Meridian Mining PLC Investor Report: Cabaçal Development Progress, District-Scale Growth and Key Questions for Investors

Meridian Mining is positioning itself around a clear investment case: bring the Cabaçal copper-gold project in Brazil into production while continuing to build value across a much larger belt-scale exploration portfolio.

The company’s latest update presents a business that is no longer defined by a single resource estimate or an early-stage concept. It now rests on a more advanced development profile, a substantial cash balance, improving permitting status, ordered long-lead items, and a broader regional opportunity that could support growth well beyond the initial mine plan.

For investors, the appeal lies in the combination of near-term development milestones, strong published project economics, favourable infrastructure and district-scale exploration upside. The more important task is to separate what is already de-risked from what still requires delivery.

Table of Contents

• Cabaçal is the centrepiece of the investment case
• Why the project economics stand out
• The deposit itself appears robust and expandable
• Resource growth is a major theme ahead of the DFS
• Metallurgy and concentrate quality may be underappreciated strengths
• Permitting progress is one of the biggest de-risking factors
• Balance sheet strength gives Meridian unusual flexibility
• The wider land package may be the long-term differentiator
• Operational readiness appears to be improving
• Why Brazil remains central to the investment case
• Critical questions investors should keep asking
• Overall assessment
• FAQ

Cabaçal is the centrepiece of the investment case

Cabaçal sits in Mato Grosso, Brazil, and is being advanced as a copper-gold volcanogenic massive sulphide, or VMS, project. Meridian has operated in Brazil previously and reshaped the company in 2020 to focus on the Cabaçal belt opportunity. Since then, it has moved through a Preliminary Economic Assessment and a Pre-Feasibility Study, and is now working towards a Definitive Feasibility Study, or DFS.

The core message from management is that Cabaçal offers unusually strong economics for a project at this stage. Using the assumptions from the published Pre-Feasibility Study, Meridian outlined:

• Post-tax NPV5: US$984 million
• Internal rate of return: 61.2%
• All-in sustaining cost: US$742 per ounce of gold equivalent
• Annual production: about 141,000 ounces of gold equivalent
• Initial mine life: 10.6 years
• Life-of-mine free cash flow: US$1.4 billion on base case assumptions

Those numbers were generated using conservative commodity assumptions relative to current market prices. Management argues that if updated economics are run using more recent gold and copper prices, the value could be materially higher. That potential uplift is one of the most obvious near-term catalysts heading into the DFS.

Why the project economics stand out

Mining investors are used to seeing attractive project studies undermined by excessive capital intensity, weak metallurgy, remote infrastructure, or a difficult permitting backdrop. Meridian’s presentation attempts to show that Cabaçal avoids many of those common weaknesses.

1. Moderate capital intensity

The company described expected capital expenditure as neither the cheapest nor the most expensive in its peer group, but solidly competitive. The Pre-Feasibility Study used a capex estimate of roughly US$248 million, while management indicated no material change is currently expected in the DFS range. The initial mill will be built at 2.5 million tonnes per annum, with expansion infrastructure planned from the start to support a later increase to 4.5 million tonnes per annum.

This phased build matters. Rather than attempt a larger first-stage operation immediately, Meridian intends to establish a safer and smoother operational ramp-up, then spend a further roughly US$59 million to expand processing capacity later. That staged approach may reduce execution risk, especially for a company making the transition from developer to producer.

2. Strong operating cost profile

Low operating costs are central to the investment case. Mato Grosso offers cheap and stable electricity, helped by substantial hydroelectric capacity in the wider area. Meridian also benefits from historical site infrastructure, including access routes and power easements from earlier operations. Logistics to the coast are supported by a state economy already geared towards moving large volumes of low-value agricultural goods efficiently.

Together, these factors help explain why the operating cost assumptions appear so competitive.

3. Fast payback potential

On the published assumptions, capex payback comes in at under 17 months. That is significant because short payback periods can improve financing options and reduce exposure to longer-term commodity price uncertainty. For any development-stage miner, a rapid move from construction spending to debt repayment and free cash generation is a major value driver.

