Targeting Production Start in Early 2026

Metrics	Value
Current Price	CAD $0.61
Fair Value	CAD $1.04
Risk	4
52 Week Range	CAD $0.12-0.79
Shares O/S (M)	64
Market Cap. (M)	CAD $39
Current Yield (%)	N/A
P/E (forward)	N/A
P/B	6.5

Report Highlights

Qualified Person: Louis Martin, P.Geo. (OGQ), Exploration Manager and Technical Advisor of LFRL

LFLR is up 74% since our initiating report in October 2024. The company has made significant progress, and is on track to potentially restart operations at the Beacon gold mill, in early 2026.
LFLR’s portfolio includes the advanced-stage Swanson gold project, and the fully permitted 750 tpd Beacon gold mill, located in Quebec’s Abitibi Gold Belt.
A recent independent study estimated the mill restart cost at $4M, while full replacement of the mill, tailings facility, and permitting is estimated at $72M. With LFLR’s market cap around $39M, we believe the mill is undervalued, and the Swanson project has been assigned minimal value by the market.
Including Swanson pre-development, we now estimate total restart costs at US$10M, down from our prior estimate of US$20M, reflecting recent project progress, and the above-mentioned independent valuation.
An 80,000–100,000 tonne bulk sampling program is planned at Swanson, which could yield 4 Koz of gold (estimated average grade 1.65 g/t, recovery 98%).

A 5,000+ m diamond drilling program has commenced to expand the existing resource base at Swanson; 50 targets have been identified across the project area and other regional targets.
LFLR is also evaluating custom toll milling opportunities from nearby advanced gold projects to generate early cash flow.
With gold trading near record highs, we anticipate an increase in M&A activity over the next 12 months. We maintain a positive outlook on gold prices, anticipating continued US$ weakness, strong demand for safe-haven assets amidst economic and geopolitical uncertainties, and the potential for a global slowdown in GDP.
Upcoming catalysts include resource expansion drilling, potential for custom milling agreements, financing to complete mill rehabilitation and recommissioning, production restart by early 2026, and a Preliminary Economic Assessment (PEA).

Price and Volume (1-year)

	YTD	12M
LFLR	79%	126%
TSXV	27%	44%
Gold	29%	42%
GDXJ	55%	65%

Portfolio Summary

An advanced-stage gold project with a permitted mill, located in Quebec’s prolific Abitibi mining camp

Located in the southern part of the Abitibi Gold Belt, close to majors such as Agnico Eagle (NYSE: AEM), and Eldorado (NYSE: EGO), as well as developers like Probe Gold (TSX: PRB)

We believe a key advantage of the Swanson gold project (18,300 hectares across 445 claims and a mining lease) is its district-scale exploration potential, which aligns seamlessly with the Beacon mill to enable a relatively rapid, low-CAPEX path to production.

The Swanson property is 66 km north of the city of Val-d’Or; the mill is located 50 km from Swanson. Established infrastructure including access to several gold mills, roadways, rail connections, and power lines

The property includes surface and underground infrastructure, including a 500 m ramp to the deposit 80 m below surface

Open-pit resources totaling 119 Koz indicated, and 29 Koz inferred, with relatively high-grades

The current resource envelope measures 475 m long x 425 m wide x 500 m deep; 84% of resources are open-pittable. We believe the project has resource expansion potential as the deposit remains open at depth, and along strike

Qualified Person: Louis Martin, P.Geo. (OGQ), Exploration Manager & Technical Advisor of LFLR

Source: Company

We believe the project has resource expansion potential as the deposit remains open at depth, and along strike. Past drilling has intersected broad zones of mineralization below the current pit shell

LFLR has commenced a 5,000+ m resource expansion drill program, targeting 50 prospects across Swanson, Jolin, Bartec, and Marimac. Management aims to delineate a gold resource exceeding 1 Moz for the project.

In addition, the property hosts two gold showings with historical resources, and several other targets

LFLR is currently conducting geological and engineering planning for an 80,000-100,000-tonne bulk sampling program at Swanson, with processing planned at the Beacon mill. Data from this program will support an upcoming PEA, and mine plan.

Bulk sampling underway at Swanson. Mill restart on track for early 2026

Management is finalizing mill restart plans, with six to eight months of repairs and maintenance anticipated. Factoring in Swanson pre-development, we estimate total restart costs at US$10M, half our previous US$20M estimate, driven by recent progress and an independent C$4M mill restart assessment. First production is targeted for early 2026.

LFLR is also pursuing toll milling opportunities from nearby advanced-stage gold projects to generate additional cash flow from the Beacon Mill. Potentially compatible deposits are shown on the map below.

Options for early cash flows through toll milling. Multiple upcoming catalysts

Near-Term Plans

Resource expansion drilling at Swanson, targeting 1M+ oz gold resource
Exploration drilling of other targets on the property
Bulk sampling at Swanson; materials to be processed at the Beacon mill
A PEA on Swanson based on a production scenario using the Beacon mill (expected by Q4-2025)

Financials

$2M in cash and liquid assets at the end of March 2025. The company is planning a $5M debt financing, and a $5.55M equity raise. In-the-money options and warrants can bring in up to $9M

FRC Valuation

Our DCF model returned a fair value estimate of $1.04/share (previously $0.83/share), driven by our higher long-term gold price forecast of US$2,500/oz (previously US$2,000/oz), and a lower CAPEX estimate

Our valuation is highly sensitive to gold prices. We are not conducting a comparables valuation, as, unlike LFLR, most juniors lack access to a mill

We are reiterating our BUY rating, and raising our fair value estimate from $0.83 to $1.04/share. LFLR has made significant progress toward restarting production at the Beacon gold mill, targeting early 2026. Despite recent gains in its share price, we believe the market continues to undervalue both the mill, and the Swanson project, creating an attractive opportunity ahead of key catalysts — especially with gold prices near record highs.

Risks