Weekly Metals Mining Rundown and Peer Table - Free Edition for Week Ending 7 Feb 2025 - Gold Price Reaches New Highs (Again) - Gold/Silver Ratio Continues to Suggest that Odd of Recession are Rising - Announcements by $HRZ $DC $CERT with Special Updates on $DSV and $HSTR

This past week’s metals price movements:

• Precious Metals:

  • Gold price up +2.2% over past week to US$2,859/oz Au

  • Silver up +1.6% to $31.79/oz Ag

  • Platinum Group Metals:

    • Platinum down -3.4% to $997/oz Pt

    • Palladium down -8.7% to $971/oz Pd

• Base Metals:

  • Copper up +7.9% to $4.59/lb Cu

  • Nickel down -3.3% to $7.14/lb Ni

  • Cobalt flat at $9.78/lb Co

• Energy Metals:

  • Uranium oxide down -2.4% to $69.95/lb U3O8

  • Lithium carbonate down -2.0% to $10,607/t LCE

This past week’s top and bottom 5 performing metals mining peer group movers include:

Top 5 performing peer groups:

1. Lithium brine explorers’ peer group median share performance was up +10.7% to a median market cap/t LCE resource of $1.92/t LCEe ($49/oz AuEq)

2. Copper producers’ median is up +6.7% to median market cap/lb of $0.13/lb CuEq ($80/oz AuEq)

3. Silver explorers’ median up +5.9% to median market cap/oz of $0.27/oz Ag ($24/oz AuEq)

4. Cobalt developers’ median is up +5.7% to median market cap/lb of $0.069/lb CoEq ($17/oz) and to a median P/NAV of 0.044x (at our Reference cobalt price of $20/lb Co)

5. Silver developers’ median up +4.8% to median market cap/oz of $0.39/oz Ag ($30/oz AuEq) and to a median P/NAV of 0.54x (at our Reference silver price of $22/oz Ag)

Bottom 5 performing peer groups:

1. PGM developers’ peer group median share performance was down -1.9% to a median market cap/oz resource of $4/oz PdEq ($10/oz AuEq) and to a median P/PNAV of 0.1x (at our Reference palladium price of $1,800/oz Pd)

2. Uranium explorers’ median is down -1.8% to median market cap/lb of $0.97/lb U3O8 ($0.34/oz AuEq)

3. Uranium developers’ median is flat at median market cap/lb of $0.79/lb U3O8 ($28/oz AuEq) and at a median P/NAV of 0.4x at our Reference uranium price of $65/lb U3O8)

4. Gold explorers’ median is flat at a median market cap/oz of $15/oz AuEq

5. PGM explorers’ median is flat at a median market cap/oz of $2.0/oz PdEq ($5.6/oz AuEq)

   
   
   

   Metals mining announcements incorporated into this week’s Peer Table (resource updates, economic studies, changes in attributable project ownership) include:

• 7 Feb 2025 - Gold developer (and small-scale gold producer) Horizon Minerals (ASX:HRZ) announced that its scheme of arrangement to merge with Poseidon Nickel (ASX:POS) has been approved by the Surpreme Court of Western Australia, and the deal is due to be effective on 10 Feb 2025. HRZ acquires all outstanding POS shares on the cheap for ~A$30M (announced on 25 Oct 2024) in stock helped by the suppressed nickel market, which comes with the Black Swan nickel-polymetallic mine/project (with a 2022 feasibility study) currently on care and maintenance. The mine has an existing 2.2 mtpa mill (with reported replacement value of ~A$150M) that the company aims to repurpose to accept mill feed from its existing mineral resources around Kalgoorie some ~40km away from Black Swan, which could expedite HRZ’s graduation into a mid-tier (intermediate) commercial gold producer. HRZ’s pre-existing projects include the PFS-stage Penny’s Find gold project and a existing small-scale producing mine (Boorara). We add POS’s Black Swan nickel polymetallic resources of 1.1 Blbs NiEq or 2.9Moz AuEq (89% Ni plus small share Cu-Co-Ag-Au) to HRZ’s mineral resource holdings in our Peer Table, which more than doubles HRZ’s AuEq resources from 1.8Moz to 4.7Moz AuEq (now 42% Au, 55% Ni, rest Cu-Co-Ag), while we preemptively increase HRZ’s shares outstanding in our Peer Table by ~30% to 2.06B sh according to the terms of the transaction announced 25 Oct 2024 that is due to take effect 10 Feb 2025. Our Peer Table now shows that HRZ trades pro-forma at a market cap/oz of $14/oz AuEq (after weekend) - a 33% discount to our gold developer median $21/oz AuEq and an 88% discount to our intermediate gold producer median $118/oz AuEq (and a 14% discount to nickel developer peer median of $16.2/oz AuEq). We also now include HRZ in our Nickel developer peer group and we remove POS from the Peer Table which is due to be delisted in the coming days).

