Investment Criteria

We conduct a thorough analysis of various documents and data to assess resource potential:

• • Exploratory Database Analysis: A thorough and accurate statistical review of the data that feeds the mineral resource models.
  • Deposit Analysis: Geological interpretation of the main areas with mineral characteristics of interest, integrating structural, geochemical, lithological, and other features.
  • Composites: Information that provides a consistent and accurate representation of the area of interest, used in the mineral resource estimation process.
  • Block Models: Discretization of interpreted geological domains into regular 3D blocks for the purpose of estimating metals of interest.
  • Validations: Essential to ensure the accuracy and reliability of the models and estimates in mineral resource estimation. This includes data quality controls, block model validation, cross-validation, sensitivity testing, comparison with previous studies, peer review, external audits, and detailed, transparent documentation. These processes help identify and correct errors, minimize uncertainties, and ensure the integrity of mineral resource estimates.
  • Surface and Underground Topography: Detailed surveys of surface and underground workings that are important for volume and surface measurement at various project stages.
  • Resource and reserve reports, mine reconciliation and NI 43-101 technical reports: Preparation of detailed technical reports on existing mineral resources and reserves, including comprehensive mine reconciliation studies and compliance with NI 43-101 standards.

Our evaluation of economic viability is a multi-dimensional approach that focuses on several key metrics to ensure the profitability and sustainability of each project. We conduct an in-depth analysis of:

• Low Cash Costs: We identify projects with the lowest possible operating costs, ensuring a competitive position in the market regardless of commodity price fluctuations. This includes a detailed breakdown of direct and indirect costs, including labor, energy consumption, and equipment maintenance.
• Robust Internal Rates of Return (IRRs): We model various scenarios and stress tests to evaluate the internal rate of return, considering the impact of fluctuating metal prices, operational risks, and capital expenditures. Our goal is to secure projects with IRRs that significantly exceed industry averages, ensuring attractive returns for investors.
• Competitive All-In Sustaining Costs (AISC): We target projects that demonstrate the potential to maintain a competitive AISC, a comprehensive metric that includes all direct, indirect, and sustaining costs. This provides a holistic view of a project’s financial health over its entire lifecycle.
• Net Asset Value (NAV): We calculate NAV by forecasting cash flows, discount rates, and long-term metal prices to determine the intrinsic value of a project. We prioritize projects with significant NAV potential and favorable risk-adjusted returns.
• Initial Capital Expenditure (Capex): We meticulously evaluate the initial Capex, considering infrastructure, equipment, and development costs, ensuring that the upfront investment aligns with our profitability and risk thresholds.

Our diversified approach to project selection involves evaluating mining assets at various stages of development to build a balanced and resilient portfolio:

• Early Exploration: We identify high-potential, early-stage projects with promising geological features and mineral indications. By investing early, we position ourselves to capture significant upside potential as the project advances through development stages.
• Advanced Exploration: For projects that have demonstrated substantial resource potential, we assess the feasibility of moving towards development, ensuring that the asset aligns with our risk profile and growth objectives.
• Near-Production Assets: We prioritize projects nearing production, where permits, infrastructure, and technical studies are in place. These projects provide quicker timelines to cash flow, reducing the overall risk of the investment while maximizing the short-to-medium term return potential.
• Production Optimization: We also look into operational mines where strategic investments or optimizations can increase efficiency, output, and profitability. This allows us to leverage existing infrastructure while capitalizing on quick wins.

We maintain a strong focus on ensuring that all investments comply with stringent regulatory and environmental standards. Our commitment includes:

• Environmental Permits: Before any investment, we verify that the project adheres to local and international environmental guidelines. This involves assessing Environmental Impact Assessments (EIAs), reclamation plans, water management strategies, and community relations programs to minimize the project’s ecological footprint.
• Local Regulations: We evaluate the legal framework in each jurisdiction to ensure full compliance with mining laws, labor regulations, and health and safety standards. We maintain a proactive stance, ensuring that our investments are adaptable to any future regulatory changes.
• Stakeholder Engagement: We emphasize building strong relationships with local communities, indigenous groups, and government agencies. Our investment approach ensures that projects receive the necessary support and permits by aligning with local development priorities and maintaining transparent communication channels.

Operational efficiency is a critical component of our investment strategy. We ensure that each project is backed by top-tier management teams and employs best-in-class operational practices:

• Managerial Expertise: We invest in teams with proven track records in exploration, development, and mine management. This expertise helps navigate the complexities of mining operations, mitigating risks, and ensuring smooth transitions from development to production.
• Technological Integration: We prioritize investments where modern mining technologies and innovations, such as automation and advanced geological modeling, are integrated to enhance efficiency and reduce operational costs. This focus on technology-driven processes ensures that projects remain competitive and sustainable in a rapidly evolving industry.
• Continuous Improvement: We actively engage in performance monitoring, process optimization, and benchmarking against industry best practices. This approach allows us to identify opportunities for improvement and enhance value throughout the project’s lifecycle.

Our investment strategy is rooted in rigorous quantitative and qualitative analysis to rank and prioritize projects with the highest potential:

• Resource Analysis: We utilize advanced statistical and geospatial models to evaluate the number of ounces, grade, and overall distribution of the mineral deposit. We consider the density, geometry, and continuity of mineralization to understand the deposit’s economic viability better.
• Qualitative Factors: Beyond quantitative metrics, we incorporate qualitative aspects such as environmental licenses, the stability of the regulatory environment, currency stability, and logistical considerations. These factors provide a more comprehensive view of the project’s overall risk and reward potential.
• Labor and Cost Structures: We analyze labor market dynamics and cost structures specific to each region. By understanding the local labor availability, wage levels, and operational costs, we can better project the long-term feasibility and profitability of a project.
• Strategic Modeling: We employ scenario modeling to simulate various market and operational conditions, allowing us to rank projects based on their resilience to risk factors, potential returns, and alignment with our long-term strategic goals.