Spanish Mountain Gold Announces Uplift in Scale and Value at Its B.C. Gold Project and Receives Confirmation From Provincial Regulators to Resume the Previously Paused Environmental Assessment and Permitting Process Advancing Towards Development
VANCOUVER, British Columbia--(BUSINESS WIRE)--September 21, 2026--Spanish
Mountain Gold Ltd. (“Spanish Mountain” or the “Company”) (TSX-V: SPA; FSE: S3Y; OTCQB: SPAUF) is pleased to announce the results of a Preliminary Economic Assessment and Mineral Resource Estimate Update (the "PEA", or “PEA Update”, “MRE” on the Spanish Mountain Gold Project (the “Project”) located within the Cariboo Gold Corridor, British Columbia, Canada. The PEA Update is a conceptual study showing improved potential economic viability of the Main Deposit. The PEA will be published in an independent National Instrument ("NI") 43-101 Technical Report within 45 days of this news release and filed on SEDAR+. Once filed on SEDAR+, the PEA will supersede the Company’s existing technical report on the Project. The PEA Update study was commissioned by the Company and prepared by consultants led by BBA Engineering Ltd. ("BBA"). The PEA envisions a conventional open pit mining and milling operation with a projected 25.8-year life of mine ("LOM") producing 3.33 million ounces ("Moz") of payable gold, with a front-weighted production profile and attractive economics.
Highlights
- Robust Economics: Base case after-tax NPV5% of US$2,156 million (C$2,910 million) with an after-tax IRR of 35.2% using a gold price assumption of US$3,600/ounce ("oz"). Using a spot gold price of US$4,400/oz gold, after-tax NPV5% increases to US$3,142 million (C$4,242 million) and the after-tax IRR to 46.3%.
- Significant Production and Low Cost: 207 koz average annual gold production in the first 5 years at an all-in sustaining cost net of by-product credits ("AISC") of US$1,098/oz (C$1,482/oz) and 129,518 oz average annual gold production over a 25.8-year LOM at an AISC of US$1,450/oz (C$1,958/oz).
- Rapid Payback of Capital Expenditures: US$1,050 (C$1,418million) initial capital paid back over 1.8 years at PEA Update base case and decreasing to 1.5 years at spot gold price of $4,400/oz gold.
- Increased gold production: Updated drilling and resource definition has increased the tonnes and gold ounces included in the mine plan, when compared to the previous 2025 PEA. A larger open pit, with a lower overall strip ratio, is targeted, providing a longer mine life at an increased mill throughput rate. Additionally, ounce production has been brought forward in time in the schedule, and the overall ratio of Measured to Indicated Mineral Resources included in the mine plan has been increased.
- Process Flowsheet Optimization: The Company advanced a significant flowsheet optimization initiative through the integration of coarse particle flotation and clean gangue rejection technologies. The optimized flowsheet has the potential to increase feed grades ahead of rougher flotation through early waste rejection, enabling higher throughput while maintaining strong gold recovery. The resulting design is more robust and operationally flexible, with benefits extending beyond metallurgical performance to include improved dry-stack tailings characteristics and reduced operating costs. These
advancements strengthen the technical basis for the 2026 PEA update and FS trade-off studies while reinforcing the Company's objective of developing a high-performing, environmentally responsible mining operation.
- Significant Opportunities: Potential to further enhance Project economics and expand production rate have been identified with the addition of the maiden Phoenix deposit MRE, ongoing endowment potential extensions, and preconcentration technologies such as mineralized material sorting to boost mill feed grade, that will be examined during the FS as an expansion option.
- Strong Discovery Growth Potential: The 2026 Exploration diamond drill program has completed 31,587 meters (m) of a 60,000 m program on plan to complete Q4 2026.
