Disclosure: Denarius Metals Corp. 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)
* Qualified Person: Scott E. Wilson, CPG, President of RDA, Independent Consultant. Denarius Metals Corp. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions. All figures are in US$, except for share price, fair value estimates, and MCAP data.
Portfolio of four polymetallic projects, led by Zancudo in early production, with full commercial production expected by Q3-2026, and Aguablanca positioned to begin production in 2027
Portfolio Summary
* All equivalent figures were calculated by FRC
Source: Company
Combined resources of 3.44 Moz AuEq (gold equivalent) or 3.21 Blbs CuEq (copper equivalent) across four projects
The following sections provide the latest updates on the two most advanced-stage assets, Zancudo and Aguablanca .
Zancudo Gold-Silver Project, Colombia (100% interest)
The processing rate and mine life used in the 2026 PEA are largely unchanged from the 2023 PEA
PEA Results (2023 vs 2026)
*Concentrates produced from the processing of mineralized material are sold to Trafigura, a global commodity trading firm, which will pay DMET 86% to 90% of contained gold , and 35% to 45% of contained silver, depending on concentrate grades.
Source: Company / FRC
However, production estimates were lowered due to lower grades, per the latest resource estimate published in late 2025
Annual gold output cut to 40–50 koz, from 50–60 koz
Production value split – gold 94%, silver 6%
The long-term gold price used was 22% higher, but cash costs rose 33% due to lower grades, and higher gold prices
Estimated cash costs of $2,448/oz are high vs peers, but with ~50% of costs, including contractor fees and royalties, tied to gold prices, operating margins (~40%) are expected to remain relatively stable, even if gold prices fluctuate
Given all the changes, after-tax NPV increased 57% to $324M
Source: Company / FRC
We believe the study was conservative, accounting for just 60% of total resources
The project is in early production, focused on mining and crushing, with processing yet to commence. From June 2025 to December 2025, the company delivered 2,092 tonnes of ore, containing 532 oz of gold, and 15 Koz of silver, generating $1.66M in revenue, and $0.55M in gross profit. DME expects to start producing concentrates, and reach full production by Q3 2026, once its approved 1,000 tpd processing plant is fully built, and operational.
Project Location
Source: Company
30 km southwest of Medellin
The project hosts a high-grade gold-silver system (3.5 km strike length x 0.4 km depth), and the historic Independencia gold mine
Excellent infrastructure, including underground mine access, connection to the national power grid, and water supply
Proposed Processing Plant
Plant commissioning targeted for Q3-2026
We estimate $39M in revenue for 2026, given DMET’s production guidance of 10 koz gold, and 40 koz silver
We estimate stabilized annual revenue of $160M, based on 45 koz gold at $3,500/oz, and 200 koz silver at $35/oz by 2028
Key Targets
Source: Company
The deposit remains open in all directions, meaning there is potential for further expansion
Commencing a 15,000 m drill program this month
Key Targets
Source: Company
Drilling will focus on Brisas, and El Castaño, to potentially upgrade inferred resources (lower-confidence category), extend gold veins at Independencia, and explore Manto Antiguo and Mani
Aguablanca Polymetallic Project (22% interest, operator), Spain
The Aguablanca project, which operated as an open-pit nickel-copper mine from 2005 to 2015, is planned to restart as an underground mine. It benefits from an existing 5,000 tpd processing plant, located 88 km from the company's Lomero project, with the capacity to process material from future Lomero operations.
Project Location
Source: Company
The joint venture that owns the project has so far raised $7M of $30.5M in debt financing needed to restart production by H1-2027
Recognized as a “Strategic project” by the European Commission
This project hosts the only known nickel-copper deposit in Spain
Processing Plant
Fully permitted to re-start operations
The well-maintained 5,000 tpd processing plant allows production to restart with a relatively low initial CAPEX of $25M
Pre-Feasibility Study
Source: Company
A PFS completed in 2024 assumed the project would use 50% of the processing plant’s capacity, reserving the rest for Lomero
AT-NPV5% of $83M, and a very high AT-IRR of 213%, using $7.30/lb Ni (spot: $7.84/lb), and $3.50/lb Cu (spot: $5.56/lb Cu)
Upcoming Catalysts
Advancing all four projects simultaneously
Financials
We estimate the company has $19M in cash, with $25M in convertible debentures (principal) outstanding
Can raise up to $34M from in-the-money options, and warrants
Source: FRC / Company
We will start presenting our revenue and EPS estimates once commercial production is achieved
FRC Comparables Valuation
(All figures are in C$, unless otherwise stated)
Source: FRC/S&P Capital IQ/Various
With DMET nearing commercial production, we are beginning to compare it with junior gold producers, instead of exploration and development companies
DMET is trading at 0.87x our stabilized revenue estimate for Zancudo vs the sector average of 1.81x, a 52% discount
Applying the sector average, we arrive at a comparable valuation of $1.63/share vs $1.13/share, when valued as an exploration & development company
FRC DCF Valuation
Source: FRC
Our DCF (NAV) valuation fell from $2.20/share to $1.96/share, mainly due to share dilution, partly offset by higher metal price forecasts
These tables summarize our valuation on each project
Source: FRC
Valuation Sensitivity
Source: FRC
The average of our DCF and comparables valuations is $1.79/share, up from $1.66/share, driven by a higher comparables valuation, partially offset by a lower DCF valuation
Our valuation remains highly sensitive to metal prices
We are reiterating our BUY rating, and raising our fair value estimate from $1.66 to $1.79/share (the average of our DCF and comparables valuations). We believe DMET offers a compelling combination of strong project economics, early production upside, and attractive valuation, trading at a 52% discount to sector peers.
Risks
As the company nears commercial production, we reduce our risk rating from 5 to 4 (Speculative)
