration upside: The Beskauga project exploration licence covers a large tenure package hosting multiple untested porphyry-style magnetic targets with similar geophysical signatures to the Beskauga main deposit. The Beskauga Central and Beskauga South prospects, among others, display magnetic depletion signatures consistent with epithermal alteration within the broader intrusive complex and have received limited to no modern exploration drilling, representing compelling satellite targets that could host additional mineralized systems. Established mining jurisdiction: Kazakhstan is a globally significant mineral producer: The country is the world's largest uranium producer (approximately 40 per cent of global output), a top-10 copper and gold producer, and holds the third-largest chromite reserves globally. Kazakhstan's new tax code (effective January, 2026) provides 100-per-cent capital deductions for exploration expenditures and a 0-per-cent mineral extraction tax for five years on new sites, reinforcing its investor-friendly credentials. The government targets $150-billion (U.S.) in foreign direct investment by 2029, and recent legislative reforms (January, 2025) further strengthen protections for foreign investors. Since 2020, Rio Tinto, Ivanhoe, Fortescue, BHP (through its Xplor generative exploration program), Barrick Mining, First Quantum Minerals and Teck Resources have established exploration programs in the country. The willingness of these globally significant operators to deploy capital into Kazakhstan validates both the geological prospectivity and the regulatory and operating environment of the jurisdiction. Highly developed infrastructure: The project is located approximately 370 kilometres from the national capital, Astana, and 70 km southwest of the provincial capital, Pavlodar, within the heart of Kazakhstan's mining and heavy industry belt. Established rail and sealed national highway infrastructure lie within 20 km, a 1,100-kilovolt-ampere power line traverses the project, and the region hosts a skilled work force and large-scale Cu-Au mining operations, including the Bozshakol mine (1.1 billion tonnes at 0.34 per cent Cu and 0.16 g/t Au). Favourable metal price environment: Mogotes's analysis suggests that positive results from post-MRE drilling, combined with significantly improved metal prices since the 2022 resource estimate was prepared (the MRE used $3.50 (U.S.) per pound Cu and $1,750 (U.S.) per pounce Au versus current prices well above those levels), offer considerable potential to update and improve the MRE. Countercyclical exploration calendar: The Beskauga project exploration season is countercyclical to the exploration season for Mogotes's Filo Sur project in the Vicuna district, providing potential for year-round exploration and news flow for the company. Further updates: Mogotes will provide further technical information on the Beskauga project in coming days as the company prepares for the 2026 exploration season. Chief executive officer Allen Sabet commented: "The Beskauga project acquisition marks a transformational step for Mogotes Metals. We have secured the right to earn a 100-per-cent interest in a resource-stage copper-gold-silver project that combines scale, grade, near-surface mineralization and district-scale exploration upside -- all in a jurisdiction that is increasingly recognized as one of the most attractive in the world for responsible mineral exploration and development. "With over 200 million tonnes already delineated and a higher-grade core starting at just 40 metres below surface, Beskauga project offers a compelling foundation for value creation. The deposit remains open at depth and along strike, with postresource drilling confirming that the system extends well beyond the current resource boundary. Equally exciting, the broader exploration licence hosts multiple untested targets with geophysical signatures analogous to the main deposit -- any one of which could represent a significant new discovery. "Kazakhstan's combination of favourable geology, established mining infrastructure, competitive operating costs and a strengthened investor protection framework makes it an ideal environment for an exploration company of our size to create outsized value. We are already on the ground preparing for the 2026 field season and look forward to updating shareholders as we advance our integrated exploration and targeting program." Strategic rationale -- a complementary portfolio The addition of the Beskauga project is designed to complement the value of Mogotes's flagship Filo Sur project in the Vicuna district: Filo Sur remains the company's primary exploration asset and continues to receive priority financing and technical focus. The Beskauga project is being acquired under an option structure that preserves the company's