Flagship Minerals Targets Double Resource on Chilean Gold Project by Year End 2025

• Flagship Minerals announced the company's strategic pivot from lithium to focus on gold and copper projects in Chile, specifically the Pantanillo Gold Project and Rosario Copper Project.
• The Pantanillo Gold Project contains 1 million ounces of gold with 80% measured resources, positioned to expand to 2 million ounces without additional drilling through optimized pit shell economics and improved gold pricing assumptions.
• The project benefits from proximity to Rio2's Fenix project and Hochschild's Vulcan project providing market benchmarks with similar geology and infrastructure where Pantanillo offers 40% higher grade in proven and probable reserves.
• Flagship Minerals plans to convert the resource to JORC compliance by October-November 2025, targeting a prefeasibility study by end of 2026, with potential for 100,000 ounces annually over 10 years to attract royalty and streaming finance.
• The company's enterprise value trades at approximately $12 per ounce compared to peer group average of $90-100 per ounce, presenting a significant valuation disconnect that management believes will correct as market awareness increases.

Flagship Minerals (ASX:FLG) has executed a strategic transformation that positions the company as an undervalued gold development opportunity in Chile's proven mining jurisdiction. Under Managing Director Paul Lockac's leadership, the company has pivoted from lithium exploration to focus on gold and copper projects, specifically targeting the advanced Pantanillo Gold Project and the early-stage Rosario Copper Project.

This decisive move toward gold and copper reflects management's understanding of supply-demand dynamics and positions the company in metals with more diverse markets and stable demand profiles.

The Pantanillo Gold Project

The cornerstone of Flagship's strategy is the Pantanillo Gold Project, which presents a rare combination of measured resources, infrastructure access, and significant expansion potential. The project currently hosts 1.05 million ounces of gold, with 80% classified as measured resources and 20% as indicated resources. This high-confidence resource base provides a solid foundation for rapid development progression.

The project's geological characteristics are particularly compelling, consisting largely of oxide and mixed mineralization suitable for heap leach processing. This metallurgical advantage, combined with surface accessibility, creates favorable economics for development. The resource is supported by 20,500 meters of drilling, with half being diamond drilling, providing substantial geological confidence.

Interview with Managing Director, Paul Lock

Comparative Advantages & Benchmarking

Flagship's positioning benefits significantly from nearby operating context. Rio2's Fenix project, located 35 kilometers north, provides a benchmark with a proven/probable head grade of 0.48 grams per ton. Pantanillo's superior grade profile of 0.69 grams per ton represents a 40% improvement over Rio2's proven and probable reserves, and 80% higher than Rio2's measured and indicated resources at 0.37 grams per ton. The regional comparisons suggest Pantanillo could achieve competitive operating costs while benefiting from superior grade characteristics.

One of Pantanillo's most compelling attributes is the potential for significant resource expansion without additional drilling expenditure. The current resource was calculated using a 0.3 gram per ton cutoff and a gold price of $1,835 per ounce, parameters that appear conservative in the current market environment.

Management projects the ability to increase resources to 1.75 to 2 million ounces through optimization of pit shell economics and cutoff grade adjustments. This expansion potential stems from existing drilling data that extends beyond current resource boundaries, supported by 5-6 kilometers of strike length showing alteration signatures.

The deepest drill hole reached 600 meters vertical depth and ended in mineralization grading 0.7 grams per ton in sulfide zones, indicating potential for deeper resource extensions. Additional upside exists along strike extensions and through exploration of five additional alteration targets identified on the property.

Development Timeline & Financing Strategy

Flagship has established an aggressive but achievable development timeline targeting JORC resource conversion by October-November 2025, followed by Pre-Feasibility Study completion by end of 2026. This timeline leverages existing geological data and nearby project benchmarks to accelerate development progression.

The company's financing strategy addresses current equity market challenges through diversified funding approaches. Management recognizes the "Lassonde Curve" phenomenon where share prices typically decline following feasibility study announcements, and has positioned the company to access alternative financing through royalty and streaming arrangements.

As Lock noted, "If we have a pathway to alternate financing and that would be one of the royalty streamers then we beat the Lassonde curve, but that doesn't mean I'm not going to look at traditional equity and so on. I just want to emphasize that we have a pathway to beat it."

The target production profile of 100,000 ounces annually over 10 years provides sufficient scale to attract major royalty and streaming companies, potentially avoiding dilutive equity raises during construction phases. As Lock explains,

"When we do that, we're looking at cut off on economics. So we think we can take it to somewhere between 1.75 and 2 million ounces. We work with a conservative overall recovery of 65%. That'll get us to 100,000 ounces for 10 years and that's good enough to get you know Wheaton Precious Metals, or Franco-Nevada, or someone else interested in the project."

