Loyalist Exploration Discloses Grade-Tonnage Sensitivity for Tully Gold Project Mineral Resource Estimate

Loyalist Exploration released grade-tonnage sensitivity data for its 100%-owned Tully Gold Project to inform a Preliminary Economic Assessment now underway, highlighting a higher-grade core at elevated cut-off grades. The release does not update the Mineral Resource Estimate; its reported base case is 1.62 million tonnes grading 3.16 g/t Au (164,000 oz) Indicated and 0.95 million tonnes grading 2.03 g/t Au (62,000 oz) Inferred. Mineral Resources are not Mineral Reserves and have no demonstrated economic viability.

Analysis

The key limitation is methodological: higher-cutoff sensitivity is measured inside stopes already shaped using the base-case cutoff and minimum width. It may show a higher-grade core, but it does not establish that those tonnes can be mined economically after dilution, access development, geotechnical constraints, and operating costs—or that a mine plan optimized at higher cutoffs would retain the same geometry. The sensitivity table itself is absent from the supplied release, preventing assessment of how quickly ounces are lost as grade rises.

Near term, treat this as low-information optionality rather than a change in asset value. The 1–3 month catalyst is the PEA: scrutinize mineable tonnes and recovered ounces, dilution and recovery assumptions, development capital, operating cost, and gold-price sensitivity. Over 6–18 months, any value case still depends on converting a resource-stage concept into a financeable project; higher gold prices could help the economics, while cost inflation or weaker gold could erase apparent grade advantages. The company’s promotional characterization is not independent evidence of economic viability. A consensus error would be to price the “robust core” as reserve-like inventory; the opposite risk is overlooking value if the PEA demonstrates attractive economics, but the release alone cannot resolve that.

Key Decisions for Investors

• No event-driven position on this release alone. The missing sensitivity figures and absence of economic metrics make the signal too weak to underwrite a directional trade in Loyalist Exploration.
• Set a PEA watch: require the full grade-tonnage curve and scenario-level mineable tonnes, recovered ounces, dilution, recovery, capital and operating-cost assumptions before reassessing valuation. Verify whether the PEA changes stope geometry rather than merely applying higher cutoffs to base-case shapes.
• For any existing exposure, treat the PEA as the near-term catalyst and size for resource-stage downside, including potential future funding and dilution; do not equate a Mineral Resource with a reserve or a development decision.
• Falsification of a positive thesis: the PEA shows material ounce loss at economic cutoffs, weak project economics under transparent gold-price sensitivities, or costs/capital that overwhelm the higher-grade inventory. A credible, independently prepared positive PEA would weaken the no-trade stance.