South Pacific Metals Secures ~$20 Million to Advance Four Gold-Copper Projects Through 2026

• South Pacific Metals holds four gold-copper projects across three established PNG mining districts, bordering or near Barrick, K92 Mining and PanAust operations.
• Kili Teke carries a 4.2Moz AuEq (gold equivalent, indicative) NI 43-101 Inferred Resource that management says excludes several higher-grade targets outside the current model.
• At Osena, the Megabe target has been traced over more than 300 metres of mineralised strike within roughly ten weeks of the discovery hole.
• The Company closed a C$20.0 million equity financing on 23 September 2026, led by BMO Capital Markets, funding the work programme through year-end 2026.

Papua New Guinea has quietly become one of the more compelling gold-copper jurisdictions for investors willing to look past its reputation for logistical difficulty. Barrick's return to Porgera, Newmont's ownership of Lihir, and K92 Mining's rise from junior explorer to a multi-billion-dollar producer have all reinforced the same point: PNG's fold-and-thrust belt hosts genuinely world-class deposits, and the market is starting to pay attention again. South Pacific Metals Corp. (TSXV:SPMC, OTCQB:SPMEF, FSE:6J00) is positioning itself squarely inside that re-rating story, with four projects across three PNG mining districts and drill rigs currently turning at Osena.

Executive Chairman Michael Murphy spoke with Crux Investor at the Beaver Creek conference about the company's then-pending financing, its expanding Kili Teke resource, and early high-grade hits at the Osena project on the doorstep of K92's Kainantu mine.

Financing & Capital Structure

On 23 September 2026 the Company closed a best-efforts private placement of units for gross proceeds of C$20,008,810, led by BMO Capital Markets as lead agent and sole bookrunner, with Paradigm Capital Inc. and Velocity Trade Capital Ltd. A total of 24,107,000 units were issued at C$0.83, including the full exercise of the agents' option for a further 6,027,000 units. Each unit comprises one common share and one warrant exercisable at C$1.40 for 24 months, subject to acceleration if the shares trade above C$1.80 for 20 consecutive days after the first anniversary. The securities carry a hold period expiring 24 January 2027.

Speaking before the close, Murphy characterised the buyers as "three or four... household big household mining name funds", adding:

"These funds have a track record of as long as you keep delivering... they'll keep supporting you."

The Company states the net proceeds will be used to expand exploration activities and for general corporate purposes. In the interview Murphy indicated roughly $6 million of the raise would go toward the current year's exploration programme across all four projects, weighted toward Osena and Kili Teke, while noting budgets were still being finalised.

As at August 31, 2026 - before the financing - South Pacific Metals carried a market capitalisation of approximately C$65 million, a share price of C$0.93, and 69,846,855 shares outstanding (92,404,790 fully diluted). Board, management and strategic investors held roughly 45% of the register, with 14 institutions holding a further 16%. The 24,107,000 units issued on closing take shares outstanding to approximately 94.0 million, with the accompanying warrants added to the diluted count.

Four Projects, One Belt

South Pacific Metals holds four projects - Kili Teke, Osena, Anga and May River - each sitting inside or adjacent to established PNG mining districts rather than in unproven ground. Kili Teke lies roughly 40 kilometres from Barrick's Porgera mine (more than 30Moz Au produced historically). Osena and Anga border K92 Mining's Kainantu operation along the same Kainantu Transfer Zone structure that hosts K92's high-margin deposits. May River sits approximately 15 kilometres from PanAust's Frieda River project, one of the largest undeveloped copper-gold deposits globally. Murphy framed the strategy plainly: proximity to proven systems, on structures that are already known to carry PNG's major deposits.

Kili Teke: A Resource With Room to Grow

Kili Teke carries an NI 43-101 Inferred Mineral Resource of 237 million tonnes grading 0.24 g/t Au, 0.34% Cu and 168 ppm Mo, containing 1.81 million ounces of gold, 802,000 tonnes of copper and 40,000 tonnes of molybdenum, effective November 18, 2022. For indicative comparison, the company calculates this as approximately 4.2 million ounces of gold equivalent, or 3.14 billion pounds of copper equivalent, using US$3,300/oz Au and US$4.45/lb Cu with assumed equal recovery and molybdenum excluded - an indicative figure only, not the basis of the resource estimate itself. The company acquired the project from Harmony Gold in 2023 and has invested roughly US$20 million to date, distinct from the current financing discussed above.

Importantly, the 2022 resource model captures only a portion of the mineralised system. It is trimmed to roughly 650 metres from surface and excludes several targets identified in historical drilling and surface sampling, including high-grade skarns at surface and depth (individual samples up to 27.5% Cu and 3.4 g/t Au), a Porgera-style alkalic gold target at Ridge Gold-Kwaki (soils up to 9,390 ppb Au), and an untested target at Yalopi-Ieru (27 m at 0.97% Cu and 1.25 g/t Au in historic trenching). A newly mapped massive sulphide zone at Kili Teke returned a surface sample of 12.8% Cu, outside the current resource boundary. Management expects drill-ready targets at Kili Teke by the end of October 2026, ahead of a planned diamond drill programme.