financial flexibility: All payments are discretionary and staged over three years, the initial cash outlay is modest relative to the value of the resource being secured, and a portion may be settled in shares rather than cash, protecting treasury for Filo Sur drilling programs. Critically, the two projects operate on opposite seasonal calendars -- the Kazakh field season runs during the northern hemisphere summer while Filo Sur's high-altitude Andean season is concentrated in the southern hemisphere summer -- allowing Mogotes's technical team and management bandwidth to be deployed year-round without competing for the same resources. The Beskauga project cost of drilling is expected to run approximately $100 (U.S.) per metre drilled, allowing a small investment in exploration budget to go a long way. For shareholders, this means continuous exploration news flow, reduced single-asset concentration risk and a second pathway to value creation through a resource-stage deposit with near-term development optionality, all achieved with relatively low cost of operation and option payments in the first years. Summary of option agreement terms Pursuant to the option agreement, Mogotes, through its wholly owned subsidiary, Mogotes Metals Kazakhstan Inc. (the optionee), has been granted the sole and exclusive option to acquire 100 per cent of the participating interests in Dostyk LLP (the target company), a Kazakh limited liability partnership that holds the Beskauga project exploration licence, from Copperbelt AG (the optionor). Key terms are summarized below: Option consideration: Total payments of $24.7-million (U.S.) comprising $17.2-million (U.S.) in cash payments (cash-only amounts) and $7.5-million (U.S.) payable in cash or Mogotes common shares at the optionee's election (eligible amounts). The payment schedule is as follows: $2.3-million (U.S.) within two business days of execution ($1.3-million (U.S.) cash and $1-million (U.S.) in cash or shares); $1-million (U.S.) on Jan. 1, 2027 ($500,000 (U.S.) cash and $500,000 (U.S.) in cash or common shares); $1-million (U.S.) on Jan. 1, 2028 ($500,000 (U.S.) cash and $500,000 (U.S.) in cash or common shares); $1-million (U.S.) on Jan. 1, 2029 ($500,000 (U.S.) cash and $500,000 (U.S.) in cash or common shares); $19.2-million (U.S.) on or before Feb. 8, 2029 ($14.2-million (U.S.) cash and $5-million (U.S.) in cash or common shares). Share pricing: The common shares issued in satisfaction of eligible amounts are priced at the greater of: (i) the 20-day VWAP (volume-weighted average price) ending on the last trading day prior to the election notice; and (ii) the market price on the execution date subject to a discounted market price of 48 Canadian cents per share and TSX Venture Exchange approval. Minimum expenditure commitments: The optionee must incur or finance minimum exploration expenditures totalling $860,000 (U.S.) over the option period. Mining licence: The optionee will prepare a mining licence application for submission by Jan. 1, 2027. Discretionary payments: All option payments and expenditure commitments are at the sole discretion of the optionee. The optionee may accelerate payments at any time without penalty. Location and previous exploration summary The Beskauga project is located in Pavlodar province in the northeast of the Republic of Kazakhstan, approximately 370 km from the national capital, Astana. The Pavlodar provincial economy is largely driven by mining and heavy industry, including large-scale open-pit and underground mining. The Beskauga project is located 70 km southwest of the provincial capital and is well serviced by established infrastructure, with the project located within 20 km of rail and sealed national highway. A 1,150-kilovolt-ampere power line also traverses the project. Kazakhstan sits within the Central Asian orogenic belt (CAOB), one of the world's most richly mineralized metallogenic domains. The CAOB hosts numerous porphyry copper-gold deposits. The Beskauga project is situated in the same geological terrane as the Bozshakol and Aktogai porphyry copper-gold operations, among others, underscoring the district's prospectivity. The Beskauga project area is covered by up to 40 m of postmineral clay overburden. As a result, prediscovery exploration was driven by project-scale IP (induced polarization) geophysics and magnetics and wide-spaced grid-based KGK drilling (similar to wet reverse circulation drilling) through cover to collect basement geochemistry and geology samples. Exploration drilling of anomalies generated by this process led to the discovery of the Beskauga project deposit in 2007. For a detailed exploration and company ownership history of the project, please see the NI 43-101 report. Mogotes is undertaking an integrated reprocessing and targeting program of the Beskauga