NorthIsle Copper & Gold - Undervalued BC Copper-Gold Play, Leveraging the Rising Prices on Path to Production

• NorthIsle Copper & Gold has a large copper-gold porphyry project in British Columbia with a preliminary economic assessment showing a $1.1B after-tax NPV, 19% IRR, and 22-year mine life.
• The company believes the current gold price environment in the $2200-2300/oz range is sustainable and is leading to more risk-on investing behavior in the junior mining sector.
• NorthIsle expects its project's economics to benefit from potential margin expansion if gold prices remain elevated while costs stabilize after recent inflation.
• The company has mitigated development risk through agreements with local First Nations groups, access to existing infrastructure, and a clean copper-gold-rhenium concentrate.
• NorthIsle believes it is undervalued, currently trading at 0.1x its net asset value based solely on the PEA economics without factoring in exploration upside potential.

NorthIsle Copper & Gold (TSXV:NCX) presents an attractive investment opportunity in the current environment of elevated gold prices and renewed interest in copper as a critical metal. The company's 100%-owned North Island Project on Vancouver Island, British Columbia contains a large copper-gold porphyry deposit with substantial exploration upside across a 35 km long district-scale land package.

PEA Demonstrates Robust Project Economics

NorthIsle recently completed a positive preliminary economic assessment (PEA) on the North Island Project that outlines a 22-year open pit mining operation producing an average of 100 million lbs of copper and 100,000 oz of gold annually. The study returned an after-tax NPV(8%) of $1.1 billion and 19% IRR using conservative long-term metal price assumptions of $3.25/lb copper and $1,650/oz gold.

NorthIsle President and CEO Sam Lee highlighted the project's attractive economics: "We have a very interesting and aggressive exploration program that we are continuing to move forward over the course of the next number of years."

The PEA is based on indicated resources containing 4.9 million ounces of gold and 2.5 billion pounds of copper, with significant expansion potential.

Interview with President & CEO, Sam Lee

Leveraged to Rising Gold and Copper Prices

The North Island Project's economics are highly leveraged to gold and copper prices, both of which have seen strong upward momentum in 2024. Gold recently rebased over $2,000/oz and has sustained in the $2,200-$2,300/oz range, leading to increased risk-on behavior among investors.

Sam Lee commented: "Clearly we're a month past [the $2,200/oz level] now. We think we've most people feel that we have rebased to the new paradigm within the $2,200-$2,300 level. And so then the question is what is the next base? As we spoke about before, usually these rebasings happen in exponential form when you go on the upside."

Copper prices have also rebounded to over $4.00/lb as demand growth tied to electrification and renewable energy development is forecast to outpace supply in the coming years. NorthIsle is well-positioned to benefit from higher metal prices, with the potential for significant margin expansion if costs stabilize.

Long-Life Asset in a Low-Risk Jurisdiction

One of NorthIsle's key advantages is the long-life nature of the North Island Project. With a 22-year mine life based on current resources, and district-scale potential to extend beyond 30-40 years, the project offers investors exposure to multiple commodity price cycles.

Lee elaborated: "I truly think that in order to be sustainable in the financial sense, gold companies have recognized that long-dated assets are the way to go. Certainly, porphyries allow you to have that ability to weather multiple cycles, as opposed to having to live and die by these very short periods of investment opportunity."

The project's location in British Columbia, Canada also mitigates development risk compared to many global copper-gold assets. B.C. has a well-established mining industry and transparent permitting process. NorthIsle has proactively engaged with local First Nations, with project consent agreements already in place prior to permitting.

Undervalued Relative to Peers

Based on its current market valuation, NorthIsle trades at just 0.1x the project's after-tax NPV(8%). Sam Lee believes this represents a substantial discount to fair value, especially considering the exploration upside not factored into the PEA economics.

"We're currently trading based on that NPV, which again we're advancing with another project with hopefully similar if not better economics," explained Lee. "But if you just take that one preliminary economic assessment that we have published, we're currently trading at 0.1 times our net asset value just based on that - without any of the exploration activities that we're doing."

