Unigold - Unlocking Dominican Republic Gold Potential with Phased Development & Upcoming Permit

• Unigold Inc. is an exploration and development company focused on projects in the Dominican Republic.
• The company has been waiting for two years for approval of their exploitation concession (mining permit) application submitted in early 2022.
• Unigold's project includes an oxide portion with 120,000 ounces of gold planned for initial development, and a larger sulfide deposit totaling 2.3 million ounces.
• The company recently signed a joint venture agreement with Barrick Gold for exploration of part of their concessions.
• Unigold is facing challenges due to permitting delays but remains optimistic about receiving approvals after the recent re-election of the incumbent president, who has been supportive of mining.

About Unigold

Unigold is a Canadian-based mineral exploration company traded on multiple exchanges, including the TSX Venture Exchange (UGD), OTCQX (UGDIF), and Frankfurt Stock Exchange (UGB1). Since 2002, the company has been actively exploring gold assets in the Dominican Republic, with its primary focus on the Candelones gold deposit within the Neita Fase II exploration concession in the northwest part of the country.

The company's flagship Candelones project features an oxide gold deposit at the surface and deeper sulphide resources. Unigold has applied to convert part of its exploration concession into an exploitation concession named "Neita Sur," while maintaining exploration rights on the remaining area under "Neita Norte." With over 20 identified areas showing surface expressions of gold systems within their concession, Unigold continues to expand its resource base through ongoing exploration and drilling programs.

Project Overview: A Phased Approach to Gold Production

Unigold's strategy involves a phased development approach for its Candelones project. The company's total resource stands at approximately 2.3 million ounces of gold, split between oxide and sulfide deposits. The current focus is on the smaller, more manageable oxide portion with:

• 120,000 ounces of gold
• 3-year mine life
• Production of about 30,000-40,000 ounces per year
• Low capital expenditure of $25-30 million
• Cash costs around $850 per ounce

This initial phase is designed to be a low-impact operation that introduces mining to the local community and generates cash flow. The oxide deposit is heap leachable, requiring no explosives and minimal processing, with expected gold recoveries of 85-88% within 60-70 days.

The larger sulfide deposit remains a future opportunity for expansion, potentially offering a more substantial operation once the company establishes its presence and gains community acceptance.

The Waiting Game: Permitting Challenges & Opportunities

At the heart of Unigold's narrative is the ongoing process of securing an exploitation concession, or mining permit, for its flagship project in the Dominican Republic. CEO Joe Hamilton provides insight into the situation:

"Around early 2022 we applied for an exploitation concession or a mining permit on our concessions in the Dominican Republic. That process led to the suspension of our work permit simply because anytime there's a new application going in and new information presented to the government, they usually want to take a look at things."

This application has been moving through government channels for two years, a timeline that reflects the cautious approach of Dominican authorities, who haven't granted a new mining license since 2007, excluding Barrick's Pueblo Viejo project. The delay, while frustrating for the company and investors, can be seen as a thorough vetting process that could ultimately benefit Unigold by ensuring a stable operating environment once approvals are secured.

Interview with Chief Executive Officer, Joe Hamilton

Political Landscape & Mining Sector Support

The recent re-election of the incumbent president in the Dominican Republic is viewed positively by Unigold. Hamilton notes:

"President Abinader's party has always been supportive of mining, and they certainly realized through COVID, through 2020 through 2024, which has been the term for his presidency, mining contributed a significant amount to the economy in the Dominican Republic."

This political continuity and the government's recognition of mining's economic contributions bode well for Unigold's prospects. The president has expressed interest in promoting mining to diversify the economy and bring jobs and infrastructure to rural areas. However, investors should note that the permitting process is far from over, with environmental and social impact assessments and community consultations still to come.

Financial Considerations & Market Perception

Unigold's financing strategy reflects both the challenges and opportunities of its current position. Recent capital raises have been primarily sourced from Dominican investors, who now constitute about 35% of the company's shareholder base. This local support is a strong vote of confidence in the project's viability and the likelihood of permit approvals.

For the initial oxide project, Unigold estimates:

• Total capital requirement: $25-30 million
• Owner's costs (including environmental studies): $5-6 million
• Potential debt financing: 50-70% of total capital

The company is optimistic about securing favorable debt terms due to the Dominican Republic's stable economy and banking system. With current gold prices, the project boasts an impressive 85% IRR and a payback period of less than a year, mitigating concerns about interest rates on short-term debt.

