$3,750 Gold Transforms Gold Terra's Con Mine Economics vs $340 at 2003 Closure

• Gold Terra has outlined 1.8 million ounces of combined indicated and inferred resources at their Yellowknife project, with 540,000 ounces near-surface in the Yellorex area accessible via ramp development
• The Con Mine represents a cornerstone asset with existing mining lease and surface rights, potentially shortening permitting from 10-15 years to one year compared to greenfield projects
• OR Royalties invested $2 million to increase their NSR royalty from 1% to 2%, with option for additional $2 million to reach 3%, providing third-party validation of the project
• With gold at $3,750/oz versus $340/oz when the mine closed in 2003, management believes lower cutoff grades could significantly expand resources and improve economics
• Company targets updating resources and completing preliminary economic assessment within 6-12 months, aiming to potentially finalise acquisition of Con Mine from Newmont by 2026, ahead of 2027 deadline

Gold Terra Resources Corporation is strategically positioned to capitalise on the current gold price environment through its Yellowknife project in Canada's Northwest Territories. With gold prices reaching $3,750 per ounce, Executive Chairman and CEO Gerald Panneton sees an opportunity to revitalise a historically productive mining district that was shuttered when gold traded at significantly lower levels. The company's approach combines existing infrastructure advantages with a disciplined development strategy focused on near-term production potential.

Strategic Asset Foundation

The cornerstone of Gold Terra's value proposition lies in the Con Mine, which provides critical infrastructure and regulatory advantages. 

The mining lease and surface rights represent a significant competitive advantage, potentially reducing permitting timelines from the typical 10-15 years for greenfield projects to approximately one year.

The company has already outlined 1.8 million ounces of combined indicated and inferred resources across their Yellowknife holdings. Most recently, they completed a deep drilling program that successfully demonstrated the continuation of the Campbell Shear 600 meters below the existing mine workings, providing confidence in the long-term resource potential.

Third-Party Validation Through OR Royalties Investment

A significant development occurred with OR Royalties’ (formerly Osisko Royalties) decision to invest $2 million to increase their Net Smelter Return (NSR) royalty from 1% to 2% across the entire Yellowknife project. This investment, originally established in 2013, represents more than financial backing. 

"Who would put $2 million if you don't believe in the project? So very simple, OR is giving us the thumbs up." 

The structure includes an option for OR Royalties to invest an additional $2 million to increase their royalty to 3%, which management expects will be exercised.

This endorsement carries particular weight given OR’s reputation and technical expertise in evaluating gold projects. The investment followed an in-depth technical review by OR Royalties, validating the project's potential and providing external confirmation of management's resource estimates and development strategy.

Economic Transformation Through Gold Price Appreciation

The dramatic appreciation in gold prices has fundamentally altered the economics of the Yellowknife project. When Panneton negotiated the Newmont option agreement to purchase 100% of past producing 16 g/t Gold Con Mine in November 2021, gold was trading at $1,600 per ounce. Today's price of $3,750 represents a 134% increase, while the historical context is even more striking. 

"The mine shut down in 2003 when gold was $340 an ounce. That's a 10 bagger."

This price appreciation directly impacts resource economics through potential cutoff grade reductions. The current resource estimate uses a 3.5 gram per tonne cutoff grade for underground mining, valued at approximately $500-600 per tonne at previous gold prices. With current valuations, management believes they can justify lower cutoff grades, potentially expanding the resource base. "Can we lower it down? Most likely yes," Panneton confirmed, suggesting the company is evaluating options including a 2.5 gram per tonne cutoff that could increase the Yellorex zone from 540,000 ounces to 700,000 ounces.

Interview with Gerald Panneton, Executive Chairman of Gold Terra Resource

Near-Term Production Strategy

Gold Terra has developed a phased approach prioritising near-surface resources that can generate cash flow more quickly than deep underground development. The Yellorex area, located approximately one kilometer south of the Con Mine, contains 540,000 ounces between 200-500 meters vertical depth. This zone can be accessed via ramp development without requiring the existing mine infrastructure, reducing capital requirements and development complexity..

The strategy reflects lessons learned from expensive deep drilling programs. While the company successfully proved continuity of the Campbell Shear at depth, management recognises that near-surface development offers superior economics and faster payback. "The most economical way is to stay within the surface or within mine infrastructure. There's no question about that," Panneton acknowledged.