Environmental, Permitting & Community: From March to August 2026, SMG worked closely with BC Environmental Assessment Office (“BCEAO”), Impact Assessment Agency of Canada (“IAAC”), participating Indigenous Nations and local communities to secure authorization in August from BCEAO to resume the previously paused combined provincial and federal Environmental Assessment (“EA”) processes. This authorization, received in August from BC EAO avoids EA termination and reduces duplicate components of early engagement and the Initial Project Description processes. Consequently, pending geotechnical and condemnation drill results, SMG is on track trending towards delivering an updated draft Detailed Project Description (“DPD”) in Q4 and formal submission of the DPD in Q1 2027. These are the next steps in resuming the EA process to advance to Spanish Mountain Gold project towards a build decision in 2028.
Key PEA Update Improvements and Optimizations vs. 2025 PEA
The PEA Update incorporates several important improvements and de-risking initiatives compared to the 2025 PEA, all of which better positions the Project for a successful next phase of development. Notable changes include:
- Improved Mine Production Schedule Gold Produced: Increased gold production in the first 10 years from an average of 153 koz to 173 koz per year. Total of 1,533 koz to 1,734 koz (excluding pre-production), increasing 13.1% in the first 10 years of production.
- Larger Project Scale: The Study has increased the process throughput (ROM Mill Feed) from 26 ktpd to 31 ktpd, which increases the LOM average gold production profile by 6% to 129 koz per year (from 122 koz per year). For the project, this will bring greater efficiency, lower unit costs, and uplift to the NPV, in addition to expanding Life of Mine (LOM) from 24.5 to 25.8 years and total gold production from 3.0 Moz to 3.33 Moz, a 11.0% increase over LOM. Further pre-concentration of mill feed to uplift feed grade such as mineralized material sorting was investigated during the PEA. It was identified as a target case opportunity to 'bolt-on' to the base case which will be further assessed during the next stages of project development.
- Increase Throughput from Improved Flowsheet Design: Updated metallurgical studies and testing has resulted in modification to a coarse mill feed flotation circuit with the use of coarse particle flotation to upgrade ore feed into the main crushing circuit of the proposed processing plant. Increased process throughput from 26ktpd to 31ktpd, an increase of 19%.
- Open Pit Mine Design Expansion and Growth: Through targeting lower strip ratios based upon improved geotechnical assessments, additional resources included in the mine plan and better stockpile management, an optimum open pit was selected to maximize efficiency. The LOM waste to resource strip ratio reduces to 1.8:1 in the PEA Update from 2.0:1 in the 2025 PEA, a 10% reduction.
- Mineral Resource Estimate: Additional drilling, the resultant assays, and a new pit design using US$3,400 per ounce gold, increased the Main deposit Measured, Indicated contained gold ounces by 500 koz. Inferred ounces in the Main Deposit increased by 227 koz.
President and CEO, Peter Mah stated:
"The results of the PEA Update reflect steady improvements to the overall project economics and further scaling up of proposed gold production now projected higher than 3.3 Moz life of mine. This PEA with updated mineral resource estimate marks another key milestone for the Company as it prepares to complete a feasibility study (FS) and build decision by H1 2028. Our ongoing 60 km drill program to support the FS is approximately 50% complete and expected to be completed towards the end of Q4 2026. The drilling is expected to provide further opportunities to enhance scale, assist with locating proposed mine infrastructure and important technical information to complete the FS that will also enable permitting to advance. We are pleased to see years 1-10 gold production grew from 1.53 Moz to 1.73 Moz while LOM strip ratio of waste to gold mineralized material reduced from 2.0:1 to 1.8:1. LOM all-in sustaining costs and Initial Capex increased marginally from US$1,338 to US$1,450 and from US$ 926 million to US$1,050 (C$1,250 million to C$1,418 million) respectively primarily due to escalation, water treatment plant requirements, and an NSR due to the project financing secured April 20, 2026 (refer to news release dated April 20, 2026)
Spanish Mountain Gold has a bright future ahead creating a new definition of responsible sustainable mining that generations of Canadians will be proud of!"
