Power Metallic Advances Toward Canadian Development and Plans Saudi Drilling in H2/26

• Power Metallic's high-grade copper-platinum-palladium-gold-silver project in Quebec achieved exceptional 95% recovery rates in metallurgical studies (versus 80% modeled), with expanded land position covering seven of eight priority targets
• Company plans 100,000 meters of drilling with five rigs (expanding to seven), focusing on defining Lion zone and testing four new exploration targets including "Elephant" (potentially 5x Lion's size)
• Company raised $50 million in 2025, currently holds $33+ million cash with additional warrant/option proceeds expected, enabling fully-funded exploration without near-term capital needs
• TSXV listing expected within weeks for copper-gold projects near Candelaria mine, plus Golden Triangle property adjacent to Scottie Resources, funded via $4 million financing
• Three 100km x 100km concessions secured with significantly lower drilling costs (effectively 4x cost advantage vs. Canada), targeting second-half 2026 drill program with government subsidies covering 50% of exploration costs

Power Metallic is advancing one of the world's rarest deposit types - an orthomagmatic polymetallic discovery in Quebec's NISK area. CEO Terry Lynch recently outlined the company's 2025 achievements and ambitious 2026 plans, emphasising the project's exceptional economics, expanded land position, and portfolio diversification into Chile and Saudi Arabia. With commodity prices strengthening across its metal suite and metallurgical results exceeding expectations, Power Metallic is positioning itself for a significant rerating as it transitions from explorer to mine developer.

Foundation Built in 2025: Land Consolidation and Capital Raise

Lynch characterised 2025 as "a real foundational year" for Power Metallic, with two critical accomplishments setting the stage for accelerated development. The company successfully consolidated its land position around the NISK discovery, acquiring seven of eight identified priority targets. These orthomagmatic deposits - of which only 20 have been discovered globally - historically develop into mining districts with multiple operations rather than single mines.

"19 of the 20 became districts, in other words, multiple mines. So we expect, using that ratio 20 to 1, that most likely this is going to become a district as well."

The land acquisition strategy required careful coordination with drilling activities to avoid signaling high-priority targets to neighboring property owners. This tactical approach delayed some exploration but ultimately secured the ground needed for district-scale development. The company now controls a six-times larger land package than at the discovery stage.

Concurrent with land consolidation, Power Metallic raised $50 million, establishing a strong treasury position. With approximately $33 million in cash plus additional proceeds from warrant and option exercises, the company is fully funded for its 2026 program without immediate financing needs. This financial strength provides flexibility to pursue multiple high-priority targets simultaneously.

Metallurgical Breakthrough: 95% Recovery Rates

Perhaps the most significant 2025 milestone was the metallurgical study, which Lynch described as "historic." The company had conservatively modeled 80% recovery rates for its polymetallic concentrate, but actual results demonstrated 95% recovery across the metal suite: copper at 98.9%, palladium at 93.9%, platinum at 96.8%, gold at 85%, and silver at 88.9%.

These exceptional recovery rates address a key concern in polymetallic projects, where processing complexity can undermine project economics. 

"People are a little sensitive to polymetallics. While we were using 80%, people somehow were probably thinking maybe that was aggressive, but as it turns out it was super pessimistic."

The metallurgical results, combined with near-surface mineralisation and high grades, position NISK as a low-capital, high-margin development opportunity. Lynch estimates internal rates of return approaching 100%, aided by Canadian federal and provincial investment tax credits covering approximately 55% of capital costs.

2026 Exploration Strategy: 4 Priority Targets Beyond Lion Zone

Power Metallic enters 2026 with an aggressive 100,000-meter drill program using five rigs, expanding to seven by year-end. While 15,000-20,000 meters will focus on defining the known Lion zone resource, the balance targets four new exploration plays that could materially expand the resource base.

Lion West lies across a fault structure from the main Lion zone, approximately 450 meters wide. Initial drilling encountered barren holes at the fault boundary, but deeper holes across the structure have shown encouraging results, suggesting mineralisation may extend beneath the fault at depth.

