Omai Gold Mines: 4.3Moz Gold Resource, Robust Economics to Production in Mining-Friendly Guyana

• Omai Gold Mines has a 4.3M oz resource at a past-producing gold mine in Guyana
• Recently completed a positive preliminary economic assessment (PEA) as a baseline
• PEA shows 13-year mine life producing 142,000 oz/year at $1950 gold, with significant expansion potential
• Parallel track of resource expansion drilling and engineering work towards pre-feasibility study
• Experienced team focused on advancing project to production; strong government support to re-open mine

Omai Gold Mines (TSXV:OMG) presents a compelling investment opportunity as it advances the past-producing Omai gold mine in Guyana towards renewed production. With a substantial 4.3 million ounce resource already delineated, a positive preliminary economic assessment (PEA) demonstrating robust project economics, and significant expansion potential, Omai is well-positioned to create shareholder value as it progresses the project through development and into production in the coming years.

Substantial Resource Base

The Omai project hosts a large 4.3 million-ounce gold resource, providing a solid foundation for a long-life mining operation. The resource is contained within two deposits: the Wenot deposit, which is amenable to open-pit mining, and the Fennell deposit, which would be mined by underground methods. The company's recent exploration efforts have been focused on the Wenot deposit, which contains 2.4 million ounces and forms the basis for the PEA completed in April 2024.

CEO Elaine Ellingham commented, "We have two deposits on the property—one that would be open underground and one that we've been really focused on, which would be a single large super pit."

This substantial resource base provides significant scale and long-term production potential. Importantly, there remains excellent potential to further expand the resource through additional drilling.

Interview with President & CEO Elaine Ellingham

Positive PEA Demonstrates Robust Economics

The recently completed PEA provides a first look at the potential economics of re-starting production at Omai, and the results are highly encouraging. The study outlined a 13-year operation producing an average of 142,000 ounces of gold annually at all-in sustaining costs of US$1,009 per ounce. At a base case gold price of $1,950, the project generates an after-tax NPV5% of US$556 million and an IRR of 19.8%.

Importantly, the PEA only considers the Wenot open pit deposit and does not include the potential from the Fennell underground deposit nor several nearby exploration targets, providing significant upside potential. Ms. Ellingham noted:

"The PEA was important for us because it allows us to move forward in Guyana looking at permitting, which can lead to the mining license... But it's only a baseline PEA and has a lot of room to grow from there."

Expansion Potential

In addition to the 2.4 million ounces within the Wenot PEA pit, a further 500,000 ounces of resource below the pit was not included in the PEA economics due to wide drill spacings. Infill drilling in this area will likely upgrade these ounces for inclusion in future economic studies.

Additionally, the south side of the Wenot deposit was not fully drilled off, and mineralization is expected to be extended in this area with further drilling. Currently treated as waste rock in the PEA, converting this to mineralized material would improve strip ratios and project economics.

Furthermore, the nearby Fennell underground deposit contains an additional 1.8 million ounce resource not considered in the PEA. While more engineering studies are required, this provides substantial upside to the project, especially at higher gold prices. The deposit is relatively shallow at 300m depth and contains wide mineralized zones up to 70-80m thick, making for an attractive underground mining target.

Finally, several near-surface exploration targets around the Wenot pit could provide higher-grade feed to augment production in the initial years of operation, further enhancing project economics.

Fast-Tracking to Production

Given Omai's history as a past-producing mine, the company can fast-track development compared to a greenfield project. Significant infrastructure remains in place, including a permitted tailings facility, roads and other site infrastructure. Metallurgical characteristics are well-understood, and several historical studies provide a head start on technical and engineering work.

The company is taking a dual-track approach, conducting infill and expansion drilling to grow the resource base in parallel with engineering and permitting activities to advance the project. Ms. Ellingham stated:

"We did our PEA in our first three years on the property. I think that's kicking it along... It's a past-producing mine, so many of the logistics of opening a new mine are based on how it ran in the old days."