Table 1: PEA Results Summary
| 2025 PEA | 2026 PEA Update | |||
| Base Case ($2,450/oz Au, $28.50/oz Ag) | Spot Price ($3,300/oz Au, $36/oz Ag ) | Base Case ($3,600/oz Au, $50/oz Ag) | Spot Price ($4,400/oz Au, $66/oz Ag)1 | |
| After-Tax NPV US$M (C$M, 5% discount rate) | $759 ($1,025) | $1,715 ($2,315) | $2,156 ($2,910) | $3,142($4,242) |
| After-Tax IRR (%) | 18.20% | 32.00% | 35.20% | 46.30% |
| Annual Average Free Cash Flow US$M (C$M)4 | $63 ($85) | $128 ($173) | $150 ($202) | $214 ($289) |
| Annual Average Free Cash Flow Yr. 1-5 US$M (C$M)4 | $230 ($311) | $336 ($454) | $406 ($549) | $507 ($684) |
| Initial Capex US$M (C$M) | $926 ($1,250) | $926 ($1,250) | $1,050 ($1,418) | $1,050 ($1,418) |
| Total Cash Cost US$ / Au oz (C$ / Au oz)2 | $1,194 ($1,612) | $1,201 ($1,621) | $1,299 ($1,754) | $1,309 ($1,767) |
| AISC US$ / Au oz (C$ / Au oz)3 | $1,338 ($1,806) | $1,345 ($1,816) | $1,450 ($1,958) | $1,460 ($1,971) |
| Payback Period (years) After-Tax | 3.4 | 2 | 1.8 | 1.5 |
| Nominal Processing Throughput (tpd) | 26,000 | 26,000 | 31,0005 | 31,000 |
| Stripping ratio | 2.0:1 | 2.0:1 | 1.8:1 | 1.8:1 |
| Mine Life (years) | 24.5 | 24.5 | 25.8 | 25.8 |
| Annual Average Throughput (Mtpa) | 9,340 | 9,340 | 11,315 | 11,315 |
| Annual Average Production (koz/a) | 122 | 122 | 129 | 129 |
| Average Gold Head Grade (g/t) | 0.46 | 0.46 | 0.41 | 0.41 |
| Average Gold Recovery (%) | 89.30% | 89.30% | 88.60% | 88.60% |
| Gold Price (US$ / oz) | $2,450 Au | $3,300 Au | $3,600 Au | $4,400 Au |
| Silver Price (US$ / oz) | $28.50 Ag | $36.00 Ag | $50 Ag | $66 Ag |
| Exchange Rate USD/CAD | 1.35 | 1.35 | 1.35 | 1.35 |
| Total LOM Au ounces produced (Moz) | 3 | 3 | 3.33 | 3.33 |
| Total LOM Ag ounces produced (Moz) | 2.1 | 2.1 | 1.96 | 1.96 |
Notes for Table 1
1. Spot price is based on the CIBC Consensus Gold Price as of Closing on Sep 1, 2026, rounded down to the nearest $100/oz for gold and $1/oz for silver.
2. Cash Costs consist of mining costs, processing costs, mine-level G&A, offsite charges, and royalties less by-product credits. Refer to the “Non- Gaap Financial Measures” section in Appendix A of this news release for more information.
3. All-In Sustaining Costs (AISC) includes cash costs plus sustaining capital, closure costs, and salvage credits. Refer to the “Non-GAAP Financial Measures” section in Appendix A of this news release for more information.
4. Free cash flow is calculated as after tax cash flow from mine-site operating activities less capital expenditures, including closure costs (net of salvage value). Refer to the “Non- GAAP Financial Measures” section in Appendix A of this news release for more information.
5. Processing throughput per day can come from run of mine and rehandling from stockpile.
6. Numbers may not add due to rounding.
The economic analysis contained in this news release is preliminary in nature and is based primarily on Measured and Indicated Mineral Resources totaling 41.7% and 56.5% respectively, and in part, Inferred Mineral Resources totaling 1.8% of the proposed mill feed from the Main deposit. Mineral Resources are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that economic forecasts on which this PEA is based will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Table 2 lists the breakdown by resource category of the run of mine ("ROM") mill feed for the PEA life of mine plan.
