Pan Global Resources - Everything You Need to Know August 2023

Introduction

Pan Global Resources is a Canadian mining exploration company focused on discovering and advancing copper projects in southern Spain. The company's flagship asset is the Escacena Project, located in the prolific Iberian Pyrite Belt. The Escacena Project contains the high-grade La Romana copper discovery and multiple untested exploration targets with strong potential for additional discoveries.

Pan Global Resources is led by an experienced management team with a track record of exploration success and mine development. The company is well-funded, with over $6 million CAD in cash as of April 2023, providing a significant runway for exploration activities.

Copper demand is expected to surge over the coming decades due to electric vehicle adoption and renewable energy expansion. However, new copper discoveries have become increasingly rare. Pan Global Resources provides a unique opportunity for exposure to potential new sources of copper supply.

Company Overview

Pan Global Resources is headquartered in Vancouver, Canada with an exploration office located in Seville, Spain. The company has a strong shareholder base with approximately 9% insider ownership. Pan Global trades on the TSX Venture Exchange and OTCQX Best Market. It has a tight share structure with 230 million shares fully diluted. As of April 2022, the company was well-funded with $6.1 million CAD in cash.

The Case for Copper

Copper is positioned for massive demand growth in the coming decades driven by decarbonization initiatives. According to forecasts by BMO Capital Markets, copper consumption could increase over 80% by 2035 in order to meet net zero emissions targets. However, new large copper discoveries have become increasingly rare in recent years.

As stated by Pan Global CEO Tim Moody, "discoveries are pretty rare these days but when you consider that we have a copper discovery in a favorable location in Europe where copper has already been added to the critical minerals list, I think that really gives us a big advantage going forward."

The European Union has added copper to its Critical Raw Materials list. This aims to ensure sustainable copper supply chains and could provide benefits such as accelerated permitting for copper mining projects in Europe.

Pan Global Resources is exploring for copper in Spain at a highly prospective time when demand growth is poised to surge. New sources of supply will be required to meet demand. With a copper discovery already established at La Romana and significant exploration upside across its strategically located land package, Pan Global is well-positioned to potentially supply the coming copper shortage.

As shown in the above forecast  of the company's presentation, copper demand from the energy transition alone could more than double over the next 15 years. Pan Global provides a unique opportunity for exposure to new potential sources of copper just as demand is set to accelerate.

Flagship Escacena Project

The Escacena Project is the flagship asset for Pan Global Resources, located in the prolific Iberian Pyrite Belt of southern Spain. As described by CEO Tim Moody, "the Iberian Pyrite Belt is a big metal producing area, about 250 kilometers long extending from just outside of Seville almost to Lisbon."

The belt has been continuously mined for nearly 3000 years but still hosts major operations today, including those owned by Lundin, Sandfire, and First Quantum. It remains a highly active exploration and mining district. For example, Atlantic Copper, a subsidiary of Freeport McMoRan operates a copper smelter approximately 70 kilometers from Escacena.

The Escacena Project covers approximately 5,700 hectares. The La Romana discovery, indicated by the red oval in the image below, sits at the southern end. This map highlights the proximity to other major mines and development projects. Approximately 23 kilometers to the northwest, Atalaya Mining operates a large open pit copper mine at the site of the world's largest volcanogenic massive sulfide (VMS) deposit.

Right next to Escacena are two old open pit mines formerly mined for copper, lead and zinc by Boliden and now owned by Grupo Mexico. Grupo Mexico plans to restart mining at Los Frailes with an underground mine. Meanwhile 12 kilometers to the east, First Quantum's Las Cruces mine is one of the world's highest grade open pit copper operations. As Moody points out, this demonstrates Escacena's "excellent location and unique advantage."

Gravity surveys are an important exploration technique for discovering deposits in the Iberian Pyrite Belt, including Escacena. Gravity surveys are combined with other methods like electromagnetics and geochemistry to prioritize drill targets. Multiple untested gravity anomalies represent exploration upside across Escacena's strategic land package.

