Patagonia Gold Signs Drilling Agreement at Monte Leon

Patagonia Gold signed a farm-in agreement with a private, arm’s length company working in the mining domain (the Partner) for a drilling project of approximately 20,000 meters on the Monte Leon target in the Company’s El Tranquilo block of concessions to receive up to 50% interest in Monte Leon.

Monte Leon is located within the El Tranquilo concession block, about 12 kilometers from Cap-Oeste. In 2021, Patagonia Gold finished a preliminary 6,000+ meters of rotary air blast (RAB) drilling at Monte Leon intended to sketch the surface footprint of anomalous silver and gold mineralization.

This work went on in 2022, so more than 15,500 meters of RAB drilling has now been accomplished. Mineralization at Monte Leon is understood to be within the same NW-trending structural path that dominates mineralization at the Company’s Cap-Oeste Project. Monte Leon has had a few historic, pre-Company explorations comprising 21 core and 76 reverse circulation drill holes.

The Partner will financially back a core drilling program to be carried out by the Company, split into two phases, to establish the depth and lateral extent of epithermal-style mineralization at Monte Leon.

Phase 1 will comprise 8,500 meters for the Partner to receive a 20% stake in Monte Leon and will have the option to progress to Phase 2 to drill an additional 11,500 meters for a maximum of 20,000 meters to receive an extra 30% interest in Monte Leon, for the highest participation of 50%.

We are excited with the opportunity of drilling this prospective target adjacent to the known Cap-Oeste Project. The drilling at Monte Leon is also a milestone moment for the Company as, based on our work and historic drilling, we believe the property has potential for new, high-grade, precious metal mineralization.

Christopher van Tienhoven, Chief Executive Officer, Patagonia Gold Corp.

Pan American Silver Corp presently controls the COSE deposit.

RAB drilling is a frequently used exploration technique used to detect near-surface mineralization. Because RAB drilling uses open-hole rotary percussion drilling techniques susceptible to down-hole contamination, RAB samples are seldom used in mineral resource approximation.

Nevertheless, RAB results are beneficial to define targets for deeper drilling, usually using core drills. At Monte Leon, RAB drilling has defined numerous clusters of anomalous gold mineralization that will guide ensuing core drilling.

Samples from the Company’s RAB drilling were sent to Alex Stewart International, a qualified commercial analytical services company, together with duplicates, blanks, and standards per Company procedures for quality assurance and quality control (QAQC) purposes. All QAQC samples came back with analytical values that were within satisfactory limits.