Jim's Mining Letter - May 3, 2025

Buy gold for $10/ounce in the ground

• Resource of over 200,000 ounces in Arizona on Route 66

• Pre-money valuation of $2 million

• Fully permitted production restart next month

• 1 million ounce exploration upside

• Highly leveraged to rising gold price

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Alkane Resources (ALK.ASX ALKEF AK7.F) and Mandalay Resources (MND.TSX MNDJF R7X2.F) announced that they have agreed to combine in a “merger of equals” transaction and have executed a definitive arrangement agreement whereby Alkane will acquire all the issued and outstanding common shares of Mandalay pursuant to a court-approved plan of arrangement. Following completion of the transaction, the combined company will continue operating as “Alkane Resources”, remain listed on the ASX and seeking a listing on the TSX exchange. Mandalay shareholders will receive 7.875 ordinary shares of Alkane for each ordinary share of Mandalay. Upon completion, former Mandalay shareholders and existing Alkane shareholders will own approximately 55% and 45%, respectively. The implied market capitalisation of the combined company is estimated at A$1,013 / C$898 million. The transaction will create a diversified gold and antimony producer with a portfolio of three operating mines and a strong balance sheet. Alkane’s established Tomingley gold mine, currently ramping up after a major capital expansion, will complement the well-established and stable production from Mandalay’s Costerfield underground gold/antimony mine and the Björkdal underground gold mine in Sweden. Combined forecast production is around 160,000 gold-equivalent ounces in 2025, growing to over 180,000 gold-equivalent ounces in 2026…more…more

Perseus Mining (PRU.ASX PRU.TSX) announced that a final investment decision has been taken to develop the Nyanzaga Gold Project in Tanzania, following an update of the NGP feasibility study. The company has committed to invest approximately $523 million (including contingency) to develop and prepare for the operation of the mine that is expected to produce first gold in Q1 2027. The NGP development will be solely financed via interest free, inter-company loans provided by Perseus from its existing cash and bullion balance of $801 million as of 31 March 2025. In anticipation, the company has spent approximately $27.5 million to date to build project team capacity and commence early works that include site establishment, installation of temporary construction accommodation, and bulk earthworks as well as implementing a relocation plan to construct new dwellings for people impacted by future construction and operating activities. Perseus has opted for a large scale, wholly open-pit mining operation for the first phase of development, in preference to a smaller scale, combined open pit - underground option contemplated by the previous owners. Total gold production over an 11-year, Phase 1 mine life is currently estimated to be 2.01 million ounces based on a JORC 2012 Probable Ore Reserve of 52.0 million tonnes at 1.40 grams per tonne gold for 2.3 million ounces. Gold production averages over 200,000 ounces of gold per annum from 2028 to 2035, with peak production of 246,000 ounces in 2028. Over the life of the mine, the estimated average all-in site cost is $1,211/ounce. At an assumed long-term gold price of $2,100/ounce, un-discounted free cashflow pre-tax is $1,133 million and $2,252 million pre-tax at a gold price of $2,700/ounce…more

Osisko Development (ODV ODV.V 3OZ0.F) announced an optimised feasibility study for its Cariboo Gold Project with a C$943 million NPV5 and 22.1% IRR at a $2,400 per ounce gold price. The study forecasts ~190,000 ounces annual production over 10 years, with first gold in H2 2027, and improved capital and processing metrics. Payback is 2.8 years at $2,400 per ounce and a spot case at $3,300 per ounce yields a C$2.1 billion NPV5, a 38.0% IRR and a 1.6-year payback. First gold is anticipated in H2 2027 assuming a Q3 2025 construction start pending financing…more

Thesis Gold (TAU.V THSGF 0110.F) announced that the company has completed its private placement through the issuance of 9.9% of its issued and outstanding common shares to Centerra Gold (CG.TSX CGAU GOU.F), which has acquired, by way of private placement, 23,460,160 common shares at a price of $1.03 for gross proceeds of $24,163,965, which will be used for working capital and general corporate purposes, including work related to the technical studies currently underway at the company's Lawyers-Ranch Project. Thesis is focused on unlocking the potential of this 100% owned project, located in British Columbia's prolific Toodoggone Mining District. The recently completed Preliminary Economic Assessment highlights robust project economics, including a 35.2% after-tax IRR and an after-tax NPV5 of C$1.28 billion, demonstrating the potential for significant value creation. The company's 2025 roadmap includes a robust exploration and drill program, delivery of a Pre-Feasibility Study on the combined Lawyers-Ranch Project, and commencement of the Environmental Impact Assessment Process. Through these strategic moves, Thesis intends to elevate the Lawyers-Ranch Project to the forefront of global precious metals ventures…more