Table 2: ROM mill feed and Contained Metal by Mineral Resource Classification
| Category | ROM Mill Feed (Mt) | ROM Au (Moz.) | ROM Ag (Moz.) |
|---|---|---|---|
| Measured | 119.5 | 1.81 | 2.40 |
| Indicated | 161.9 | 1.91 | 3.43 |
| Total M+I | 281.4 | 3.72 | 5.83 |
| Inferred | 5.1 | 0.04 | 0.20 |
Notes:
1. ROM mill feed represents material scheduled for processing in the PEA life-of-mine plan.
2. Contained ounces are based on estimated grades and tonnages and do not represent recoverable metal.
3. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
4. The PEA includes 5.1 Mt of Inferred Mineral Resources. Inferred Mineral Resources are considered too speculative geologically to have economic considerations applied that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA results will be realized.
Mineral Resource Estimate for the Main Deposit
Note: The Main Deposit is included in the financial modelling for the 2026 PEA.
The updated MRE for the Main deposit is based on the amalgamation of what have been historically described as the Main Zone, North Zone, Slipper Zone, and K Zone, effective May 19, 2026, and it is reported at a 0.15 g/t gold cut-off (see Table 3). There is no certainty that Mineral Resources will be converted into Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Mineral Resources include Inferred Mineral Resources which have had insufficient work to classify them as Indicated Mineral Resources. It is uncertain but reasonably expected that Inferred Mineral Resources could be uplifted to Indicated Mineral Resources with additional drilling.
Geological and resource domain modelling and estimation for the Project was completed using Leapfrog 2026.1. The lithological model was developed based on data from the extensive relogging program of 170,000 m drill core that was completed in 2023 and 2024, in addition to geochemical classification of sampled intervals eligible for such analysis, which includes both historical and modern drilling. Mineralization domains are modelled by identifying zones with gold values greater than 0.3 g/t over a minimum width of 3 m. Two primary styles of mineralization were recognized. Early mineralization includes disseminated stratiform mineralization in argillite-bearing lithologies. Late mineralization includes gold associated with late-stage quartz veins. Three high-confidence faults were modelled, including the North Fault, South Fault, and Fault 1. The Main Block is bound by the North and South Faults, representing significant discontinuities in stratigraphy and mineralization. Within the Main Block, Fault 1 introduces a minor offset in the main block.
Reasonable prospects for eventual economic extraction were evaluated by performing a pit optimization using the Lerchs-Grossman algorithm with the following parameters: gold price of US$3,400/oz, silver price of US$45/oz, and gold selling costs of US$5.19/oz (C$7/oz) for offsite charges, and a 1.5% royalty. Mining costs for mineralized material and waste are US$2.59/t (C$3.50/t), with incremental mining costs of US$0.02/t (C$0.03/t). Processing costs are US$8.52/t (C$11.50/t) for mill processing and include site G&A. Payability for gold is 99.8%, and payability for silver is 90%. Process recovery for gold is 90%, while process recovery for silver is 50%. The exchange rate used is C$0.73 to US$1.
Total Measured and Indicated Mineral Resources for the Main deposit includes 342.0 Mt at an average grade of 0.42 g/t gold and 0.66 g/t silver, for a total of 4.7 M contained ounces of gold (12% increase over the 2025 gold MRE) and 7.2 M contained ounces of silver (17% increase over the 2025 silver MRE). Total Inferred Mineral Resources for the Main deposit includes 42.4 Mt at an average grade of 0.28 g/t gold and 0.86 g/t silver, for a total of 0.4 M ounces of gold and 1.2 M ounces of silver.