The Fold Hinge represents perhaps the most significant opportunity. This target, located on former Quebec Hydro restricted lands recently acquired with support from the James Bay Cree Nation, tests the hypothesis that the Lion zone represents a folded structure with a mirror image beneath the surface. "The nature of this deposit, we think, is that basically it's likely a fold," Lynch explained. "We think the second half of it is out there."

Tiger Deep investigates the source of high-grade but thin lenses encountered at the Tiger zone. These lenses appear unmobilised and intact, suggesting a larger source at depth approximately 400 meters down. The company expects to reach target depth within weeks.

Elephant, the largest and potentially most transformative target, emerged from borehole electromagnetic surveys conducted in June 2025. A research hole drilled parallel to Lion structure recorded the largest EM anomaly the technical team has encountered - theoretically five times Lion's size. The company deliberately paused drilling to secure the land position before testing the target. "We're about a week or two weeks away from penetrating that," Lynch reported.

Interview with Terry Lynch, CEO of Power Metallic Mines

Technology-Driven Exploration Approach

Power Metallic's exploration success reflects systematic application of borehole electromagnetic (EM) surveys, which provide 150-200 meter detection radius for sulfide mineralisation. This technique has proven highly effective in defining drill targets and extending known zones.

The company is now introducing muon tomography, an advanced geophysical technique that images subsurface density variations. While results take time to process, muon technology could accelerate resource definition and identify targets more cost-effectively than traditional drilling.

Lynch emphasised the company's disciplined approach: "We don't want to drill foolishly, but we've got more targets than we've got rigs." This methodical strategy prioritises high-probability targets while maintaining drilling efficiency.

Chilean Metals Spinout: Diversification & Value Creation

Power Metallic is completing a TSXV listing for Chilean Metals, consolidating copper-gold exploration assets in Chile's established Candelaria district plus a Golden Triangle property in British Columbia. The spinout allows focused management attention and separate financing while maintaining shareholder value through retained ownership.

The company plans a $4 million initial financing, contributing $2 million to maintain 50% ownership, with the balance offered to existing Power Metallic shareholders in a quasi-rights offering. Initial programs include 4,000-5,000 meters of drilling on the Chilean copper-gold project and maiden drilling on the Golden Triangle property adjacent to Scottie Resources.

Lynch noted unexpected major mining company interest in the Chilean assets during industry conferences: "I was in Beaver Creek last year and we had a couple big meetings with a couple majors which I thought were about NISK, and it was all about Chile." Recent discoveries by Codelco and Rio Tinto in the region have heightened exploration interest.

Saudi Arabia: Emerging High-Potential Jurisdiction

Power Metallic's most strategic diversification involves three large-scale concessions in Saudi Arabia, each measuring approximately 100 kilometers by 100 kilometers. The company was the first foreign explorer to win concessions through competitive bidding without requiring a Saudi partner, demonstrating the government's commitment to attracting international expertise.

The economic advantages of exploring in Saudi Arabia are substantial. Drilling costs run approximately half Canadian rates, and most targets are near-surface, eliminating expensive overburden drilling. "If you have a 5,000-meter program in Saudi, it's like having a 20,000-meter program here from a cost perspective," Lynch calculated.

Government support includes remarkable incentives: $1 million exploration rebates per concession (50% of the first $2 million spent) and 75% project financing at 1% interest rates for projects advanced to feasibility. By comparison, Canadian projects typically secure 50-55% financing at commercial rates of 5-7%.

The company plans its first Saudi drill program in second-half 2026, targeting 3,000-5,000 meters initially, with multiple additional land packages under negotiation. Lynch expects Saudi Arabia to emerge as a major focus: "We're definitely going to scale up in Saudi. We think Saudi is going to be a spot to be."

