Spanish Mountain Gold Announces Uplift in Scale and Value at Its B.C. Gold Project and Receives Confirmation From Provincial Regulators to Resume the Previously Paused Environmental Assessment and Permitting Process Advancing Towards Development
Spanish Mountain Gold Announces Uplift in Scale and Value at Its B.C. Gold
Project and Receives Confirmation From Provincial Regulators to Resume
the Previously Paused Environmental Assessment and Permitting Process
Advancing Towards Development
VANCOUVER, British Columbia--(BUSINESS WIRE)--September 21, 2026--Spanish
Mountain Gold Ltd. (“Spanish Mountain” or the “Company”) (TSX-V: SPA; FSE: S3Y;
OTCQB: SPAUF) is pleased to announce the results of a Preliminary Economic Assessment
and Mineral Resource Estimate Update (the "PEA", or “PEA Update”, “MRE” on the Spanish
Mountain Gold Project (the “Project”) located within the Cariboo Gold Corridor, British
Columbia, Canada. The PEA Update is a conceptual study showing improved potential economic
viability of the Main Deposit. The PEA will be published in an independent National Instrument
("NI") 43-101 Technical Report within 45 days of this news release and filed on SEDAR+. Once
filed on SEDAR+, the PEA will supersede the Company’s existing technical report on the
Project. The PEA Update study was commissioned by the Company and prepared by consultants
led by BBA Engineering Ltd. ("BBA"). The PEA envisions a conventional open pit mining and
milling operation with a projected 25.8-year life of mine ("LOM") producing 3.33 million
ounces ("Moz") of payable gold, with a front-weighted production profile and attractive
economics.
Highlights
Robust Economics: Base case after-tax NPV5% of US$2,156 million (C$2,910 million)
with an after-tax IRR of 35.2% using a gold price assumption of US$3,600/ounce ("oz").
Using a spot gold price of US$4,400/oz gold, after-tax NPV5% increases to US$3,142
million (C$4,242 million) and the after-tax IRR to 46.3%.
Significant Production and Low Cost: 207 koz average annual gold production in the first
5 years at an all-in sustaining cost net of by-product credits ("AISC") of US$1,098/oz
(C$1,482/oz) and 129,518 oz average annual gold production over a 25.8-year LOM at an
AISC of US$1,450/oz (C$1,958/oz).
Rapid Payback of Capital Expenditures: US$1,050 (C$1,418million) initial capital paid
back over 1.8 years at PEA Update base case and decreasing to 1.5 years at spot gold
price of $4,400/oz gold.
Increased gold production: Updated drilling and resource definition has increased the
tonnes and gold ounces included in the mine plan, when compared to the previous 2025
PEA. A larger open pit, with a lower overall strip ratio, is targeted, providing a longer
mine life at an increased mill throughput rate. Additionally, ounce production has been
brought forward in time in the schedule, and the overall ratio of Measured to Indicated
Mineral Resources included in the mine plan has been increased.
Process Flowsheet Optimization: The Company advanced a significant flowsheet
optimization initiative through the integration of coarse particle flotation and clean
gangue rejection technologies. The optimized flowsheet has the potential to increase feed
grades ahead of rougher flotation through early waste rejection, enabling higher
throughput while maintaining strong gold recovery. The resulting design is more robust
and operationally flexible, with benefits extending beyond metallurgical performance to
include improved dry-stack tailings characteristics and reduced operating costs. These
advancements strengthen the technical basis for the 2026 PEA update and FS trade-off
studies while reinforcing the Company's objective of developing a high-performing,
environmentally responsible mining operation.
Significant Opportunities: Potential to further enhance Project economics and expand
production rate have been identified with the addition of the maiden Phoenix deposit
MRE, ongoing endowment potential extensions, and preconcentration technologies such
as mineralized material sorting to boost mill feed grade, that will be examined during the
FS as an expansion option.
Strong Discovery Growth Potential: The 2026 Exploration diamond drill program has
completed 31,587 meters (m) of a 60,000 m program on plan to complete Q4 2026.
Environmental, Permitting & Community: From March to August 2026, SMG worked closely
with BC Environmental Assessment Office (“BCEAO”), Impact Assessment Agency of Canada
(“IAAC”), participating Indigenous Nations and local communities to secure authorization in
August from BCEAO to resume the previously paused combined provincial and federal
Environmental Assessment (“EA”) processes. This authorization, received in August from BC
EAO avoids EA termination and reduces duplicate components of early engagement and the
Initial Project Description processes. Consequently, pending geotechnical and condemnation
drill results, SMG is on track trending towards delivering an updated draft Detailed Project
Description (“DPD”) in Q4 and formal submission of the DPD in Q1 2027. These are the next
steps in resuming the EA process to advance to Spanish Mountain Gold project towards a build
decision in 2028.
