A New Reality for Mining: Billion-Dollar Builds and Copper-Driven Growth

• Copper displaced gold as the standout commodity of the quarter, with Rio Tinto and BHP copper business becoming its largest-ever single earnings contributors.
• Omai Gold Mines' preliminary assessment delivered a $4 billion net present value at $3,600 gold, rising to $5.5 billion at $4,200 gold, with average production of 350,000 ounces annually over an 18-year mine life and $8.1 billion in cumulative undiscounted cash flow.
• Prospector Metals fell 40-50% on a thin early batch of assay results before recovering roughly 25% off its low, as Olive added to its position between $0.80 and $0.90 per share.
• K92 Mining reported over $300 million in quarterly cash flow and moved into a net-cash position, alongside a planned leadership succession from CEO John Lewins to internally-promoted David Medilek.
• DPM Metals posted record revenue and free cash flow on roughly 25% copper exposure via its Chelopech mine, and also discussed Eldorado's McIlvenna Bay as a copper asset.

Samuel Pelaez, President, CEO and CIO of Olive Resource Capital, and Derek Macpherson, Executive Chairman, used their latest Compass episode to catch up on several weeks of news flow, headlined by the preliminary economic assessment (PEA) at Omai Gold Mines (TSXV:OMG), a company in which Macpherson sits as a director and Olive holds a position exceeding 30% of the fund. The pair also reviewed a sharp, short-lived drawdown at Prospector Metals, a leadership transition and blowout quarter at K92 Mining, and a second-quarter reporting season in which copper, not gold, drove the headline results at the world's largest diversified miners.

Omai's PEA Sets a New Scale Benchmark

The Omai Gold Mines' (TSXV:OMG) PEA followed April's resource upgrade and delivered what Pelaez called a pretty significant headline number: $4 billion of after-tax net present value at $3,600 gold, rising to $5.5 billion at $4,200 gold. Average annual production of 350,000 ounces over an 18-year mine life places the project, in Pelaez's assessment, near the top of the second quartile of global gold producers. Cumulative undiscounted cash flow over the life of mine came in at $8.1 billion.

Despite the scale, the stock's initial reaction was muted, trading roughly flat to slightly down before recovering over the following days. Pelaez attributed this to a market still digesting a new reality of billion-dollar-plus capital costs for developer-stage projects, pointing to Troilus Mining as a precedent for how a project once viewed as unbuildable can re-rate once financing structures, including debt, streaming and royalties, are demonstrated to be available.

"We just simply live in a new reality. The gold price is up 150% from when it was a couple of years ago. The market caps have reacted, but also we can now digest these billion-dollar-plus capex numbers."

Prospector's Draw-Down Becomes a Buying Opportunity

Prospector Metals Corp. (TSXV:PPP) fell roughly 40% after releasing its first batch of 2026 Yukon drill results, two full holes and a partial assay from a 44-hole program. The results were described as encouraging but not a full replication of the previous summer's spectacular intercepts. Pelaez cautioned against drawing firm conclusions from two and a half holes out of 44, noting CEO Rob Carpenter's statement that the company had defined the geometry of a high-grade plunging core to the target system based on visual observations across the full drill programme, even ahead of assays.

With the company funded through its current drill programme, Olive added to its position between roughly $0.80 and $0.90, a level the stock has since largely recovered from, delivering close to a 25% gain from the low. Macpherson noted the fund's approach of adding to positions on weakness rather than treating any single entry as a final exit, particularly given the absence of near-term financing risk.

K92 Delivers a Blowout Quarter Amid a Planned Leadership Handover

K92 Mining Inc. (TSX:KNT) reported a standout quarter, generating over $300 million in cash flow and moving into a net-cash position while ramping up its Stage 3 expansion. Pelaez and Macpherson framed this as validation of a long-held thesis around underappreciated, funded organic growth, and flagged the company's undiscussed copper exploration potential beneath its Papua New Guinea gold operations as additional unpriced optionality.

The company also confirmed a leadership succession: John Lewins moves to non-executive chairman, with David Medilek, promoted internally through operational roles, becoming CEO. Both speakers characterised this as continuity rather than a strategic shift, noting Lewins remains involved and a large shareholder, with the transition primarily reducing his travel burden between Perth and the company's North American investor base.

Copper Displaces Gold as the Standout of Q2 Reporting

Across the sector, Q2 2026 marked a shift in leadership from gold to copper. Rio Tinto reported copper along with aluminium and lithium, contribute the large portion in earnings while at copper exceeded 50% of EBITDA of BHP, also a first. Pelaez linked this to a structural narrative the pair has tracked for roughly a year: mine supply disruptions across Panama, Grasberg, Chile and the Democratic Republic of Congo (including a suspension at Kamoa-Kakula), alongside US stockpiling ahead of potential tariffs, have tightened the physical market even as gold's own six-quarter run of sequential record results paused without falling.

The Search for Copper-Gold Kickers: DPM and Eldorado

The rotation revived investor interest in producers with meaningful copper exposure alongside gold. DPM Metals Inc. (TSX:DPM), formerly Dundee Precious Metals, reported record revenue and free cash flow, with roughly 20-25% of output tied to copper and gold via its Chelopech mine, a level Macpherson expects to moderate as the recently acquired Vareš asset ramps up. Macpherson acknowledged Olive's own history with the name, having exited a position around $10 that has since traded near $70, a decision he attributed to an earlier, mistaken read on the market's willingness to reward M&A-led growth.

Eldorado Gold Corporation (TSX:ELD; NYSE:EGO) was discussed more cautiously on the market's framing of the company's McIlvenna Bay project, acquired via the Foran Mining transaction, as a copper asset, arguing it is more accurately a zinc asset. With first concentrate now produced at McIlvenna Bay and initial crushing underway at the Skouries copper-gold project in Greece, Eldorado's production base and balance sheet are set to diversify meaningfully, offset by continued caution around the company's remaining Turkish assets.

Both Macpherson and Pelaez closed by noting they have been active buyers through late July and August as gold prices stabilised, adding to existing positions and building a small number of new ones they expect to disclose once fully established.

TL;DR 

Olive Resource Capital's Samuel Pelaez and Derek Macpherson used their latest Compass episode to catch up on a busy few weeks, headlined by Omai Gold Mines' preliminary assessment ($4-5.5 billion NPV depending on gold price, 350,000 oz/year average over 18 years). A sharp draw-down at Prospector Metals became a buying opportunity given thin early assay data and a funded treasury. K92 Mining posted a blowout quarter and confirmed a planned CEO succession. Second-quarter results across the sector marked copper's overtaking of gold as the standout commodity, with Rio Tinto and BHP posting record copper contributions, reviving interest in copper-gold producers like DPM Metals and Eldorado Gold. 

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