Mining Americas: Three Permitted Gold Projects, One Growth Plan

0:16Mining Stock Daily: Welcome back to Mining Stock Daily, everybody. I'll begin wrapping up my week of corporate updates. Big news this morning coming out of Mexico and the Cerro De Oro project with Mining Americas. Mining Americas does trade on the TSX with MAI and on the OTCQX with MAIFF. Not necessarily a surprise announcement, but a very anticipated one. The government of Mexico has granted the final key permits for the project, and so Mining Americas can move forward with a construction decision. Happy to welcome in Darren Blasuti, CEO of the company. Darren, congratulations. Huge news. Big catalyst. The stock was up over 15 % today as we are recording right after market.

1:01Mining Stock Daily: So obviously lots of anticipation and appreciation for that. Walk us through this. I mean, was this something you expected? What was maybe the final moments or things you needed to get done to get this thing approved by the Mexican authorities? Well, as you know, Trevor, we've had great support from the Zacatecas government from all levels, quite frankly, to try and move this forward. where our property is, you know, it's probably one of the, one of the towns that probably needs this project the most. And, uh, you know, again, we've had, I think I told the story of the daily, the mayor calls the, the, uh, the, the, the, the state government asking if the permits been received yet.

1:43So again, it's a, cause we've kind of been in our state of, we need to do some, uh, exploration work. We need to do some network, but we're not going to spend any money until we have a permit, right? So ultimately the end of the day, uh, the, you know, everybody worked really hard. The government recognized that this was not a complicated permit. Um, and that the project was rather small compared to our, you know, very distinguished Penasquito mine. And we've got Fresneo, we've got Newmont, we've got Orla, all with much bigger projects. And this one was a, a much smaller project, uh, from, from a environmental and water perspective.

2:19So again, And, you know, we're happy to get it and we're very thankful for all the hard work the state and the local administration has done to get this done. You know, it's a project which, you know, in 2001 or 2021 when the company bought it in 2020 and did the PEA, it was, you know, it was the valuation of Monero Alamos for a long time. you know, based on that number, you know, it was a project. And at these prices, it's worth eight or 850 million just on the old study. So ultimately, you know, that's almost two times our market cap. So again, at the end of the day, it's an important milestone for the company.

3:01We got not only the land use change, we also got our NIA. We do have some ancillary permits. we do have lots of industrial water around the mine. We are applying and have applied with Conagua to get our own water, which is available there. But, you know, again, this starts the process for us to now start drilling, to start doing some more test work, to start planning around it and getting a new study done and get that ready for kind of mid-next year when Copperstone is built and operated, right? So in our timetable, I mean, if we had our druthers and we were starting from zero, we probably would have started with this project first, given its value and its rather unique small capital.

3:52So again, but that was not the position we were in. And, you know, there's never surety on the permitting scale. But this gives us the surety to go ahead and start spending some money and get ready on what we're going to do. And as I said, uh, this is one deposit where if gold prices are up, it makes a huge difference. It is a, it is a, a heap, uh, it's a Valley heap leach. It's a sea of disseminated ore everywhere you look at the strip ratio on the 20, in the 2021 model at$6 ,000 gold was 0.3 to one. So at$4 ,500 gold, the strip ratio is going to be zero. And the other thing that's, you know, this project was drilled by Naranda in the past.

4:36They did a really good job drilling out the surface, but they've only really drilled it out to like between 110 and 130 meters. So we believe there's a lot more gold below that. So I think it gives us time to do the drilling to build a much bigger project. I think one of the big advantages of Mexican permitting over, say, you know, U.S. and Canadian permits, It's about what you're going to do to the land. It's not about how many tons you do today or how many tons you're going to do in a day. So for example, the feasibility study or the PEA was done at 20 ,000 ton per day mining rate. It doesn't matter under the permit, whether it's 30, whether it's 10, whether it's 40.

