PANORO MINERALS LTD.
Management's Discussion and Analysis
As at and for the three and six months ended June 30, 2025
(Expressed in United States dollars, unless otherwise stated)
Background & DateThis Management's Discussion and Analysis should be read in conjunction with the audited consolidated financial statements as at and for the year ended December 31, 2024 and the unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2025 of Panoro Minerals Ltd. ("Panoro" or the "Company"), as filed on the System for Electronic Document Analysis and Retrieval ("SEDAR+").
This report has been dated and approved by the Board of Directors as at August 29, 2025.
The common shares of the Company are listed under the trading symbol "PML" on the TSX Venture Exchange ("TSXV") and the Junior Board of the Bolsa de Valores de Lima - the Lima Stock Exchange), "POROF" on the OTCQB in the United States and "PZM" on the Frankfurt Exchange.
Additional Sources of InformationFor a complete understanding of the Company's business environment, risks and uncertainties and the effect of accounting estimates on its results of operations and financial condition, this MD&A should be read together with the Company's Management Information Circular, Material Change Reports, press releases, and the Company's technical reports, all of which are available on the SEDAR+ website at https://www.sedarplus.com or on the Company's website https://www.panoro.com.
CAUTION REGARDING FORWARD LOOKING STATEMENTS:Information and statements contained in this Management Discussion and Analysis Quarterly Update ("MD&A") that are not historical facts are "forward-looking information" within the meaning of applicable Canadian securities legislation and involve risks and uncertainties. Examples of forward-looking information and statements contained in this MD&A include information and statements with respect to:
Acceleration of payments by Wheaton Precious Metals International Ltd. ("Wheaton Metals") to match third party financing by Panoro targeted for exploration at the Cotabambas Project;
Payment by Wheaton Metals of $140 million in installments;
Mineral resource estimates and assumptions;
Completion of the Company's technical objectives, including a preliminary economic assessment;
the receipt of the third payment from the previous sale of the Antilla Project;
the receipt of a contingent payment based on the estimated net present value of the Antilla Project determined at a later date;
the use of proceeds from the receipt of the third payment and the contingent payment in connection with the previous sale of the Antilla Project; and
the Company's plans and expectations for the Cotabambas Project.
Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. In some instances, material assumptions and factors are presented or discussed in this MD&A in connection with the statements or disclosure containing the forward-looking information and statements. You are cautioned that the following list of material factors and assumptions is not exhaustive. The factors and assumptions include, but are not limited to, assumptions concerning: metal prices and by-product credits; cut-off grades; short and long term power prices; processing recovery rates; mine plans and production scheduling; process and infrastructure design and implementation; accuracy of the estimation of operating and capital costs; applicable tax and royalty rates; open-pit design; accuracy of mineral reserve and resource estimates and reserve and resource modeling; reliability of sampling and assay data; representativeness of mineralization; accuracy of metallurgical test work; and amenability of upgrading and blending mineralization.
risks relating to metal price fluctuations;
risks relating to estimates of mineral resources, production, capital and operating costs, decommissioning
or reclamation expenses, proving to be inaccurate;
Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements and are included in all of the Company's documents filed on SEDAR+ and available on the Company's website. Items referred to in this MD&A may include forward-looking statements related to:
the inherent operational risks associated with mining and mineral exploration, development, mine
construction and operating activities, many of which are beyond Panoro's control;
risks relating to Panoro's or its partners' ability to enforce Panoro's legal rights under permits or licenses or
risk that Panoro or its partners will become subject to litigation or arbitration that has an adverse outcome;
risks relating to Panoro's or its partners' projects being in Perú, including political, economic and regulatory instability;
risks relating to the uncertainty of applications to obtain, extend or renew licenses and permits;
risks relating to potential challenges to Panoro's or its partners' right to explore or develop its projects;
risks relating to mineral resource estimates being based on interpretations and assumptions which may result in less mineral production under actual circumstances;
risks relating to Panoro's or its partners' operations being subject to environmental and remediation requirements, which may increase the cost of doing business and restrict operations;
risks relating to being adversely affected by environmental, safety and regulatory risks, including increased regulatory burdens or delays and changes of law;
risks relating to inadequate insurance or inability to obtain insurance;
risks relating to the fact that Panoro's or its partners' properties are not yet in commercial production;
risks relating to fluctuations in foreign currency exchange rates, interest rates and tax rates; and
risks relating to Panoro's ability to raise funding to continue its exploration, development and mining
activities; and
counterparty risk under Panoro's agreements.
This list is not exhaustive of the factors that may affect the forward-looking information and statements contained in this MD&A. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking information. The forward-looking information contained in this MD&A is based on beliefs, expectations, and opinions as of the date of this MD&A. For the reasons set forth above, readers are cautioned not to place undue reliance on forward-looking information. Panoro does not undertake to update any forward-looking information and statements included herein, except in accordance with applicable securities laws.
Qualified PersonThe technical information in this MD&A has been reviewed and approved by Mr. Luis Vela, a Qualified Person as defined by National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101"). Mr. Vela is responsible for the preparation and/or verification of the technical disclosure in this document unless otherwise noted.
Description of Business and OutlookPanoro is a uniquely positioned Peru-focused copper development company. The Company is advancing its flagship Cotabambas Copper-Gold-Silver Project (the "Cotabambas Project") located in the strategically important area of southern Peru. The Company also owns four early stage exploration projects in Peru.
During the six months ended June 30, 2025, the Company entered into a $900,000 loan agreement with Wheaton Precious Metals International Ltd. and loan agreements totaling $456,528 with several shareholders of the Company including two shareholders who are also key management personnel (see discussion below under "Transactions with Related Parties"). Each loan agreement includes an interest rate equal to 18% per annum and a maturity date of September 30, 2025.
