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MSA: Robust Porvenir PFS; Beginning of a Polymetallic District

What you need to know:
• Mineros released an updated PFS on the Povenir Project outlining robust and improved economics with a NPV5% of $460M and IRR of 37.9% at a base case gold price of $3,150/oz.
• The project NPV5% improves to $558M and $655M at gold prices of $3,465/oz and $3,780/oz, which remain conservative to spot pricing.
• Importantly, updated resources highlight the district-scale potential of the Hemco property with several targets centred around Porvenir.
• We are increasing our target price to $11.50/share as MSA continues to delineate long-term opportunity in Nicaragua.

This morning, Mineros S.A. (MSA:TSX, MINEROS:CL) announced the results of an updated Prefeasibility Study (PFS) at its Hemco Property in Nicaragua, which includes the 100% owned Porvenir Project. The study reinforces Porvenir’s high-margin potential as a stand-alone underground mine at Hemco, improves confidence in the mine plan, and optimizes processing plans. The Company has also updated reserves and resources at its Panama and Pioneer mines with a ~35% increase. We are maintaining our BUY rating and increasing our target price on Mineros to C$11.50/share (previously C$11.00/share).

Porvenir 2026 PFS Highlights
The study outlines a 2Ktpd processing plant to support the standalone underground operation with flotation and cyanidation recovering copper and zinc concentrates, along with gold-silver doré. Porvenir’s updated reserves total 736Koz AuEq at 3.53 g/t (additional detail below), anchoring a strong production profile with average sales of 72.3Kozpa AuEq for the first 9 years of the mine life (54.5Koz Au, 190Koz Ag, 28Mlb Zn, 3.75Mlb Cu). The production profile outlined in the PFS is displayed below in Figures 2 and 3. At a low initial capex of $206.8M and a competitive AISC of $1,295/oz, the PFS results in an after-tax NPV5% of $460M, IRR of 37.9%, and 2-year payback, with LOM FCF of $727M ($3,150/oz Au). At gold prices of $3,465/oz and $3,780/oz, the NPV5% increases to $558M and $655M, respectively, with spot prices currently sitting +$4,500/oz. Importantly, updated resources throughout the district are centred on this Porvenir infrastructure, reinforcing the district-scale opportunity. Emerging targets include the Guillermina, Leticia, and San Antonio deposits.