A new access agreement has opened up additional exploration potential west of La Romana. This area has seen little exploration since the 1980s but hosts compelling targets defined by gravity anomalies. Pan Global now has the opportunity to potentially expand La Romana and make new discoveries.

The Escacena Project checks all the boxes: a Tier-1 mining jurisdiction, proximity to infrastructure, surrounding mines operated by major companies, an established discovery at La Romana, and district-scale exploration potential. This makes Escacena a highly strategic asset within the world's most prolific VMS district.

La Romana Discovery

The La Romana discovery is the flagship asset within Pan Global's Escacena Project. The defined 0.2% copper grade shell outlines continuous mineralization over 1.2 km of strike, open to the west and at depth. This coincides with a large gravity anomaly.

La Romana demonstrates metal zonation, with copper grades increasing towards the west. This indicates the mineralized system remains open in the direction of current drilling, where Pan Global sees potential to expand the deposit by up to 800 meters. Alteration patterns also suggest the copper mineralization continues further west.

The discovery has very favorable geometry for potential mining. It consists of a flat-lying lens of copper mineralization with a shallow dip of 35-40 degrees. Importantly, the highest grades come near surface, which is positive for early payback in an open pit scenario. Additional copper mineralization is also found in the hanging wall and footwall.

Thick intercepts of 50-70 meters of continuous copper mineralization have been found in the central part of La Romana. Again, the highest grades are found closest to surface due to the shallow mineralization geometry.

Metallurgical testwork has demonstrated excellent recoveries of 86-90% copper from locked cycle flotation tests. Tests also showed high concentrate grades of 24-29% copper. La Romana mineralization has low deleterious elements and the potential for payable silver credits. Furthermore, the coarse grain size could reduce operating costs compared to other mines in the district.

La Romana has many positive attributes including near-surface mineralization, excellent geometry, favorable metallurgy, and location near infrastructure. Based on modeling to date, Pan Global sees potential for low cut-off grades that could substantially expand the optimal pit shell and mine life. Ongoing work includes additional drilling, metallurgical testing, baseline environmental studies, and economic assessments.

The project is shaping up to be a significant copper-tin discovery with expansion potential that can enhance shareholder value as Pan Global continues to derisk and advance the project.

Exploration Upside at Escacena

The Iberian Pyrite Belt is a world-class VMS district where deposits typically occur in clusters. For example, Lundin's Neves Corvo mine camp contains multiple ore bodies clustered together. This suggests a high probability that additional discoveries can be made at Escacena beyond La Romana.

The project encompasses many untested exploration targets identified through geophysical, geochemical, and geological work. Numerous gravity anomalies represent high-priority drill targets based on past exploration success linking these anomalies with ore bodies. Pan Global's strategic land package and systematic exploration provides significant upside for new discoveries.

With copper mineralization extending from surface to over 400 meters and remaining open, La Romana offers relatively inexpensive drilling and potential mining costs compared to other projects.

For example, Las Cruces had 150 meters of barren cover before reaching the ore body. Underground mines in the region are mining between 400-800 meters depth. And Lundin's Neves Corvo mine reaches about 1.2 km depth. As Moody states, near surface discoveries like La Romana are becoming rare, giving Pan Global a "unique advantage."

The exploration upside at Escacena is exceptional, with La Romana likely representing the first of potentially multiple discoveries. Pan Global controls a huge consolidated land package in a Tier-1 VMS district with demonstrated high-grade copper mineralization starting at surface. Systematic exploration has the potential to significantly expand resources and make additional high-value discoveries.

Advancing Exploration at Romana West and Cañada Honda

Exploration is rapidly advancing at two high-priority targets within the Escacena Project - Romana West and Cañada Honda.

Exploration has commenced at Romana West through a 6000 meter, 20-25 hole drill program. This area encompasses historic copper mine workings and a large untested gravity anomaly. The initial drill holes are progressively stepping out west from La Romana, with the goal of extending the known deposit by 500-800 meters based on encouraging geology and geophysics.