The deposit itself appears robust and expandable

Cabaçal is described as a giant-sized VMS deposit by reference to United States Geological Survey classification. The open pit is more than two kilometres long, around half a kilometre wide, and extends nearly 200 metres deep. Importantly, mineralisation begins at surface.

There are two mineralisation styles that support the geological model:

• The broader VMS system distributed across the belt
• A later overprinting phase of high-grade gold veins cutting through the VMS sequence

This combination has produced a mix of bulk tonnage potential and very high-grade intercepts. Management highlighted examples that suggest both gold-rich and copper-rich zones can emerge in different parts of the deposit. Towards the south-east, copper grades appear to strengthen, including feeder-style mineralisation.

That geological complexity can be positive if it translates into flexibility in mine planning and the possibility of future reserve growth.

Resource growth is a major theme ahead of the DFS

One of the most important updates is the increase in the definitive feasibility stage resource. Meridian reported an uplift of more than 20 million tonnes of ore compared with the earlier study basis. Management stated that this translated into:

• 39% more gold content
• 19.3% more silver content
• 14.2% more copper content

What makes this especially relevant is that the larger resource still sits within the same permitted pit outline used in the earlier study. In practical terms, this supports the view that the reserve statement should rise once the DFS is completed.

The current reserve base discussed by the company is 41.7 million tonnes, with 89% classified as proven. For a development-stage project, that is a meaningful point of de-risking. A high proportion of proven reserves can strengthen confidence in mine planning, financing discussions and construction readiness.

Metallurgy and concentrate quality may be underappreciated strengths

Meridian places unusual emphasis on metallurgy, and with reason. Cabaçal was mined historically, so there is legacy knowledge around how the ore behaves. The company describes the flow sheet as simple and highly effective.

The planned operation would produce two saleable outputs:

• Gold recovered through gravity, producing doré for off-site refining
• A copper concentrate carrying gold and silver credits

Recoveries are presented as exceptionally strong for a VMS system, and the company has recently improved them further through more aggressive reagent use. That has fed directly into the resource and study work.

The quality of the copper concentrate is another point management believes differentiates the project. Rather than framing Cabaçal as a giant volume producer, Meridian argues that its concentrate could be especially attractive as a blending product for smelters. The concentrate is described as high grade and free from problematic fluorine, which could make it useful in blends with poorer concentrates while also supporting acid production.

If that commercial positioning holds up in offtake and financing discussions, it could become an important strategic advantage.

Permitting progress is one of the biggest de-risking factors

Permitting is often where mining projects stall. Meridian’s progress in Brazil therefore deserves close attention.

The company has already secured the preliminary licence from the state of Mato Grosso. Management described this as the most demanding and important licence in the process because it examines environmental, social, technical and economic justification for the project.

The next key step is the installation licence. Meridian has guided to a nine to twelve month window, while also suggesting that legislative changes could allow this to be granted sooner. Once the installation licence is in hand and the DFS is complete, the company intends to move into mine construction. Following construction and pre-strip work, it would then seek an operational licence confirming that the mine has been built as approved.

For investors, the installation licence is arguably the single most important near-term milestone.

Balance sheet strength gives Meridian unusual flexibility

Meridian reported just under US$100 million on the balance sheet. That is a substantial cash position for a company at this stage and gives it flexibility across several fronts:

• Completion of the DFS
• Further permitting work
• Long-lead equipment orders
• Site infrastructure preparation
• Ongoing exploration during the development phase

Management made it clear that exploration spending will not be paused during construction preparation. That is a notable strategic choice. Rather than treat Cabaçal as a standalone asset, Meridian is trying to preserve district growth momentum while building the first mine.

That can create more upside, but it also raises a discipline question: how effectively can management allocate capital between mine delivery and exploration ambition? Investors should continue to watch this balance carefully.

The wider land package may be the long-term differentiator

Meridian’s broader claim is that it controls one of South America’s strongest exploration portfolios for VMS-hosted copper-gold systems. The company has assembled a large tenement package across more than 50 kilometres of prospective belt-scale ground, including not only Cabaçal but Santa Helena, Chiquito, Sucuri, Zicão, and other targets.