Infrastructure & Permitting Advantages

Chile's mining-friendly jurisdiction provides significant advantages for project development. Lock mentions,

"Chile just brought into a law an initiative to reduce permitting times by 30-70%. So I think the driver there is what's happening in Argentina. Argentina, if you look at lithium as an example, are kicking a lot of goals there, whereas Chile's sort of dragging their feet a bit. This is also very relevant to gold and copper which we're focusing and and this is really important.

This regulatory improvement, combined with established infrastructure, creates favorable development conditions. Pantanillo benefits from excellent infrastructure access through three high-quality roads and proximity to existing power infrastructure. The Kinross Maricunga project, located 25 kilometers west, has established power transmission lines that could potentially be shared with Flagship and neighboring projects, reducing infrastructure development costs.

Water access, a critical consideration for heap leach operations, presents multiple solution pathways. Conservative planning assumes trucked water supply similar to Rio2's approach, while upside scenarios include local water well development or connection to planned regional water pipeline infrastructure.

The Strategic Metals Pivot

Flagship's current enterprise value of approximately $12 per ounce represents a significant discount to peer group averages of $90-100 per ounce for companies with similar resource profiles. This valuation gap reflects limited market awareness of the company's strategic transformation and gold project acquisition.

The peer group analysis includes companies with minimum 500,000 ounces of precious metals resources, predominantly gold-focused assets not yet in feasibility studies. This comparison framework suggests substantial revaluation potential as Flagship progresses through development milestones and increases market visibility.

Management's roadshow activities and strategic communications efforts aim to address this awareness gap, with expectation that fundamental value recognition will follow successful execution of development milestones.

The Investment Thesis for Flagship Minerals

• Acquire proven gold resources at significant discount: Current enterprise value of $12 per ounce versus peer average of $90-100 per ounce represents compelling entry valuation for 1+ million ounce gold resource with expansion potential.
• Leverage near-term catalyst timeline: JORC resource conversion by October-November 2025 followed by prefeasibility study by end of 2026 provides clear value inflection points within 18-month timeframe.
• Benefit from resource expansion without drilling costs: Potential doubling of resource base to 2 million ounces through pit shell optimization and existing geological data utilization minimizes capital requirements for growth.
• Access established jurisdiction with infrastructure advantages: Chilean mining-friendly regulatory environment with recent permitting timeline improvements and existing infrastructure access reduces development risks and costs.
• Participate in alternative financing opportunities: Management's focus on royalty and streaming finance provides pathway to avoid equity dilution during construction phases while maintaining development control.
• Capitalize on superior grade characteristics: 40% higher grade than nearby Rio2 project suggests competitive operating cost potential in proven metallurgical environment.
• Monitor strategic portfolio optionality: Rosario copper project provides additional upside exposure to copper market fundamentals with minimal capital commitment requirements.

Macro Thematic Analysis: Valuation Disconnect Presents Opportunity

The broader commodity landscape has witnessed a significant shift in strategic thinking, particularly regarding battery metals versus traditional precious and base metals. Flagship Minerals' pivot from lithium to gold and copper exemplifies this trend, reflecting changing supply-demand dynamics and market maturation cycles.

The lithium market has experienced dramatic oversupply conditions, with collapse reflecting rapid capacity additions in processing and mining, particularly from Chinese operations and South American brine projects. The market's structural oversupply is expected to persist through 2025-2026, making lithium projects economically challenged even at higher prices.

Conversely, gold and copper markets present more favorable fundamentals. Gold benefits from central bank purchasing, geopolitical uncertainty, and currency debasement concerns, while copper faces supply constraints from declining grades and limited new discoveries. The energy transition requires substantial copper consumption, with electric vehicles and renewable energy infrastructure driving demand growth.

Chile's strategic importance in both metals cannot be overstated. The country produces approximately 30% of global copper supply and maintains established mining infrastructure and regulatory frameworks. Recent government initiatives to reduce permitting timelines by 30-70% demonstrate recognition of competitive pressures from neighboring Argentina and commitment to maintaining mining sector attractiveness.

As Lock observed, "Big diverse in both metals -very diverse supply, very diverse offtake. As long as we're producing cathode or doré economically, we have a market. If we go into minor metals, there's a whole heap of issues around sales including qualification periods much more different market."

This perspective captures the fundamental advantage of focusing on liquid, established commodity markets rather than specialized or emerging metals with limited trading infrastructure and concentrated buyer bases.

Flagship Minerals' transition from exploration to development company demonstrates clear value catalysts and established resource base. The combination of proven geology, infrastructure access, and significant valuation discount creates compelling investment proposition for gold-focused investors seeking exposure to near-term development opportunities in established mining jurisdictions. The company's strategic focus on execution rather than exploration, combined with management's project finance background, positions the organization for successful advancement through development milestones toward production decision.