Wallbridge to Advance Fenelon to Pre-Feasibility Study

0:04 I will say good morning, good afternoon or good evening, depending on where in the world you are signing in from today. Very excited to be talking to Walbridge Mining CEO Brian Penny for this week's very exciting news for the company. Brian, how are you today? I am excellent. And you yourself? I'm doing well. I'm doing well. Let me go quickly through a bit of housekeeping before we get into some prepared questions that I've got for Brian. But this is an interactive event. There's a chat button at the bottom of the screen. Please feel free to ask questions at any time during today's event. We're trying to stick to about 30 minutes, 40 minutes, so it's very likely

0:35 we won't get to all the questions if there's a lot of them. In such a case, I'll make sure that the Walbridge team gets those questions afterwards, so you'll still get an answer. I just might not be able to get it during today's event, but I will try to get to as many as I can. The other piece of housekeeping is that this event is being recorded and will be available for replay. It's going to be on the same link probably in just a couple of hours after the event ends. You'll also find it on Six's YouTube page and I imagine various other places it will be posted, but that's where you can find it quickly. I encourage you to share it once we get to that point. Last thing, there's a request meeting button at the bottom of the screen. You can press that and request a meeting with the Wallbridge team. And anytime during today's events, I'll pass those on to the team following and they'll be sure to get back to you. But enough boring stuff out of me, Brian, I'd love to get into the protein here. Obviously, big week for Wallbridge.

1:22 I'd love if you could just storytelling wise, start at the beginning. How did these 2 cornerstone investments come together at the same time? And What does it mean to have both Agnico and Huerta stepping up in the same round?

1:38 Well, this has been quite a stretch. We've been talking for some time that The next value creation opportunity for Fenlon is to finance and commence a pre-feasibility. We managed to announce that yesterday, it will close tomorrow. The closing condition is the money in our bank account, so We're highly confident that's going to happen. Otherwise, we wouldn't be having this call right now. But really, really excited. We we're going to need to bring a few people into the organization. If you If you look at where we are, before the transaction we're trading about the announcement, we're trading about $10 per contained ounce, as high as 12.

2:27 And our multiple to the NAV in the last study is about 0.1 times. Grossly undervalued to our peers in the Abitibi. I view this as a catalyst to unlock that value. And as we've seen yesterday, after announcement, the stock was up 40%. So, very, very good day. Very well received by the marketplace. I'm excited. I think we've got a great opportunity to create value going forward. We have to start the infill program because the vast majority of the pre-feas is infill drilling. So we need to get that started as soon as possible. We need to find contractors and drills and stuff like that. But let's get on that right away.

3:12 And as we develop the team for all the studies to go forward.

3:16 Awesome. Exciting. Big names. I'm happy to hear some of the story and background for it. I do want to talk about that premium because I think putting the placement at 9.2, 15% premium, your 20 day VWAP sends to me a pretty clear signal to the market when most juniors are still, from what I can see, raising into weakness. So for the folks in the room, what does that premium tell investors about how these 2 groups see the value at Fenelon? Well, I can't speak for the 2 groups, but what I can say is that, you know, first of all, there's no warrants. It's strict equity. So if you attach a full warrant, it would have been like a 2 cent value. So this is a great premium opportunity financing.

4:02 You know, It tells me that they're very confident that there's a large valuation opportunity ahead of ourselves. That's my interpretation.

4:16 And if you look at the premium based on the day before it closes, 24%. So it's a very attractive premium where usually equity financing are the discount and include a warrant. So it's a big vote of confidence in my opinion, and I'm excited. That's great. I appreciate that too. I know Agnico, obviously, an exciting name, but you guys go way back. They've been a long-time shareholder. You sold them D2E last fall, and now they're taking a 19.9% partially diluted position with a board speed and a spot in the technical committee. So I always like to ask this when a group like Agnew gets on, how active do you expect them to actually be in shaping how Fenlon advances from here?

5:02 Well, first of all, to talk about technical committee, yes, it will be a technical advisory committee. We do have a technical committee of our board, and this is a different technical committee, just to avoid some of the confusion there. I welcome their input. It's a 100-plus year mining company here. They've got great experiences in the Abitibi. They've got a strong team. As we go forward and we choose contractors and where we're going and drilling companies to have their input so we do it right the first time is appreciated. So I welcome that. I welcome to be working with them on that. You know, they have been helping us through some of the challenges that we've faced in the past and it will continue. It's more or less formalizing something that was informal over the years.

