District-scale opportunities are very unique: Sam Lee on NorthIsle's 36% Resource Growth

0:15This month, North Isle copper and gold connected at four deposits and released an integrated mineral resource estimate. The headline was an additional 330 million tons of indicated material at 36 % increase. North Isle is advancing a former copper mine on the north end of Vancouver Island. The company is expecting to release a pre-feasibility study during the first quarter of 2027. The copper sector is hot. North Isle is up 228 % over the past year with a market cap of$1.3 billion. Sorry, rather$1.13 billion. CEO and President is Sam Lee. Sam, welcome to Mining Stock Daily. Thank you very much, Michael.

0:54Good to speak with you. Sam, what do you want to highlight from the mineral resource estimate? Well, this is just another step towards what we think is one of the most prospective copper and gold porphyry projects in Canada, if not the world. I think what makes this quite unique is that not only is it a very significant copper project as identified by the RMRE, but it is almost equally in part in gold as well. And what makes that important is that for big copper projects such as ours, there needs to be an appreciation that you need a reasonably low cost of capital to advance these projects. So we are very pleased to now show the market that this is a project with a mineral inventory of approximately 1.2 billion tons, as you mentioned, which is an increase of about 36 % and indicated resources.

1:56So the activities that we have pursued over the last year and a half, 18 months, is the inclusion of a new deposit called West Goodspeed, which we exceeded expectations in identifying approximately 113 million tons of indicated resources. This is all part of the Northern Corridor, which in our previously reported PEA, informs phase one of the project. And in addition, we've effectively increased our not only tonnage grade and confidence at the Northwest Expo project with about 120 percent increase in indicated tonnage and greater than 80 percent increase in copper, contained copper and gold. In addition to that, we have increased resources at Red Dog, where we have identified an eastern pit and a higher grade zone at depth.

3:03So this has all been very positive. I think all in all, what we've been able to now demonstrate is within larger resources, we've also identified a high NSR value per tons, a high value rock of about 405 million tons of indicated resources, grading 0.5 % copper equivalent, which is significantly above global mining grade. So a very positive outcome around moving towards our PFS for Q1 of 2027. Sam, can you talk a little bit more about GRADE? You did say that, as we did mention at the top, and you mentioned that indicated tonnage grew 36%, but in this copper grew 22 % and gold 26%. Sure. So because this is a polynothalic and almost equal copper gold project with molly and rhenium credits, the number that we really rely on as it relates to the profitability of a mine would be in the NSR dollar value per ton, which is what we report in our resources.

4:13I know that a lot of people rely on grade as it relates to measuring and comparing deposit to deposit. And so we've included that number of, call it 405 million tons, in indicated grading about 0.5 % copper equivalent. So for those that are unaware of that, 0.5 % copper equivalent is above global average of mining copper porphyries. so this is showing that we have about 400 million tons of that higher grade copper porphyry resource which in any respect is impressive most of that would be mined out in the earlier years because the deposit effectively is an at-surface deposit in the higher grade zones at Hushamu and Northwest Expo and Red Dog and Goodspeed all exist closer to surface.

5:10That is why we're demonstrating this zone, which would be mined out first in around 400 million tons at this grade. The remainder of this and what creates a material significant project is the longevity of a project. And the PEA, which is no longer the relied upon study, which has been displaced by the 43-101 resource, MRE Today, suggested about a 29-year life of mine. And so a lot of that high margin rock that comes out first will effectively be used to pay for the mine up front and would be extended well beyond that payback period to ensure that the overall life of mine of 29 years is effectively profitable to the extent that we had demonstrated into our PEA.

6:13So think of this as a high-grade, high-margin, high NSR Phase 1, which we are looking to grow beyond the five-year period in our PEA, and effectively a long-dated life of mine, which in the PEA was done for about 29 years. In the news release, you said that the Northwest Expo deposit remains open to the Northwest. Is there another resource update coming before the PFS? or are you just locked in at this point as you get to the PFS in Q1 2027? That's a good question. So the PFS is going to be predicated on this resource. Obviously, when you issue a resource, you make sure that you give the engineers the ability to optimize the pit shells and you give them all the resources possible that allows them to make that optimization.

7:07So in the end, I think that this is the resource that we would be using for the PFS. Having said that, not only at Northwest Expo, as you mentioned, there is that extension of the high-grade zone that goes beyond the pit shell that we identified earlier this year. There's also another area at Red Dog, which we announced in June, that also goes a high-grade zone that goes beyond the pit shell on the east, in addition to West Goodspeed, where the same thing happens as you go to depth. All of these are going to be factored in to the new updated MRE that will inform the preliminary feasibility study, the final feasibility study in 2027.

7:55So we are moving this forward in sequence in a way that as we go from study to study and as we de-risk this, we effectively make the project bigger and better, especially in these higher margin NSR zones at our deposits. Can we talk about cost inflation? Now, as you're saying, this is that when you look at sequencing and then getting into these higher grade deposits as you start, Surge Copper recently published a PFS in June. Surge Copper also has a copper project in BC. The NPV CapEx ratio was about one. You're using many of the same people that Surge was using for his PFS. What are you generally seeing in terms of costs?

