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:	31.12.2026
Last rating change:
Analyst:	Matthias Greiffenberger, Cosmin Filker

New High-Grade Intercepts Confirm Investment Case

We maintain our BUY rating and increase our target price from C$2.85 to C$3.00. In our view, the latest technical progress materially increases the probability that Lion could ultimately justify a valuation well above our revised base case. The expected maiden resource estimate, now indicated for summer 2026 and no longer a distant 2027 milestone, is particularly important because it could move Lion from a discovery valuation toward a resource-backed and eventually economics-based valuation earlier than previously assumed.

Importantly, our revised C$3.00 target price should be understood as a base case, not as a ceiling. Management’s internal expectations point to a potentially sizeable high-grade Lion resource, with a possible 10.00 to 12.00 million tonne range at grades above 5.00% CuEq. If this scale is confirmed in the maiden resource estimate and subsequently supported by metallurgical recoveries of around 95.00%, high payable rates, moderate tax assumptions and meaningful government support for project financing, Lion could support a valuation materially above our current assigned value. Under such a scenario, the project could move toward a value range in excess of C$1.00bn at the asset level.

In our opinion, Lion’s value is driven by a simple but powerful idea: the metal appears to be highly concentrated. In mining, grade is not a cosmetic detail. Grade is the economic engine. Higher grade means more metal per tonne of rock, and that changes almost everything about a potential mine. The reason this matters is straightforward. A high-grade orebody does not require a company to move as much ground to produce the same amount of payable metal. Less material movement can mean lower stripping requirements, lower haulage intensity, less crushing and grinding, less tailings volume, smaller infrastructure needs, and potentially a less capital-intensive mining operation. Put simply, high-grade ore can give even a smaller mine real economic significance.

That is the key reason we view Lion as a potentially premium asset. This is not a low-grade bulk-tonnage concept that only works if the company can move massive volumes of rock at very low unit costs. The value is concentrated. The latest holes reinforce that point, with Power Metallic reporting 22.00 m at 11.46% CuEqRec in PML-26-095, 17.45 m at 9.47% CuEqRec in PML-26-094, and 39.00 m at 5.66% CuEqRec in PML-26-101. These are not marginal grades. These are very high-grade polymetallic intervals that support our view that Lion could become a meaningful high-value core within a broader district-scale system.

In our view, the latest results strengthen confidence in the assumptions underlying our valuation framework and justify a moderate upward adjustment to reflect reduced geological uncertainty, improved technical confidence and the increasing probability that Lion evolves into a sizeable resource-backed development opportunity.

The second part of the value proposition is polymetallic revenue density. Lion is not simply a copper story. It is a copper-PGE-nickel-gold-silver system. That matters because the recovered value per tonne is built from multiple payable metals. Copper appears to be the dominant economic driver, but palladium, platinum, gold, silver and nickel credits can materially increase recovered value per tonne. This is why copper-equivalent grade is such an important metric for Lion, provided it is supported by realistic recovery assumptions and metallurgical test work.

The third part of the value proposition is processability. High grade alone is not enough if the ore is difficult to treat. In our last report, we emphasized that early metallurgy materially upgrades confidence because locked-cycle flotation indicated very high recoveries and a strong copper concentrate grade, supporting the “it can be processed and sold” question earlier than is typical for a new discovery.

You can download the research here: 20260519_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,6a,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: https://www.gbc-ag.de/de/Offenlegung.htm
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Completion: 18.05.2026 (15:15)
First distribution: 19.05.2026 (10:00)