Metals Exploration: Zero-Debt Gold Producer Expands Portfolio with Strategic Condor Gold Acquisition

• Metals Exploration, an LSE-listed gold producer in the Philippines, acquired the Condor gold assets in Nicaragua in January 2025 to fuel its growth strategy
• Runruno mine in the Philippines optimised performance in 2024 with over 90% recovery, $96M free cash flow, and 83,500 oz gold produced
• Near-mine target could extend Runruno mine life by 3-10 years from 2026; drilling to start soon
• Condor gold project in Nicaragua is construction-ready; secondhand plant purchased to accelerate timeline to production in 18-24 months
• Strong financial position with no debt, $20-25M free cash flow per quarter; cash generation to fund Condor development and further growth

Metals Exploration, an LSE-listed gold producer operating in the Philippines, is positioning itself for significant growth in the coming years. The company's CEO Darren Bowden provided an update on the promising developments over the past year that have set the stage for Metals Exploration to become a multi-asset gold producer with a robust pipeline.

Optimising Operations at Runruno

Metals Exploration's primary asset, the Runruno gold mine in the Philippines, delivered stellar operational performance in 2024. The mine achieved an average recovery rate exceeding 90%, resulting in 83,500 ounces of gold produced for the year - meeting the upper end of guidance. This translated to $96 million in free cash flow generation, providing a strong financial foundation for the company.

Darren Bowden highlighted the tremendous efforts of the on-site team in optimising Runruno, stating:

"2024 results - over 90% average recovery, $96 million free cash on a strong gold price, with 83,500 ounces produced. We beat guidance. The team did a great job and it has absolutely set the base for our pillar one."

Near-Mine Extension Potential

While Runruno's current mine life extends to 2027 based on existing reserves, the recent identification of a near-mine target could add meaningful longevity to the operation. Initial indications point to the potential to extend Runruno's life by 3-10 years, depending on the size of the resource.

Elaborating on the prospectivity, Bowden noted:

"We've seen gold grades over 15 g/t, we're seeing copper grades up around 7%, and this is across the total length of that strike. So the numbers are good."

The near-mine target is now drill-ready, with mapping and preparatory work complete. Drilling is set to commence shortly, moving the target towards a resource-ready state for mining. The proximity to Runruno's existing infrastructure is a key advantage, enabling ore to be processed through the current facilities.

Bowden provided a promising timeline for the potential mine life extension, commenting:

"While we're looking at quarter 1, 2027 for Runruno to finish with the existing ore body, there is absolutely opportunity within a very short timeframe to start the new mine up if it pans out the way the team think it is."

Interview with Chief Executive Officer, Darren Bowden

Condor Gold Project: The Growth Engine

In December 2024, Metals Exploration announced the proposed acquisition of Condor Gold. The deal closed on January 15th. Condor have been advancing gold projects in Nicaragua towards production but struggled to gain traction in the market. Metals Exploration seized the opportunity to acquire a construction-ready gold project with robust economics to fuel its next phase of growth.

The Condor gold project boasts an initial production profile of 130,000-150,000 ounces per year, a 50% increase over Runruno's current output. With all-in sustaining costs estimated at $900-1,000 per ounce, the project stands to deliver significant margins at current gold prices.

To accelerate the timeline to production, Metals Exploration made the strategic decision to purchase a secondhand processing plant. Bowden highlighted the benefits, stating:

"We've actually bought a secondhand plant, so we can move that faster into operation. We're looking at an 18 month to 24 month strategy there to get that up and running."

The Condor acquisition also came with a seasoned management team that Bowden has worked with extensively in the past across various jurisdictions in Latin America. Their experience and established relationships in Nicaragua provide a solid foundation to navigate any potential challenges.

Financial Strength & Growth Trajectory

Underpinning Metals Exploration's growth strategy is its robust financial position. The company has zero debt and is generating $20-25 million in free cash flow per quarter. Bowden emphasised,

"We're in a position where we're building cash, we're building that war chest we talked about, and we're looking to deploy that war chest into the Nicaraguan asset which is construction-ready."

The projected cash generation from Runruno over the next two years is expected to reach $170-180 million, more than sufficient to fund the $110-120 million capital requirement for building the Condor project. This financial flexibility allows Metals Exploration to advance its growth plans without diluting shareholders.

Looking further ahead, Metals Exploration has a portfolio of earlier-stage exploration assets in the Philippines that provide a pipeline for organic growth. The Abra project, acquired in August 2024, hosts two significant targets - one of the largest copper footprints Bowden has seen, and a promising copper-gold target.

These opportunities fit into what Bowden call's the company's "pillar four" - the longer-term strategy to bring new assets online once the company has two or three operating mines in its portfolio. The company remains flexible and open to strategic M&A as well to build a platform for sector-leading growth over the coming years.

The Investment Thesis for Metals Exploration

• Runruno delivering strong free cash flow with potential near-mine extension
• Condor acquisition adds construction-ready 130-150,000 oz per year project
• Robust balance sheet with zero debt and $20-25M quarterly free cash flow
• Fully funded growth strategy to reach mid-tier producer status
• Pipeline of organic growth opportunities in the Philippines
• Management team with proven track record of delivering value

Macro & Strategic Positioning

Metals Exploration's strategic positioning stands out in the current market environment through several key differentiators. The company has transformed from a single-asset producer to executing a multi-jurisdictional growth strategy, leveraging operational expertise across regions.

The acquisition of Condor demonstrates the company's ability to capitalise on value opportunities in the market, taking advantage of the current arbitrage between explorers and operators. This was highlighted by CEO Darren Bowden's assessment that the Condor asset has significant untapped potential, particularly in near-mine areas where previous ownership lacked the capital to extend exploration.

The company's growth trajectory aligns with its strategic goal of achieving a FTSE listing by 2028, requiring significant scale expansion beyond its current operations. This ambitious target provides a clear framework for evaluating future opportunities, whether through organic growth or M&A activity.

While maintaining operational focus on existing assets, management has positioned the company to evaluate additional growth opportunities in 18-24 months, once Condor's development is well advanced. This measured approach to expansion, combined with the team's cross-jurisdictional experience, creates a foundation for sustainable growth without overextending operational or financial resources.