Earnings Call - SOLARIS RESOURCES INC

Our next presenter is Matthew Rowlinson from Solaris Resources. Matthew, please go ahead with your presentation. Thanks very much, Thomas, and welcome to the Solaris Resources presentation. I'll take the forward-looking and cautionary statements as being read. just looking at the solaris investment case and understanding that the principal asset is the warrencer asset located in the southeastern corridor of ecuador very close to the producing mines both fruta de norte as well as mirador the pre-feasibility study that we we delivered in november of 2025 really did highlight the tier one status of this global scale resource it has multi-generational features and quartile one costs that drive significant EBITDA and free cash generation back to shareholders over a significant period of time. We talk to 5.8 billion tons of resource, 1.3 billion tons or reserve, and a 55-year life of mine, which is very rare in the world of copper. We have district scale potential. We own 260 square kilometers of land in Morona, Santiago province, as well as option properties with the government, creating a cluster that is very unique. And also, we don't have any attachments to a major in the equity stack, which provides us with strategic flexibility as we move forward into the financing of this project. Operationally, it's very simple. It's a large open pit mine with conventional processing and conventional processing plant and design of 165 000 tons a day 60 million tons a year producing a high quality copper and gold concentrate as well as a molybdenum concentrate very marketable to the world no deleterious elements included in that we've got the social license to operate and ecuador is a very favorable mining geography and jurisdiction today We have a host of Latin American exploration properties beyond Warrinza itself, two in Peru, a joint venture with Tech La Verde in Mexico, as well as an early stage asset in Chile. We have an very experienced team moving the project forward and we have diverse skill sets all required for moving forward the project at this stage of development. We are fully funded all the way through to complete the feasibility study and drive the value accretive catalyst for shareholders through the $200 million financing from Royal Gold, which we concluded in May of 2025, highlighting the great success of our partner and the quality of this underlying project. just looking at the value driving catalysts for a step change in re-rating we are focused on de-risking the ecuadorian warinza project itself bringing that into a fully permitted project by h1 of 2027 and a final investment decision in the back end of 20 27 as i mentioned we have district consolidation strategy and district scale beyond warinzo itself with their untested targets when and then the significant land package, and we continue driving fieldwork forward on many of the concessions, and I'll highlight that a little bit later. We have a great Latin American exploration portfolio. These are David Well targets both in Peru and Chile, adjacent to existing operations, and the joint venture with Tech at La Verde is very interesting. On the backdrop of this, we have a very resilient copper market that we're entering into. You see TCRCs negative for a long period of time, and the world's requirement for copper demand is plus 800,000 tons per annum of replenishment, which certainly we are not seeing today. And that highlights the resilient copper, that's on the backdrop of a resilient copper demand market with the challenges that we see on supply across the world, whether it be degradation of grade, challenges from a technical perspective, weather interruptions, and the fact that no new large-scale operations are coming into fruition. just looking at the pre-feasibility highlights for warrensa and understanding that the pre feasibility was designed in two stages ultimately the first stage was really restricted by the tailings capacity design of 1.3 billion tons we do have significant tailings tailings capacity beyond that so the reserve life you're talking to here is only 22 years but in reality, you have a 55-year life of mine with 5.8 billion tons of resource. You see 242,000 tons of copper equivalent production, a life of mind of over 20 years in reserve life, a Life of Mine strip ratio profile of 0.53 to 1, driving a significantly low strip-adjusted grade, and also pushes that oil in sustaining cash costs down to $1.07, which really does highlight the quality of the net present value and IRR that you talked to when we looked at these figures back in when we delivered this in November we used $4.50 copper and 2,500 gold at spot prices today those are vastly different we talked to 4.6 billion in terms of NPV value 26% IRR at spot prizes that's well over 10 billion dollars of NPv value and a 40% plus return on capital, post-tax payback period of 2.6 years, and certainly in today's spot environment, that drops to below two years. The pre-feasibility was prepared in conjunction with Asenko, Knight Peacehold, and AMC, high-quality expertise in terms of consulting, and certainly that does highlight the quality of the Warrinza project and the global scale that we're dealing with today. We've got a significant resource base, as I mentioned before. We talked to the 5.8 billion tons of resource. We have 5.3 