5:17It's about what you're disturbing on the surface as opposed to what you're putting on the peat leach pad. So again, that gives us time to prepare to get a really good sense of how big we can build this thing. So the project was originally$28 million in capital using a contractor. It was a 20 ,000 ton per day project. That gave us something like 65 ,000 ounces over the first four years and then dropping down to kind of just below 50. at$1 ,600 gold. The question is, how big can it get with higher gold prices and lower cutoff grades? So we've got about a resource of about 790 ,000 ounces. We think at these prices, it could be closer to$1.5 to$1.6 million.

6:05So again, a lot of important work is going to get done now. We're going to start the drilling campaign, you know, I would say in the fourth quarter to kind of start to figure out how much is at depth. and then, you know, really how we're going to redesign that pit for a bigger gold price. So lots ahead of us on this one while we're obviously building Copperstone and getting ready, you know, to hopefully start building Goldrock in Q4 as well. So we've got a lot on our plate.

6:32Mining Stock Daily: All right. So let's kind of rehash a little bit if we can kind of go through some of that with the fine-tooth comb here, Darren, because I think a lot of people listening would appreciate that. And yes, the 2023 PEA at$1 ,600 gold showed – an after-tax IRR of 111%. Well, now with the gold price, are you 200 % premium, but it's based on the gold. And I know you're going to go back and look at the economics, look at the potential mining strategy. So a lot of this stuff can change. But could we be talking to 200 % plus after-tax IRR, just given basic napkin math here of where gold is? Again, let's just say that, Again, these are just numbers that I would throw out that are not scientifically based.

7:20But if we're going to build a bigger heap leach pad and we doubled the size of the heap leach pad, maybe the capital goes from 28 to 37, right? But the NPV goes to well north of a billion dollars. So when you're looking at a 30 to 1 NPV to CapEx ratio, it's not inconceivable to think that the IRR could be approaching 200%.

7:42Mining Stock Daily: Sure, sure. Well, and the reason I ask, and I sure, you know, again, you've been on probably on phone calls all day talking about this. And so I would be shocked if I'm the only person all day who's going to ask you this here, Darren. But shouldn't this project be greenlit, like, immediately? Because it's so easy? Well, again, I think, you know, my dad was a carpenter, Trevor. And he always told me measure two or maybe three times cut once. So we got one chance. And again, because of the drilling we want to do, and because of the, we want to improve the recoveries from the original test work. I think there's probably, you know, six to eight months of work to be done anyways.

8:28So when you look at the timing, um, you know, and again, you think about it when we got Copperstone, it was February, 2025. So the team had time to get ready for the May, 2026, 2026 start, right? gold rock we've had uh from you know october 1st we probably focused probably the first three months on pan and getting that right three or four months and then we spent another six months or seven months on gold rock making sure that what we're producing is the right project now that both of those projects didn't have any initial additional drilling that has to come and happen to it right because it's a lot different if the project goes from 110 meters to 200 meters in depth, and you've got more gold there, how big are we going to build the project?

9:14Now, knowing Mr. Conaghan, like I do, he's always going to try to find the cheapest way to get it into cash flow. And the other thing I would say about that, into cash flow, and lower capital and then spend more over the life of mine, if you think about proceeds and capital coming out of Copperstone and Goldrock as we're constructing, maybe that allows us to build it much bigger than we're thinking about. So all of those things are, again, I would say that we want to give our technical team six to eight months. And remember that, you know, Copperstone is being built as we speak on budget, but, you know, we're slowly ramping that up because it's all detailed engineering and mills and all that kind of stuff.

9:59And because we have$50 million of underground development at Copperstone, we don't need to get going on mine development yet. but we're going to be spending quite a bit of capital between January and June for both of those projects in order to get them into play. And so the only reason we were able to do Gold Rock is because we've got 130 people sitting at Pan, right? It's hard to build when you're a relatively small company to build two projects at the same time, let alone three. So I think the answer is, again, if we could reverse ourselves and start from zero, maybe we'd build this one first.