Resource Expansion Potential

Beyond the defined resources, Gold Terra has identified significant expansion targets. The northern extension of the Campbell Shear presents a 1.4-kilometer strike length between 500-800 meters vertical depth with what management estimates as potential for an additional 500,000 ounces. Combined with management's assessment that the Yellorex zone could yield a million ounces at a 2.5 gram cutoff, these targets could help the company approach or exceed the 1.5 million ounce threshold required for the Newmont acquisition.

Winter drilling programs will focus on converting inferred resources to indicated category while testing these expansion targets. The dual approach of infill drilling and step-out exploration aims to demonstrate both resource confidence and growth potential, supporting the preliminary economic assessment scheduled to follow the resource update.

Development Timeline and Milestones

Gold Terra has established a clear development pathway with specific milestones leading to production. The immediate focus involves completing winter drilling programs to update resources and support a preliminary economic assessment within 6-12 months. Success in these programs could enable finalisation of the Newmont acquisition by 2026, one year ahead of the 2027 contractual deadline.

The accelerated timeline reflects both the improved gold price environment and the company's strategic focus on near-surface resources. Rather than pursuing the original deep underground development plan, management has pivoted toward a more capital-efficient approach that can generate cash flow sooner while preserving long-term expansion options.

Financial Position and Capital Efficiency

With approximately $3 million in treasury and the OR Royalties endorsement, Gold Terra enters the critical development phase with improved financial flexibility. The company has completed three financings at $0.05 per share during challenging market conditions, demonstrating management's commitment to advancing the project through difficult periods.

The current gold price environment should improve access to capital at more favourable terms than previously available. 

"We can also be very smart about it and less dilutive than we've been over the last three financings," Panneton suggested, indicating plans to leverage the improved market conditions for future funding requirements.

The Investment Thesis for Gold Terra Resources

• Leveraged Gold Price Exposure: Project economics transform dramatically with gold at $3,750/oz vs. $340/oz closure price, enabling lower cutoff grades and expanded resources
• Permitted Infrastructure Asset: Con Mine's existing mining lease and surface rights provide 10-15 year permitting advantage over greenfield competitors
• • Near-Term Cash Flow Potential: 540,000+ ounces accessible via ramp development could generate revenue within 3-4 years rather than decade-plus timeline for deep mining
• Third-Party Validation: OR Royalties' $2M investment and technical endorsement validates resource potential and development strategy
• Resource Expansion Runway: Multiple high-grade zones along 1.4km Campbell Shear strike length offer organic growth beyond initial production targets
• Skilled Labor Availability: Diamond mine closures create experienced workforce pool in established mining jurisdiction
• Acquisition Catalyst: Newmont option exercise by 2027 provides clear value crystallisation timeline with potential acceleration to 2026

Macro Thematic Analysis

The current gold price environment reflects broader macroeconomic themes including monetary policy uncertainty, geopolitical tensions, and currency debasement concerns. Gold Terra's positioning in this cycle is particularly compelling given the dramatic transformation of project economics since the original mine closure. Historical mining districts shuttered during previous gold bear markets are experiencing renewed investor interest as current prices justify previously uneconomic resources.

The company benefits from both the immediate revaluation of existing resources and the potential for resource expansion through lower cutoff grades. This dual leverage to gold prices creates asymmetric return potential, particularly for projects with existing infrastructure that can accelerate development timelines. The Yellowknife district's established mining culture and available skilled workforce provide additional advantages as the industry experiences labor constraints in many jurisdictions.

Panneton's perspective captures the opportunity succinctly: "The mine shut down in 2003 when gold was $340 an ounce. That's a 10 bagger. Think about that." This dramatic revaluation, combined with infrastructure advantages and proven management, positions Gold Terra to capitalise on gold's structural bull market through both near-term production and long-term resource growth.

TL;DR

Gold Terra Resources offers leveraged exposure to gold prices through its Yellowknife project, featuring 1.8M oz resources, permitted infrastructure via the Con Mine, and 540k oz near-surface accessible within 3-4 years. Osisko Royalties' $2M endorsement validates the strategy while CEO Panneton's track record building Detour Gold provides execution confidence. The combination of 10x gold price appreciation since mine closure, infrastructure advantages, and clear development milestones creates compelling asymmetric opportunity in Canada's established mining jurisdiction.

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