Key PEA Update Improvements and Optimizations vs. 2025 PEA
The PEA Update incorporates several important improvements and de-risking initiatives
compared to the 2025 PEA, all of which better positions the Project for a successful next phase
of development. Notable changes include:
Improved Mine Production Schedule Gold Produced: Increased gold production in the
first 10 years from an average of 153 koz to 173 koz per year. Total of 1,533 koz to 1,734
koz (excluding pre-production), increasing 13.1% in the first 10 years of production.
Larger Project Scale: The Study has increased the process throughput (ROM Mill Feed)
from 26 ktpd to 31 ktpd, which increases the LOM average gold production profile by
6% to 129 koz per year (from 122 koz per year). For the project, this will bring greater
efficiency, lower unit costs, and uplift to the NPV, in addition to expanding Life of Mine
(LOM) from 24.5 to 25.8 years and total gold production from 3.0 Moz to 3.33 Moz, a
11.0% increase over LOM. Further pre-concentration of mill feed to uplift feed grade
such as mineralized material sorting was investigated during the PEA. It was identified as
a target case opportunity to 'bolt-on' to the base case which will be further assessed
during the next stages of project development.
Increase Throughput from Improved Flowsheet Design: Updated metallurgical studies
and testing has resulted in modification to a coarse mill feed flotation circuit with the use
of coarse particle flotation to upgrade ore feed into the main crushing circuit of the
proposed processing plant. Increased process throughput from 26ktpd to 31ktpd, an
increase of 19%.
Open Pit Mine Design Expansion and Growth: Through targeting lower strip ratios based
upon improved geotechnical assessments, additional resources included in the mine plan
and better stockpile management, an optimum open pit was selected to maximize
efficiency. The LOM waste to resource strip ratio reduces to 1.8:1 in the PEA Update
from 2.0:1 in the 2025 PEA, a 10% reduction.
Mineral Resource Estimate: Additional drilling, the resultant assays, and a new pit design
using US$3,400 per ounce gold, increased the Main deposit Measured, Indicated
contained gold ounces by 500 koz. Inferred ounces in the Main Deposit increased by 227
koz.
President and CEO, Peter Mah stated:
"The results of the PEA Update reflect steady improvements to the overall project economics
and further scaling up of proposed gold production now projected higher than 3.3 Moz life of
mine. This PEA with updated mineral resource estimate marks another key milestone for the
Company as it prepares to complete a feasibility study (FS) and build decision by H1 2028. Our
ongoing 60 km drill program to support the FS is approximately 50% complete and expected to
be completed towards the end of Q4 2026. The drilling is expected to provide further
opportunities to enhance scale, assist with locating proposed mine infrastructure and important
technical information to complete the FS that will also enable permitting to advance. We are
pleased to see years 1-10 gold production grew from 1.53 Moz to 1.73 Moz while LOM strip
ratio of waste to gold mineralized material reduced from 2.0:1 to 1.8:1. LOM all-in sustaining
costs and Initial Capex increased marginally from US$1,338 to US$1,450 and from US$ 926
million to US$1,050 (C$1,250 million to C$1,418 million) respectively primarily due to
escalation, water treatment plant requirements, and an NSR due to the project financing secured
April 20, 2026 (refer to news release dated April 20, 2026)
Spanish Mountain Gold has a bright future ahead creating a new definition of responsible
sustainable mining that generations of Canadians will be proud of!"
