Disclosure: MetalQuest Mining Inc. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
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Price and Volume (1-year)
*QP: Adou Katche, P.Geo., Consultant to MQM
* MetalQuest Mining has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Lac Otelnuk Iron Ore Project , Quebec
This advanced-stage project spans 673 km² in the central Labrador Trough, Nunavik, Northern Quebec. It lies within a territory governed by the Naskapi Nation, with whom MQM has an exploration and pre-development agreement. The company also engages with other potentially impacted First Nations.
The 1,100 km-long Labrador Trough is a major iron belt, producing 100% of Canada’s iron
Location Map
Source: Company
The region offers well-developed infrastructure, including low-cost hydroelectric power, rail, and port facilities
MQM’s project is located 155 km northwest of Schefferville, near active iron ore mines operated by majors, including Rio Tinto (NYSE: RIO), Tata Steel, and ArcelorMittal (NYSE: MT)
The property has no road access; if advanced to production, it could be reached via a new road or rail spur
In June 2025, MQM commissioned AtkinsRéalis , an engineering services firm, to conduct a gap analysis to identify areas of the 2015 Feasibility Study needing updates for current market trends, regulations, engineering practices, and environmental standards. Once complete, management will conduct targeted technical reviews and studies before pursuing a Prefeasibility Study (PFS).
2013 Resource (Historic)
The project hosts a large, low-grade open-pit resource
The current resource envelope covers 36 km (strike) x 4-6 km (width) x 130 m (depth)
2015 Reserves, US$110/t Iron Ore
QP: Adou Katche, P.Geo., Consultant to MQM
Source: Company
Metallurgical tests indicate that the project can produce high-grade concentrates, averaging 68% Fe (iron)
Resource Outline
Source: Met-Chem Canada Inc.
The FS was based on just 24% of M&I resources
Initial CAPEX is relatively high at US$9B, exceeding the typical range of US$2B-US$7B for iron ore projects
However, OPEX is relatively low at US$31-US$34/t, falling within the typical range of US$30-US$90/t for iron ore projects
The 2015 FS was based on open-pit -operations spanning 30 years.
FS Highlights
Source: Technical Report/FRC
The study returned an After Tax-NPV8% of US$5.24B, with an AT-IRR of 13%, based on a long-term iron ore price forecast of US$105/t vs the spot price of US$106/t
MQM is seeking a strategic partner to advance project development
Equity Investment and NSR
MQM holds 1.92 M shares and 2.50M warrants (exercise price $0.12; current share price $0.30) in Canadian Copper Inc. (MCAP: $31M) , representing a current market value of $1.03M.
MQM also retains a 1% NSR royalty on CCI’s Murray Brook Project , located in the Bathurst Mining District, New Brunswick. The project hosts a large, low-grade open-pit polymetallic deposit. CCI has the right to purchase 0.17% NSR for $1M, and must make a $1M cash payment to MQM once the project enters production.
A recent Preliminary Economic Assessment (PEA) on Murray Brook outlined an after-tax NPV7% of $171 M, and an IRR of 36%, based on US$4.25/lb Cu (spot price: US$5.11/lb) , with a relatively low initial CAPEX of $64 M . CCI is currently pursuing a $15 M equity financing to advance the project.
Exposure to an advanced-stage copper project through equity and royalty interests
Financials
Source: FRC / Company
At the end of July 2025, MQM held $0.74M in working capital, including a $0.61M investment in shares and warrants of CCI, which has since risen in value to $1.03M
Source: FRC / Company
Can raise up to $0.64M from in-the-money options
FRC Projections and Valuation
Source: FRC / S&P Capital IQ / Various
MQM’s EV/Resource and EV/AT-NPV remain materially lower than those of comparable iron ore juniors
Source: FRC
We are not changing our DCF model; however, the recent share price spike reduces the dilutive impact of future financings, raising our DCF valuation from $0.68 to $0.80/share
Given the recently completed PEA on the Murray Brook project, we are introducing our valuation of MQM’s 1% NSR at $0.08/share
Source: FRC
Using a sum-of-parts valuation, we arrive at a fair value of $0.92/share
We are reiterating our BUY rating, and adjusting our fair value estimate from $0.72 to $0.92/share. MQM has delivered strong YTD performance, significantly outperforming the TSXV, while advancing one of North America’s largest undeveloped iron ore projects. With high-purity iron now on Canada’s Critical Minerals list, the project may benefit from enhanced funding and tax incentives. Key near-term catalysts, including potential partnerships and gap analysis updates.
Risks
We believe the company is subject to the following risks: The value of the company is dependent on commodity prices
We are maintaining our risk rating of 5 (Highly Speculative)
