Pan American's role in the agreement
El Cancel lies in the municipality of Guadalupe y Calvo, within the Sierra Madre precious metals belt. Because it falls within the Amalia agreement's area of influence, Radius must present the concession to Pan American Silver Corp. Radius can retain sole ownership and operating rights only if Pan American formally declines to include it.
The neighboring project's ownership was outlined in Radius's July 27, 2026 portfolio update: Pan American had met the payment and exploration-spending requirements for a 65% interest in Amalia, while Radius held the remaining 35%. Pan American's opportunity to earn another 10% by taking the project to pre-feasibility had expired. The update also reported that no further material work had taken place on the Amalia properties since fall 2022.
Payments and exploration commitments
The El Cancel option runs for three years. To acquire a 100% interest, Radius must settle about US$90,000 in unpaid mining duties and pay the vendor US$250,000 in installments. Payments of US$50,000, US$75,000 and US$125,000 are due at 12, 24 and 36 months, respectively.
Required exploration spending is US$100,000 in the first year and US$250,000 in the second. Radius must also maintain the concession in good standing for the duration of the option.
Exercising the option would leave the vendor with a 1% net smelter return (NSR) royalty. Radius would have four years from the interest transfer to buy back 0.5% of the NSR for US$1 million.
The agreement includes two further payments tied to technical milestones. Public disclosure of an NI 43-101-compliant Indicated and Measured mineral resource would trigger a US$150,000 payment; a subsequent declaration of Proven and Probable reserves would trigger another US$150,000.
Exploration targets along the Amalia system
Radius plans to investigate several undrilled structural extensions at El Cancel. The concession contains prominent veins trending northwest to north-northwest, with surface rock samples yielding more than 1 gram per metric ton of gold and 10 grams per metric ton of silver. Those surface features resemble the expressions seen at adjacent Amalia.
Historical Amalia drilling provides the nearby comparison. Results include a 44-meter interval at the Amalia vein grading 12.39 g/t gold and 309 g/t silver, along with 26.9 meters at the California vein grading 2.59 g/t gold and 353 g/t silver. Qualified Person Dr. Luke Longridge reviewed the technical data.
Radius's July portfolio update also detailed the Amalia joint venture's last reported hole, AMDD22-066, at the El Cuervo target in August 2022. It returned 13.55 meters grading 10.25 g/t gold and 841 g/t silver, including a 5.65-meter interval grading 19.16 g/t gold and 1,560 g/t silver. These intervals represent approximate true widths.
Portfolio priorities and permitting context
The El Cancel agreement follows Radius's July statement that it was prioritizing two Peruvian assets: the Tierra Roja copper project and the Jonco silver project. At that time, the company proposed a non-brokered private placement of up to 10 million units priced at $0.12 each, targeting gross proceeds of up to $1.2 million. It was also continuing to assess ways to monetize assets, including Amalia.
Amalia's land package consists of 1,681 hectares covered by granted exploration licenses and applications covering another 8,613 hectares. Mexico's May 2023 Mining Reform proposed canceling existing exploration license applications. Radius, like almost all exploration and mining companies active in Mexico, filed legal challenges against the reform's application to all of its properties and projects.
More broadly, the Mexican Mining Chamber, CAMIMEX, projects a recovery in the country's total mining investment to US$6.4 billion. Interagency coordination under the Extractive Activities Coordination Unit, UCAE, is intended to address permitting backlogs at federal bodies including SEMARNAT and CONAGUA.
Industry analysts emphasize that bringing a mining project into production requires coordination of surface rights, water access, environmental compliance and infrastructure. For El Cancel, technical standards and community relations remain part of the work as exploration advances from surface sampling toward systematic drilling.