Table 1: PEA Results Summary
2025 PEA 2026 PEA Update
Base Case
($2,450/oz Au,
$28.50/oz Ag)
Spot Price
($3,300/oz Au,
$36/oz Ag )
Base Case
($3,600/oz Au,
$50/oz Ag)
Spot Price
($4,400/oz Au,
$66/oz Ag)1
After-Tax NPV US$M (C$M, 5% discount
rate) $759 ($1,025)
$1,715 ($2,315)
$2,156 ($2,910) $3,142($4,242)
After-Tax IRR (%) 18.20% 32.00% 35.20% 46.30%
Annual Average Free Cash Flow US$M
(C$M)4 $63 ($85) $128 ($173) $150 ($202) $214 ($289)
Annual Average Free Cash Flow Yr. 1-5
US$M (C$M)4 $230 ($311) $336 ($454) $406 ($549) $507 ($684)
Initial Capex US$M (C$M) $926 ($1,250) $926 ($1,250) $1,050 ($1,418) $1,050 ($1,418)
Total Cash Cost US$ / Au oz (C$ / Au oz) 2 $1,194 ($1,612) $1,201 ($1,621) $1,299 ($1,754) $1,309 ($1,767)
AISC US$ / Au oz (C$ / Au oz) 3 $1,338 ($1,806) $1,345 ($1,816) $1,450 ($1,958) $1,460 ($1,971)
Payback Period (years) After-Tax 3.4 2 1.8 1.5
Nominal Processing Throughput (tpd) 26,000 26,000 31,0005 31,000
Stripping ratio 2.0:1 2.0:1 1.8:1 1.8:1
Mine Life (years) 24.5 24.5 25.8 25.8
Annual Average Throughput (Mtpa) 9,340 9,340 11,315 11,315
Annual Average Production (koz/a) 122 122 129 129
Average Gold Head Grade (g/t) 0.46 0.46 0.41 0.41
Average Gold Recovery (%) 89.30% 89.30% 88.60% 88.60%
Gold Price (US$ / oz) $2,450 Au $3,300 Au $3,600 Au $4,400 Au
Silver Price (US$ / oz) $28.50 Ag $36.00 Ag $50 Ag $66 Ag
Exchange Rate USD/CAD 1.35 1.35 1.35 1.35
Total LOM Au ounces produced (Moz) 3 3 3.33 3.33
Total LOM Ag ounces produced (Moz) 2.1 2.1 1.96 1.96
Notes for Table 1
1. Spot price is based on the CIBC Consensus Gold Price as of Closing on Sep 1, 2026,
rounded down to the nearest $100/oz for gold and $1/oz for silver.
2. Cash Costs consist of mining costs, processing costs, mine-level G&A, offsite charges,
and royalties less by-product credits. Refer to the “Non- Gaap Financial Measures”
section in Appendix A of this news release for more information.
3. All-In Sustaining Costs (AISC) includes cash costs plus sustaining capital, closure costs,
and salvage credits. Refer to the “Non-GAAP Financial Measures” section in Appendix
A of this news release for more information.
4. Free cash flow is calculated as after tax cash flow from mine-site operating activities less
capital expenditures, including closure costs (net of salvage value). Refer to the “Non-
GAAP Financial Measures” section in Appendix A of this news release for more
information.
5. Processing throughput per day can come from run of mine and rehandling from
stockpile.
6. Numbers may not add due to rounding.
The economic analysis contained in this news release is preliminary in nature and is based
primarily on Measured and Indicated Mineral Resources totaling 41.7% and 56.5% respectively,
and in part, Inferred Mineral Resources totaling 1.8% of the proposed mill feed from the Main
deposit. Mineral Resources are considered too geologically speculative to have the economic
considerations applied to them that would enable them to be categorized as Mineral Reserves.
There is no certainty that economic forecasts on which this PEA is based will be realized.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Table 2 lists the breakdown by resource category of the run of mine ("ROM") mill feed for the
PEA life of mine plan.
Table 2: ROM mill feed and Contained Metal by Mineral Resource Classification
Category ROM Mill Feed (Mt) ROM Au (Moz.) ROM Ag (Moz.)
Measured 119.5 1.81 2.40
Indicated 161.9 1.91 3.43
Total M+I 281.4 3.72 5.83
Inferred 5.1 0.04 0.20
Notes:
1. ROM mill feed represents material scheduled for processing in the PEA life-of-mine plan.
2. Contained ounces are based on estimated grades and tonnages and do not represent
recoverable metal.
3. Mineral Resources are not Mineral Reserves and do not have demonstrated economic
viability.
4. The PEA includes 5.1 Mt of Inferred Mineral Resources. Inferred Mineral Resources are
considered too speculative geologically to have economic considerations applied that
would enable them to be categorized as Mineral Reserves, and there is no certainty that
the PEA results will be realized.
Mineral Resource Estimate for the Main Deposit
Note: The Main Deposit is included in the financial modelling for the 2026 PEA.
The updated MRE for the Main deposit is based on the amalgamation of what have been
historically described as the Main Zone, North Zone, Slipper Zone, and K Zone, effective May
19, 2026, and it is reported at a 0.15 g/t gold cut-off (see Table 3). There is no certainty that
Mineral Resources will be converted into Mineral Reserves. Mineral Resources that are not
Mineral Reserves do not have demonstrated economic viability. Mineral Resources include
Inferred Mineral Resources which have had insufficient work to classify them as Indicated
Mineral Resources. It is uncertain but reasonably expected that Inferred Mineral Resources could
be uplifted to Indicated Mineral Resources with additional drilling.
