FireFly Metals

To discuss FireFly’s path forward. Thank you very much, and it’s an absolute pleasure to be here back in Denver again, especially given the great time for commodity prices. Introducing FireFly to people, this company has grown rapidly in the last three years in particular. And when you think about what the team has done to achieve that, I don’t think there’s any company that’s done more than we have in such a short period of time.

We’ve had the asset for about three years now, and what we’ve done with that is really strategically look at the way that we’ve unlocked the value in the company. So we wanted to prove that this thing had scale and grade, and we did that by doing two kilometers of underground development, 210,000 meters of underground diamond core, six rigs. It’s been a busy time. And what that’s done is it’s got our resource up to 84 million tonnes at a grade of 2.5% copper equivalent. So I think you’d agree it is a very rare combination of scale and grade. We see a lot of projects that have more tonnes, but half a percent copper. But now we’re rapidly progressing towards 100 million tonnes at 2.5% copper equivalent.

And what makes this one unique is there’s a high-grade core opportunity there as well. So we have a high-grade zone within the deposit, 25.1 million tonnes at an incredible grade of 4.3% copper equivalent. And it’s a robust resource, 72% in the measured and indicated category.

What we’ve done recently is we’ve put out a PEA study. So the second plank of our strategy was once we’ve developed the resource, once we’ve shown the scale and the grade, let’s wrap the economics around it and show there’s a viable project. There’s two scenarios that we presented in our PEA, and both of them show multi-decade mine life with near-term production. I think that’s one of the key. You see a lot of copper assets out there and they can be ten years, fifteen years away from production, extremely high CapEx. We’re blessed because we can be in production before the end of 2029. There is the opportunity to get up to 100,000 tonnes of copper equivalent production, which puts us in pretty rare company, particularly with assets owned by juniors in Tier One jurisdictions. And we have a low cost, rapid payback, and it generates huge levels of free cash flow.

And then finally, the growth story has just begun. We’ve only scraped the surface of the regional exploration story. Will be results coming out shortly. But what we’ll demonstrate is the potential for multiple mines in this district. It’s genuinely a camp. It’s not just a single deposit. Within the mine itself, the resource is still open. 49.1 meters at 6.1% copper equivalent is the deepest hole that’s ever been drilled into this system. So we know it’s gonna continue.

And look, I’m not gonna spend too much time on this, but it’s a pretty constant theme in this conference that we’ve seen is it’s great time to be in copper. Not only is there a scarcity of copper assets that can be brought into production quickly, but we expect to see the copper price go from strength to strength given there is an emerging supply gap. With the AI revolution that’s occurring, data centers, electrification, there are just not enough new copper mines in the world coming online. The ones that are there, low grade, high capital, and we are uniquely positioned to be into production before the end of ’29, so we can produce within this copper cycle.

As I mentioned before, we presented two cases in our PEA, and one of the key things I want you to take away from this is this is a serious mine and it’s a serious copper producer. So when you strip out all the by-product metals, ’cause I get a bit sick of seeing projects call themselves copper mines when they’re just hiding behind metal equivalents. When you look at copper exposure and what we will be producing in terms of pure copper, the base case puts us in the top twelve mines in Australia and Canada. But the upscale case where we do achieve those 90,000 tonnes of copper equivalent production over eleven years, that puts us in rare company. That puts us up in the top five mines in either Canada or Australia. So this is a big project. You can see from the names on this list that’s really the only one in the hands of juniors.

Just in terms of the capital structure, we’re really well-funded. We have $373 million in cash in the bank. We’ve just done an equity raise, and one of the reasons we raised now was because we have just taken out the question as to whether we can fund this. So combined with project finance, combined with all the offtake offers we’re getting for pre-payments and so on and so forth, we can build this mine and it doesn’t have to be dilutionary. We don’t have to raise equity to build this mine. We’ve got no debt, no streams, very, very minimal royalties, and a really supportive shareholder base of institutional investors. So we are in a very good position moving forward. Solid market cap, and look, share price is pretty cheap at the moment, and I’d say to people, [chuckles] I’d like to think we’re not gonna get much lower than this. It’s a great project, a lot of value in there. And once you have a look at the economics of the study, you’ll see that we’re pretty undervalued at this point in time.

The Green Bay Copper-Gold Project, which is the core project, is located in Newfoundland. And for those that aren’t familiar, that’s an eastern province of Canada. Great jurisdiction, extremely supportive government, and a massive amount of infrastructure there, both provincially that we can leverage, such as the hydro power, the airports, the road infrastructure. But even locally at our mine site, there’s been $250 million previously invested, and that enables us to really leverage that and get into production at a low capital intensity and for relatively little cost. There’s a big brownfields advantage. And look, when you look at the Fraser Institute index, for those that aren’t familiar with the province, it’s globally well-regarded in terms of being one of the premier mining districts. So not only do you have a combination of scale and grade and large-scale mine, but you’re truly in one of the tier-one jurisdictions of the planet.

