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Dear Shareholders and Interested Parties

The similarities between gold today and copper in late 2005 are striking. Back then the copper industry was coming out of a 10 year bear market, new mine supply was non existent and demand from China was considered unsustainable. The move in gold over the last 2 months has caught many by surprise and today there is still an overwhelming view that this $300 rally will soon fizzle out. Eleven years of bear markets in gold has trained the market to think that way.

I found an old report I wrote 16 years ago called A Brave New World. Back then I remember the sceptisim from fund managers when I said copper was about to spike to $8,000/t ($3.60/lb). Today the thought of gold going to $3,000 per ounce this year is laughed at. The gold bugs used to make these predictions at the end of the last bull market but they have all gone into hiding or just given up.

To me, gold has the same setup as copper before it took off in 2006. A bear market since 2011, very few gold mines built and new buyers of physical gold that are growing by the day. I would argue that the supply and demand fundamentals for gold are much stronger than copper, oil or even lithium. In A Brave New World for Gold the price will be increasingly driven by physical fundamentals rather than paper trading. While demand destruction and substitution always follow price spikes in other commodities, higher gold prices actually create more demand.

This is why at Pilar Gold we want to continue to buy rather than build. Xstrata mastered the trade of buying higher cost mines into a rising market. We want to do the same and would much rather buy a high cost mine with a long mine life than try and build a big low cost gold mine that won´t produce for 2+ years. Building big new mines in a world of inflation is very risky and something we don´t want to take on.

Our recent acquisition of the exciting Laiva mine in Finland was paid with only 12.3% new Pilar shares and is ready to switch on in May. I genuinely believe that Laiva is a game changer for our company. It is a fast payback acquisition that could become Europe´s second largest gold mine over the medium term.

Pilar Gold Investor Presentation - January 2023

We are also lucky to be bringing on Sertão in August which we believe will be the highest grading gold mine in the industry and have a cash cost of less than $400 per ounce. In football terms, Sertão won 3 Ballon D’ors in 2003, 2004 and 2005 and then retired. I call it Georgie Best (Britain´s greatest ever who retired at 26) but unlike football players, world class gold deposits don´t age.

The presentation link above provides an update on our growth plans to achieve 110,000 – 120,000 ounces in 2023 with an expected AISC of $1,350-1,400 per ounce. Our leverage to a rising gold price is significant and would build our momentum to grow our existing mine base faster to achieve 150,000 ounces in 2024.

We want to complete our C$8M raise by the end of February to ensure everything is in place for the warmer months in Finland. At C$1 per share with a full warrant of C$1.5 this values our group post money at C$250 million. To build our mines and mills today would cost C$1 billion. Selling our shares at such a discount to our replacement cost is another product of the 11 year bear market. Please use the form in the link below if you would like to participate or call us anytime to discuss more.

Private Placement Subscription Document - January 2023

Hold onto your hat, gold is going to do things that the market is not expecting.

Regards,

Jeremy Gray | CEO
jeremy.gray@pilargold.com

Edward Balme | Head of Investor Relations
edward.balme@pilargold.com

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