Ann: Pantanillo Gold Project - Metallurgical Review and Update, page-4

The metallurgical review and update for the Pantanillo Gold Project by Frontier Energy (ASX: FLG) contains some notable takeaways that could positively influence shareholder value and potentially support a rising share price (SP), depending on future developments and market sentiment. Here's a breakdown of the key points and how they could play out:

Key Findings from the Update

1. Improved Metallurgical Recovery:

   • The latest tests showed up to 94.7% gold recovery in concentrate and 91.6% in tails leach using standard processing techniques (flotation + cyanide leach).

   • This is a significant improvement over the previous ~50–60% recoveries using heap leaching methods.

2. Conventional Processing Route Confirmed:

   • The use of conventional flotation and leaching methods reduces technical risk and aligns with proven gold extraction techniques globally.

3. Potential Project Scale and Grade:

   • The project has a JORC 2012-compliant resource of 1.34Moz @ 0.5 g/t Au, with potential for expansion.

   • The company highlighted the large alteration system and potential for higher-grade targets at depth.

4. Cost and Capital Advantages:

   • Improved recoveries enhance the potential project economics, reducing the gold price threshold for profitable development.

   • The project benefits from existing infrastructure and historic data, which could lower exploration and development costs.

5. Path Forward:

   • The company is preparing for scoping-level engineering studies to better define CAPEX/OPEX and confirm economic viability.

   • Future steps likely include drilling to test high-grade potential and infill/expansion drilling to increase confidence.

How This Could Impact Shareholder Value

1. De-risking Event:

   • Metallurgical performance is often a key risk factor for gold projects. Demonstrating high recoveries using standard processing reduces technical uncertainty—generally a positive re-rating catalyst.

2. Improved Project Economics:

   • Higher recoveries mean more payable gold per tonne processed, which directly improves net present value (NPV) and internal rate of return (IRR).

3. Speculative Upside:

   • If future drilling confirms higher grades or a larger resource, valuation models will reflect this, potentially justifying a rising share price.

4. Market Sentiment & Catalysts:

   • ASX gold juniors can move sharply on news flow. Upcoming milestones—scoping study results, drilling updates—can act as short-term catalysts.

   • Also, broader gold market sentiment (e.g., rising gold prices) can amplify the effect.

Risks and Caveats

• The project is still at the pre-feasibility stage—economic assumptions are not yet confirmed.

• Capital funding and permitting in Chile could introduce delays or cost overruns.

• The deposit’s grade (0.5 g/t) is moderate; high recoveries help, but margins could be thin without scale or higher-grade zones.

Bottom Line

The metallurgical update materially de-risks the Pantanillo project and could improve perceived shareholder value. If upcoming studies confirm strong economics and the company maintains positive momentum (exploration success, permitting progress), a rising share price is a reasonable expectation. However, this is still speculative and contingent on execution and external market factors.