10:33but that's not what's in front of us right now. And, you know, you never want to build your best IRR project and your best NPD project last. But I think given where we are and given the potential size of it, you know, I think it behooves us to kind of do the technical work. But listen, don't let me say that I'm not excited about it. And if, you know, we woke up with$5 ,500 gold and not a constrained balance sheet that's there to only build projects, you know, maybe we would think about it. But I think where we are today, I mean, again, when we talked in October 2026, 2025, we were talking about sequentially building three projects.

11:11Now we're talking about, oh, we should build all three together. I think that's probably not.

11:17Mining Stock Daily: The market doesn't like surprises, right? If you put out a plan for execution, which I would say your valuation of the company will be based on the execution of your business strategy going forward, not necessarily future cash flows. That's just where we're at here because they will judge you on your execution of getting Goldrock, Copperstone, and Cerro de Oro into production in the timely manner you have communicated that to the market. And so even with this 15 % pop in your stock today, I think there's going to continue to see execution. And I think that's just kind of where we're at. And that's a good thing, right?

11:59Mining Stock Daily: It keeps everybody accountable. So I do want to go back. Listen, we've been covering this story for years. And so I do remember when that original PEA for Cerro de Oro came out. And shortly thereafter, there was a financing package that was announced in 2023. Is that still applicable to this under the new company, new management, or is that obsolete? No, it's totally gone. That was where the, I think that's, you know, that's the Orbeck thing that was done in 2023. That kind of gone, as you know. I mean, we've, there was some advanced payments made that ended up being paid back through delivering gold ounces at Santana.

12:44So again, the only thing that I think is still remaining, if you remember in May when we announced the financing with Scotiabank and National Bank, we had bought back three quarters of that royalty. So the only thing that's left from that is the 0.25 % NSR that we could still buy back from Oramed as we go forward. everything else that's out there. Again, it's not a, given the low CapEx, uh, it's not a question of being able to finance. It's being able to build it while we're doing all the other things that we're doing, right. Where I'm, you know, where I want to, you know, explore things or how we do things faster is, you know, we, we haven't done a lot of exploration drilling in the company this year,$3 million we're estimating because we've had numerous mines to be building and that's going to have a lot of capital outflow.

13:34So we're always kind of not doing things as quickly as we can as a result of, of making sure that we've got enough capital to build the mines we've said we've got. So again, we're going to have to figure out how we manage, uh, you know, the, the, the, the$5 billion we're probably going to pay for the land use, probably some of the drilling and that money. So we're going to, you know, do our own things that we should do, which is, can we explore, um, you know, maybe taking our debt up a little bit so that we're not issuing any stock. Can we find another form of financing that's, that's unsecured in Mexico to kind of move some of this forward?

14:11We'll, we'll look for that for sure. But, uh, again, I think, you know, the cart before the horse, the guy's got to drill out the deposit and they got to do some more net test work and that's going to determine the size. I mean, I don't think in any, in, in any way, do we think meaningfully the initial capital is going to be much more than probably 35 million dollars so again on on on our what's very interesting and why what the real uh the real purpose of owning that era and why we've been so excited about it is we now have three fully permitted projects that we think are going to cost 125 million dollars us in total capital to build out a hundred and you know, 45 ,000 ounces of gold production.

14:55So that's the story. Um, we've said we're going to do it without equity dilution and we're going to stick to that. We're going to continue to try and make sure that we, we, we go do this going forward. Uh, and that means sequentially, uh, you know, having to take our time on some things while we move other things forward faster. And I, and I don't think, you know, we've got a lot of questions today, quite frankly, but why don't you slow down gold rock and build Cerro, right? Because Copperstone's already committed, right? And I think the answer is there is we have all the tentacle work done for Gold Rock.