As NorthIsle continues to derisk and advance the North Island Project, there is potential for significant re-rating to peer company multiples in the 0.2-0.4x NPV range. Ongoing exploration success could drive further upside as the company demonstrates the district-scale potential of its land package.

The Path Forward

Looking ahead, NorthIsle is well-funded to continue advancing the North Island Project through 2024 and beyond. The company's key priorities include continued exploration drilling to expand the resource base and discover new porphyry centers, as well as initiating pre-feasibility level studies.

With $2 billion in potential government funding earmarked for critical metal projects in Canada, NorthIsle is favorably positioned to access capital given the North Island Project's existing infrastructure, First Nations agreements and demonstrated economic viability. The company aims to expedite development to be at the forefront of the next wave of Canadian copper-gold projects moving towards production.

Conclusion

NorthIsle Copper & Gold offers investors a unique opportunity to gain leveraged exposure to rising gold and copper prices through a large-scale, long-life asset in a top-tier mining jurisdiction. With a substantially undervalued stock price, robust project economics, exploration upside and a clear path forward, NorthIsle is an attractive candidate for resource investors seeking exposure to the next wave of Canadian copper-gold developers.

The Investment Thesis for NorthIsle Copper & Gold

• 100%-owned copper-gold porphyry project in mining-friendly British Columbia, Canada
• PEA outlines $1.1B after-tax NPV(8%), 19% IRR and 22-year mine life with expansion potential
• Highly leveraged to rising gold and copper prices, with potential for significant margin expansion
• Long-life asset (22+ years) in low-risk jurisdiction mitigates development and commodity cycle risks
• Trades at 0.1x NPV based on PEA, representing deep value with exploration upside not yet priced in
• Well-funded to continue resource growth/discovery drilling and advance project through development studies
• Positioned to be at forefront of next wave of Canadian copper-gold projects moving towards production

Key Takeaways

NorthIsle Copper & Gold's 100%-owned North Island Project is a rare long-life copper-gold development asset in a top-tier jurisdiction with substantial exploration upside. The company trades at a deep discount to the project's robust base-case economics, offering investors an attractive entry point ahead of ongoing de-risking and value creation catalysts. With leverage to rising gold and copper prices, a strong balance sheet and a proven management team, Northisle is well-positioned to emerge as a leading Canadian copper-gold developer in the coming years.

Gold Macro Thematic Analysis

The interview with NorthIsle CEO Sam Lee highlights several key macro themes currently driving the mining industry and commodity markets. The most important is the growing consensus that gold prices have rebased at a sustainably higher level in the $2,200-$2,300/oz range, leading to increased investor interest and risk-on sentiment for gold equities.

This constructive view on the gold price is underpinned by several factors, including growing demand for hard assets as a hedge against geopolitical instability and currency debasement, as well as recent central bank buying. At the same time, a decade of underinvestment in the mining industry has constrained gold supply growth, supporting higher prices as demand outpaces production.

Alongside the bullish outlook for gold, there is growing recognition of copper as a critical metal that will be essential for the global transition to clean energy and electrification. With demand expected to surge and supply constrained by a lack of new mine development, the industry is forecasting a looming copper supply gap that could necessitate much higher prices to incentivize new production.

For mining companies and investors, these macro tailwinds are driving a shift in focus towards large-scale, long-life gold and copper assets in low-risk jurisdictions. As geological and jurisdictional risks become more pronounced, the industry is placing greater emphasis on project economics, scale and sustainability through multiple commodity cycles.

In this context, NorthIsle Copper & Gold's North Island Project stands out as an attractive investment opportunity, with the potential for significant margin expansion, exploration upside and a clear path to production in a mining-friendly jurisdiction. As the gold and copper markets continue to strengthen, NorthIsle is well-positioned to create substantial value for shareholders in the coming years.