Riley Gold (RLYG.V RLYGF) announced that the 2025 exploration program is well underway at the company's Pipeline West/Clipper Gold Project, located in the Cortez mining district of the Battle Mountain - Eureka Trend. PWC is operated by Kinross Gold (K.TSX KGC) under an exploration earn-in agreement executed in March 2024 whereby Kinross has the right to earn up to 75% of PWC by spending $20 million. Kinross has defined new high-priority framework drill target areas at PWC that have never been drill tested. The first set of 2025 framework drill holes are approximately 2.5 kilometres north-northwest of the previous (and first) Kinross drill hole (in late 2024). These holes are targeting the highest grade gold-in-soil anomalies location on the property. Compiled geologic mapping, geophysical surveys, historical drill results, and gold-in-soil survey results uploaded in Leapfrog software support the new 2025 drill hole locations. Recent geologic modelling and interpretation by Kinross also provides a supporting structural foundation and information for the 2025 exploration and drill program. Drill contracts have been awarded, drill permitting is in process and drilling is expected to begin in approximately 4-6 weeks…more

Meridian Mining UK Societas (MNO.TSX MRRDF N2E.F) announced that it has drilled one of the highest grading gold veins to date at its advanced copper, gold and silver Cabaçal VMS project. Targeting potential extensions to Cabaçal's pre-feasibility study's high-grade ore reserves, CD-654 drilled one of the best grading gold veins to date at Cabaçal, returning 276 grams per tonne gold over 0.46 metres. This was within a broader shallow gold-copper-zone that returned 9.9 metres at 14.8 grams per tonne gold equivalent from 29.3 metres. The company also reported multiple stacked layers of gold-copper mineralization within Cabaçal's PFS pit shell. These results continue to improve the strong upside that remains within Cabaçal and will be included into a future resource and reserve calculation for Cabaçal's definitive feasibility study. Drilling continues and more results are pending.

Lion One Metals (LIO.V LLO.ASX LOMLF LY1.F) reported significant new high-grade gold results from 4,123.8 meters of underground infill and grade control drilling at its 100% owned Tuvatu Alkaline Gold Project in Fiji. The drilling is focused on the Zone 5 area of the deposit, which is currently being mined. Drilling was conducted from two near surface underground drill stations and the company intersected high-grade mineralised structures in 29 drill holes targeting the UR2 lode down-dip of current underground developments. Most of the drill holes did not exceed 150 metres in length and most of the high-grade drill intercepts are located within 50 metres of current underground workings. Drill results include multiple bonanza grade gold intercepts over narrow widths, such as 236.00 grams per tonne over 0.4 metres, 101.58 grams per tonne over 0.5 metres, 102.35 grams per tonne over 0.3 metres, 94.23 grams per tonne over 0.3 metres, and 89.63 grams per tonne over 0.4 metres. Due to the proximity of drill results to existing workings there is a strong probability that these intercepts can be incorporated into the mine plan in the next six to twelve months. Tuvatu is a high-grade narrow vein alkaline gold deposit and bonanza grade drill results are not uncommon on the project. In January the company released the highest grade assay ever returned from Zone 5 drilling, 2,749.86 grams per tonne over 0.3 metres…more

These are opinions only of the individual author. The contents of this piece do not contain investment advice and the information provided is for educational purposes only and no discussions constitute an offer to sell or the solicitation of an offer to buy any securities of any company. All content is purely subjective and you should do your own due diligence. No representation, warranty or undertaking, express or implied, as to the accuracy, reliability, completeness or reasonableness of the information contained in the piece is made. Any assumptions, opinions and estimates expressed in the piece constitute judgments of the author as of the date thereof and are subject to change without notice. Any projections contained in the information are based on a number of assumptions and there can be no guarantee that any projected outcomes will be achieved. No liability is accepted for any direct, consequential or other loss arising from reliance on the contents of this piece. The author is not acting as your financial, legal, accounting, tax or other adviser or in any fiduciary capacity.

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