15:28And there's 450 ,000 ounces probably sitting there ready to be mined. And we've got a 130-person team sitting eight miles away. So that gives us the comfort to be able to, with only some construction oversight, with a really good team there, to be able to do that. Copperstone and Cerro Dora are very similar because there's basically nobody on site when you start, right? And so building up a team from zero to a team of how many you're going to need there, 40 or 50 at Copperstone over time, and the same number at Cerro Doro, that takes some time. Now, the good news is we got an excellent team in Mexico that's helping us on Copperstone and Gold Rock.

16:09So we're going to continue to leverage that team. They're now a lot busier than they thought they'd be over the next six to eight months. So they got lots to do. uh but as i said i think the board has a path it has a room and it seems like you know 2020 into 2027 is a long way away you end up mid you know third quarter 2028 to deliver uh to deliver serodoro but it's not really that far in the time frame of of a company right it's pretty quick and i think what you've got i think what you've said is absolutely true we trade we have a developers multiple until we show people we can build projects and then we're going to get a producer multiple and you tend to get it even before you produce the assets that are in the in your stable if you've shown that you can do it again right so again we need to focus our time and our energy and making sure that copperstone and uh and goldrock get delivered uh you know on time

17:05Mining Stock Daily: and on budget and that's going to be the focus so very good uh yeah it's going to be an incredible two, two and a half years here, Darren, to see a full execution of all three of these projects come into the pipeline. And, you know, if you're looking at maybe some blue sky potential here, you might have a rough idea. Let's say gold sticks around$4 ,500 an ounce. Obviously, I think it's going higher. I think you would too. But if you're talking about future potential cashflow, given everything put together, you're looking at a pretty healthy chunk of change in the kitty come the end of 2028. And for the longevity of the company, I mean, you've got a lot to balance now.

17:46Mining Stock Daily: And you've mentioned doing some more exploration work. I mean, there's going to come a time where you need to replace to plenish ounces. But also, we also know gold projects are just going to get more and more expensive. So think about future capital allocation is acquisition of new projects within the type of framework that Mining Americas is known for. you know is that still kind of on the table will you be looking to acquire more projects for this funnel well interestingly if you look at the analyst estimates of four companies of the four analysts that cover our company they have you know in 2028 something like 250 million dollars of free cash flow and now they'll have they'll move saradoro into the 2029 category so that number will be over$500 million of free cash flow.

18:36And then you look at the warrants that are 705 that I think will quickly move into being in the money. There's another$200 million. So, I mean, you only have really three things you can do with your, three or four things you can do with your money, right? One of them is find projects that are accretive to you that you think you can build. And, you know, those things we're always on the lookout for. I think where we are today is we trade like a developer. So it's hard to buy something that's valued more than you when they don't have permits today. So, you know, so again, I think there's a time and a place, but we're always going to review those opportunities.

19:16That's, I think, the greatest use of your capital, drilling out exploration and finding other assets that on a per share basis are very accretive for your shareholders. The attraction to those companies to us is we will have enough cash flow without having to go to any financing to build almost any project out there. So, I mean, obviously we're not building barrack size projects, but anything in our, you know, 70, 50 to 200 ,000 ounce production per year. I think, you know, we could make a case that we could build that out of cash flow. That makes us an attractive partner. The second thing you want to do is you want to buy back your stock if you keep trading at a crappy multiple and people aren't giving you value for that.

19:55And the third thing is a dividend, right? So you kind of got your expiration of your own projects and your capital allocation to find new projects to get your production up per share. And then you've got your buybacks, which are very popular right now. And then you've got your dividends. And I think we'll have ample room to do all three of those as we look out into the future. The challenge we have is if we're going to keep trading at 0.35 times NAV, you know, it's hard to buy things. And so that's the reality that we're in. So we've got to wait and be patient and deliver the things that the market expects of us.

20:32I think if you looked at our, you know, milestone chart in our presentation on page five, we have listed out since October probably 20 things. And we've now executed on 15 of those, right? The mark, but the, so that was what I'm going to call the easier stuff. That was like, you know, fixing the balance sheet. Now we're on the path of focusing the entire organization on, on, uh, on, on the blocking and tackling of building these mines. Right. And we've got everything to help us, everything behind it. You know, we've probably added in the last month, not that we put out press releases every week, you know, five or six people really strengthening our construction and operations team at Copperstone.

