Mogotes Metals (TSX-V:MOG) has closed a US$15 million ($20.84 million) strategic investment from Rio Tinto Canada, a regional division of Rio Tinto (ASX:RIO).

Rio Tinto subscribed for approximately 30.39 million units at C$0.70 per unit for gross proceeds of US$15 million, equivalent to C$21.3 million. Each unit comprises one common share and half a warrant, with whole warrants exercisable at C$1.00 for 18 months from closing.

The placement gives Rio Tinto access to Mogotes’ exploration team and district knowledge in the Vicuña district, while providing Mogotes with Rio Tinto’s global technical capabilities.

Following the closing of this placement, the companies formed a technical alliance focused on Mogotes’ Filo Sur Copper-Gold-Silver Project in Argentina and Chile.

Key elements of the alliance include the formation of a joint technical committee to advise the exploration program, the application of Rio Tinto’s proprietary geoscience tools, and joint efforts to expand the consolidated land position.

CEO Allen Sabet says the completion of this placement is “a powerful endorsement” of the prospectivity of Filo Sur and the broader Vicuña district.

“The alliance gives our team access to one of the deepest exploration capabilities in the industry while preserving Mogotes’ ability to deliver value to all shareholders,” Sabet says.

Under the terms of the alliance, the companies will initially target the Filo Sur Project, but may expand their joint efforts across the broader Vicuña district or include data sharing agreements on prospective targets in Kazakhstan.

Concurrently, Mogotes issued an additional estimated 8 million units at the same price to existing investors exercising pre-emptive rights, raising a further C$5.6 million.

Rio Tinto has agreed to customary standstill restrictions during an exclusivity period. All securities issued carry a four-month-and-one-day statutory hold period under Canadian securities laws.

Mogotes notes the placement received conditional approval from the TSX Venture Exchange.

Mogotes Metals is an explorer focused on discovering and developing copper, gold, and silver deposits in the Vicuña district of Argentina and Chile.

Write to Paula Fabe at Mining.com.au

Images: Mogotes Metals

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