5:54 Great. That's helpful. And I will say, you know, as a sometimes literary person myself, There's some symbolism in the operator of Canada's largest gold mine sitting on the same Sunday Lake structure, doubling down on Walbridge. So as you said, I know you can't speak, Frank Nicco, but what do you imagine they see in Fenelon and along the trend that the broader market might still at this point be discounting? Well, if you look at our PEA and recognize it's a PEA, not a pre-feasibility, but the fundamental economics at US$3,000 Gold, which was the high price scenario in the last study we did, which was a $1.4 billion NAV,

6:38 34% IRR and a payback of 2.4 years. Pretty attractive numbers, costs about 1000, little over 1000 dollars an ounce for cash costs and maybe 100 dollars higher for all that sustained costs. So very attractive. And you know, everybody looks at that opportunity and says, why is it not trading at higher multiples? And I think we've just unlocked the, you know, we've created an opportunity by unlocking the financing to improve our valuation as we continue to de-risk the project going forward. Great. And 1, I know we went over the Agnico angle, but Warren has a new name on the register. And from my research leading up to this chat, they're not a passive buyer. They're a fund that's been pretty deliberate about going overweight on Canadian, specifically Canadian gold names this cycle.

7:38 Just curious, I'll have a peek behind the curtain if you don't mind. What was the conversation with them like and what made them want a full 19.9 rather than a more classic starter position that's smaller? Well, these 2 opportunities started on separate tracks. Then we brought them together. There was no discussion on anything smaller than 19.9. So,

8:04 that is a question for Warrthal. But, you know, again, I'll reiterate, I believe they see the same value creation opportunity that I see. And I think we're all on the same page. You know, Warthog, I welcome them to be a shareholder as well because, you know, they bring capital markets, intelligence and stuff. And you know, it will complement our technical side with Agnico. I think they're great partners to have. There you go. So the release in reading it says that the proceeds together with existing cash fully fund the PFS, which is cool. Can you walk us through how the PFS work plan is structured, the role of infill drilling and where you expect,

8:52 you know, you personally, where you expect the biggest unlocks versus the 2025 PEA? Well, You know, the biggest part of the work is infill drilling. That's why it's really important to start the infill drilling. The technical studies are a smaller part. You know, I'd say 80% of the pre-feas costs are infill drilling. And it's important to get that done because you can't build a, you know, a pre-fease mine plan until you have all the infill drilling done, because as you go through an infill drilling, there'll be pluses and minuses along the way, and it may tweak your mine plan. So it's

9:29 important to start that quickly. However, if it takes us a few months to decide on the appropriate, you know, chief operating officer or consultants to use to advance the studies, you know, they're going to be waiting for some of this stuff anyhow. A lot of the early stage stuff like the metallurgical testing and other stuff we're doing is ongoing. So, you know, that will be available later on this year, maybe early next year. So, you know, it's, you know, The value creation will come at the end of the 18-month period or so, but along the way we will have news flow as we tick some of these boxes.

10:16 It's a big exercise in de-risking. Do I see a material change in the proposed size of the mill? We don't know yet. But, you know, however, it's probably about the right size. That makes sense. I want to look back at that 2025 PEA for a second. I know it showed, for my notes, 107,000oz a year over a 16-year mine life with a quite modest ASIC of 1046, 21% after tax IRR and 706 million NPV. That was at 2200 Gold. With Gold sitting where it is today, obviously a different spot. How much of that economic picture do you expect to look different when the PFS lands in, I think, late 27 or early 28?

11:06 Well, the biggest difference will be the price of Gold. The base study was US$2,200 an ounce. And that was analyst consensus last February. Today, analyst consensus is a little over $3,600 an ounce. So, you know, a big plus on that side. Yes, you know, we're seeing a bit of inflation. So, you know, higher fuel prices and stuff like that. So it will affect the cost structure. So it may push the costs higher. However, the margins will continue to improve. So big picture. Yeah, I think it's important for most people to know that the price of Gold is going up a lot or has gone up a lot faster than inflation. Whenever these questions pop up, that's useful info. But I do want to talk about the name change, because I love this kind of marketing stuff. And I say this as a compliment, I hope you take it as such. Sunday Lake Gold is not subtle, your name, naming the company after the deformation zone that hosts Etorre Lake.

