Investigator Silver

Thanks, Kyle. Really appreciate it. Lachlan Wallace, Managing Director of Investigator Silver. We are building the Paris Silver Project in South Australia. It is the only primary silver project, pure play silver project in Australia. And when I say pure play, what I mean here is we’re producing silver doré, so silver bars on site. This is not a lead or zinc operation pretending to be silver. It’s not a silver equivalent story. It is a simple, high margin, silver only project in a true tier one jurisdiction providing investors with 100% exposure to the silver price.

So, I’m just gonna walk through the investment thesis and then introduce you to the Paris Silver Project. So, silver is in high demand, particularly as the world continues to decarbonize through electrification, but the supply side is really struggling to keep up. That has led to about five years of consecutive deficits that has put upward pressure on the silver price, and these deficits are forecast to continue. And this is the backdrop that we are building the Paris Silver Project, a 57 million ounce resource with a completed DFS at $60 US that the DFS was done under. The project throws off more than $700 million US in free cash, with an NPV of about $426 million. It’s a simple open pit. Ore does start only 10 meters below surface, uses conventional processing and it’s located in South Australia, one of the best jurisdictions in the world for mining investment.

And importantly, we have a team that has permitted, financed, built and operated projects within South Australia. We’re really well-financed with more than US$40 million in the bank, and we are actively progressing a permitting, engineering and financing pathway through to planned construction towards the middle of next year. In parallel, we have recently commenced a 30,000-meter drilling program aimed at increasing the size of the mining opportunity to add both mine life and project value. And in addition to that, we have a broader 15-kilometer-long silver corridor that surrounds the Paris District, which is largely underexplored.

Now, with all of that, we only have an EV of about $60 million. So this translates to around 0.15 of net present value of the project, which is quite low when compared to peers that are trading about 0.4, and we think that that value disconnect is what provides a fantastic investment opportunity here today. So over the course of the next twelve or thirteen minutes, I was gonna be talking about how we’re gonna close that valuation gap over the next twelve months or so as we advance towards construction in twelve months and silver production in 2029.

So firstly, on silver, as I said, the demand is really getting driven through the electrification as the world continues to decarbonize. But silver is the most conductive metal known. It is important input to all manner of green energy technology, solar panels, semiconductors. And as the world continues to decarbonize, this demand is growing. But the supply side is constrained. Around 70% of the silver that is mined is mined as a byproduct of lead, zinc, gold and copper. And these gold and copper miners are not changing their production profile just to mine a little bit more silver because the price has increased. The supply response is effectively priced inelastic.

And of the silver that is mined, over 70% of that is coming from Latin America, China and Russia. So these are high risk locations. There is very little that is coming from true tier one investment-grade jurisdictions like Australia. But Paris is quite different. We are planning to develop, process and refine the silver within Australia. There’s also a supply security dimension here as well. With most of the material coming as a concentrate, a lot of it is being processed in China that are then controlling exports, so metal flows back onto the market. And that has led to concerns over security of supply that has prompted the US government to add silver to the critical minerals list. So it’s into this, I guess, backdrop that Paris Silver is providing this new pure silver exposure in a true tier one jurisdiction.

The project itself is located in South Australia’s Gawler Cratons. This is a mineral province that includes BHP’s Olympic Dam, Carrapateena, Prominent Hill, as well as large iron ore assets. And these combined mines have developed enormous capability within the region, so skilled workforce, capable contractors, as well as a deep mining services industry that the Paris Silver Project will leverage through construction and into operations. Fully, one in fifteen dollars of the state economy comes from the resources industry, and this creates a government that is very supportive of exploration through development into production in the entire mining cycle. It’s a very clear pathway to be able to take projects through that cycle. And that was recently recognized in this year’s Fraser Institute that not only puts South Australia as the best location for mineral potential in the world, but also number four globally and number one Australia for mining investment attractiveness. On top of all that, we have a team that has permitted, financed, built and operated mines within South Australia, and we are now deploying that capability to take the Paris project forward through development and into construction.

This is the location of the Paris Pit. It is located on state government land. It has a single pastoral leaseholder. As you can see, it’s flat, it’s dry, sparsely vegetated. It has a highly saline groundwater that does not support any livestock. So there is no real competing land use here. We have over fourteen years of working relationship with our traditional owner partners. They actually assisted in the design of the layout of the mine to ensure that no areas of cultural significance were impacted by the mine’s development. And we’ve just recently completed all of the heritage surveys associated with the project. So we’re now advancing a native title mining agreement in parallel with all of the remaining approval processes that we anticipate will be finished by the middle of next year, ahead of an FID point in the second half of 2027.