Omai aims to move directly from the PEA to a pre-feasibility study, incorporating an updated resource estimate based on ongoing drilling.

Experienced Team

Omai has an experienced management team with a track record of successfully developing mining projects. The company recently hired a new country manager, who started his career at the Omai mine before working at major mining companies internationally. His experience will be invaluable in navigating the permitting process and advancing the project.

CEO Elaine Ellingham is a geologist with decades of experience in the mining industry. She focuses on achieving key milestones and moving projects towards production, rather than just exploration for its own sake. The company has hit many milestones in quick succession, putting out three resource estimates and a PEA in under three years.

Supportive Jurisdiction

Guyana is a mining-friendly jurisdiction with a long history of gold production. The government is highly supportive of the project and keen to see the economic benefits of restarting the Omai mine. Many within the government have direct ties to the project from its previous operation. This support will translate into a smoother permitting process as the project advances.

Valuation Upside

Omai currently trades at a market capitalization of approximately C$100 million, or just US$15 per ounce of resource. This represents a significant discount to the project's NPV and peer companies at a similar stage. As the company continues to advance the project and expand the resource base, there is considerable potential for share price appreciation. The large resource base makes Omai an attractive potential acquisition target for mid-tier producers seeking to add ounces in a rising gold price environment.

The company has 4.3 million ounces and the potential for further resource growth in a rising gold price environment. Omai Gold Mines presents a unique investment opportunity, combining a large resource base in a past-producing mine, a fast track to production, and significant exploration upside. With a positive PEA in hand demonstrating robust economics, the company is well-positioned to create shareholder value as it advances the project back into production. In a rising gold price environment, the company's 4.3 million ounces and potential for further resource growth make it an attractive acquisition target.  Omai's experienced management team takes a disciplined, milestone-driven approach to advance the project while rapidly increasing resources through aggressive exploration. The company trades at a discount to the project's NPV and peers, providing an attractive entry point for investors. As the gold market gains momentum, Omai is well-positioned to re-rate as the Omai project advances towards production in the coming years.

The Investment Thesis for Omai Gold Mines

• Large 4.3 Moz resource base provides long-term production potential and scale
• Positive PEA with after-tax NPV5% of $556M and IRR of 19.8% at $1950/oz gold
• Significant expansion potential from Fennell underground deposit and along strike/depth extensions
• Fast-track to production by advancing engineering/permitting in parallel with resource expansion drilling
• Experienced team with CEO Elaine Ellingham's track record of advancing projects to production
• Mining-friendly Guyana jurisdiction keen to see Omai restarted
• Attractive valuation with just US$15 per resource ounce
• Exposure to rising gold price environment; potential acquisition target

Omai Gold Mines offers investors exposure to a large, highly economic gold project in Guyana with a clear path to production. The 4.3 Moz resource and robust PEA economics provide a solid foundation, with excellent potential to grow the resource base through exploration. The company's experienced team is quickly advancing the project on parallel tracks, aiming to expand resources while completing engineering studies and permitting to fast-track the restarting of production. With a rising gold price increasing the M&A potential of large gold assets, Omai presents a compelling investment opportunity at current valuations.

The current macro environment is highly supports gold, with geopolitical tensions, high inflation, and economic uncertainty driving demand for safe-haven assets. Gold has reached multi-year highs and looks poised for a significant bull market run. In this context, gold equities provide leverage to a rising gold price and the potential for outsized returns.

Mid-tier gold producers are struggling to replace reserves and maintain production levels, driving increased M&A activity as they seek to acquire assets. Omai's large 4.3 Moz resource base makes the project an attractive potential acquisition target. CEO Elaine Ellingham commented, "5 million ounces is sort of a benchmark, especially if a company is looking at going into a new jurisdiction." As a single-asset company, Omai's valuation is dominated by the Omai project, providing pure-play exposure to a rising gold price and M&A potential.

With its large resource base, robust economics, and fast track to production, Omai is well-positioned to create shareholder value in a strong gold market. The company's current valuation provides an attractive entry point for investors seeking exposure to the gold sector.