12:00 Why now? And what are you saying to the market by anchoring the identity of the company to that structural corridor?

12:07 Well, our sole assets right now are 600 square kilometers of prospective land in this part of Quebec. We don't have any Nickel assets in Sudbury anymore. We don't have any Nickel assets in Quebec. They were all vended off. So, Walbridge name goes back to 25 years of exploration, started off for the first 17 years in the Sudbury Basin. It's time to turn the corner, rebrand. Sunday Lake Gold is such a neat name. We like it. And we haven't decided if it's IncoCorp yet. It all depends on what stock symbol we can get. So we're working on that.

12:53 But you know, it's really, really exciting. And then, you know, we also have building in a 20 to 1 consolidation.

13:00 You know, This is very, very good news. It's very value accretive. And if there's any time to do a consolidation is when you've got something as attractive as this to announce. So we will call a shareholders meeting sometime after our current annual meeting, probably sometime in September or so. It will be a pretty short, circular and a short meeting to talk about the main change in the consolidation because we do need shareholder proof. No, of course. Yeah. And it read my mind. I do want to talk about that 20 to 1 consolidation next because it's a piece of housekeeping. You've got to manage the shareholders. And I'm just curious for your strategic thinking, how much of that move is about widening the institutional and U.S. Investor base? And where do you see the post consolidation share count and trading profile line you up against your peers?

13:51 Well, you know, Proforma will have 1.8 billion shares outstanding, you know, based on the current share count after we close this deal. 20 to 1 consolidation, we're roughly at 100 million shares. I'll take the current share price times 20, should be trading about 2 bucks. Obviously, as we continue onward and we demonstrate value creation, it will improve from there. But your comment about institutions, yeah, institutions don't like to buy penny stock. However, at a $2 share price, maybe there's an opportunity to bring some of the larger institutions into the story. And I look forward to those discussions. That makes sense. Yes. So people got to remember some institutions.

14:39 And so, World Health is a big institution. So we got 1 already. Yeah, there you go. They're already in. So that makes it a lot easier. Now, I know it was mentioned in the PR, but people did ask questions about it coming into

14:51 the event. So I just wanted to reiterate. Does this news impact anything about the exploration at Martinier? Is that ongoing? Are there any changes there? I'm just looking for some clarification. No, there are no changes right now. We're not drilling at Martinier because we had to shut down for some caribou restrictions in the northern part of the property. We stopped from May 15th to July 1st. We're catching up on the assays. The drilling in the first half of the year was a little slower than what we thought because we had one of the snowiest winters on record in the Northern Labatibi. At one point in time, we had about 8 feet of snow on the ground. We could appreciate the challenges, but we had a nice runoff. It was slow and steady. So flooding was not a significant issue. We managed it quite well, but

15:45 we will continue on after the break and focus on Martini as well. Awesome. No, appreciate that. Now, I got one last one for me and then I want to get into the questions that are in the chat. I'll try to get to as many as I can today for sure. 1 for me is kind of big picture. And that's of a generalist investor who more and more are coming to events like this or showing up to conferences, comes to you and you've got now 2 cornerstone shareholders locked in at close to 40% combined, fully funded PFS, clear path to development decision. What is the one thing you'd want them to take away about why the next year and a half matters for Walbridge?

16:27 It's all about de-risking from here. And we're focused on de-risking. Biggest de-risking is the infill drilling to get it to the right density, to call it a reserve once you put a technical study on top of it. Okay. That's for the generalists in the room. Take that away. It's about de-risking for the next 3 and a half. So there you go. One person wrote in over email again. I apologize, asking you questions about other people's opinions and beliefs. But somebody asked, I thought I'd throw it to you. They want to know what Eric Sprott's feelings on this deal are or if they had anything to say about it. Well, I can't talk for Eric, but you know what I'll say is we've got 2 very strong cornerstone investors in the story right now. And Eric is a third strong investor. But you know, with Eric not participating, he'll fall below the 10% share threshold.