8:43And also, what are you looking at strategically in terms of kind of reducing costs with your own project? Sure. So on the cost side, we haven't yet seen a significant inflationary environment. Obviously, with some of the disruption that's happening around the world, there is an expectation that there will be. But at this point, we haven't seen a material increase from certainly where we saw the surge copper PEA, which was reported recently and from our 2025 technical report. I think that there are obviously areas to improve around optimization and which affects costs. But the PEA, the historical PEA that we issued back in 2025, contemplated a 40 ,000 ton per day phase one that twinned into an 80 ,000 ton per day phase two.

9:41And that was the ideal optimization throughput for the time. Obviously, pricing has increased tremendously. we used a copper price of$4.20. Analyst consensus today, as we would use in our MRE, was north of$4.85. Gold, we used$2 ,150, which was analyst consensus back in February of 2025. Today, analyst consensus would be north of$3 ,400. So as you go through not only the increase in MRE, as we did recently, and you go through the pricing environment, that will impact what the optimal throughput would be, which would obviously have an impact on costs. So in summary, I think the cost inflation has not been deemed as a material issue today.

10:42Obviously, we still have six months left until we go into the Q1 2027 deadline targets for ourselves. But the other aspect of the equation is optimization. How do we get the most NPV impact for the most attractive capital intensity? Let's talk about this opportunity that you have right now. There is obviously commodities are hot. It's a favorable environment for mining. You're sitting on$133 million in cash with no debt. The corporate deck also talks about evaluating opportunities for accelerating the regulatory timeline. you also had the support that you were getting from the Canadian government for moving the projects forward.

11:35Is there anything that you can do that you can mention specifically in terms of accelerating the timeline for getting this project going ahead? Sure. It's what we're doing right now, which is effectively sticking to our critical path timeline, which identifies the technical things that need to get done, the environmental baseline work that needs to get done, and then, of course, specifically issuing the initial project description, which is expected to be completed later half of this year. So the triggering of the process has been initiated. I think that the key thing that we have continued to view as being essential for our project is the relationships that we have with our First Nation communities.

12:26And so the three of them that we are dealing with, Quotsino, Klokosikwela, and Kwaguth, have all now been engaged around the project description and the technical aspects of what we are looking to advance. And so the idea and the concept there is that when we go together and in consensus agreement of how the project should be progressed, then that makes the provincial and the federal process go much smoothly. Sorry, go ahead. I'll let you finish on that, Sam. Is there anything else you wanted to add regarding that? Yeah, sure. So in terms of what that regulatory period and timeline is around the provincial side of it, Well, that is being determined as we speak right now.

13:17So there is some concerted effort around identifying areas on how to contract the regulatory period that allows for consensus behavior amongst the proponents and First Nation groups. And so that's what we're advancing today. Lastly, Copper M &A, Sam. Sonoran, Arizona Sonoran was acquired by HUD Bay. Faraday Copper has had to tie up with Lundin and BHP. How do you think about North Isle in terms of this consolidation wave? Sure. So I think the reality is over the last five and a half years since I've been involved in North Isle Copper and Gold, the environment has changed dramatically. you go from a buyer's universe to a seller's universe.

14:12And what's happening right now is that this condition around this dearth of opportunities really has culminated into a lot of the M &A activity that you're seeing today. So I think that as it relates to us, we've always viewed M &A as being an outcome, not a strategy. We've got a number of pillars ahead of us that we are using and advancing today to accelerate the development of our project, but not only accelerate the development of our project, but also to expand our overall resources across our 50 kilometers, 100 % owned district. This is important because I think that taking a bit of a step back, what has become a tremendous theme over the past a few years has been projects are obviously interesting and good projects and tier one projects are what we're all driving towards but district scale opportunities are very very unique and are few and far to opportunity you can't just consolidate a district overnight you either own it and you or you don't and so what we have is a starter operation.

15:30When I say a starter operation, this is what we're trying to define through the de-risking process of about 30 years. That's what we've defined today. So the second half of the stool here is that we believe that we are now in a position to go after the growth opportunity across the 50-kilometer districts, which is a bona fide porphyry district. This district obviously was mined by BHP back in the 70s, circa 70s to the 90s, and we effectively own 45 kilometers north of that existing historical mine and have discovered approximately four deposits since that period of time. So I think that's something that clearly is unique around our story is that we do have a project that we are faithfully developing on an expeditious timeline but we are also in parallel to that focusing on our growth opportunity around the exploration of the district for which we have now spent 10 million dollars this year alone on the exploration program we've seen some successes that have come out over the last two quarters at Northwest Expo, which is the expansion of the high-grade, at Red Dog, which, as I mentioned, is the high-grade expansion beyond the pit shell, and of course at West Goodspeed, where we actually have now a new resource as part of the MRE.

17:02So that is going to continue on in 2026, Unabated, where we will be coming to the market with new news on those activities shortly. Sam Lee, thanks for speaking with Mining Stock Daily. Thanks very much, Michael. Take care.