RockeTeller updated the narrative for DMET

DENARIUS METALS (DMET) – Updated Snapshot (2025)

What’s new

• Shares outstanding (basic): ~123,739,188 as of Sept 2, 2025. There are also multiple warrant and option series outstanding. Denarius Metals
• Zancudo (Colombia): Mining commenced in Q2-2025; first shipment under the Trafigura offtake was announced July 14, 2025. A new 1,000 tpd processing plant and site infrastructure are fully funded for completion by end-2025 to produce Au-Ag concentrates. Denarius Metals+1
• Zancudo PEA (context): initial capex ~US$14.8M; AISC ~US$1,059/oz payable gold (by-product basis). Denarius Metals
• Lomero-Poyatos (Spain): Updated MRE (Sept 2023) converted ~73% of resources to Indicated; 146 holes (44,228m) by DMET plus 55 historical. May-2025 presentation says a PEA based on the updated MRE and access to the 2,500 tpd Aguablanca plant was being completed “early 2025.” (No separate PEA news release posted since; treat timing as sliding.) Denarius Metals+1
• Aguablanca (through RNR): DMET owns ~21% of RNR; Aguablanca underground mine expected back in production by mid-2026. Plant condition assessment with METSO Spain underway as of Aug-2025. wp-denariusmetals-2023.s3.ca-central-1.amazonaws.com+1
• Financing: Two 1H-2025 private placements raised ~US$7.8M net to bolster liquidity; ongoing debenture interest settled partly in shares. Cboe Global Markets+1

Latest AISC

• Zancudo: AISC ~US$1,059/oz (PEA). Denarius Metals
• Lomero-Poyatos: No public AISC yet (PEA not released). I’ll use a conservative GEO AISC proxy of US$1,200/oz for consolidated FCF modeling and note it explicitly as an assumption.

Key resources (Lomero-Poyatos, 2023 MRE – rounded as per your inputs)

• Gold: ~700,000 oz
• Silver: ~7 million oz
• Copper: ~105M lbs
• Lead: ~96M lbs
• Zinc: ~240M lbs (Recovery rate assumption in your model: 80%. Keep that for comparability.)

Price deck for scenarios

• Base metals (per your inputs): Cu US$4/lb, Pb US$1/lb, Zn US$1.5/lb
• Precious metals scenarios below.

Streamlined revenue build (recoverable metal @ 80%)

• Gold: 560,000 oz
• Silver: 5.6M oz
• Copper: 84M lbs
• Lead: 76.8M lbs
• Zinc: 192M lbs

I convert non-gold revenue to gold-equivalent ounces (GEOs) by dividing non-gold revenue by the gold price in each scenario, then add to gold ounces. Costs modeled with AISC = US$1,200/GEO (proxy), so Margin/GEO = (Gold price − 1,200).

Valuation Scenarios (FCF × multiple; shares = 123,739,188)

Scenario A: Gold US$4,500/oz, Silver US$100/oz (Cu $4, Pb $1, Zn $1.5)

• Revenues (recoverable): gold 560k × 4,500 = US$2.520B silver 5.6M × 100 = US$0.560B copper 84M × 4 = US$0.336B lead 76.8M × 1 = US$0.0768B zinc 192M × 1.5 = US$0.288B total ≈ US$3.7808B
• GEOs = 560k + (0.560+0.336+0.0768+0.288)B / 4,500 ≈ 840,178 GEO
• Margin/GEO = 4,500 − 1,200 = US$3,300
• FCF ≈ 840,178 × 3,300 ≈ US$2.7726B
• 10× FCF ≈ US$27.73B → US$224.07/share
• 15× FCF ≈ US$41.59B → US$336.10/share
• 20× FCF ≈ US$55.45B → US$448.13/share

Scenario B: Gold US$5,000/oz, Silver US$150/oz (Cu $4, Pb $1, Zn $1.5)

