Filo Mining Corp. (TSX: FIL) (Nasdaq First North Growth Market: FIL) (OTCQX: FLMMF)  announces its results for the three and twelve months ended December 31, 2022.

Jamie Beck, President & CEO, commented, “With a strong balance sheet and continued exploration success in 2022, we are accelerating our exploration efforts. There are nine rigs currently available at the project and we are planning for year-round operations throughout 2023. We look forward to another year of high impact drilling comprised of a mix of both large and small step-outs to the north and south of our current interpretation of the Aurora Zone, as well as resource definition drilling within it. Our exploration results continue to stand out on a global scale and showcase the project as one of the most significant copper-gold-silver discoveries of its generation.”

2022 HIGHLIGHTS

• $82.5 million in exploration and project investigation costs incurred, yielding multiple successful holes highlighted by:
  • Discovering what is interpreted to be a new porphyry centre along the broader Filo trend, now named the “Bonita Zone”. The Bonita discovery supports the interpretation that Filo del Sol hosts a multikilometer, northeast-trending alignment of overlapping porphyry-centered hydrothermal systems which is open to expansion both to the south and to the north. The Bonita Zone is evidence of the untapped exploration potential that still exists at Filo del Sol despite the significant mineral discoveries made to date;
  • Drilling the highest grade silver intersection on the project to date in hole FSDH055A which intersected 64m at 1,214 g/t silver;
  • Extending the high-grade Breccia 41 Zone with new intersections in holes FSDH055C (126m @ 5.02% CuEq (2.12% Cu, 1.69 g/t Au, 188.7 g/t Ag)) and FSDH057 (289m @ 2.0% CuEq (1.18% Cu, 0.68 g/t Au, 36.0 g/t Ag));
  • Continued drilling of a combination of larger step-out holes to try to find the edges of the mineralized system, along with step-out and infill holes to further define the size of the remarkable Aurora Zone;
  • Both the Aurora Zone and Breccia 41 remain open to expansion in several directions and drilling to further define them is ongoing;
• Pace of exploration accelerated with drilling rig count on site increasing from 6 at the beginning of the year to 9 currently;
• The first year in which drilling, and field operations continued year-round, through the South American winter;
• Funding secured via $100 million strategic investment by BHP Western Mining Resources International Pty Ltd (“BHP”), resulting in BHP owning approximately 5% of the Company;
• Added to the S&P/TSX Composite Index – the headline index for Canada, represented by the largest companies on the TSX, and is the principal benchmark measure for the Canadian equity markets;
• Added to the VanEck Junior Gold Miners ETF, recognizing the significant precious metals content at Filo del Sol, as well as the continued growth in our market capitalization and trading liquidity;
• Entered 2023 with strong balance sheet including cash of $74.9 million and working capital of $60.3 million; and
• On January 17, 2023, announced a proposed name change to “Filo Corp.” to better align with the Company’s strategic vision and plans to seek shareholder approval for the name change at its upcoming annual shareholder meeting. If approved by shareholders, the name change is also subject to TSX approval.

FOURTH QUARTER 2022 DRILLING AND ASSAY RESULTS

During and subsequent to the end of the fourth quarter of 2022, the Company announced the following results from the ongoing drill program:

