Operational Update: Tesoro Gold Mine Production

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

18 September 2024

Echo Energy Plc

("Echo" or the "Company")

Operational Update: Tesoro Gold Mine Production

Echo (LON:ECHO), the Latin America focused natural resources company, provides a further update on the Tesoro Gold Mine ("Tesoro"), southern Peru, which is held by the Company's 50%-owned Peruvian joint venture, Boku Resources SAC ("Boku").

During the mine preparation phase, as the "Bonanza" shaft is deepened and galleries are driven, 1-2 tonnes per day ("tpd") of mineralised material is now being produced.

Selective sampling of vein material previously returned values between 4 g/t and 12 g/t gold. Further samples have been sent for analysis and results are expected in October.

Current internal forecasts, prepared by Boku's mine manager, suggest production rates of 10 tpd will be achieved once the mining blocks are in production, while allowing for mine extension work to occur through the simultaneous preparation of subsequent blocks.

In addition to Boku's own production, Boku is aggregating production from the adjacent Termopilas mine that is operated by an independent third party. Boku intends to sell the combined production to a commercial processor. By aggregating production, Boku expects to be able to secure better commercial terms. Termopilas is currently producing at a rate of  1-2 tpd and plans are in place to scale production to 10-15 tpd.

Production enhancement

To optimise grade and gold recovery, Boku will this week install a crushing unit at the Tesoro central camp. Once the crushing unit has been installed, the central camp will have a designated area that will be used as a warehouse, where ore will be crushed, sorted, stored, and prepared for trucking to a gold lixiviation plant. The crusher has a capacity of 1-5 tonnes per hour.

Stephen Birrell, Chief Executive Officer of Echo, commented:

"Following the commencement of production announced last week, I am pleased that Boku has now commissioned the crushing plant, which we expect will increase ore grades and optimise recovery rates, resulting in shorter payment times and enhanced terms from processors. Simultaneously, it is anticipated that the aggregation of ore from a neighbouring mine will optimise trucking logistics and increase gross income as Boku applies its royalty and handling fees."

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About Echo

Following the partial divestment of its assets in Argentina, Echo entered into a 50:50 joint venture in Peru in July 2024 with an experienced local partner for precious metals (gold/silver) mining and the cleaning of known tailings deposits containing Measured and Indicated resources of gold and silver. Through the JV, known as Boku Resources, Echo has secured an opportunity to scale operations in Peru producing gold and silver through primary mining and tailings cleaning, owning 50% of the production and resources. Initially, Boku intends to establish formalised artisanal and small mining operations on its 100% held Tesoro Gold concession, southern Peru, targeting early cash flow generation by Q4 2024.

Qualified Persons Statement

The scientific and technical information contained within this announcement has been reviewed and approved by Dr Alberto Rios Carranza, a geologist with over 27 years' experience, who holds a doctorate cum laude awarded by the Polytechnical University of Madrid, Spain and who has published or co-authored over 17 scientific papers on the mineralisation across Peru. Alberto is a member of the Geological Society of Peru, the Colombian Society of Geology and the Institute of Mining Engineers of Peru. He is a Qualified Person as defined by the AIM Guidance Note on Mining and Oil & Gas Companies dated June 2009.

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