21:14Right. And, and, and we're going to, we've got the people already available to do Cerro Doro that had always been in Minerala. So we're, we're building up our, our, our, uh, you know, our, our group of, of talent within the company, because you got to not only build these mines, you got to manage them. But then if you're going to build something bigger beyond this, you've got to have that team in place and ready to go. So listen, a lot of excitement. It's a very exciting time. Um, you know, I think the market has been very, um, negative on the ability of not to receive this permit, uh, that we haven't gotten this permit.

21:49Uh, you know, we had a pretty good idea when the, the federal inspector came a few months ago that this would happen. Uh, and, uh, you know, we'd been telling you Q3 and, and we delivered Q3. So that, that's our job. And, uh, you know, I laughed cause I said, what we think goal, I think gold's going way hire, but my job is to manage the company as if gold's going way lower. So that's the problem because when gold touched 3 ,900, of course, we're having the conversations in August at Copperstone where we went underground our board meeting where we're saying, oh, maybe we should slow down this or maybe we're not going to have three months.

22:26So, you know, of course, we want have conviction in our you have conviction when you when you buy assets and when you look at them you believe your prices the prices are going to be strong because that's what you believe but when you're building them you got to make sure that you can build them if gold goes to three thousand bucks and and you know so that's where we are uh and and again as i said it's like you know we don't have although we have you know 30 million dollars in our credit line undrawn and 45 in cash and you know we're having good you know another good couple of a couple another four good quarters at pan uh while these projects are getting built third fourth and one and two next year all helping that you know there's always more you can do if you have the cash right and so ultimately uh you know we're gonna we're gonna try and focus people that's why expiration like you know if you talk to our peer group at macco and integra and heliostar they're probably spending 10, 15,$20 million in drilling.

23:28It's not because we don't have good targets. We got great targets, but we got to get these mines built. And if we're going to have$500 million in two or three years, then let's not worry about the small stuff today with lots of time to build out. They're drilling expiration because they don't have 140 ,000 ounces of production coming on in the next 27 months. That's why they're drilling, right? So we just got to remember that that's where we are.

23:51Mining Stock Daily: One last question here, Darren. And not everybody gets to put out really great news for companies when gold's up$100 on the day. So you hit the bullseye on that one. But at the same time, there's another interesting dynamic with the GDXJ, a little bit of rebalancing there that looks like Monera. Mining Americas, I told you, this is going to take me a while. I'm sorry. Mining Americas is going to benefit from. Ken, what's the expectations here with that indexing? Well, again, I think we've met all the conditions for the GDX Day inclusion. The big one was the nine months of trading liquidity, which we have met.

24:30So the expectation is somewhere between three and three and a half million shares need to be bought, depending on which bank research you're looking at. And so we expect that that will be happening over the next couple of weeks. I think it's important inclusion for us. Most of our peer group have already been in that group already. And again, as a result of meeting that nine months of liquidity, we believe that it will be important for our stock. You know, again, usually if it's happening on the 15th or the 17th, people are starting to buy now. So hopefully we're getting them to buy at$7, not$5, which is quite easy.

25:10Yeah, absolutely.

25:11Mining Stock Daily: All right. Darren, thanks so much again. Congratulations. Huge news. and happy to be wrapping up my week of corporate updates with this one. We always love good news. So Minding America's Trades on the TSX with MAI and on the OTCQX with MAIFF. Darren, we'll talk to you again soon. We'll catch you in Colorado for the conferences here. Sounds great. Thanks, Darren. Thank you. The information presented should not be considered investment advice. Minding Stock Daily Yen's affiliates are not responsible for any loss arising from any investment decision in connection with the material presented herein.

25:47Mining Stock Daily: Please do your own research or speak with a licensed financial representative before making any investment decisions.