Patagonia Gold Enters Into Option Agreement With Astra Exploration Inc. For Exploration And Development Of La Manchuria Property In Argentina

(MENAFN- GlobeNewsWire - Nasdaq) VANCOUVER, British Columbia, July 09, 2024 (GLOBE NEWSWIRE) -- Patagonia Gold Corp. (“Patagonia” or the“Company”) (TSX.V:PGDC) is pleased to announce that it has entered into a binding letter agreement dated July 8, 2024 (the“Option Agreement”) with Astra Exploration Inc. (TSX.V:ASTR) (“Astra”, and together with the Company, the“Parties”). The Option Agreement grants Astra an option (the“Option”) to earn up to a 90% undivided interest in the Company's La Manchuria property (the“Property”) in return for spending at least US$3.0M on the Property and making a cash payment of US$5.0M, as described below.

The Property is the +5,600 hectare-sized, gold and silver property owned by Patagonia Gold S.A. (“PGSA”), a subsidiary of the Company. The Property is located within the prospective and permissive Deseado Massif geologic region of the Santa Cruz Province of southern Argentina. As disclosed in the Technical Report (as defined below), the Property has a mineral resource of 474 k (thousand) tonnes of indicated mineral resources grading 2.59 grams per tonne (g/t) of gold and 129 g/t of silver and a further 1.84 M (million) tonnes of inferred mineral resources grading 1.3 g/t of gold and 40 g/t of silver.

Summary of the Terms of the Option Agreement

  • Pursuant to the Option Agreement, Astra has an option to earn up to a 90% managing, joint venture interest in the Property over six years (subject to Astra's right to extend such timeframe in accordance with the Agreement) upon achievement of the Earn-In Obligations (as defined below).
  • A 45-day due diligence period will commence once the Company obtains the written approval: (i) of the Option from the holder of the existing 2.5% Net Smelter Return (“NSR”) royalty over the Property; and (ii) from the Santa Cruz Provincial authorities for the Company's updated work plan for the next five years on the Property, which has been agreed to by the Parties.
  • The Earn-In Obligations shall vest and commence on the date (such date, the“Election Date”) Astra delivers written notice to the Company and PGSA confirming that it wishes to proceed with acquiring the Option.
  • Astra will incur at least US$3.0M in staged expenditures (of which US$150,000 over the first 12 months are non-discretionary) on and for exploration and development of the Property by the 4th anniversary of the Election Date, subject to Astra's right to extend such timeframe (the“Initial Earn-In Obligations”).
  • Upon satisfying the Initial Earn-In Obligations, Astra will have a right to exercise the Option to earn an 80% interest in the Property. Following such exercise, Astra and PGSA will hold 80% and 20%, respectively, in a joint venture company holding the Property.
  • Under the Option, Astra may also acquire an additional 10% interest in the Property by making a cash payment of US$5.0M to Patagonia (the“Additional Earn-In Obligations” and together with the Initial Earn-In Obligations, the“Earn-In Obligations”) within two years of Astra having earned an 80% interest in the Property (subject to Astra's right to extend such timeframe).
  • The Company's interest in the Property (i.e., its 10% or 20% interest, depending on whether the Additional Earn-In Obligations have been satisfied) shall be carried until publication of a technical report prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”) defining an inferred mineral resource, an indicated mineral resource, or a combination of inferred mineral resource and an indicated mineral resource, of 1 million ounces of gold equivalent (AuEq).
  • If either Party's interest is diluted below 10%, such interest will be converted to a 1% NSR royalty.

Mr. Christopher van Tienhoven, Chief Executive Officer of Patagonia, stated: “We are pleased to have joined with Astra for further exploration and development of the Property, our gold and silver, exploration-stage property. This will allow the Company's shareholders to realize value from further exploration and development of the Property and permit the Company to focus on its material projects, mainly Cap Oeste and Calcatreu.”

Qualified Person's Statement

Donald J. Birak, an independent consulting geologist, Registered Member of SME, Fellow of AusIMM, and qualified person as defined by NI 43-101, has reviewed and approved the scientific and technical information in this news release.

Additional information about the Property and the mineral resources referred to in this news release are available in the technical report prepared in accordance with NI 43-101, entitled“Updated Technical Report on the Mineral Resources of the La Manchuria Project Santa Cruz Province, Argentine” dated effective February 28, 2019 (the“Technical Report”), which is available under the Company's profile on SEDAR+ at .

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 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 430 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: ...


This news release contains certain forward-looking statements, including, but not limited to, statements with respect to, among other things, the Option Agreement and Astra's interest in the Property, the advancement and development of gold and silver projects in the Patagonia region of Argentina, including the Calcatreu property, and the anticipated growth in shareholder value. Wherever possible, words such as“may”,“will”,“should”,“could”,“expect”,“plan”,“intend”,“anticipate”,“believe”,“estimate”,“predict” or“potential” or the negative or other variations of these words, 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 risk, 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. Factors that could cause future results to differ materially from those anticipated in forward-looking statements in this news release include, among other things, (i) the risk that the Company may not be able to secure the requisite approvals for the Option Agreement, (ii) changes in law, (iii) unforeseen circumstances and events affecting the Company's ability to implement its business strategies and pursue business opportunities, (iv) the state of the capital markets, (v) the availability of funds and resources to pursue the Company's proposed plans, and (vi) 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+ at . All such risk factors should be considered carefully, and readers should not place undue reliance on the forward-looking statements in this news release. 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 these forward-looking 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 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.


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