billion tons of copper equivalent within the total reserves and over 16 billion tons within M&I, within the resources category, inclusive of the inferred category. So something that really does illustrate the scale of this multi-generational asset, reserved for 22-year life of operation, significant potential to extend the life of mine by 25 to 30 years beyond just the reserves. And the reserves represent less than a third of Warrinza's current resource endowment. As you'll see on the right-hand side of the chart, Warrina sits firmly within the top tier of future copper producers, and only 10 of the top 30 Greenfield projects of scale have no attachments to a major, which is very important as to the flexibility, as I mentioned earlier on. Capital intensity, very, very low on the capital intensity metrics. And that's really driven by the pre-stripping capex required. The ore body sits very close to the surface. And ultimately, we sit very closeto very good infrastructure. Andthat really does assist driving that capital intensity down to the metrics you see of $15,500 per ton of copper equivalent versus the benchmark of approximately $21,000 per ton. The strip ratio, when you compare this project to other projects around the world, porphyry projects, you have to look at strip adjusted grade. The trip adjusted grade here of 0.53 to 1 drives that strip adjusted grade down to a very low level, and you will see Wurrinsa sits firmly within the top quartile of future producers from a strip-adjusted-grade perspective. Just so you're aware, the median average from a trip-adrasted- grade perspective is approximately two to one in the industry today. And again, the operations, it's very close to surface, and that removes that large capital requirement in terms of moving significant waste to access the ore body. Technically, it's very simple in design as you'll see it's encapsulated by the north, the south, the west ridge lines and the water runs off to the east. The footprint is encapsulated as I mentioned it's a very small footprint and water flows down outside the Ecuadorian waterways. As you'll see the principal access road to the north as again we are very close to good infrastructure there's fresh water availability the operations at a very low elevation of 1200 meters above sea level, and there is substantial infrastructure in-country beyond Limon and Dunster. We can access the port there, the highway, all the way to the ports where we'll be shipping out our concentrates. The social license to operate is very important, as we mentioned. Partnerships have been signed with indigenous organizations within the area of influence. The free prior informed consultation process has commenced with the government, and that's underway in terms of including the resettlement approvals, multiple impacts and benefits agreements have been signed, and the community life plans incorporate mining as a cornerstone of resource for their future engagement with the project. Ecuador is an export-driven country with very strong infrastructure and deep sea ports. The left, the central, the right governments have all been very supportive of mining. It's a U.S. denominated currency, and mining is a future growth pillar to this economy. From a project timeline perspective, as I mentioned, we are a very well-capitalized business. At the half-year, we had $54 million on the balance sheet. We expect the other $50 million from Royal Gold, the third and last tranche, in the upcoming days, ultimately, which is very good and secures that long-term balance sheet, all the way through to getting to a fully-permitted project by H1 of 2027. The FID will take place in H2 of 2027, and thereafter the construction period will be approximately three years, bringing this large-scale production into fruition in 2030, which is very exciting. It's a very near-term proposition to the world of copper and very deliverable. And certainly from a government perspective, the approach here is very focused on ourselves in delivering this project because it's the largest project in Ecuador and certainly delivers significant economic value to the country moving forward. The district scale potential is something that I'm very focused on in terms of developing this Warrinza cluster and potential around just what we own in Morona-Santiago. We've done a lot of work on the southeastern part of the tenements. The dotted lines in this graph are reflected of the NRE concessions. It's the earning concessons that we have with the government. and then the solid lines in the chart and in the picture are representative of what we own as Solaris 100% owned properties. We've done a lot of work on the southeastern tenements, on the Tinky concessions. They are highly prolific. There's a fantastic alteration that resembles a very large porphyry system there. We'll hope to get the drill permits very shortly and that's another game-changing opportunity in terms of bulking out the 5.8 billion tons of resource that we do own within the country, and potentially another large porphyry project that exists very close to the Wurundjeri cluster today. We are talking to approximately 10 billion tons of opportunity within this cluster. Again, from an infrastructure perspective, it's at 1,200 meters above sea level and very executable. When you look at St. Carlos Panazza, that's owned by the