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Patagonia Gold Corp. ("Patagonia" or the "Company") (TSX.V: PGDC) is pleased to announce that Astra Exploration Inc. (TSX.V: ASTR) ("Astra") has exercised its first earn-in option (the "First Earn-In") under the binding letter agreement dated July 8, 2024 (the "Option Agreement") between Astra, the Company and Patagonia Gold S.A. in respect of the Company's La Manchuria gold and silver property in Santa Cruz Province, Argentina (the "Property").
Astra exercised the First Earn-In by delivering written notice to Patagonia on August 11, 2026, following the completion of exploration and development expenditures on the Property in excess of US$3.0 million, thereby earning an 80% interest in the Property. Patagonia retained a 20% 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% of NewCo and Patagonia will own 20%.
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% 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 fund expenditures in proportion to their respective interests in NewCo.
Astra may acquire a further 10% interest, increasing its ownership to 90% and reducing Patagonia's interest to 10%, by paying Patagonia US$5.0 million 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%, such interest will be converted into a 1% 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 Huracán project in Santa Cruz which are under an option agreement with Newmont1, while allowing the Company to remain focused on advancing its core projects."
About Patagonia Gold
Patagonia Gold Corp. 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.
For more information, please contact:
Christopher van Tienhoven, Chief Executive Officer
Patagonia Gold Corp.
T: +54 11 5278 6950
E: cvantienhoven@patagoniagold.com
FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking statements, including, but not limited to, statements with respect to the Option Agreement, including implementation of the joint venture arrangements, the transfer of the Property and additional mining claims to NewCo, Astra's potential exercise of its option to acquire an additional 10% interest in the Property, future exploration and advancement of the Property, the potential growth and value of the Property, the Company's strategy of maximizing the value of its project portfolio, and the advancement and development of the Company's gold and silver projects in Argentina. Wherever possible, words such as "may", "will", "should", "could", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or similar words or phrases have been used to identify these forward-looking statements. These statements reflect management's current beliefs and are based on information currently available to management as at the date hereof.
Forward-looking statements involve significant risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. Such factors include, among other things, the ability of the parties to implement the joint venture arrangements contemplated under the Option Agreement, risks associated with exploration and development activities, changes in applicable laws and regulations, unforeseen circumstances affecting the Company's ability to implement its business strategies, the state of the capital markets, the availability of funds and resources, and general economic, market and business conditions.
For a more detailed discussion of additional risks and other factors that could cause actual results to differ materially from those expressed or implied by forward-looking statements in this news release, please refer to the Company's filings with Canadian securities regulators available on SEDAR+. Readers should not place undue reliance on forward-looking statements. Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with such statements. These forward-looking statements are made as of the date of this news release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by applicable law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
1 Please see the Company's news release on the Tornado and Huracan deal announced in April 2025 https://patagoniagold.com/investors/news-releases/