Table 3: Mineral Resource for the Main deposit - 2025
| Category | Cut-off Grade | Tonnes (kt) | Au Avg. | Au (koz) | Ag Avg. | Ag (koz) |
|---|---|---|---|---|---|---|
| (g/t) | Grade | Grade (g/t) | ||||
| Measured | 0.15 | 77,370 | 0.53 | 1,321 | 0.68 | 1,701 |
| Indicated | 0.15 | 214,702 | 0.41 | 2,842 | 0.65 | 4,463 |
| Measured & Indicated | 0.15 | 292,072 | 0.44 | 4,163 | 0.66 | 6,163 |
| Inferred | 0.15 | 14,830 | 0.33 | 155 | 0.95 | 454 |
Mineral Resource for the Main deposit - 2026
| Category | Cut-off | Tonnes (kt) | Au Avg. | Contained | Ag Avg. | Contained |
|---|---|---|---|---|---|---|
| Grade (g/t) | Grade | Au (koz) | Grade (g/t) | Ag (koz) | ||
| Measured | 0.15 | 111,383 | 0.51 | 1,831 | 0.66 | 2,356 |
| Indicated | 0.15 | 230,636 | 0.38 | 2,832 | 0.66 | 4,863 |
| Measured & Indicated | 0.15 | 342,019 | 0.42 | 4,663 | 0.66 | 7,219 |
| Inferred | 0.15 | 42,375 | 0.28 | 382 | 0.86 | 1,174 |
Notes for Table 3:
1. The qualified person responsible for the Main Deposit MRE, effective May 19, 2026, is Bahram Bahrami, P.Geo of Equity.
2. Mineral Resources are classified in accordance with CIM (2014) definition standards.
3. Bulk density is assigned on a block-by-block basis.
4. Mineral Resources are reported using a 0.15 g/t gold cut-off grade.
5. Metal price assumptions include US$3,400/oz Au and US$45/oz Ag.
6. Metallurgical recovery assumptions are 90% for gold and 50% for silver.
7. Payability assumptions are 99.8% for gold and 90% for silver.
8. Numbers may not add due to rounding.
9. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
10. The qualified persons responsible for this section of the technical report are not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate other than those disclosed in this news release and in the PEA Technical Report.
Mineral Resource Estimate for the Phoenix Deposit
Note: The Phoenix Deposit is not included in the financial modelling for the 2026 PEA.
The MRE for the Phoenix deposit is reported at a 0.15 g/t gold cut-off, reflecting an updated pit shell based on a US$3,400/oz gold price. Total Indicated Mineral Resources for the Phoenix deposit include 0.09 Mt at an average grade of 0.25 g/t Au, for a total of 0.7 koz of contained gold. Inferred Mineral Resources include 54.4 Mt at an average grade of 0.36 g/t Au, for a total of 629 koz of contained gold (see Table 4).
Table 4: Mineral Resources for the Phoenix deposit
| Resource | Cut-off Grade (Au, | Tonnes (kt) | Gold Grade (Au, g/t) | Contained Gold (Au, |
|---|---|---|---|---|
| Classification | g/t) | koz) | ||
| Indicated | 0.15 | 0.09 | 0.25 | 0.72 |
| Inferred | 0.15 | 54.45 | 0.36 | 629 |
Notes for Tables 4:
1. The qualified person responsible for the Phoenix deposit MRE, with an effective as of May 19, 2026, is Bahram Bahrami, P.Geo of Equity Exploration Consultants Ltd.
2. Mineral Resources are classified in accordance with CIM (2014) definition standards
3. Mineral Resources are reported using a 0.15 g/t gold cut-off grade
4. Metal price assumptions include US$3,400/oz Au
5. Metallurgical recoveries assumptions are 90% recovery for gold
6. 99.8 payability for gold
7. Numbers may not add due to rounding
8. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
9. The qualified persons responsible for this section of the technical report are not aware of any environmental, permitting, legal, title, taxation, socio- economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate other than those disclosed in this news release and in the PEA Technical Report
10. Refer to Appendix B for the estimation methodology
Geological and resource modelling for the Phoenix deposit was completed using Leapfrog 2026.1 and Micromine Origin & Beyond 2026. The lithological model was developed based solely on geochemical classification, with six principal stratigraphic units identified: Upper Mafic Tuff, Upper Sedimentary Sequence, Lower Mafic Tuff, Intermediate Sedimentary Sequence, Intermediate Tuff, and Lower Sedimentary Sequence. These units generally dip gently to the northeast. A steeply dipping north-south trending fault divides the Phoenix deposit into eastern and western blocks. The eastern block contains the full stratigraphic sequence, while the western block includes only the two lowermost stratigraphic units found in the eastern block.