Osena: High-Grade Hits at the Kainantu Transfer Zone

Osena, sitting on the southwest border of K92's Kainantu mine, is where the company's most recent drilling has produced its strongest results. At the Megabe target, hole ONED26-009 intersected three mineralised zones in a single hole, including 8 metres at 8.95 g/t Au (incorporating 5 metres at 12.46 g/t Au and 2 metres at 27.45 g/t Au) and 12.2 metres at 4.93 g/t Au. Four subsequent step-out holes have since extended the mineralised structure to over 300 metres of strike, remaining open along strike and at depth - roughly ten weeks from the first discovery hole to a mapped 300-metre-plus structure. Drilling elsewhere at Onki (2 m at 5.74 g/t Au, 1.49% Cu) and Jorkol (assays to 3.16 g/t Au, 0.62% Cu, 96 g/t Ag) points to a broader mineralised cluster; four holes at the separate Ontenu Central target are complete with assays pending. All intervals are downhole (core) lengths; true widths have not yet been determined.

Interview with Michael Murphy, Executive Chairman, South Pacific Metals

Jurisdiction, Team, & Approach

PNG's mining law is modelled on the Australian system, and Murphy - who sat on Torex Gold's board for 12 years after building it from a small shell company into a producer now valued at more than $4 billion - argued the country's permitting timeline supports a staged approach over a single large capital-intensive build:

"The way to build a mine in PNG is to... start modest... and build it up like a Lego set. You can get a... mining lease or mining licence... in under two years."

That view is echoed by a board that includes Alex Davidson, formerly EVP of Exploration and Corporate Development at Barrick Gold and a 2023 Canadian Mining Hall of Fame inductee, alongside CEO Timo Jauristo, a 40-year mining executive with prior senior roles at Goldcorp and Placer Dome. On the ground, the company has received a letter from the Ontenu clan recognising it as a new clan within the local community, and management has met directly with PNG Prime Minister James Marape and the country's Minister of Mines.

Investment Thesis for South Pacific Metals

• A defined 4.2Moz AuEq (or 3.14 billion lbs CuEq) NI 43-101 Inferred Resource at Kili Teke sits inside only one portion of a larger mineralised system, with skarn, deeper and lateral targets still outside the model.
• Osena's Megabe discovery has already delivered high-grade intercepts and remains open along strike and at depth.
• Concurrent, sequenced news flow is expected through H2 2026: drill-ready Kili Teke targets by end-October, ongoing Ontenu drilling, and pending Ontenu Central assays.
• Management has direct experience scaling a discovery into a multi-billion-dollar producer, and the board includes former senior Barrick exploration leadership.
• The Kainantu Transfer Zone hosts K92 Mining, which Murphy points to as having started from a comparable market capitalisation a decade ago.
• The C$20.0 million financing closed on 23 September 2026, funding the current work programme through year-end 2026.
• Watch-items: deployment of the net proceeds, Ontenu Central assay results, and the October 2026 Kili Teke drill-target announcement.

Macro Thematic Analysis

The broader thesis for South Pacific Metals rests less on any single drill result and more on where it sits. PNG has produced a disproportionate share of the world's genuinely tier-one gold-copper discoveries - Porgera, Ok Tedi, Lihir, Wafi-Golpu, and more recently K92's Kainantu operation - yet has seen relatively little systematic junior exploration investment over the past decade, largely on perceptions of logistical and political risk that management argues are overstated relative to the reality on the ground. That is now changing: Barrick has returned to Porgera, Newmont holds Lihir, and PanAust continues to advance Frieda River, all signalling renewed confidence in the jurisdiction from majors with the resources to properly assess country risk.

South Pacific Metals' own comparison point is K92 Mining, which sits on the same Kainantu Transfer Zone as the company's Osena and Anga projects. Murphy made the comparison directly:

"So 10 years ago, K92 had the same market cap we do. Today it's worth 7 billion."

Whether South Pacific Metals can replicate any part of that trajectory depends on drilling results still to come, not on the analogy itself. But the analogy captures the thesis in one line: junior gold-copper exploration in a re-rating jurisdiction, on the same structures that have already produced a multi-billion-dollar mining company next door.

TL;DR

South Pacific Metals is drilling gold-copper targets on the same structural belt as K92 Mining, funded by a C$20.0 million financing that closed on 23 September 2026. Kili Teke already carries a 4.2Moz AuEq inferred resource that excludes several higher-grade targets outside the current model, with drill-ready expansion targets expected by end-October. At Osena, the Megabe discovery has been traced over more than 300 metres of strike and remains open. The board includes Torex Gold's founder and a former senior Barrick exploration executive.

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