Equicorriente Group, and certainly those are also very prolific projects very close to the Wernicke cluster itself. We have a highly prospective copper and polymetallic portfolio outside of Ecuador itself, as I mentioned. Paco Orco and Capriccio are two projects that sit in Peru. Pacco Orco is a polymetALLIC project. Capricio is a porphyry project. Both of those projects have got social license, and we'll continue to drill those project. We'll start drilling those projects in Q1 of 2027. La Verde is the joint venture with Tech. It's 60-40 in Solaris' favor. We're refreshing that PEA and we'll move that project forward accordingly. Tamarugo is an early stage project in Chile. And certainly these four assets provide us with a bulked out portfolio beyond Ecuador itself. What we can do here is spin out these projects to shareholders in due course. There's significant value that's not rendered in our stock today. And ultimately here, as we create value within Solaris, we'll determine as to the right time that we potentially will spin those properties out and drive significant value again for shareholders. Just looking at the investment case again and highlighting the quality of this global scale asset, the pre-feasibility study really does confirm Warrant's tier one status and multi-generational facets. We have district scale potential from an exploration perspective and having no attachments to a major in the equity stack provides us with flexibility from a partnering perspective as we look at the world going forward in terms of financing. Operationally, it's very simple in terms of its design. We have this social license to operate and a very favorable mining backdrop in Ecuador today. We have the early stage exploration portfolio, which provides further upside to our shareholders we have a very experienced team driving the project forward and again we are fully funded to complete the words of feasibility study and value accretes all the value accretive activities uh in the near term so with that i will hand back to thomas and uh and thank you very much thank you matthew um regarding the warrants project It's a huge project, right? It will cost somewhere around 3.7 billion US dollars to build. Yes. How will you finance a project like this, of that size, without heavily diluting retail shares? Yeah, I think that's a good question. We have a very strong byproduct that comes from gold, molybdenum, and silver in the project today. Today, we've streamed only 12% of our gold content. We've priced 6% of that content. So a very small slug brought us $200 million from Royal Gold. We could look at streaming and royalty finance from the by-product credits coming from a full, you know, the 88% unencumbered gold plus silver capacity. And that will bring us a significant portion of funding. Then you look at the senior debt alternatives today in the market. I mean, there's project financing arrangements that could be brought in. And there's overlay that with national security and government funding. That's certainly on the table today, as well as EPC, EPCM with funding attached to the back of that. Again, partnership is something that we as an organization will look at. Partnership needs to be obviously not just financial. It needs to also be bringing in the right expertise at the right time. And that's something, Jonathan, that we'll look at as we move forward. But certainly this project, in the highly prolific nature of this project financing is available today. It's how we look at the equity stack and look at optionality as we mature the project forward so the optionality will mature itself. And ultimately it's a cost of capital equation for ourselves and ensuring that we do have the right cost of capitol for this project moving forward. And how do you look upon political and community risks in Ecuador going into your construction now in the 20s? I think the communities are very supportive. We've put $350 billion into this project. It's not as though we have significant communities around the project. Morona-Santiago is a very rural area of the world and southeastern corridor of Ecuador. We are dealing with two host communities. They are very, again, very supportive, we signed long-term impacts and benefits agreements with them. We are entering into the free prior informed consultation process with the government. They are going, obviously, moving that process forward. That'll conclude in Q1 of 2027. And the company hopes to sign a long-term collective agreement between ourselves and the communities before then. And how do you plan to split your team and money between the Warinsa and your other side projects in Peru, Chile and Mexico? Yeah, I think, you know, we will allocate capital maturely to the peripheral projects. We have a small team that's focused on them sitting in Lima today. It's not as though a significant quantum of capital is going in there. Obviously, when we start drilling Paco Orco and Capriccio in the new year, those could be game-changing. And we'll allocate capital accordingly where we see value being fit. We are driving on a per-share value metrics here. We don't like the word dilution in this company. And that's the key is that we are looking at that very closely and driving value forward on that basis. Matthew, thank you so much for coming here. Thanks very much, Jonathan. Appreciate it.