• Revenues (recoverable): gold 560k × 5,000 = US$2.800B silver 5.6M × 150 = US$0.840B copper/lead/zinc as above = US$0.336B + 0.0768B + 0.288B total ≈ US$4.3408B
• GEOs = 560k + (0.840+0.336+0.0768+0.288)B / 5,000 ≈ 868,160 GEO
• Margin/GEO = 5,000 − 1,200 = US$3,800
• FCF ≈ 868,160 × 3,800 ≈ US$3.2990B
• 10× FCF ≈ US$32.99B → US$266.61/share
• 15× FCF ≈ US$49.49B → US$399.91/share
• 20× FCF ≈ US$65.98B → US$533.22/share

Notes on the math

• These are consolidated, conceptual FCFs centered on Lomero-Poyatos’ metal inventory and your recovery/price assumptions. They do not include corporate G&A, sustaining/expansion capex, taxes, working capital, financing costs, or schedule phasing. Zancudo’s early cash flow and Aguablanca (via RNR) could help fund capex, but also have their own cost structures and ownership splits. Treat these as upper-bound operating proxies under high-price decks.

Risks

• Study timing and AISC visibility: Lomero PEA timing has slipped from “early 2025”; without a PEA, capital and operating cost certainty is limited; no public AISC yet. wp-denariusmetals-2023.s3.ca-central-1.amazonaws.com
• Financing and dilution: Multiple placements and debenture-related share issuances in 2025; financing pipeline likely ongoing. Cboe Global Markets+1
• Execution: Concurrently advancing Zancudo build-out, Lomero technical work, and Aguablanca restart (via RNR) spreads management bandwidth and adds integration risk. wp-denariusmetals-2023.s3.ca-central-1.amazonaws.com+2Denarius Metals+2
• Jurisdictional: Colombia and Spain are mining-active, but subject to shifts in fiscal/regulatory frameworks and community expectations (permits, social license).
• Commodity dependency: Scenario values rely on very high gold/silver prices persisting; downside metals pricing compresses FCF sharply.
• Metallurgy/recoveries: Polymetallic flowsheets must prove stable, especially with manganese/lead/zinc components; recoveries and penalty elements can impact netbacks.
• Ownership & offtake complexities: RNR interest (~21%) and Trafigura offtake at Zancudo introduce third-party performance and pricing dependencies. wp-denariusmetals-2023.s3.ca-central-1.amazonaws.com+1

Catalysts (12–24 months)

• Zancudo plant completion and commissioning (target end-2025) → ramp to steady Au-Ag concentrate sales under Trafigura offtake. Denarius Metals
• Formal Lomero-Poyatos PEA publication → first look at capital, operating costs, and NPV/IRR. wp-denariusmetals-2023.s3.ca-central-1.amazonaws.com
• Aguablanca restart (RNR) by mid-2026 → potential cash flow exposure via DMET’s 21% stake. wp-denariusmetals-2023.s3.ca-central-1.amazonaws.com
• Further resource work/permits in Spain; plant refurbishment milestones (METSO-supervised program) and any tolling/processing agreements. Denarius Metals
• Additional funding packages (equity, project finance, offtake prepayments) that reduce dilution risk.
• Strong precious-metals tape (gold to US$4,500–5,000; silver to US$100–150) that re-rates developers.

Expected timeline (planning view)

• 2H-2025: Zancudo 1,000 tpd plant construction complete; commissioning into 2026. Lomero PEA publication (timing TBD). Aguablanca plant condition assessment (Phase 1) with METSO. Denarius Metals+1
• 2026: Zancudo ramps up concentrate sales; Aguablanca restarts mid-year (RNR). Lomero advances through permitting/engineering depending on PEA outcomes. wp-denariusmetals-2023.s3.ca-central-1.amazonaws.com
• 2027–2029: Lomero FS/permits/financing window and staged construction (subject to PEA economics and funding). First Lomero production would most likely be late-decade, not before.
• Ongoing: Potential M&A / strategic JV if study results and market backdrop are favorable.

Bottom line

• Latest share count is ~123.7M basic. Denarius Metals
• Latest public AISC: Zancudo PEA ~US$1,059/oz (payable gold); no Lomero AISC yet. Denarius Metals
• High-price decks produce very large theoretical values, but the de-risking path is Zancudo cash flow → Lomero PEA/FS → financing and permits → build. Treat the FCF outputs above as illustrative upside, not price targets.