Quality of Rupice

Morning Guys,

Today, Trilogy Metals (TMQ), a Canadian listed Cu developer put out a FS for their Arctic Project. This has / is considered one of the best polymetallic development plays around and, as per Rick Rule is one of only a handful of development plays that meets exceptional project metrics.

S32 has a 50% interest in TMQ's Arctic project which provides great confidence that this will become a mine.

Pretty much every controllable metric between the PFS --> FS got worse for TMQ / S32. (NPV and IRR -20%, Opex +9%, Capex +34%)

Regardless, the numbers are still good with a post-tax IRR of 27%, NPV(8) of US$1.1B and a capex of US$1.2B.

However, when compared to ADT, the PFS for Rupice alone (assuming it doesn't crater like TMQ's does in the conversion to FS) blows TMQ out of the water. It shows just what an exceptional asset Rupice is. Then there are all the additional assets and exploration prospects that ADT has that adds further potential upside and one can see that ADT is quite a unique opportunity.

Cheers
John