This consolidation matters because district-scale systems are often fragmented between many owners. Meridian argues that by securing much of the belt itself, it has kept future upside largely within the company rather than surrendering value through royalties, streams or third-party ownership.

That is an attractive strategic position if exploration success continues.

Santa Helena could become the next processing hub

Santa Helena is one of the most advanced growth targets in the portfolio. It is described as an open pit opportunity with a higher-grade character, and current work is focused on infill and extension drilling. Recent results also indicate that the same later-stage gold overprint seen at Cabaçal is present there as well.

That matters for two reasons. First, it may increase the scale and grade potential of Santa Helena itself. Second, it supports a broader reinterpretation of the district as not just a VMS belt, but an area with additional structural gold potential layered on top.

Meridian has also taken the step of permitting Santa Helena as a second processing hub. If this is ultimately approved, total potential processing capacity would rise above 5.7 million tonnes per annum.

Alamo and the Aquapi unit add a fresh exploration angle

The recent Alamo discovery was presented as encouraging because it suggests that structurally controlled gold mineralisation extends into the south-east of the belt. At Cabaçal, this overprint has already shown the ability to generate both very high grades and potentially bulk tonnage zones. If similar styles are present elsewhere, the implications could be material.

The Aquapi unit adds another layer. Management pointed to evidence that the overlying geology may host gold in more than one form, including palaeochannel-style mineralisation and structural gold linked to underlying systems. This opens up a new family of targets beyond the core VMS setting.

Operational readiness appears to be improving

Meridian says it has already begun ordering long-lead items such as the SAG mill and transformers. Engineering work has also been advanced so that basic engineering is included within the DFS scope, allowing the company to move quickly into detailed engineering once the study is filed.

Site optimisation work is ongoing, including trucking distances and checks on historical infrastructure such as bridges and roads. The company expects to begin infrastructure work during the dry season, with construction preparation building towards the following year.

This indicates a business trying to remove lag between technical approval and physical execution.

Why Brazil remains central to the investment case

Management was explicit that Brazil, and Mato Grosso in particular, is considered a favourable mining jurisdiction. The argument rests less on abstract country comparisons and more on practical operating conditions:

• Established mining activity in the region
• Abundant low-cost power
• Legacy site infrastructure
• Efficient logistics to port
• No highlighted exposure to sensitive rainforest or indigenous land issues at the project belt

Those factors do not eliminate country risk, but they help explain why Meridian sees this as a lower-risk development setting than many alternatives.

Critical questions investors should keep asking

The company’s presentation is strong on ambition and headline economics. The next phase now depends on execution. Several questions deserve close attention over the coming quarters:

• Will the DFS confirm a meaningful reserve increase from the larger resource within the same pit shell?
• Can updated economics remain as compelling once current costs, exchange rates and final engineering inputs are incorporated?
• Will the installation licence arrive within guidance, or better still ahead of schedule?
• How will project finance be structured, and on what terms, given the company’s desire to protect shareholder value?
• Can management maintain exploration momentum without distracting from the build-out of the first mine?
• How quickly can the 4.5 million tonne expansion be pursued once the initial operation is stable and cash flow is established?

These are not reasons for scepticism alone. They are the practical checkpoints that will determine whether the story progresses from promising developer to successful producer.

Overall assessment

Meridian Mining presents a compelling mix of development maturity and exploration upside. Cabaçal already appears advanced enough to stand on its own economics, with a sizeable reserve base, improving resource scale, supportive infrastructure and a major permitting milestone secured. The balance sheet also gives the company more room than many peers to keep moving without immediate financial strain.

The larger attraction, however, may be what sits around Cabaçal. If Santa Helena, Alamo and the broader belt continue to deliver, Meridian may evolve from a single-asset developer into a district-scale copper-gold producer with optionality across multiple deposits and processing hubs.

That is the opportunity. The challenge now is disciplined delivery.

For those tracking the company closely, the most important milestones from here are clear: the installation licence, the DFS, updated reserve and economic outcomes, financing structure, and continued drilling success across the broader land package. If Meridian executes on those fronts, it could justify the market’s growing attention.

FAQ