Low-Capex Copper-Gold Project Posts US$2B NPV in Latest PEA

• Northisle Copper & Gold released a preliminary economic assessment (PEA) for their North Island project showing an after-tax NPV of $2B and IRR of 29%
• The project uses a phased approach, with Phase 1 having 70% margins from gold and Phase 2 including more copper for a 50/50 gold/copper split
• Capital intensity is very low with a high NPV to capex ratio of 1.7. Payback period is under 2 years.
• The company is fully funded in 2025 to focus on expanding the higher-grade northern corridor area
• Northisle has a 35km land package with district-scale potential. Strategic partnerships may be considered to help unlock the full district.

On February 19, 2025, Northisle Copper & Gold (Northisle) released a positive preliminary economic assessment (PEA) for its 100%-owned North Island project located in British Columbia, Canada. The study outlined a long-life, low-cost, copper-gold project with industry-leading capital intensity metrics. Sam Lee, President & CEO of Northisle Copper & Gold stated:

"We have one of the highest return, lowest capital intensive copper and gold porphyry projects on the planet" 

PEA Highlights World-Class Project Economics 

The PEA, based on consensus pricing, yields an after-tax net present value (NPV) of approximately US$2 billion at a 7% discount rate and an internal rate of return (IRR) of 29%. The study outlines a 29-year mine life with average annual production of 157 million pounds of copper equivalent or 300,000 ounces of gold equivalent.

Importantly, the capital intensity of the project is amongst the lowest in the copper-gold porphyry space with a NPV to capex ratio of 1.7. This is substantially higher than typical copper projects which range from 0.5-1.0. The initial capex is estimated at US$850 million.

Interview with President & CEO, Sam Lee

Phased Approach Accelerates Cash Flows 

Northisle has implemented a phased development approach to reduce capital intensity and leverage gold-rich mineralization early in the mine life. Phase 1 is a 40,000 tonnes per day operation focused on gold-rich material, providing 70% margins. Cash flows from Phase 1 help fund the expansion to 80,000 tonnes per day in Phase 2 which accesses more copper.

"The first phase is so robust, it has that 70% margin that I talked about. And so starting in year three or four, then you're going to show that ability to fund Phase 2."

The payback period is a quick 1.9 years, after which the project generates significant free cash flow. Life-of-mine production is approximately a 50/50 split between copper and gold.

Expanding the High-Grade Northern Corridor 

Exploration upside at North Island remains substantial, particularly in the high-grade northern corridor area which is the focus of Northisle's fully funded 2025 drill campaign. Approximately 85% of the 2025 drilling budget is allocated to expanding resources around the 2021 Goodspeed discovery and testing the 7km trend in this area.

"If we see anywhere near the similar grades as we've seen in the last 16 holes, that Northern Corridor could be the standalone project. So that would dramatically even more so reduce our capital intensity." 

Growing the higher-margin northern corridor provides potential to further enhance already compelling project economics.

District-Scale Potential on 35km Land Package 

North Island is part of a 35km porphyry district where Northisle has only scratched the surface in terms of exploration. The Pemberton Hills target, 5-7km from North Island, is a 6.5 x 1.5km lithocap that has seen over $5 million in historical exploration. Northisle is advancing Pemberton Hills in parallel with North Island. According to Lee: 

"It's my view that companies like BHP don't really care about single asset projects, they care about district plays...The beauty of our project [is] we have just scratched the surface on that 35km trend."

Multiple Avenues to Maximize Shareholder Value 

Looking ahead, Northisle has multiple avenues to maximize shareholder value. Organic resource growth, especially in the northern corridor, could enable North Island Phase 1 to become a standalone project. This would further reduce capital intensity while still maintaining exposure to district-scale upside.

Strategic partnerships may also be considered to help fund exploration at Pemberton Hills and unlock the full district potential. However, any deal is likely to only involve Pemberton Hills claims to minimize corporate dilution. 

"We would not give up any ownership interest in the current project that we've just defined in the PEA." 

A Unique Investment Opportunity 

The North Island project is a unique investment opportunity in the copper-gold space. The project boasts world-class economics (29% after-tax IRR), very low capital intensity (1.7x NPV/capex), and a rapid payback of under two years. Exploration upside remains substantial with potential to further enhance already robust economics.

Northisle's 35km land package provides district-scale potential and longevity that is coveted by major producers. As Lee explained: 

"It's not a single asset exposure...it's a district play. And right now, that's what the seniors are focused on." 

The company is fully funded to continue advancing North Island and unlock further value from the prospective 35km district.

The Investment Thesis for Northisle Copper & Gold

• Exposure to a world-class, high-margin, copper-gold project in a stable jurisdiction
• Industry-leading capital intensity metrics (1.7x NPV/capex)
• Substantial exploration upside with district-scale potential across a 35km trend
• Fully-funded to continue value-adding drilling and advance the project in 2025
• Multiple avenues to grow resources, make new discoveries and attract strategic interest
• Proven management team with a track record of exploration success and value creation
• Leverage to rising copper and gold prices; Phase 1 economics resilient to lower prices
• Potential for further economic enhancements by expanding the high-grade northern corridor
• Relatively low market capitalization (~C$160M) allows for significant price appreciation potential

Macro Thematic Analysis

The outlook for copper remains exceptionally bullish due to the global transition towards renewable energy and electrification. Copper is a critical metal for electric vehicles, wind and solar power, and related infrastructure. Demand growth is forecast to significantly outstrip supply over the next decade.

Meanwhile, the copper project pipeline is sparse, especially in low-risk jurisdictions. Many major discoveries from the last cycle are struggling to be developed due to high capital intensity and regulatory challenges. This puts projects like North Island, which have scale, high margins, and low capital intensity, in an enviable position.

The gold market also looks favorable over the medium-term. Negative real interest rates, concerns over fiat currency debasement, and geopolitical uncertainty all provide tailwinds for gold prices. The unique gold-rich nature of North Island's Phase 1 production provides valuable diversification and leverage to gold prices not found in most copper projects.

As Northisle CEO Sam Lee explained: 

"It's my view that companies like BHP don't really care about single asset projects, they care about district plays...The beauty of our project [is] we have just scratched the surface on that 35km trend."

With a market capitalization of just C$160 million, the company is well positioned for a significant re-rating as it continues to advance and de-risk the North Island project.