17:20 Great chat, I appreciate that. Let me get into some of the questions in the chat. Just a reminder, because I know a large jump of people came in a bit late. There's a request a request meeting button at the bottom of your screen. If you want to press that, I'll try to get you connected to the Walbridge team afterwards. But California Gold from the chat wrote in basically right as we started, congratulations on bringing Warrata into the picture. I think that's a fantastic strategic move that the market doesn't fully get yet. They got a question about the size and scope of the PFS. They want to know how many meters are going to be drilled and is this going to be spread between underground and surface drilling? They note that dewatering is going to need to take place for the underground. Yes. There are no plans right now to do underground drilling because of the cost of rehabbing and dewatering and getting all the services in. The most effective, cost-effective way is from surface.

18:08 It's about 50,000m so that will be spread off. Right now we have a 2-drill program on Martigny. We look to add up to another 4 or 5 drills to get a good start on Fenelon. But we're about to send out tenders and stuff. So that will be one of the first hurdles that we have to jump over. Great, I appreciate that. Somebody in the chat asked just a question about the project generally. How close is Fenelon to infrastructure? They specify roads, but you can speak with any infrastructure you'd like. Well, in Quebec, there is a highway 810. It's a provincial highway. It runs east-west.

18:55 The road, the gravel road into the exploration site is 30 kilometers long. It branches off of a highway 810, so there's infrastructure there. We have a camp that we house our employees while they're working. All of our employees are on a 14 and 14 schedule. So, and you know, it works well. Yeah, great. One question from Dean on strategy here for, you know, how this deal came together. He wants to explain why Walbridge chose a multi-year PFS timeline and dilutive financing instead of just pursuing a strategic transaction. Both Agnico and Warrat, who they note are clearly willing to invest out of premiums. They want to know what milestone are you expecting to unlock that justifies delaying that takeout?

19:43 Well, first of all, there wasn't a takeout to be had. And secondly, as I said, it's about advancing the project, getting the feasibility done and then looking at the next step, pre-feasibility done, then looking at the next step of feasibility. It's all about de-risking. It's all about advancing the project and looking for other opportunities because we have a 600km2 property. And to put it in perspective, the Fenelon deposit sits on about 15km2 of that. So there's a lot of perspective land there in a great belt. One question from the chat, again, almost right when we started, they want to know if Mayhew performance is going to be involved in the PFS.

20:29 Don't know yet. Mike Mayhew I've known for many years since I was a CFO at Kinross and he worked at the Macassar mine. He did a lot of great work in helping us get the PA done and doing a lot of the checking of some of the QP's assumptions. But we're just getting out of the gate right now. Once the financing is in place, you know, we'll have to look at who we are going to want to work on this and lead this. I appreciate that. One person wanted to know, can investors expect a totally revamped board of directors? There are no plans right now. There'll be, you know, one of the directors is Brian Christie currently he is the Agnico nominee. We will have a Warthog nominee on the board and that's the only changes that are planned at present.

21:19 Great, I appreciate that. It's just 1 change actually. Yeah, it's just the one. Somebody wants to know if Waratah can increase their position from here. Well, Waratah can do whatever they want, but they're subject to the rules of the exchange. Yep, Fair enough. And there's one person, MLB 6, it's either initials or they're also a baseball fan. Not a question. They just want to say congratulations to you and the team. You made a lot of steps forward. And I echo that. I don't always get to talk to people with good news. So I do want to say congratulations to the Waldridge team. I'll give everybody a last chance to ask a last question in the chat. I'll just ask you, Brian, what are you most excited about for the rest of this year now that this is behind you? I'm looking forward to starting the infill drilling, you know, get a substantial portion completed by the end of the year. I'm looking forward to building a team to work on this. We're not going to have a large technical services team at Walbridge.

22:16 We may have a couple of in-house people and rely heavily on consultants. Because once you build that tech services team in the company, they get hungry and you have to feed them and it costs money. So relying on consultants to get this to the next level and then obviously once you go to a feasibility you know things change drastically and we'll deal with that at that point in time. Awesome, appreciate that. Well Brian thank you so much and again congratulations on the good news. Appreciate you letting me grill you on some of the finer details of the PR. I'd appreciate everybody in the chat. I know there's quite a few of you in the room, so I appreciate all of the great questions. If you think of a perfect question to ask right after the event ends, as I am known to sometimes do, please do still send them in. I'll make sure the Wallbridge team gets them. But Brian, thanks so much.

23:02 Really appreciate your time. Thank you