Geological and resource domain modelling and estimation for the Project was completed using
Leapfrog 2026.1. The lithological model was developed based on data from the extensive re-
logging program of 170,000 m drill core that was completed in 2023 and 2024, in addition to
geochemical classification of sampled intervals eligible for such analysis, which includes both
historical and modern drilling. Mineralization domains are modelled by identifying zones with
gold values greater than 0.3 g/t over a minimum width of 3 m. Two primary styles of
mineralization were recognized. Early mineralization includes disseminated stratiform
mineralization in argillite-bearing lithologies. Late mineralization includes gold associated with
late-stage quartz veins. Three high-confidence faults were modelled, including the North Fault,
South Fault, and Fault 1. The Main Block is bound by the North and South Faults, representing
significant discontinuities in stratigraphy and mineralization. Within the Main Block, Fault 1
introduces a minor offset in the main block.
Reasonable prospects for eventual economic extraction were evaluated by performing a pit
optimization using the Lerchs-Grossman algorithm with the following parameters: gold price of
US$3,400/oz, silver price of US$45/oz, and gold selling costs of US$5.19/oz (C$7/oz) for offsite
charges, and a 1.5% royalty. Mining costs for mineralized material and waste are US$2.59/t
(C$3.50/t), with incremental mining costs of US$0.02/t (C$0.03/t). Processing costs are
US$8.52/t (C$11.50/t) for mill processing and include site G&A. Payability for gold is 99.8%,
and payability for silver is 90%. Process recovery for gold is 90%, while process recovery for
silver is 50%. The exchange rate used is C$0.73 to US$1.
Total Measured and Indicated Mineral Resources for the Main deposit includes 342.0 Mt at an
average grade of 0.42 g/t gold and 0.66 g/t silver, for a total of 4.7 M contained ounces of gold
(12% increase over the 2025 gold MRE) and 7.2 M contained ounces of silver (17% increase
over the 2025 silver MRE). Total Inferred Mineral Resources for the Main deposit includes 42.4
Mt at an average grade of 0.28 g/t gold and 0.86 g/t silver, for a total of 0.4 M ounces of gold and
1.2 M ounces of silver.
Table 3: Mineral Resource for the Main deposit - 2025
Category Cut-off Grade
(g/t)
Tonnes (kt) Au Avg.
Grade
Au (koz) Ag Avg.
Grade (g/t)
Ag (koz)
Measured 0.15 77,370 0.53 1,321 0.68 1,701
Indicated 0.15 214,702 0.41 2,842 0.65 4,463
Measured & Indicated 0.15 292,072 0.44 4,163 0.66 6,163
Inferred 0.15 14,830 0.33 155 0.95 454
Mineral Resource for the Main deposit - 2026
Category Cut-off
Grade (g/t)
Tonnes (kt) Au Avg.
Grade
Contained
Au (koz)
Ag Avg.
Grade (g/t)
Contained
Ag (koz)
Measured 0.15 111,383 0.51 1,831 0.66 2,356
Indicated 0.15 230,636 0.38 2,832 0.66 4,863
Measured & Indicated 0.15 342,019 0.42 4,663 0.66 7,219
Inferred 0.15 42,375 0.28 382 0.86 1,174
Notes for Table 3:
1. The qualified person responsible for the Main Deposit MRE, effective May 19, 2026, is
Bahram Bahrami, P.Geo of Equity.
2. Mineral Resources are classified in accordance with CIM (2014) definition standards.
3. Bulk density is assigned on a block-by-block basis.
4. Mineral Resources are reported using a 0.15 g/t gold cut-off grade.
5. Metal price assumptions include US$3,400/oz Au and US$45/oz Ag.
6. Metallurgical recovery assumptions are 90% for gold and 50% for silver.
7. Payability assumptions are 99.8% for gold and 90% for silver.
8. Numbers may not add due to rounding.
9. Mineral Resources are not Mineral Reserves and do not have demonstrated economic
viability.
10. The qualified persons responsible for this section of the technical report are not aware of
any environmental, permitting, legal, title, taxation, socio-economic, marketing, political,
or other relevant factors that could materially affect the Mineral Resource estimate other
than those disclosed in this news release and in the PEA Technical Report.
Mineral Resource Estimate for the Phoenix Deposit
Note: The Phoenix Deposit is not included in the financial modelling for the 2026 PEA.
The MRE for the Phoenix deposit is reported at a 0.15 g/t gold cut-off, reflecting an updated pit
shell based on a US$3,400/oz gold price. Total Indicated Mineral Resources for the Phoenix
deposit include 0.09 Mt at an average grade of 0.25 g/t Au, for a total of 0.7 koz of contained
gold. Inferred Mineral Resources include 54.4 Mt at an average grade of 0.36 g/t Au, for a total
of 629 koz of contained gold (see Table 4).