Just the mineralization, and this is what really sets this deposit apart, as I said before. It’s not low grade. It’s very, very high grade. And we have multiple styles of mineralization. One is the upper volcanogenic massive sulfide. And you can see the grades in those intersections. They aren’t out of a historic database. They’re actually holes we’ve drilled in the last few years, and they are truly world-class hits. Getting hits up to 12.2% copper equivalent, and it’s genuinely copper and gold. It’s not anything else. It’s not zinc, it’s not lead, it’s nothing else. It’s copper and gold, two of the hottest commodities right now.

And beneath that, you have a broad zone, a copper stringer zone, where you get really thick intersections of not massive sulfide, but little stringers of chalcopyrite, and they bulk out to average around the 2% mark. And you can see some of those incredible thicknesses there. 117 meters true thickness at 2.1% copper equivalent are pretty outstanding. But one of the things we’ve discovered since we’ve had the asset is, as we drill down plunge, those two zones converge. So higher up in the mine, there’s a gap of about 150 meters of barren rock between the massive sulfides on the seafloor, given this is a VMS, the stringer zone beneath it, which are the fluids moving up to actually deposit that on the seafloor. They actually converge, and you’re getting some spectacular results like 43.6 meters at 7.6. The deepest hole we’ve ever drilled into this system, as I mentioned before, 49 meters at 6.1% copper equivalent. So we’re very confident that we’ll continue to grow, and these grades will continue to increase as we go down plunge.

The mineral resource has grown significantly since we’ve acquired the project, and as I mentioned before, we’ve done 210,000 meters of underground drilling. And we now have the resource to total about 84 million tons at 2.5% copper equivalent. And the great thing about that, 60 million tons in the measured and indicated category. It’s pretty rare to have over 70% of your inventory in measured and indicated in an underground mine, because you’re usually limited by development. But we have invested in that development. We’ve done that two kilometers of development that has enabled us to extend this resource significantly. And now, when you look at the in situ metal content, this deposit has 1.6 million tons of contained copper, has 1.3 million ounces of contained gold, and 12.1 million ounces of contained silver. So it is a very, very high grade and very well-endowed copper gold VMS. It’s very unusual to see these sort of VMSs anywhere.

And what people are starting to appreciate now is just the scale of this resource and how it compares to some very well-known deposits. Once again, stripped out the by-product metals, so this doesn’t include our gold. It’s just pure copper exposure, which is what the investment community can’t seem to get enough of at the moment. And you can see our resources are far bigger than some very significant deposits, such as Ernest Henry, Miramaca. And surprisingly, we’ve got more than double the amount of copper that McIver Bay had before they were taken out by Eldorado. So this competes very well on the world scale, and there’s very, very few of these quality assets in tier-one jurisdictions in the hands of junior developers.

So just under the PEA study highlights, and as I mentioned before, we’ve done a hell of a lot of work on this. This is not your average Canadian-style PEA. This is actually a lot more robust. It’s based on a resource that’s well over 70% M&I. The costing and design work we’ve done is anywhere between pre-feasibility and feasibility level. And what that base case, the 4,800 tons per day shows, is that it’s got a very healthy NPV discount at 7% of 2.2 billion and a steady-state production of about 50,000 tons of copper equivalent. Very strong IRR at 41%. The cash flow is impressive. This is based on $5 a pound copper price and $3,500 an ounce gold, $44 an ounce silver. So the metrics look far better at spot price. But even at that discounted rate, still $5.4 billion post-tax cash flow, very rapid payback and relatively modest capital to build it. So what we’re doing on site is we’re building a new mill on the site suited to this deposit, changing the mining method to a more bulk scale. And for this particular case, we’re only using truck haulage.

Then what we considered was, okay, well, what if we decided to expand this? What could this deposit do? So we’ve considered a case of 12,500 tons per day or 4.6 million tons per annum. Now, the key difference between those two is it’s gonna require a shaft. And we’ve already done the design work on the shaft. We’ve had it fully costed. And what we know about Canada is that some of the best shaft-sinking companies in the world cut their teeth in Canada. It’s a common thing to get shafts in operations in Canada. Not so common in Australia, but it’s very common in Canada. What that does is it takes us up through a large-scale production of 90,000 tons of copper equivalent over 11 years, but there’s a six-year period where it peaks at over 100,000 tons of copper equivalent production, which is really significant. That’s what really defines a world-class project.