If you are looking for a technically challenging operation, this is not it. It is a flat tabular ore body. It starts only 10 meters below surface. It’s 2 kilometers long, 600 meters wide, and goes down only 175 meters. So this is really well set up for low-cost bulk open-pit mining. As you can see in the image, we stage the development, and that is to bring forward the high-grade ore. We have a production profile that produces about 5 million ounces a year over the first few years, followed then by 3.5 million ounces per year for the remainder of active mining. We’ve recently commenced a 30,000-meter drill program aimed at both continuing the mine life, but importantly, increasing that early-stage high production profile for a longer period of time.

On the processing side, the philosophy is very similar. It’s about simplicity. It’s a three-stage crush. It’s a whole ore cyanide leach with recovery of silver through Merrill Crowe. This is a proven method with off-the-shelf standard equipment that is used in silver projects all over the world. Importantly, we produce the silver doré, so we don’t have concentrate handling. There’s no complicated logistics. There’s no opaque offtake agreements. There’s no arguments with disport around concentrate quality. This is just a simple silver-only project with a 100% leverage to the silver price for investors. When we’re in operations, every fortnight, we will be pushing out around 5 tons of silver metal to the local refineries, which provides a really regular cash inflow to support business liquidity.

So what we have here is an exciting silver market backed by a very simple, straightforward, low-cost mining, processing, and logistics process. And it’s this combination that leads to some really exciting economics. So over the eleven-year mine life, we throw off around $700 million US in free cash generation for a relatively modest capital build of $180 million. And with the staging of the pits bringing forward all of that high-grade material, we see a rapid repayment in the order of about thirteen months. With an all-in sustaining cost of $27 million, that leads to a margin of over 50%. But I guess the thing that most excites me on this slide is the leverage. So the bottom left-hand corner, what we have here is for every $1 of silver in US terms, we see $29 million US added to the free cash generation and $19 million US to the MPV, which is $426 million at $60 silver price assumption.

But the DFS is really just the beginning. We had a cut-off grade set at $48 US, but there is fully 6 million ounces of contained silver within the DFS pit design that makes margin at the current price of $60. So if you believe that the silver price could be $60 or higher, you can bank that 6 million ounces in. In addition to that, we optimized the pit also at $48 US. And the optimization wanted to push towards the north, towards the south, towards the east, into these areas that are shown on the model here in light blue. These are areas of inferred. So we deliberately restricted the size of the pit to not include that inferred material. But we are now actively drilling through a 30,000-meter drill program to convert these inferred areas into indicated, measured, bring them into an updated resource model and into an updated mine plan, which we would anticipate would both increase mine life as well as project value.

Although the work has only just begun, I did release only a couple of weeks ago the preliminary results. And what we’re seeing here is already some excellent hits outside of the current DFS that those project economics were talking to before. So 4 meters over 5,000 grams per ton, 2 meters over 4,000 grams a ton. But more importantly, we’re seeing a lot of intercepts that suggest that these inferred areas will upgrade from a resource category and be included into that upgraded mining plan.

In a more broader sense, what we have here is an image that shows the Paris Pit in the middle with three rings. This is 5, 10, 15 kilometers from the project. And what we can see here is there is a high number of projects that have had silver intercepts over the history, including to the north, Apollo, 5 meters, 5 kilometers to the north, it’s 8 meters at over 1,260 grams a ton. All the way down to the south at Athena, 20 meters, 160 grams a ton, including 5 meters at almost 500 grams a ton. There’s only a handful of holes through this whole 15-kilometer district scale belt, and that is because we have been largely undercapitalized in the past and have not deployed very much money towards developing this area. But we now have over $40 million cash at hand and are deploying this to aggressively open up this area. And of course, any project within this area that’s in close proximity to the Paris plant as well as the tail storage facility has a lower permitting as well as economic hurdle to bring into the project. And what we see here is that Paris may become just the first mine in a broader district-scale opportunity.

In terms of team, we have been actively assembling a team that has taken projects through feasibility, permitting, financing, build, and into steady state operations over the course of the last 12 months. We also retain quite a bit of exploration leadership. Jason Murray was there from early stage discovery and has stewarded this through to 57 million ounces and growing as a resource. So we have this now combination of an understanding of the resource with a team that has delivered opportunities within South Australia before. And it’s deploying this, I guess, capability and networks to take Paris through the next stages, development, and into construction and production, that this team will do over the course of the next couple of years.