• FSDH067, an infill hole in the Aurora Zone, intersected 1,131.6m at 1.11% CuEq from a depth of 132m, including 4m at 1.54% Cu, 12.08 g/t Au and 20.5 g/t Ag from 202m and 36m at 0.76% Cu, 0.71 g/t Au and 123.2 g/t Ag from 248m. The hole ended in strong mineralization at a depth of 1,263.6m;
• FSDH062 intersected 1,313.2m at 0.65% CuEq from a depth of 134m, including 520.4m at 0.82% CuEq from 400m. The hole ended in strong mineralization at a depth of 1,447.2m due to rig capacity. The hole was collared at the eastern edge of the current mineral resource of the Aurora Zone and is entirely outside it;
• FSDH064 intersected 1,356.0m at 1.09% CuEq from a depth of 44m, including 79.0m at 182.6 g/t Ag from 306.0m and 424.0m at 1.54% CuEq from 536.0m. The hole ended in mineralization at a depth of 1,400.0m. The hole is an Aurora Zone infill hole, filling a 300m gap between previously drilled holes. It tested an area which has particularly high-grade mineralization in the shallow, oxidized part of the deposit. The intersected silver zone correlates well with adjacent holes, although the silver zone here is thicker and higher-grade than expected. The porphyry interval in this hole also correlates well with adjacent holes;
• FSDH070A an infill hole in the Aurora Zone intersected 1,056.5m at 0.86% CuEq from a depth of 282m, including 670.4m at 0.97% CuEq from 369.7m. The hole ended in strong mineralization at a depth of 1,338.5m due to rig capacity;
• FSDH071 an infill hole in the Aurora Zone intersected 1,028.0m at 1.16% CuEq from a depth of 292m, including 172.0m at 2.14% CuEq from 408.0m and 237.5m at 1.49% CuEq from 776.0m. The hole ended in mineralization at a depth of 1,320m due to rig capacity. The entire hole is outside of the resource pit shell.
• FSDH068A intersected 1,776.0m at 0.70% CuEq from a depth of 18.0m, including 1,120.0m at 0.92% CuEq from 394.0m and 724.2m at 1.08% CuEq from 574.0m. The hole was planned to test for the eastern and depth extension of the high-grade Breccia 41 Zone intersected in three holes drilled on this same section. The hole is entirely outside of the resource pit shell;
• FSDH069A intersected 1,296.5m at 1.00% CuEq from a depth of 138.0m, including 31m at 127.0 g/t Ag from 404.0m in the Silver Zone, 598.0m at 1.51% CuEq from 498.0m and 94.0m at 3.01% CuEq from 792.0m. The hole ended in strong mineralization at a depth of 1,434.5m due to rig capacity. The hole is entirely outside of the resource pit shell;
• FSDH074 intersected 1,022.0m at 0.66% CuEq from a depth of 278.0m, including 516.0m at 0.79% CuEq from 644.0m and 252.0m at 0.85% CuEq from 840.0m. The hole was collared on Section 9200N, 200m east of FSDH068A and 400m east of FSDH041. The hole was stopped in porphyry mineralization at 1,509.0m. The hole is entirely outside of the resource pit shell; and
• FSDH077 intersected 2.0m at 10.35 g/t Au from a depth of 192.0m plus 516.2m at 0.20% CuEq from 404.0m. The hole was collared on Section 6000N and is the first hole into the new Flamenco target and there are no holes within 500m of it. The hole was stopped at 920.2m.

Assay results received by the Company during and subsequent to 2022 are summarized in Appendix 1 to this news release.

PRE-FEASIBILITY STUDY UPDATE

The Company has completed an update to the pre-feasibility study (“PFS”) on the Filo del Sol Project, with an effective date of February 28, 2023, which continued to demonstrate the project’s robust economic potential. The PFS, which was based only on the oxide portion of the current Mineral Resource and used prices of US$3.65/lb copper, US$1,700/oz gold, and US$21/oz silver, yielded an after-tax net present value (“NPV”) of US$1.3 billion at a discount rate of 8%, and generated an internal rate of return of 20%.  Positive valuations were also maintained across a wide range of sensitivities on key assumptions.

The Company’s most recent Mineral Resource and Mineral Reserve statement for the Filo del Sol Project is shown below. This Resource does not include any of the mineralization hosted in the Aurora, Breccia 41 or Bonita Zones and the Reserve only encompasses the oxide portion of the Resource.

The Company’s Mineral Resource estimate is inclusive of the Mineral Reserve estimate as set forth above.

The technical information relating to the PFS is described in a technical report titled “Filo del Sol Project NI 43-101 Technical Report, Updated Pre-feasibility Study” dated March 17, 2023, with an effective date of February 28, 2023 (the “Technical Report”). The Technical Report was prepared for Filo Mining by Ausenco Engineering Canada Inc. and is available for review under the Company’s profile on SEDAR at www.sedar.com and on the Company’s website at www.filo-mining.com.

OUTLOOK

Drilling continues to be the primary focus with nine drill rigs at site. As the summer drilling campaign continues, drilling is underway on new exploration targets outside of the Aurora and Breccia 41 Zones. Drilling will remain a mix of both large and small step-outs to the north and south of the Aurora Zone, as well as resource definition drilling within it. The Company continues to maintain a strong focus on improving drill productivity through a variety of initiatives, and is planning for year-around drilling and field operations.

Data collected from the current campaign will be used to develop a comprehensive geological model which will guide further exploration and form the basis of an eventual update to the Mineral Resource estimate. The Company will continue preliminary metallurgical testwork on the sulphide mineralization, as well as environmental and social baseline programs in support of future project permitting.

The Company’s plans and timelines are subject to equipment and staff availability, along with being able to operate safely and effectively throughout the winter and in accordance with the Company’s health and safety protocols.

