Pan Global Resources - Advanced, Growing Deposit in Spain Offers Compelling Exposure to Surging Copper Demand

• Pan Global Resources is a copper-focused exploration company with a promising pipeline of projects in Spain, including an advanced discovery and a new discovery
• Recent positive tin metallurgy results highlight the potential for tin to be an economically attractive byproduct, in addition to the primary copper target
• The company sees three potential paths forward: (1) Advancing its main La Romana project toward development on its own, (2) Making additional discoveries to increase appeal as a takeover target, (3) Providing ore feed to nearby mines and development projects
• Work is ongoing to progress the La Romana discovery toward a maiden resource while also growing the new Escacena discovery to demonstrate district-scale potential
• The company is being prudent with spending in a challenging market but is well-positioned to ramp up drilling again as copper market sentiment improves

The Opportunity in Pan Global Resources

As the global economy accelerates its shift toward electrification and decarbonization, the long-term demand outlook for copper looks exceptionally robust. One company well-positioned to capitalize on this opportunity is Pan Global Resources (TSXV:PGZ), a copper-focused exploration company advancing a portfolio of promising projects in the prolific Iberian Pyrite Belt of southern Spain.

In a recent interview, President and CEO Tim Moody laid out the investment case for Pan Global, highlighting the company's potential to emerge as a significant new copper producer in an ideal jurisdiction.

He explained, "We've got a pretty unique patch of ground here that we're going to make not only one discovery – we've got one discovery that's very advanced with 180 drill holes and it's still growing. That is hopefully a significant discovery in its own right."

Interview with President & CEO, Tim Moody

A Rapidly Advancing Copper Discovery

That primary discovery is the La Romana project, where Pan Global has been aggressively drilling for over three years to delineate a sizeable zone of near-surface, potentially open-pittable copper mineralization. The steady drumbeat of strong drill results has grown the deposit considerably, with the latest holes continuing to extend the mineralization.

Importantly, La Romana benefits from extremely favorable metallurgy, with clean, coarse-grained copper mineralization that yields high concentrate grades with no penalty elements. "The copper mineralization doesn't have any penalty elements, it's coarse-grained relative to all the other producers – those are really desirable aspects of the mineralization we have," Moody noted.

While La Romana is not yet at the resource stage, Moody emphasized that a maiden resource could be released at any time. "We could put a resource out today if we felt there was the need to do so," he explained. However, the company is being patient in order to capture the maximum value. "When you come out with a resource, you know that's the number that sticks in people's heads. We don't want to come out with a number knowing that this could grow quite a bit from where it is today."

Positive Tin Metallurgy Adds a Sweetener

In addition to the flagship copper resource, recent metallurgical test work has also highlighted the potential for a significant tin byproduct at La Romana.

"Given it was our second commodity after copper, we were getting premium grade concentrate and excellent recoveries, top of the range when you compare it to other deposits where tin is the primary commodity," Moody reported.

The tin results were well-received by the market, sparking a re-rate in the company's share price. "It meant there were new eyes on Pan Global as a copper company, and the tin is seen as a very positive addition to our project," said Moody. The tin could make a meaningful contribution to the overall economics.

Multiple Pathways to Value Creation

Beyond La Romana, Pan Global sees excellent potential to deliver a pipeline of new copper discoveries across its prospective land package. The company has already delivered a new discovery called Escacena which is shaping up to be a significant zone of mineralization in its own right.

Moody laid out three potential pathways to value creation for Pan Global:

1. Advancing La Romana toward development as a standalone mine
2. Making additional discoveries to build a cluster of deposits, increasing appeal as a takeover target
3. Providing ore feed to one of several nearby mining and development projects

"If we want to compete with the other larger mines in the area, they are not reliant on one body – they have three, four, five of these bodies. That's the significance of our second discovery at Escacena – we've now got two discoveries and I think we're going to make additional ones," he said.

The company is also continuing to progress La Romana on the permitting and economic evaluation front, with environmental baseline studies underway and a preliminary economic assessment planned to follow on the heels of the maiden resource. The release of the PEA will be a major catalyst for the stock.

A Disciplined Approach in a Tough Market

Like many junior resource stocks, Pan Global has had to navigate some choppy waters over the past year as economic uncertainty and a hawkish Fed have pressured valuations. Moody explained how the company has adapted to market conditions:

"Last year we had three or four drills turning, and we've been almost drilling continuously for three and a half years. But what we saw last year was that by continuing to drill and coming out with good results, we weren't seeing a reaction in the share price. So this year we've taken a fairly prudent approach in terms of being conservative with our cash. But we're ready so that when we do see the share price start to appreciate, we can really ramp things up again."

Conclusion

With a large, growing, advanced-stage copper discovery, a promising pipeline of earlier-stage prospects, and a top-notch management team, Pan Global Resources offers investors compelling exposure to the coming copper boom. As the La Romana project continues to advance toward a maiden resource and economic studies, the company looks poised for a significant re-rate. Positive tin metallurgy adds an additional sweetener, while ongoing exploration offers ample discovery upside. Despite a challenging market backdrop, Pan Global continues to methodically advance its assets and is positioned to aggressively ramp up drilling as sentiment improves. For investors bullish on the long-term copper story, Pan Global is a name to watch closely.

The Investment Thesis for Pan Global Resources

• Advanced copper discovery at La Romana is rapidly advancing toward maiden resource and preliminary economic assessment; drilling continues to expand mineralization
• Extremely favorable copper metallurgy yields clean concentrates with high grades and no penalty elements, making it an attractive takeover target or ore feed for nearby mines
• New discovery at Escacena highlights district potential; multiple avenues to value creation through additional discoveries or feeding nearby mines
• Exposure to strong long-term copper fundamentals as decarbonization and electrification drive demand; tin byproduct provides additional upside
• Prudently managed by experienced team; well-funded to deliver near-term catalysts as market sentiment improves

Key Takeaways

With its flagship La Romana copper discovery nearing a resource and economic study, a growing pipeline of earlier-stage prospects, and exposure to highly favorable copper and tin market fundamentals, Pan Global Resources looks significantly undervalued. The company stands out among peers for the size and grade of its main deposit, its clean and coarse-grained metallurgy, and its attractive location in a mining-friendly jurisdiction with nearby processing infrastructure. As the company delivers on a series of upcoming catalysts in a rising copper price environment, the stock looks poised for a major re-rating.

Macro Thematic Analysis

The investment case for Pan Global is set against a backdrop of historically bullish long-term fundamentals for the copper market. As the global economy accelerates its transition toward renewable energy and electrification to meet ambitious emissions reduction targets, copper demand growth is expected to surge. Electric vehicles, wind and solar power infrastructure, and upgrades to electrical grids will all require massive amounts of incremental copper supply in the coming years.

At the same time, the outlook for copper supply growth looks increasingly constrained. Years of underinvestment in exploration and development have left the project pipeline relatively bare, while declining grades, rising input costs and increasingly onerous permitting have made new mine development more challenging and time-consuming. These supply and demand dynamics are expected to push the copper market into a deep structural deficit by the second half of this decade, necessitating much higher prices to incentivize new production.

As Moody explains, "We're looking at the market having bottomed and starting to see some reaction. We're starting to see the positive outlook for copper really gain traction."

This backdrop of rising copper prices should provide a major tailwind for copper exploration and development plays like Pan Global. The company's Spanish location in a mining-friendly jurisdiction with access to renewable power gives it a further edge over prospective mines in less favorable locations. Overall, Pan Global looks exceptionally well-positioned to capitalize on a looming bull market in copper.