In terms of timelines, obviously the DFS was released in February. We now have three active work streams. This is the permitting, the engineering, as well as the financing. So just on permitting, we’re advancing the native title mining agreement as well as the mine lease applications, and we would anticipate that all of that is complete by the middle of 2027. In terms of engineering, we are already involved on an early contractor engagement point of view with our delivery partners to really work through these designs, get them to issue for construction work plan level such that when we hit final investment decision, we are ready to execute immediately. In addition to this, we have around $40 million US, so that enables us to also consider some long lead items and enabling works to bring forward that first silver production.

And I guess the final work stream here is the financing. We have seen a lot of inbound, particularly over here in the US recently. But we are setting up to run a formal debt process from early next year. And one of the things that we’re doing in preparation for that lender process is to increase the drill hole density over the areas that will repay the debts the first three to four years. We already have drill spacing at about 25-meter centers, but we’re seeking to take that down to 12.5-meter centers. And what that means is for every existing drill hole, we’re gonna add another three. So basically take this down to grade control, operational level data density, and I fully suspect that that’ll improve lender confidence and then lead to a faster due diligence as well as better debt lending terms. So it’s these three, I guess, work streams, the permitting, the engineering, and the financing, they’re all coming together with an FID targeted for the middle or second half of 2027. Two-year build, then for silver production targeted for 2029.

So what we’re seeing here is a really bullish silver market coupled within a simple high-margin silver-only project located in arguably one of the best mining jurisdictions in the world with a team that’s actually delivered operations within that same state. We’re well-funded, and we have plenty of exploration upside both in and around the pit to grow the mine plan as well as explore this broader scale district opportunity. But despite all of that, we have an EV of only $60 million, which is equivalent to about 0.14 of the NPV of the project, which sits at about 426 million US. And most of our peers are trading at about 0.4. So we see this as a material value disconnect, which of course provides an investment opportunity here today. And we believe that as we grow the mine plan through resource conversion and continue to de-risk the milestones of permitting, engineering through to financing, that we’ll see this valuation gap close.

So just in summary, we have a really bullish silver market located in a perfect location in South Australia with a team that’s delivered operations here before. We have a feasibility study which demonstrates the project throws off some really solid economics and we’re now trading at a discount to peers. So that is the Paris Silver opportunity, and I’d welcome any questions.

Awesome. Do we have any questions for Lachie? I’ll kick off with one, mate. Just talk us through, between now and the end of next year, where you intend on building the project, how the team’s gonna change, and what your strategy is around getting this project off the ground from a people perspective.

Yeah, certainly. When I joined the business about 14 months ago, I was the third employee, if you like. It was myself and two of the geologists that had been there for some time. And we’ve now started to build that team out. So I brought in Joe Satanto, who helped me build the Kameng 2 operation in South Australia that got underway in 2024, is now continuing to go strong today. Recently brought in Milan and Jeff, who have built respective projects, iron ore projects in South Australia, as well as the Carrapateena Block Cave expansion. So really getting that capability from an execution point of view. Byron Gordon, who’s with us here today, he joined recently. And that’s really around putting together the financing.

And we have just recently, well, yesterday in fact, signed up a metallurgist. So once that’s released, we’ll be able to talk about that more fully. But really, these are all people who have built, permitted, and operated mines in South Australia. And it’s that, I guess, local experience of successful development that we continue to build out as we work forward over the course of the next 12 months to FID. And then obviously that’ll continue to expand. But also being located where we are, only two hours from Whyalla, there is 20,000 people there. There’s skilled contractors, skilled workforce, deep mining services industry, and that all lends well to both the construction as well as the operational phase.

Sure. And just one more from me. There’s a bit of big valuation discrepancy between the ASX-listed silver explorers and developers compared to the TSX. Would that be something you’d consider?

Absolutely. That’s why we’re here at the moment. We see that the North American market is quite mature in its understanding of silver in comparison to Australia that hasn’t had a primary silver project. And what we’re seeing is a lot of inbound interest from the US. So we’re interested in talking to some of those larger funds, and bringing those onto the register to support what is an excellent register really led by Jupiter Asset Management, who have 14% of the stock. But then there’s largely a lot of generalist, I guess, funds within Australia that support us as well. And we think that getting that exposure to the North American market in particular is an important way for us to start to close that valuation gap.

Awesome. Fantastic. Thanks, mate. Thank you. Thanks, Tom.