According to CEO Tim Moody, copper mineralization has been intersected close to the historic mine workings. Early drill results suggest La Romana has strong potential for continued growth to the west. Exploration data is also revealing additional satellite targets that could further expand the system.

At Cañada Honda, there's a sizeable gravity anomaly that is the target of recent drilling. As described by Moody, the initial holes have intersected significant copper and gold mineralization associated with the gravity feature. For example, hole 5 returned an interval of 20 meters at 0.5% copper and 5 meters at 1.3% copper and 0.5 g/t gold. This target is at an early stage but has demonstrated clear discovery potential.

There are encouraging indicators from the initial Romana West drill holes. Visual chalcocite mineralization, coarse cassiterite veining, and massive sulfide textures provide evidence of a robust mineralized system. Assay results are pending.

Systematic exploration continues to yield positive early results at both Romana West and Cañada Honda. Pan Global has an extensive pipeline of targets supporting potential for additional new discoveries. Drill-ready anomalies across its strategic land package provide ongoing upside and catalysts.

Near-Term Catalysts

Pan Global has an active exploration program underway that can provide ongoing catalysts and news flow.

Results from step-out drilling at La Romana and the new Romana West target are anticipated over the coming months. These have potential to demonstrate further growth of the La Romana system, which would be positive for shareholder value.

In addition, exploration is advancing at earlier stage targets such as Cañada Honda. Initial drill results have been encouraging, with additional assays pending that could point towards a new discovery. Ongoing target delineation across the Escacena project also provides opportunities for positive drill results.

On the metallurgy and engineering side, Pan Global is awaiting additional test work focused on tin recovery and variability across the La Romana mineralization. These studies will further enhance development plans. Environmental baseline programs are also underway.

Looking further out, completion of the current drilling will support calculation of a maiden resource estimate for the La Romana discovery. This would be a major de-risking milestone.

With a well-funded treasury, Pan Global has the ability to aggressively explore and advance its projects. The company’s extensive pipeline of exploration targets and systematic approach provides the potential for ongoing positive news flow in the year ahead.

Key Takeaways for Investors

Some key takeaways for investors considering Pan Global Resources:

• Early mover copper exploration opportunity in Spain's prolific VMS belt
• La Romana is shaping up to be a potentially significant discovery
• New concessions expand exploration potential around La Romana
• World-class address surrounded by major mining companies
• Multiple untested exploration targets provide significant upside potential
• Near-term catalysts from ongoing drilling and development work
• Ideal time to invest, with copper poised for strong growth

Pan Global Resources presents a compelling investment case as it systematically explores its copper portfolio in Spain's premier VMS district. Investors have the opportunity to get in early on potential new copper discoveries that could one day help supply the rapidly growing market.

Conclusion

Pan Global Resources presents an attractive investment opportunity as it advances its copper exploration projects in Spain's prolific Iberian Pyrite Belt.

The La Romana discovery has demonstrated high-grade copper-tin mineralization starting at surface that remains open. This validates the district potential for additional discoveries across Pan Global's strategic land package. The projects are ideally located in an established mining district surrounded by major operating mines, providing access to infrastructure and a favorable permitting environment.

Pan Global has an experienced management team and board with a track record spanning exploration, discovery, mine development and operations. This provides integrated capabilities across the full lifecycle of projects. The company is exploring for metals like copper and tin that are essential for decarbonization initiatives and poised for structural growth.

With approximately $6 million CAD in cash, Pan Global is funded for aggressive exploration programs in 2023 that can provide near-term catalysts via ongoing drilling. The company has a tight capital structure with only 230 million shares fully diluted, giving investors excellent leverage to exploration success.

With copper demand growth anticipated to surge over the next decade, new discoveries will be needed. By systematically exploring its copper portfolio in Spain's most prolific VMS district, Pan Global offers investors a compelling opportunity for early exposure to potential significant new discoveries that could help supply the rapidly growing copper market.