Table 4: Mineral Resources for the Phoenix deposit
Resource
Classification
Cut-off Grade (Au,
g/t)
Tonnes (kt) Gold Grade (Au, g/t) Contained Gold (Au,
koz)
Indicated 0.15 0.09 0.25 0.72
Inferred 0.15 54.45 0.36 629
Notes for Tables 4:
1. The qualified person responsible for the Phoenix deposit MRE, with an effective as of
May 19, 2026, is Bahram Bahrami, P.Geo of Equity Exploration Consultants Ltd.
2. Mineral Resources are classified in accordance with CIM (2014) definition standards
3. Mineral Resources are reported using a 0.15 g/t gold cut-off grade
4. Metal price assumptions include US$3,400/oz Au
5. Metallurgical recoveries assumptions are 90% recovery for gold
6. 99.8 payability for gold
7. Numbers may not add due to rounding
8. Mineral Resources are not Mineral Reserves and do not have demonstrated economic
viability.
9. The qualified persons responsible for this section of the technical report are not aware of
any environmental, permitting, legal, title, taxation, socio- economic, marketing,
political, or other relevant factors that could materially affect the Mineral Resource
estimate other than those disclosed in this news release and in the PEA Technical Report
10. Refer to Appendix B for the estimation methodology
Geological and resource modelling for the Phoenix deposit was completed using Leapfrog
2026.1 and Micromine Origin & Beyond 2026. The lithological model was developed based
solely on geochemical classification, with six principal stratigraphic units identified: Upper
Mafic Tuff, Upper Sedimentary Sequence, Lower Mafic Tuff, Intermediate Sedimentary
Sequence, Intermediate Tuff, and Lower Sedimentary Sequence. These units generally dip gently
to the northeast. A steeply dipping north-south trending fault divides the Phoenix deposit into
eastern and western blocks. The eastern block contains the full stratigraphic sequence, while the
western block includes only the two lowermost stratigraphic units found in the eastern block.
Gold mineralization was modelled based on downhole structural data measured from oriented
drill core. This interpretation includes identifying two principal sets of mineralized structures:
flat to gently east-dipping and steeper northeast-dipping orientations. These define three
mineralized lenses-two upper, gently dipping zones and a deeper, steeper-dipping zone.
Capping values for the Phoenix deposit were determined using decile analysis and log-scaled
probability plots of length-weighted gold assays. Outlier restrictions were applied to lithological
domains during the second estimation pass, excluding samples above 0.2 g/t gold where search
distances exceeded 30% of the variogram range. No outlier restrictions were applied to
mineralized domains. A semi-hard boundary approach was applied to specific lithological
contacts reflecting gradational contacts of lithological units. These included the Lower
Mineralized Zone (Domain 630) with a distance threshold of 5 m, the Lower Mafic Tuff with 15
m, and the Lower Sedimentary unit with 50 m. This approach was used to reduce artefacts and
better represent grade continuity in stratigraphically complex or sparsely drilled areas.
The block model was constructed using a parent block size of 5m x 5m x 5m, with sub-blocks
refined down to 1.25 m to accurately honor geological boundaries and minimum mining widths.
Grade estimation was conducted using a combination of Ordinary Kriging (OK) and inverse
distance cubed (ID3) methods. OK was used for all mineralized domains where variograms
could be reliably modelled; ID3 was applied to other domains where variogram stability could
not be achieved. Locally varying anisotropy (LVA) was applied within mineralized domains to
reflect observed structural controls.
Resource classification followed the CIM Definition Standards (2014) and was guided by
geological confidence, data spacing, and estimation support. The current drilling density supports
predominantly Inferred classification. These are supported by at least two drill holes within a
spacing of ≤155 m. Indicated Mineral Resources are supported by drill hole spacing of ≤70 m
with minimum of 3 drill holes used for estimation.
Reasonable prospects for eventual economic extraction were applied by performing a resource
pit optimization and applying the following parameters: a gold price of US$3,400/oz, gold
selling costs of US$5.19/oz (C$7/oz) for offsite charges, a 1.5% royalty, mining costs of
US$2.59/t (C$3.50/t) with incremental costs of US$0.02/t (C$0.03/t) per 10 m elevation drop
starting at 1,050 m elevation, and combined processing and site G&A costs of US$8.52/t
(C$11.50/t). Gold payability was assumed to be at 99.8%, with a metallurgical recovery of 90%.
The exchange rate used was C$0.73 to US$1.00. No by-product metals were included in the
estimate.
Spanish Mountain Project Consolidated Mineral Resources