Still get very high IRRs, 22-year mine life. The cash flow goes up to $6.5 billion or $550 million a year. But one of the things that really stands out is the costs. The C3 costs are only $2.16 for the metal. And when you apply the gold credit to that, it comes down to $1.43 per pound for copper production, which is one of the leading cost curve producers of copper out there. The other thing I’d point out with the expansion capital, which is basically increasing the processing capacity and about $300 million on the shaft, is that that can be self-funding out of cash flow if you stage the operation starting at 1.8 and then expand it down the track if we choose to do so.

This demonstrates the free cash flow after tax for the base case, and you can see that at fifteen years at $290 million, but at spot price that goes up to $434 million per annum average over that fifteen-year period. And where that tails off, that’s an artificial boundary. That is exploration driven and, as I mentioned before, the deepest hole in that system, 49 meters at 6.1, we expect that tail to push further to the right because the ore body won’t stop. And the other thing is, any regional discoveries will fill that gap as well and enable us to think about further expansions.

Now, when we look at the upscale case, so the 4.6 million tons per annum, we’ve got a number of ways we can do this, and we’re assessing all our options at the moment, but it can be self-funding, as you can see here. If we start off at 1.8 million tons per annum, the cash flow generated there can pay for the majority of the shaft and the majority of building the actual capacity into the processing circuit. And you see there the cash flow is pretty amazing. Eleven years at $550 million average using a $5 a pound copper price. At current spot price, that goes up to $820 million a year. So you think about it, that’s post-tax free cash flow. Our current market cap is about $1.4 billion. So if we end up spitting out $820 million a year, that’s pretty significant, and this is a major project and we are very much undervalued at the moment. So this current dip in the market, I view this as a great buying opportunity that may not be around forever.

You can see here once again the life of mine production. This is actually recovered metal. So you can see with that upscaled case, it’s just over 1.1 million tons of contained copper produced, 860,000 ounces of gold and 8 million ounces of silver as a by-product for the upscale case. But as I said, this is a snapshot in time. This is drilling constrained, and we know that this is only gonna get better with time. We have six rigs underground still drilling this deposit, and we have three rigs on surface doing the regional exploration. So we will grow this deposit. And that’s how we’re gonna beat the Sun Curve eventually. We’re gonna keep growing. The growth story here is not over by any stretch of the imagination.

The way we’re doing it from an operational point of view, very standard. So the mining methods are standard, conventional long-hole stoping. A combination of transverse and longitudinal haulage trucks for the base case, shaft for the upscale case. The metallurgical test work is fantastic. We get 98% recovery on the copper. We found a way to get the gold recovery up to 82% and the silver recovery up to 85%. So you couldn’t ask for a better polymetallic ore body comminution-wise and flotation-wise. Just standard process, just a rougher flotation, a cleaner flotation. We are floating a pyrite tail and leaching it to recover additional gold. So we will be producing not only a copper and gold and silver-rich concentrate, but also some doré on-site as well.

And on the concentrate side of things, this concentrate is extremely clean. It’s extremely sought after with no deleterious elements. And we do not have the offtake agreements in place yet, and there’s a lot of competition to try and get their hands on this. Our port is only five kilometers away from the mine, and it’s a deep water port, year-round access, easy access to the European markets. I think people don’t realize how close to Europe Newfoundland is. Our project’s actually closer to Munich than it is to Vancouver. So we’re a long, long way east, so easy access to European markets. And we’re blessed with the infrastructure, with the power, the power corridor. The power line runs through our property. We do not have to build miles and miles of power infrastructure. It’s already there.

And then the final thing is the exploration. We really believe that this is a camp. We really believe that this is gonna become a hub-and-spoke opportunity where you’ve got a central mill that’s fed by multiple mines. And I think when we put out our most recent amount of exploration results, which is coming within the next month, people will start to appreciate the opportunity that’s in front of us to build a hub-and-spoke operation with multiple feed sources. We’re currently spending $16.7 million on regional exploration this year. Three rigs, 346 square kilometers of ground, and that will grow. But we’ve done extensive geophysics. We’re getting some exceptional results, and they’ll all be coming out in due course. One of the areas that we’re drilling our maiden drill campaign on is the Tilt Cove area. That’s got amazing VMS potential. And the areas around the Ming Mine, the main mine, we’re anticipating putting out a maiden regional resource on that in the first quarter of next year.

So to wrap it up, really busy times for us. We don’t do things by halves. There’s no question about that. We’re looking at getting out our feasibility study in the first quarter of next year. Currently assessing all the financing options, but what’s really clear is all that we’ve got to decide now was the split of equity, the split of the project financing and the offtake prepayments. There is a way where we don’t have to raise money to build this. And then FID construction mid ’27, first production end of ’29. So big time for us and thank you. We’re floating around the conference. Any questions, come and ask, and just like to thank the team for all the work they’ve done on it as well. Thank you very much. Great. Thank you.