Gold mineralization was modelled based on downhole structural data measured from oriented drill core. This interpretation includes identifying two principal sets of mineralized structures: flat to gently east-dipping and steeper northeast-dipping orientations. These define three mineralized lenses-two upper, gently dipping zones and a deeper, steeper-dipping zone.
Capping values for the Phoenix deposit were determined using decile analysis and log-scaled probability plots of length-weighted gold assays. Outlier restrictions were applied to lithological domains during the second estimation pass, excluding samples above 0.2 g/t gold where search distances exceeded 30% of the variogram range. No outlier restrictions were applied to mineralized domains. A semi-hard boundary approach was applied to specific lithological contacts reflecting gradational contacts of lithological units. These included the Lower Mineralized Zone (Domain 630) with a distance threshold of 5 m, the Lower Mafic Tuff with 15 m, and the Lower Sedimentary unit with 50 m. This approach was used to reduce artefacts and better represent grade continuity in stratigraphically complex or sparsely drilled areas.
The block model was constructed using a parent block size of 5m x 5m x 5m, with sub-blocks refined down to 1.25 m to accurately honor geological boundaries and minimum mining widths. Grade estimation was conducted using a combination of Ordinary Kriging (OK) and inverse distance cubed (ID3) methods. OK was used for all mineralized domains where variograms could be reliably modelled; ID3 was applied to other domains where variogram stability could not be achieved. Locally varying anisotropy (LVA) was applied within mineralized domains to reflect observed structural controls.
Resource classification followed the CIM Definition Standards (2014) and was guided by geological confidence, data spacing, and estimation support. The current drilling density supports predominantly Inferred classification. These are supported by at least two drill holes within a spacing of ≤155 m. Indicated Mineral Resources are supported by drill hole spacing of ≤70 m with minimum of 3 drill holes used for estimation.
Reasonable prospects for eventual economic extraction were applied by performing a resource pit optimization and applying the following parameters: a gold price of US$3,400/oz, gold selling costs of US$5.19/oz (C$7/oz) for offsite charges, a 1.5% royalty, mining costs of US$2.59/t (C$3.50/t) with incremental costs of US$0.02/t (C$0.03/t) per 10 m elevation drop starting at 1,050 m elevation, and combined processing and site G&A costs of US$8.52/t (C$11.50/t). Gold payability was assumed to be at 99.8%, with a metallurgical recovery of 90%. The exchange rate used was C$0.73 to US$1.00. No by-product metals were included in the estimate.
Spanish Mountain Project Consolidated Mineral Resources
Total combined Mineral Resources for the Spanish Mountain Gold Project are summarized in Table 5. Total Measured and Indicated mineral resources include 342.1 Mt at 0.42 g/t gold for total 4.66 M contained gold ounces. Total inferred mineral resources include 96.8 Mt at 0.32 g/t gold for total 1.01 M contained gold ounces.
Table 5: Consolidated Mineral Resources for the Spanish Mountain Gold Project
| Area | Classification | Cut Off Gold | Tonnes | Gold | Contained | Silver | Contained |
|---|---|---|---|---|---|---|---|
| Grade | (Mt) | (g/t) | Gold | (g/t) | Silver | ||
| (g/t) | (koz) | (koz) | |||||
| Main Deposit | Measured | 0.15 | 111.4 | 0.51 | 1,831 | 0.66 | 2,356 |
| Indicated | 230.6 | 0.38 | 2,832 | 0.66 | 4,863 | ||
| M&I | 342.0 | 0.42 | 4,663 | 0.66 | 7,219 | ||
| Inferred | 42.4 | 0.28 | 382 | 0.86 | 1,174 | ||
| Phoenix Deposit | Indicated | 0.15 | 0.09 | 0.25 | 0.72 | - | - |
| Inferred | 54.45 | 0.36 | 629 | - | - | ||
| Total Spanish Mountain Gold Project | M&I | 342.1 | 0.42 | 4,664 | 0.66 | 7,219 | |
| Inferred | 96.8 | 0.32 | 1,011 | 0.86 | 1,174 |
Notes for Table 5:
1. The Mineral Resource for the Main Deposit and the Phoenix Deposit are both reported using a cut-off grade of 0.15 g/t Au.