• 6 Feb 2025 (after-market TSX) - Gold explorer Dakota Gold (NYSE:DC) announced a substantial S-K 1300 compliant resource upgrade for its Richmond Hill project in South Dakota, which increased its total gold resources by some ~4x to 9.7 Moz Au + some silver totalling 10.7 Moz AuEq, which includes a potentially heap leachable 3.65 Moz Au portion in the Measured and Indicated category grading 0.463 g/t Au. While the resource grades are modest in the 0.38-0.54 g/t Au range (plus some silver), the majority of the resources are reported to be potentially heap leachable, which could result in low capex and opex to be evaluated in an initial economic assessment expected by mid-2025 (which would graduate DC to our gold developer peer group). Stock traded up 23% on this news - giving DC the #8 top performing this past week after finishing the week up +33.9%. DC now (at weekend) trades at a market cap/oz resource of $27 /oz AuEq - a premium to our gold explorer median market cap/oz of $14.7, but still a 29% discount from the peer group mean of $38/oz AuEq, and perhaps more imporantly given the ongoing economic study that is being complete, DC is a 37% discount to our gold developer peer group mean of $43/oz AuEq (and a slight premium to our gold developer median $21/oz AuEq). Correction: DC’s market cap according to Google Finance was previously understated in our earlier daily version of this note, and has been corrected herein.

• 3 Feb 2025 - Intermediate gold producer Cerrado Gold (TSXV:CERT) announced that is has agreed to acquire silver (and zinc, lead, copper, gold) developer Ascendant Resources (TSE:ASND) along with exposure to its low cost, 86 Moz AgEq (1 Moz AuEq) Lagoa Salgada VMS project in Portugal, with a post-tax NPV of US147M and IRR of 39% (at $22.5/oz Ag) from initial capex (including contingency) of US$164.35M, according to a 2023 DFS (that will be optimized). CERT reports that Lagoa Salgada has EIA approval due in Q2/25, an optimized feasibility study due in Q3/25 (aims to improve NPV/capex ratio), with a construction decision expected by yearend. The deal is set to include multiple private placements, that are expected to result in CERT issuing 27.7 M additional new shares for a 131.3 million share (pro-forma) upon completion, and with the merged entity owning 80% of the Salgada VMS project (from ASND’s previously reported effective ownership of 21.25% pending additional milestones to increase). We preemptively add (with a footnote) the additional shares to CERT’s market cap in the Peer Table which increases CERT’s market cap to US$32M profoms (as of this weekend, after stock rose 19% this week), and we also add 80% of Lagoa Salfada resources to CERT’s resource holdings,

