Original-Research: Power Metallic Mines Inc (von GBC AG): Buy

Classification of GBC AG to Power Metallic Mines Inc

Company Name:	Power Metallic Mines Inc
ISIN:	CA73929R1055
Reason for the research:	Research Update
Recommendation:	Buy
Target price:	3.00 CAD
Target price on sight of:	31.12.2027
Last rating change:
Analyst:	Matthias Greiffenberger, Cosmin Filker

Deep drilling confirms Lion Continuity below the Maiden Resource

Lion’s maiden Mineral Resource Estimate (MRE) marks an important milestone for Power Metallic and strengthens its investment case. The estimate defines 4.145 million tonnes of Indicated resources at 3.86% copper equivalent (CuEq) and 0.601 million tonnes of Inferred resources at 4.01% CuEq, containing approximately 406 million pounds CuEq. Around 87% of the tonnage is classified as Indicated, providing encouraging geological confidence and a solid foundation for engineering studies.

The resource distribution offers promising development options. Approximately 2.882 million tonnes, or 61% of the total, lie within the conceptual open-pit resource. This near-surface inventory provides a starting point for evaluating an initial open-pit operation, followed by underground development. Although the maiden estimate is smaller than management’s earlier expectations, it establishes a high-grade base from which to assess a practical mining strategy and pursue further expansion. Palladium, platinum, gold and silver add potential revenue alongside copper.

Recent drilling reinforces the growth outlook. The MRE incorporates drilling only through April 19, 2026, leaving the deeper summer results outside the current inventory. September drilling intersected 5.70 metres at 14.00% recovered copper equivalent near 800 metres vertical depth, supporting Lion’s continuation below the existing model. Follow-up drilling will help establish the size and continuity required to incorporate additional tonnes into future resource updates. Tiger and other district targets provide further discovery opportunities.

Lion’s maiden MRE could provide the foundation for further resource growth. Muon imaging results, expected by management in late October, may help identify connections to mineralised zones outside the current estimate and guide follow-up drilling. Together with the encouraging deeper intersections, this offers a promising catalyst for expansion at Lion and could support further discoveries across the wider district.

Metallurgical results are another important strength. Laboratory tests recovered more than 98% of the copper from both blended and lower-grade samples, producing concentrates containing more than 25% copper. Strong palladium and platinum recoveries also support the potential contribution of precious metals. These results provide encouraging evidence for conventional flotation, with further testing and commercial concentrate terms set to refine the processing and revenue assumptions.

The PEA targeted for H1 2027 should assess an initial open pit at Lion, subsequent underground mining and the possible inclusion of nickel-rich Nisk feed. Nearby road and power infrastructure could reduce development requirements, while shared facilities may improve the economics of a combined operation. The study will be a key opportunity to demonstrate how the resource, metallurgy and infrastructure translate into project returns.

We increase our valuation of Lion and Tiger to C$660 million from C$570 million, reflecting the defined resource and anticipated exploration and development progress. Our revised framework incorporates the updated share count and an assumed deduction for warrants and options. We maintain our BUY recommendation and C$3.00 target price, equivalent to approximately €1.86 at the assumed exchange rate. Further resource growth and favourable PEA results remain the principal opportunities to substantiate the assigned project values.

You can download the research here: 20261005_Power_Metallic_Mines_Update
Contact for questions:
GBC AG
Halderstrasse 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: https://www.gbc-ag.de/de/Offenlegung
Hinweis zu Issuer-Sponsored Research: Vorliegende Researchstudie ist Issuer-Sponsored Research und wurde in Übereinstimmung mit dem EU-Verhaltenskodex (EU Code of Conduct) für Issuer-Sponsored Research erstellt.
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Completion: 05.10.2026 (15:15)
First distribution: 06.10.2026 (11:00)