Lavras Gold Corp V.LGC

RE:RE:New discovery

[bobleplast]

PARADIGM $LGC $5.20 CAD PT Valuation & Conclusion We are initiating coverage of Lavras Gold with a Speculative Buy rating and $5.20 target price. The LDS project is large, highly prospective with a plethora of targets and excellent infrastructure. Permitting timeframes in Brazil are a fraction of North America’s. We heartily endorse management’s strategy of derisking the project by focusing on delivery of an attractive starter mine. Based on drilling since the Fazenda do Posto discovery in August 2023, we believe a starter mine is now visible, a critical milestone for any exploration play and impressive for just 2.5 years of work. Our analysis, while order of magnitude, indicates a robust starter project: at US2,600/oz our starter pit after-tax IRR is 35% and the NPV@5% is US$501 million (Lavras’ market cap is US$86 million). And this is just the beginning. We expect there will be several additional discoveries, benefiting from the infrastructure funded by the starter mine. We will be touring LDS for a second time in early December.