2. The Mineral Resources are constrained within an optimized pit shell generated using Lerchs–Grossman pit optimization based on a gold price of US$3,400/oz, 99.8% payability, 90% gold recovery, C$11.50/t processing and G&A, C$3.50/t mining for ore and waste, C$0.03/t incremental mining cost, 1.5% royalty, C$7/oz offsite charges, and an exchange rate of 0.73:1 (CAD:USD).
3. Mineral Resources are derived from resource statements for each deposit and area, prepared by Bahram Bahrami, P.Geo., a Qualified Person as defined under NI 43-101.
4. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
5. The Mineral Resource estimate complies with NI 43-101 Standards of Disclosure for Mineral Projects (May 2016) and CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014).
6. Any discrepancies in totals are due to rounding.
7. The effective date of the Mineral Resource statement is May 19, 2026 for both the Main Deposit and the Phoenix Deposit.
Mining and Processing
Open pit mine designs, mine production schedules, and mine capital and operating costs have been developed for the Main deposit, at a scoping level of engineering. The mineral resources, including inferred resources, form the basis of the mine planning. The Phoenix deposit MRE is not included or considered as part of the mine plan.
Open pit mining activities are designed for approximately 25.8 years of operation. Mine planning is based on large scale conventional drill, blast, load, and haul open pit mining methods suited for the Project location and local site requirements. The subset of mineral resources contained within the designed open pits are summarized in Table 6, with a 0.15 g/t Au cut-off grade, and form the basis of the mine plan and production schedule, which is summarized in Figure 5.
Table 6: PEA Mine Plan Production Summary
| Mine Plan Pit Contents Total | |
|---|---|
| ROM Mill Feed | 286.5 Mt |
| Mill Feed Au Grade | 0.41 g/t |
| Mill Feed Au Metal | 3.8 Moz. |
| Mill Feed Ag Grade | 0.65 g/t |
| Mill Feed Ag Metal | 6.0 Moz. |
| Waste Overburden and Rock | 507 Mt |
| Waste: Resource Ratio | 1.8 |
Mill feed quantities and grades include estimates of mining dilution and recovery based on a 10 m selective block size and 2 m dilution skins applied to all waste contacts. This results in an addition of 9% dilution and 0% loss to the original sub-block resource block model.
Processing of the ROM mill feed at 31,000 tpd (or 11.3 Mt per annum from run of mine and rehandling from stockpile) is by means of a conventional process flowsheet including primary grinding, gravity concentration, preconcentration with coarse particle flotation, conventional flotation with regrind, concentrate followed by cyanidation via a CIL circuit to produce dore. The process achieves an average overall LOM gold recovery of 89%. The average silver recovery as a by‐product of the milling process for the life of the Project is 44%. Non-Acid Generating ("NAG") tailings from the plant are dewatered by screening and filtering and conveyed to a dry stack tailings facility, where it will be spread and compacted in engineered lifts. All site water is managed through a separate water management pond that includes a water treatment plant for any water to be discharged during the LOM.
The tailings storage facilities proposed for construction and development at Project are primarily based on utilization of filtered tailings technology for the base case scenario. Multiple tailings storage locations, designs, and technologies were analyzed to arrive at the preferred location and tailings technology.
Initial Capital Costs
The initial capital expenditures for the Project as integrated by BBA are summarized in Table 7 and the capital expenditures to be incurred after the start-up of operations are assigned to sustaining capital and are projected to be covered by operating cash-flows. Project contingencies have been added where applicable, excluding capitalized operating costs, which results in an overall contingency of US$216 (C$292M) (excluding taxes).
The Project will benefit from established infrastructure in central British Columbia, noting that the Project is approximately 70 km by road to the city of Williams Lake. Local infrastructure in Likely will further support the Project development.