Market Position & Near-Term Catalysts

Lynch argues Power Metallic trades at "20-30 cents on the dollar relative to what we've already found and proved up," suggesting significant rerating potential. The company's polymetallic focus may have limited market attention relative to single-commodity stories, despite natural hedging benefits and high revenue per ton.

Several catalysts could drive revaluation in 2026:

• Drill results from four new exploration targets, with initial assays expected within weeks
• Resource growth at Lion zone from 15,000 meters of infill drilling
• Preliminary Economic Assessment (PEA) targeted for Q4 2026 or Q1 2027
• Chilean Metals listing providing liquidity for spinout assets
• Saudi Arabia drill program demonstrating exploration success in a new jurisdiction
• Potential NYSE listing to access deeper capital markets

The company's current resource base approaches 600,000-800,000 tons of contained metal. Historical orthomagmatic deposits average at least 1 million tons, with several exceeding 10 million tons. Lynch expects Power Metallic to define "a couple million tons of contained metal" by year-end, with further expansion potential.

The Investment Thesis for Power Metallic

• Rare deposit type with district potential: Only 20 orthomagmatic deposits discovered globally; 19 of 20 became multi-mine districts; NISK shows similar characteristics with multiple high-priority targets
• Exceptional metallurgy de-risks development: 95% overall recovery rates (vs. 80% modeled) across all metals eliminates key polymetallic processing concern; copper 98.9%, palladium 93.9%, platinum 96.8%
• Strong commodity leverage: Diversified metal portfolio (copper, platinum, palladium, gold, silver) provides natural hedging; commodity prices up 50%+ since capital raise
• Near-surface, high-grade economics: Shallow mineralisation reduces capital requirements; estimated 100% IRR aided by 55% Canadian tax credits; high revenue per ton excavated
• Fully funded aggressive drilling: $33+ million cash plus warrant proceeds funds 100,000-meter program without dilution; five rigs expanding to seven by Q4
• Multiple near-term catalysts: Drill results from four transformative targets (Elephant target potentially 5x Lion size); PEA by Q4 2026/Q1 2027; resource expansion toward district-scale tonnage
• Valuation disconnect: Management estimates trading at 20-30% of in-ground value; metallurgical breakthrough and land consolidation not yet reflected in market capitalisation
• Portfolio diversification adds optionality: Chilean Metals spinout (copper-gold near Candelaria) and Saudi concessions (4x cost advantage, 50% government subsidies) provide upside without diluting NISK focus

Power Metallic's polymetallic deposit positions the company uniquely in the current commodity supercycle, where copper, platinum-group metals, and precious metals are simultaneously experiencing strong fundamentals driven by electrification, industrial demand, and monetary uncertainty. The traditional mining sector bias toward single-commodity stories overlooks the economic advantages of diversified metal portfolios: natural price hedging, premium revenue per ton, and reduced project risk through multiple revenue streams. NISK's exceptional metallurgy - recovering 95% of value across five metals - demonstrates that modern processing can efficiently handle complexity that once deterred development. As Lynch observed, 

"The mines that are making money, the most profitable mines are these mixes, the polymetallics, because they're naturally hedged and they're high revenue per dollar per ton excavated." 

Orthomagmatic deposits combine this polymetallic advantage with extreme grades and near-surface geology, creating compelling unit economics that justify premium valuations once markets recognise the development potential.

TL;DR: Executive Summary

Power Metallic is advancing one of only 20 orthomagmatic polymetallic deposits discovered globally, with 95% metallurgical recovery rates significantly de-risking development economics at its NISK project in Quebec. The company has consolidated a district-scale land position, raised $50 million, and is fully funded for a 100,000-meter 2026 drill program testing four transformative targets including "Elephant" (potentially 5x the current Lion zone size). With near-surface, high-grade mineralisation, estimated 100% IRRs, and commodity prices up 50%+, management argues the company trades at 20-30% of in-ground value, positioning for significant rerating as exploration delivers results and the PEA (Q4 2026/Q1 2027) demonstrates mine economics.

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