BHP exercises anti-dilutive top-up right to maintain pro rata shareholding

Jamie Beck remarked, “Recently, BHP elected to exercise its right to maintain its pro rata interest in Filo Mining, and we are once again pleased to receive BHP’s ongoing vote of confidence in our team and the Filo del Sol Project.”

On February 7, 2023, the Company closed a non-brokered private placement to BHP Western Mining Resources International Pty Ltd, a wholly owned subsidiary of BHP Group Limited (collectively, “BHP”), whereby the Company issued 43,711 common shares to BHP for gross proceeds of C$1,084,907 (the “Anti-dilution Top-Up”).

The Anti-dilution Top-Up was undertaken pursuant to the terms of the March 11, 2022 private placement (the “Private Placement”), whereby BHP was granted certain anti-dilutive rights, allowing BHP to top-up and maintain its pro rata ownership interest in the Company from time to time (see news releases dated February 28, 2022 and March 11, 2022).

SELECTED FINANCIAL INFORMATION

FINANCIAL RESULTS

During the three months and year ended December 31, 2022, the Company incurred net losses of $21.0 and $69.0 million, respectively. Net losses are driven primarily by $25.6 million and $82.5 million, respectively, in exploration and project investigation expense and $3.0 million and $13.0 million, respectively, in G&A expense. These expenses were partially offset by gains of $8.3 million and $25.0 million, respectively, resulting from the use of marketable securities for the purposes of facilitating intragroup funding transfers (“Funding Gains”). For the three months and year ended December 31, 2021, the Company reported net losses of $8.1 million and $32.4 million, respectively, consisting mainly of $10.3 million and $40.9 million, respectively, in exploration and project investigation expense and $1.7 million and $6.1 million, respectively, in G&A expense. These expenses were partially offset by Funding Gains of $4.7 million and $15.3 million, respectively.

LIQUIDITY AND CAPITAL RESOURCES

As at December 31, 2022, the Company had cash and cash equivalents of $74.9 million and net working capital of $60.3 million, compared to cash of $19.4 million and net working capital of $13.1 million as at December 31, 2021. The increase in the Company’s cash and cash equivalents and net working capital is primarily due to the $100.0 million Private Placement of 6,270,000 common shares to BHP at a price of $15.95 per common share. An Additional $4.8 million in gross proceeds was received by the Company in relation to the exercise of stock options during 2022. The Company plans to deploy its treasury to fund ongoing exploration and advancement of the Filo del Sol project, and for working capital and general corporate purposes.

About Filo Mining

Filo Mining is a Canadian exploration and development company focused on advancing its 100% owned Filo del Sol copper-gold-silver deposit located in Chile’s Region III and adjacent San Juan Province, Argentina.  The Company’s shares are listed on the TSX and Nasdaq First North Growth Market under the trading symbol “FIL”, and on the OTCQX under the symbol “FLMMF”. Filo Mining is a member of the Lundin Group of Companies.

Technical Information

Copper Equivalent is calculated based on US$ 3.00/lb Cu, US$ 1,500/oz Au and US$ 18/oz Ag, with 80% metallurgical recoveries assumed for all metals.  The formula is: CuEq % = Cu % + (0.7292 * Au g/t) + (0.0088 * Ag g/t).

Details on assay procedures and the drill intersections provided above can be found in the Company’s news releases dated January 12, 2022, January 19, 2022, April 19, 2022, May 12, 2022, May 23, 2022, June 9, 2022, August 23, 2022, October 5, 2022, November 23, 2022, January 10, 2023 and February 2, 2023.

Qualified Persons

The scientific and technical disclosure for the Filo del Sol Project included in this news release have been reviewed and approved by Bob Carmichael, P.Eng. and Jamie Beck, P. Eng.  Mr. Carmichael is Filo Mining’s Vice President of Exploration and a Qualified Person under National Instrument 43-101 Standards of Disclosure of Mineral Projects (“NI 43-101”). Mr. Beck is Filo Mining’s President and CEO and is also a Qualified Person under NI 43-101.

APPENDIX 1 – 2022 ASSAY RESULTS

Assay results received by the Company during and subsequent to 2022 are summarized in the following table:

As of the date of this News Release, additional holes have been completed with assays pending, which include:

• FSDH073 drilled to a final depth of 1,388m; and
• FSDH079 drilled to a final depth of 846m.

Assay results for these holes will be released as they are received, analyzed and confirmed by the Company. Two additional holes, FSDH065 (196m) and FSDH066 (458m) were suspended earlier this year, prior to the winter weather, and will be deepened during the upcoming months.