Table 7: Initial Capital Cost Estimate
| 2025 PEA US$M (C$M) | 2026 PEA Update US$M (C$M) | Difference (C$M) | |
|---|---|---|---|
| Mining (Including contingency) | $83.7 ($113) | $82.2 ($111) | ($2) |
| Process Plant and Facilities(1) | $310 ($419) | $327.4 ($442) | $23 |
| On-site Infrastructure (including tailings, water management, water treatment, environmental, site costs, and earthworks)(1) | $113 ($152) | $152.6 ($206) | $54 |
| Off-site Infrastructure | $118 ($159) | $116.3($157) | ($2) |
| Project Indirects | $28 ($38) | $34.1 ($46) | $8 |
| EPCM, Owners Cost, Consultants | $83 ($112) | $96.6 ($129) | $17 |
| Project Contingency & other (excluding mining contingency)4 | $192 ($260) | $242.9($327) | $67 |
| TOTAL(2) (3) | $926 ($1,250) | $1050.4 ($1,418) | $ 165 |
Notes on Table 7:
1. Direct process plant capital costs are based on benchmarking and not from engineering design.
2. Totals do not necessarily equal the sum of the components due to rounding adjustments; not all cost components are illustrated in this table.
3. The initial capital costs have increased by C$154M since the 2025 PEA. This is due to the tailings and water management updates, the coarse particle flotation added to the process circuit, and additional buydown royalties for Wheaton added.
4. The total project contingency currently stands at 27.1% of DFC + IFC
Sustaining Capital Costs:
BBA estimates the LOM sustaining capital for Project to be US$399M ( C$539 M), which is expected to be funded by operating cash flows. The sustaining capital estimate is primarily for the expansion of the tailing storage facility, mining fleet additions as total material movements increase with depth, and reclamation and closure. The PEA has assumed US$119.5 (C$161.3 M) in closure and reclamation costs.
On Site Direct Operating Costs (“Opex”)
The estimated Opex for Project is US$14.44/t (C$19.49/t) of mill feed - see Table 8. BBA and MMTS have estimated the Opex based on first-principles calculation, industry benchmarking, proprietary information and professional experience.
Table 8: On Site Operating Cost for Base Case
| Metric | Unit | 2026 PEA Update |
| Open pit mining cost (excl. pre-prod) | US$/t milled | 7.12 (C$9.61) |
| Processing cost (excluding G&A) | US$/t milled | 6.42 (C$8.67) |
| G&A | US$/t milled | 0.91 (C$1.23) |
| Total site operating cost | US$/t milled | 14.44 (C$19.49) |
Notes on Table 8:
1. Totals do not necessarily equal the sum of the components due to rounding adjustments; not all cost components are illustrated in this table.
Royalties
There are three Net Smelter Royalty (“NSR”) payments applicable to the current Mineral Resource. There are two 1.0% NSRs payable, and one 1.5% Net Smelter Royalty ("NSR") payable to another royalty holder. These are the only three royalties that apply to the current Mineral Resources as mill feed for the Project and they have been incorporated into the economic analysis of the 2026 PEA Update. The Company plans to exercise its right to buydown the NSRs, for a total buydown payment of $25.9 Million USD ($35 million CDN) as provided in the agreements to be paid during the initial capital period. Therefore, all or substantially all of the Project (Main Deposit only) is subject to a combined NSR burden of between 2 and 2.5% after the aforementioned buydowns.
Infrastructure
The major infrastructure items considered and costed in the PEA support a mining and milling operation that is expected to operate 24 hours per day, seven-days per week. The design of Project infrastructure has prioritized environmental protection, workforce safety, and operating efficiency while minimizing community impacts. The Project site will consist of the open pit mine and mining related workshops, a processing plant, waste rock and tailings stack, and support service infrastructure such as warehousing, offices and workshops.
The Project site-wide water balance is positive for which water capture, treatment and discharge infrastructure has been allowed for and designed. The Project will draw water from within the property and contain process water and tailings within the water management pond and tailings stack, effectively. Water management and treatment has been included to treat both open pit dewatering and surface facilities run-off to required environmental discharge standards.
The site will be supported by renewable electrical grid power through a new, 75 km long 230kV, transmission line constructed by the Company from site to a new switching station designated as