Drilling Success & Upcoming Resource Estimate

Metrics	Value
Current Price	CAD $0.22
Fair Value	CAD $0.39
Risk	5
52 Week Range	CAD $0.08-0.32
Shares O/S (M)	195
Market Cap. (M)	CAD $43
Current Yield (%)	N/A
P/E (forward)	N/A
P/B	7.1

Report Highlights

Since our previous report in February 2024, EQTY is up 144%, making it one of the best-performing gold-silver stocks in our coverage universe.
The stock's strong performance is attributed to a promising 2024 drill program at the 100%-owned Silver Queen gold-silver-polymetallic project in B.C.

Management plans to complete an updated resource estimate in Q3. The last resource estimate, completed in 2022, was 1.04 Moz AuEq (85 Moz AgEq) at 6.2 g/t AuEq (512 g/t AgEq). The updated resource will incorporate results from the 2023-2024 drilling campaigns.
We believe the 2023-2024 drill programs have added 20-30 Moz AgEq in new resources, and as a result, we expect the new resource estimate to reflect a 30% increase.
In December 2024, the company entered into an option agreement to acquire an early-stage gold-copper-silver project located in a historic mining district in B.C. This project is located 60 km from the Buckhorn mine, which was operated by Kinross (TSX: K) from 2007 to 2017. Past work has identified three main targets on the property. Sampling indicates potential for high grades, with notable values such as 11.7 g/t Au, 211 g/t Ag, and 3.22% Cu. EQTY is planning surface mapping, sampling, and airborne geophysical surveys across the three targets, followed by a drill program.
EQTY is well-funded for at least 12 months, with $6.5M in cash, and access to an additional $6.6M through in-the-money options and warrants.
With gold trading near record highs, we anticipate an increase in M&A activity over the next 12 months, as larger companies target juniors to grow their portfolios.
Relative to other gold juniors, EQTY is trading at a 51% discount ($33/oz gold equivalent vs the sector average of $68/oz, assuming 100% of measured and indicated resources, and 50% of inferred resources).

Price Performance (1-year)

	YTD	12M
EQTY	18%	150%
TSXV	4%	17%

Portfolio Overview

Four projects. In 2025, the company will maintain its focus on the flagship Silver Queen project, while initiating preliminary exploration at the recently acquired Arlington project

Silver Queen Gold-Silver-Polymetallic Project, B.C.

The project is 590 km northwest of Vancouver, B.C. As major and mid-tier miners are operating in the region, we believe there is potential for M&A opportunities

Since 2020, EQTY has drilled 146 holes, totaling 52,877 m

High-grade resources totaling 1.04 Moz AuEq (85 Moz AgEq) covering four out of 20 known veins

A Successful 2024 Drill Program

In 2024, EQTY completed 42 holes (17,209 m), delineating a 550 m strike at George Lake, a 400 m strike at No. 3 North, extensions in the Camp Deposit veins, and a new discovery at Camp North.

2024 Drill Results: Highlights

Multiple holes intersected high-grades

George Lake Target:

8.8 m averaging 324 g/t AgEq, including 1.2 m grading 1,189 g/t AgEq
9.1 m averaging 321 g/t AgEq, including 1.6 m grading 802 g/t AgEq
0.4 m grading 4,512 g/t AgEq
0.5 m grading 1,008 g/t AgEq

No. 3 North Target

7.6 m grading 431 g/t AgEq, including 1.6 m grading 1,475 g/t AgEq
3.3 m grading 710 g/t AgEq, including 1.1 m grading 1,341 g/t AgEq
0.7 m grading 1,609 g/t AgEq
0.6 m grading 1,089 g/t AgEq

Camp Deposit

0.7 m grading 7,532 g/t AgEq, within 3.5 m grading 1,901 g/t AgEq
0.7 m grading 1,257 g/t AgEq, within 2.3 m grading 557 g/t AgEq

2024 drilling confirmed mineralization beyond the northern end of the No. 3 vein, which remains open along strike and at depth

Management intends to complete an updated resource estimate in Q3. Given that the last resource estimate was completed in 2022, the new resource will include results from 68 holes (27,198 m) drilled in 2023-2024. We believe the 2023-2024 programs have added 20-30 Moz AgEq in new resources, and as a result, we expect the new resource estimate to reflect a 30% increase.

This year, the company plans to drill an initial 6,000 m, focusing on No. 3 North, Camp, and other targets.

Arlington Au-Cu-Ag Project, B.C.

In December 2024, the company entered into an option agreement with Origen Resources (CSE: ORGN / MCAP: $3M) to acquire the 3,584 ha Arlington project in the Boundary district of south-central B.C. The company can acquire the project for 2.9M shares (0.9M issued), $0.25M in exploration spending, and $130k in cash ($80k paid).

Located in a historic mining district. 65 km south of Kelowna

Property Location

60 km from the Buckhorn mine, operated by Kinross (TSX: K) from 2007 to 2017, which produced 1.3 Moz of gold

Targets

Three main targets identified

Past work has identified the following: a Au-Ag-Cu anomaly spanning 2,000 m xby 1,000 m, and a Cu-Mo-Ag anomaly spanning 750 m x 500 m

Past work on the property included rock chip and grab sampling, soil sampling, and geophysical surveys. Sampling indicated potential for high grades, with strongly anomalous values such as the following:

11.7 g/t Au, 211 g/t Ag, and 3.22% Cu
6.8 g/t Au and 2.0g/t Ag
1.3 g/t Au, 31g/t Ag, and 1.2% Cu

EQTY is planning surface mapping, sampling, and airborne geophysical surveys across the three targets, prior to a planned 3,000 m drill program this year.

Financials

Strong balance sheet. Subsequent to Q1-FY2025, EQTY raised $2.47M through an equity financing

Can raise up to $6.63M from in-the-money options and warrants

FRC Valuation

EQTY is trading at $33/oz AuEq vs a comparables average of $68/oz (previously $44/oz)

EQTY is trading at $0.40/oz AgEq vs a comparables average of $0.69/oz (previously $0.47/oz)

Applying sector multiples to EQTY’s resources, we arrived at a revised fair value estimate of $0.39/share (previously $0.30/share)

We are reiterating our BUY rating, and adjusting our fair value estimate from $0.30 to $0.39/share. We expect a 30% increase in the upcoming resource estimate, based on data from the past two years of drilling. With a solid cash position, a newly acquired high-grade project, and a substantial valuation discount relative to its peers, we believe EQTY presents a compelling opportunity, especially considering our expectation of heightened M&A activity driven by strong metal prices.

Risks