Latin Metals and Daura Gold option Cerro Bayo and La Flora Projects, Santa Cruz Province, Argentina

Latin Metals Inc. [TSXV: LMS; OTCQB: LMSQF] reported that it has entered into a binding letter agreement with Daura Gold Corp. [TSXV: DGC] under the terms of which, Daura can earn up to an 80% interest in the Cerro Bayo and La Flora projects.

Daura will be granted the option to earn a 75% undivided interest in the Properties for a period of 38 months from the date of execution and delivery of the letter agreement.

To exercise the option, Daura must make aggregate payments of US $1,700,000 to Latin Metals, assume payments of US $400,000 to the underlying vendor, complete exploration work commitments, and prepare and deliver to Latin Metals a technical report prepared in accordance with Form 43-101F1 on the properties, addressed to Latin Metals and containing a mineral resource estimate on the properties.

Irrevocable work commitments to be completed on or before April 30, 2026, are 50-line km of IP profiling, 150-line km of gradient array IP, and 1,500 metres of drilling. A total of 28,000m of drilling must be completed prior to the exercise of the option.

Keith Henderson, CEO of Latin Metals, stated: “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 Corp., commented: “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.”

The properties are currently subject to an underlying purchase agreement between Latin Metals and Tres Cerros Exploraciones S.R.L. The underlying vendor retains a 0.75% NSR royalty, 0.5% can be purchased for US $1,000,000, which cost will be assumed by Daura.

Concurrently with the exercise of the option, Daura may give notice to Latin Metals of its intention to increase its interest in the properties to 80% (the top-up right). To exercise the top-up right, Daura must make cash payments to Latin Metals based on the measured, indicated and inferred mineral resources included in the mineral resource Estima set out in the technical report, as follows: US$7.00 per gold equivalent ounce of measured and indicated resources; and US$5.00 per gold equivalent ounce of inferred resources.

Upon written notice by Daura to Latin Metals of the exercise of the option, Latin Metals and Daura will be deemed to have formed a joint venture in respect of which the initial participating interests of the parties will be 75% Daura (80% if the top-up right is exercised), and 25% Latin Metals (20% if the top-up right is exercised).

Upon the formation of the joint venture, Daura will assume Latin Metals’ existing right to repurchase 0.5% of the existing 0.75% net smelter returns royalty from the underlying vendor for US$1,000,000.

If the interest of either party falls below 10%, the parties’ interest will be converted to a 2% NSR royalty, of which half (being 1%) can be purchased by the other party for US $5,000,000 at any time until three months after a production decision.

Following the top-up right expiry date, and for 90 days thereafter, Latin Metals may elect in its sole discretion to convert its interest in the joint venture to a 3.0% net smelter returns royalty (the converted royalty), leaving Daura with a 100% interest in the properties. Daura shall have the right to purchase 33.33% (being 1%) of the converted royalty upon the payment to Latin Metals of US$5,000,000 at any time until the date that is three months after a production decision on the properties has been made, in which case the converted royalty will be reduced to 2.0%.

In March 2025, Latin Metals received formal approval of the Environmental Impact Assessment (EIA), authorizing exploration drilling at Cerro Bayo. The approved permit includes authorization for 21 drill pads across the project area. A total of nine high-priority targets defined by historical and recent exploration and the project is year-round accessible, with excellent infrastructure and an experienced workforce in Santa Cruz Province.

Exploration work completed to date, including geochemical sampling, detailed mapping, and over 100 line-km of magnetic surveys, has defined a 6 km-wide structural corridor with multiple low-sulfidation epithermal-style vein targets.

Cerro Bayo and La Flora are located in the heart of the Deseado Massif, a prolific region with over 600 million ounces of silver and 20 million ounces of gold discovered since 1990. The district hosts multiple producing mines and advanced-stage projects, including Newmont’s Cerro Negro Mine (~7 Moz AuEq) and Hochschild’s San Jose Mine (~64 Moz AgEq).

Cerro Bayo’s geological setting, structural controls, and alteration footprint are consistent with known high-grade gold-silver systems in the region.

Daura is advancing high-impact exploration projects in Peru’s Ancash region. Daura owns a 100% undivided interest in over 15,900 hectares of exploration concessions in Ancash, including the 900-hectare Antonella target and adjacent 2,900 Libelulas concessions.

Latin Metals is a copper, gold and silver exploration company operating in Peru and Argentina under a prospect generator model, minimizing risk and dilution while maximizing discovery potential. With 18 projects, the company secures option agreements with major mining companies to fund exploration. Latin Metals is seeking new partners to advance its portfolio.