project ahead of the Kazakh field season and will provide a technical update on the Project in the coming weeks. The Company has commenced engaging a local team and service providers to advance the 2026 program at the Beskauga project. Table 1 -- mineral resource estimate for the Beskauga main project Table 2 -- Beskauga select intercepts from drilling, from drill holes used in mineral resource estimate Table 3 -- Beskauga select intercepts from drilling completed after mineral resource estimate About Mogotes Metals Inc. Mogotes Metals is a mineral exploration company focused on copper, gold and silver exploration and development. The company's portfolio includes the Filo Sur project, which adjoins the large Filo del Sol copper-gold-silver discovery in the prospective Vicuna district of Argentina and Chile, and the Beskauga project (copper/gold/silver) in the Pavlodar province of Kazakhstan. Additional information The information contained in this news release was accurate at the time of dissemination but may be superseded by subsequent news release(s). The company is under no obligation, nor does it intend to update or revise the forward-looking information, whether as a result of new information, future events or otherwise. Qualified person The scientific and technical disclosure for the Beskauga project included in this news release has been reviewed and approved by Stephen Nano, who is a qualified person as defined by NI 43-101, Standards of Disclosure for Mineral Projects. Mr. Nano is a director and technical adviser of the company and is therefore not considered independent of the company for the purposes of NI 43-101. Cautionary note regarding historical estimates The mineral resource estimate referenced in this news release was originally prepared by David Underwood, BSc (honours), a registered professional natural scientist and an independent qualified person, as defined by NI 43-101 and disclosed in a technical report titled "Beskauga Copper-Gold Project, Pavlodar Province, Republic of Kazakhstan, Amended & Restated NI 43-101 Technical Report," with an effective date of Feb. 20, 2022, which is available under Arras Minerals Corp.'s SEDAR+ profile. Mineral resources referenced in this news release are classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) definition standards for mineral resources and mineral reserves (May 10, 2014). Mineral resources that are not mineral reserves do not have demonstrated economic viability. The mineral resource estimate for the Beskauga deposit referenced in this news release is treated as a historical estimate for the purposes of NI 43-101. The estimate was prepared by Mr. Underwood (Osino Resources) and Matthew Dumala, BSc (Archer Cathro & Associates), with an effective date of Feb. 20, 2022. Key assumptions include top-cut values for copper, gold and silver of 3.00 per cent, 10.0 grams per tonne and 25.0 grams per tonne, respectively, a gross metal value cut-off of $20 (U.S.) per tonne, base metal prices of $3.50 (U.S.) per pound copper, $22 (U.S.) per ounce silver and $1,750 (U.S.) per ounce gold, and recovery factors of 85.0 per cent for copper, 74.5 per cent for gold and 50.0 per cent for silver. The estimate was disclosed in the 2022 NI 43-101 technical report for the Beskauga copper-gold project, Pavlodar province, Republic of Kazakhstan (effective Feb. 20, 2022), for Arras Minerals. The company considers the historical estimate to be relevant to investors as it provides an indication of the mineralization potential of the Beskauga property. However, the company's qualified person, Mr. Nano, has not completed sufficient work to verify or classify the historical estimate as a current mineral resource or mineral reserve in accordance with NI 43-101 and CIM definition standards. The company is not treating the historical estimate as a current mineral resource or mineral reserve, and the historical estimate should not be relied upon. In order to verify or upgrade the historical estimate to current mineral resources or mineral reserves, the company anticipates that work would include, among other things: compilation and independent verification of the historical drill hole database, including relogging and reassaying of selected drill core where available; integration of the 18,657 metres of postresource drilling completed to date; an updated geological and structural interpretation; revised resource estimation incorporating current commodity prices and economic parameters; and, if warranted, additional infill and stepout drilling to support reclassification. The company intends to evaluate and advance this work as part of its 2026 exploration and technical program at the Beskauga project. Inferred mineral resources, where referenced, have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. We seek Safe Harbor.