SPECIAL UPDATES ON INTERESTING PRIOR COMPANY ANNOUNCEMENTS PREVIOUSLY INCORPORATED TO OUR PEER TABLE

•  27 Jan 2025 - Silver developer Discovery Silver Corp. (TSX:DSV) announced the transformational acquisition of the producing Porcupine mine complex in the Timmins gold camp from Newmont Corporation (NYSE:NEM). This deal is set to roughly double DSV’s gold-equivalent resource ounces to 31.7 Moz AuEq (from 15.3 Moz AuEq). And upon closing expected in H1/25, DSV would immediately graduate to our immediate gold producer peer group from its current silver developer peer group (NEM reported that Porcupine produced 67koz Au in most recent Q3/24). DSV reported they will pay US$425M for the gold mine ($200M cash on closing pending a cap raise, $75M in new DSV shares, with remaining $150M to be paid in cash over next 4 years). DSV’s CEO Tony Makuch has executed company-transforming deals like this before, and on a much bigger scale, after he led the bold move to take out Detour Lake for C$4.9B back in 2019 while at the helm of Kirkland Lake Gold, which turned out to be a home-run (not only because the gold price ripped afterwards, also because it helped lead to Kirkland Lake’s merging with Agnico Eagle NYSE:AEM). Our Peer Table now assumes this DSV deal will close (with a footnote) and we preemptively increase DSV’s shares outstanding to 771 M sh (from Google Finance’s current 400M sh), and add Porcupine’s whopping 12.5 moz Au M&I and 3.9 Moz inferred resource to DSV’s holdings. Based on DSV’s pro-forma share count of 771M, its market cap closed Friday (7 Feb) at US$863M (afer shares already traded up some ~60% since the announcment), or at a market cap of US$27/oz AuEq resource (proforma), which is (still) a 10% discount to DSV’s (former) silver developer peer group median of $34/oz AuEq and a much larger 77% discount to (its new) intermediate gold producer peer group median market cap/oz resource of $118/oz AuEq. The deal announcment also included results for a PEA for Porcupine, yielding growing production and an NPV5 of US$1.2B from capex of $854M (over 5 years, to grow production from current levels) at the reported analyst consensus gold price of $2,150/oz. Our Peer Table now reports a (pro-forma) combined NPV of US$1.6B for both Porcupine and Cordero at our (lower) Reference metal prices of $22/oz Ag and $1,800/oz Au, resulting in a P/NAV (pro-forma market cap / combined NPV) of 0.54x (on 7 Feb) - now in-line with our silver developer peer group median of 0.54x (at same Reference metal prices). However, at our recent spot price deck ($31/oz Ag and $2,650/oz Au), DSV’s combined-pro-forma NPV rises sharply to US$5.4B and trades (pro-forma) at corresponding P/NAV of only 0.16x, still resulting in a substantial 43% discount to (DSV’s former) silver developer peer group median of 0.28x (at same recent spot metal prices) - highlighting the solid torque that DSV’s projects have on rising metal prices.

• 14 Jan 2025 - Gold developer (and current small-scale producer) Heliostar Metals Ltd (TSXV:HSTR) released 3 updated techincal reporrs with economic studies for 3 different development stage projects recently acquired in Mexico. The post-tax NPV5 of US$25.9M for the most advanced project - La Colorada past-producing mine where small-scale production resumed earlier this month - was somehwat dwarfed by its capex of 53.9M. However, the combined NPVs for all 3 projects, together with the NPV for a 2023 PFS for a 4th Mexican development project, Ana Paula, together equate to US$722M (adjusted for our Reference gold price of $1,800/oz, according to the NPV sensivity analysis provided in each study). HSTR’s week ending market cap has risen 25% over past week and 67% over past month (much of is since announcement) to US$150M, but that still implies a price-to-net-asset-value (“P/NAV”, taken as mkt cap/NPV) of only 0.21x - now a narrower 4% discount to our gold developer peer group median P/NAV of 0.22x (based on study results for 55 companies in our gold developer peer group – also adjusted for our Reference gold price of $1,800 using the NPV sensitivity information provided in each study), and te NPV rises sharply to. On market cap/oz Au resource, HSTR’s existing 8.4 Moz AuEq (85% from Au) still trade cheap vs. peers, at a market cap of US$18/oz AuEq – still a 15% discount to our gold developer median US$21/oz AuEq. This is interesting given how close HSTR is to becoming a mid-tier producer, once it expands current small-scale gold production at La Colorada to a commercial-scale 50+ koz/yr (as it plans to do, following another updated technical report due mid-2025, targeting lower capex). Our mid-tier (intermediate) gold producer peer group of 50 producers has a median mkt cap / oz is US$118/oz AuEq resource (still offering 6.6x of lift from HSTR’s current market cap of $18/oz). Recent social media posts by the HSTR highlighted active drilling to expand reserves (and help boost the above-stated NPV, and imrprove the above-stated Capex/NPV ratio) in the upcoming optimized technical/Operations report for La Colorada mine (due mid-2025), where small-scale production is also ongoing.