Joint Venture with Barrick: Exploration Upside

In a significant development, Unigold has entered into a joint venture agreement with Barrick Gold for exploration of part of its concessions. This partnership brings several advantages:

1. Validation of the project's potential by a major industry player
2. Access to Barrick's expertise and resources
3. Potential for new discoveries without capital outlay from Unigold

Under the agreement, Barrick will spend approximately $12 million over eight years to deliver a feasibility study on any discoveries made in the northern part of Unigold's concessions. This arrangement allows Unigold to focus its resources on developing the Candelones deposit while maintaining exposure to exploration upside.

The Path Forward

Unigold's immediate focus is on securing the exploitation concession, which CEO Hamilton hopes will come "shortly after inauguration, which is the third week in August." Once obtained, the company plans to:

1. Resume exploration drilling
2. Complete detailed engineering studies
3. Conduct environmental and social impact assessments
4. Progress towards a construction decision for the oxide project

The company's phased approach, starting with the smaller oxide deposit, presents a lower-risk entry into production. This strategy could generate early cash flow to support further development of the larger sulfide resource.

Market Opportunity & Investor Sentiment

The gold mining sector has seen renewed interest as global economic uncertainties persist. Unigold's project, with its low capital intensity and potential for rapid payback, could be attractive in this environment. The company's market capitalization currently reflects the uncertainties around permitting, potentially offering value for investors willing to accept the associated risks.

Conclusion

Unigold Inc. represents a speculative but potentially rewarding investment opportunity in the gold mining sector. The company's assets in the Dominican Republic offer significant upside, particularly if permitting hurdles are overcome. The phased development approach, starting with a manageable oxide project, provides a pathway to near-term production and cash flow.

Investors should weigh the considerable potential against the risks, particularly the ongoing permitting process and the early stage of development. The joint venture with Barrick and strong local investor support are positive indicators, but patience may be required as Unigold navigates the final stages of approval and moves towards project development.

As with any junior mining investment, thorough due diligence and an understanding of the risks involved are essential. Unigold's story is one of patience and perseverance, with the potential for significant rewards if the company successfully transitions from explorer to producer in the coming years.

The Investment Thesis for Unigold

• Undervalued Asset: Unigold's market capitalization may not fully reflect the potential of its 2.25 million ounce gold resource, presenting a value opportunity.
• Near-Term Catalyst: Approval of the exploitation concession could be a significant share price catalyst.
• Phased Development Approach: The low-capex oxide project offers a path to early cash flow and proof of operational capability.
• Strong Local Support: Significant investment from Dominican investors suggests confidence in the project's viability.
• Exploration Upside: Joint venture with Barrick provides free exposure to potential new discoveries.
• Favorable Jurisdiction: The Dominican Republic's stable economy and pro-mining stance offer a supportive environment for development.
• Experienced Management: The team has navigated challenging permitting processes and maintained project momentum.

Macro Thematic Analysis

The global economic landscape is creating a favorable environment for gold mining investments, particularly in stable jurisdictions with untapped potential. Several factors contribute to this trend:

1. Economic Uncertainty: Ongoing geopolitical tensions, inflationary pressures, and concerns about global economic stability are driving interest in gold as a safe-haven asset.
2. Supply Constraints: Many mature gold-producing regions are experiencing declining grades and depleting reserves, increasing the importance of new discoveries and developments.
3. ESG Focus: Investors and consumers are demanding more responsible mining practices, favoring companies and jurisdictions with strong environmental and social governance.
4. Technological Advancements: Improvements in mining and processing technologies are making previously uneconomic deposits viable, opening new opportunities in established mining regions.
5. Geopolitical Shifts: Some traditional mining jurisdictions are becoming less attractive due to resource nationalism or political instability, increasing interest in stable, mining-friendly countries like the Dominican Republic.
6. Green Energy Transition: The push towards renewable energy and electric vehicles is creating demand for minerals often associated with gold deposits, potentially improving project economics.

CEO Joe Hamilton captures the opportunity succinctly: "The Dominican Republic is the largest economy in Central America. The banking system works, the court system works, it's a fairly secure spot for foreign investment."

This statement underscores the strategic advantage of operating in a stable jurisdiction with established economic frameworks, a crucial factor for mining investments in today's complex global environment.

In this context, Unigold's project in the Dominican Republic aligns well with several macro trends. The country offers a stable, mining-friendly environment in a region with established infrastructure. The phased development approach, starting with a low-impact oxide project, addresses ESG concerns and allows for community engagement. The potential for additional discoveries through the Barrick joint venture adds exploration upside in a world hungry for new gold sources.