On June 12, 2025, the Company announced that it entered into an agency agreement with Cantor Fitzgerald Canada Corporation ("CFCC") who agreed to act as lead agent and sole bookrunner, on behalf of a syndicate of agents in connection with a C$10,000,000 brokered private placement offering pursuant to the listed issuer financing exemption under Part 5A of National Instrument 45-106 (the "LIFE Offering"). The net proceeds of the LIFE Offering were to be used for infill drilling, metallurgical testing, pre-feasibility engineering and completion of an updated
preliminary economic assessment ("PEA") on the Company's Cotabambas Copper-Gold-Silver project (the
"Cotabambas Project"), working capital, including mineral concession payments, and general corporate purposes.
On August 29, 2025, the Company announced that it has decided to cancel the previously announced LIFE Offering, to terminate the agency agreement with CFCC and to advance with financing alternatives. Alternatives, including the receipt of the third payment from the previous sale of the Company's Antilla Project and the sale of a non-core, early-stage exploration project, are in advanced discussions.
With an often overlooked contained gold content of 3.3 million ounces at indicated category plus 2.7 million ounces at inferred category, together with contained copper content of 3.8 billion pounds at indicated category plus 3.0 billion pounds at inferred category combined with a more current gold price of over $US 3,400 per ounce and a more current copper price of over $US 4.40 per pound, completion of an updated PEA will increase significantly the value of the Cotabambas Project.
Panoro remains focused on completing its technical objectives including project optimization studies which will feed into a PEA and help define the scope for the prefeasibility study for its Cotabambas Project.
Corporately, in parallel with the advancement of its technical objectives, Panoro is engaged in evaluating potential strategic alternatives with several parties to advance the Cotabambas Project into construction and operation.
Panoro Minerals has been advancing technical studies at the Cotabambas Project aimed at optimizing the project's technical and financial metrics. These studies include optimization of the mining plan, ore processing, tailings and wasterock storage, concentrate transport and infrastructure requirements. These studies will be incorporated into a preliminary economic assessment to be built upon the updated Mineral Resource Estimate announced in early 2024.
The recent approval of the expanded and extended semi-detailed Environmental Impact Assessment (EIA-sd) is valid until 2030 and allows for additional drilling within the area of the current Mineral Resources (2 Targets) and into the other 17 targets identified on Panoro's mineral concessions at the Cotabambas Project.
The advancement of the technical studies and the expansion of the environmental permit together with the Company's strong share price performance has attracted the attention of a number of company's interested in potentially partnering for the advancement of the project to feasibility and development or to acquire the project. The company is evaluating strategic alternatives to advance the project to development.
The Company has completed a number of transactions to position itself to continue advancing the Cotabambas Project as other strategic alternatives are evaluated:
From the sale in 2021 of its interest in Antilla Copper S.A., which holds the Antilla Project, Panoro has received C$13,000,000 and is planning to receive the third payment of C$7,000,000 in 2025. The total potential cash payable by the purchaser to Panoro is C$70,000,000, comprised of the C$20,000,000 purchase price and up to a C$50,000,000 contingent payment based on the estimated NPV of the Antilla Project at a later date. Additional proceeds received from the sale of the Antilla Project are expected to be invested into the advancement of the Cotabambas Project to feasibility level and permitting; and
In December 2024, Hubay Minerals Inc. ("Hudbay"), exercised its option to acquire the Company's 2.0% net smelter returns royalty ("NSR") on the Kusiorcco Project (the "Kusiorcco NSR") for $2.0 million which the Company retained from the sale of its concessions comprising the Kusiorcco Property to Hudbay in December 2017.
Cotabambas ProjectIn February 2024, the Company filed an updated mineral resource estimate (the "Updated Mineral Resource Estimate") in compliance with NI 43-101 requirements and in accordance with CIM Best Practices for the Cotabambas Project. The Updated Mineral Resource Estimate was authored by AGP Mining Consultants Inc. ("AGP").
The Updated Mineral Resource Estimate utilized all drill and assay results available to June 23, 2023, including 73,938 meters of drilling distributed through 148 drillholes and 9,923 meters of drilling from legacy campaigns distributed through 27 drillholes. The Updated Mineral Resource Estimate includes hypogene and supergene sulphides and mixed/oxide copper-gold and oxide gold mineralization contained within a single conceptual pit shell that has been modelled to include that portion of the mineral resource block model having a reasonable prospect for economic extraction.
The Updated Mineral Resource Estimate for the Cotabambas deposit is reported by copper equivalent cut-off grade of 0.15 %CuEq within an optimized pit constraint. The effective date of the Updated Mineral Resource Estimate is November 20, 2023.
The Updated Mineral Resource Estimate at a 0.15%CuEq cut-off grade includes:
An Indicated mineral resource of 507.3 million tonnes at 0.34%Cu, 0.20 g/t Au, 2.42 g/t Ag, 0.0021%Mo, and 0.43%CuEq grade; and
An Inferred mineral resource of 496.0 million tonnes at 0.27% Cu, 0.17 g/t Au, 2.53 g/t Ag, 0.0027%Mo, and 0.36%CuEq grade.
HighlightsA Higher-Grade Component of Indicated resource delineated:
o 129.0 million tonnes at 0.70% Cu, 0.44 g/t Au, 4.12 g/t Ag and 0.0014%Mo, and 0.91%;
CuEq grade, at a cut-off of 0.5% CuEq; and
the higher-grade component is present within the optimized pit constraint (tables 5 and 6 show the Mineral Resources at a 0.5% CuEq cut-off grade).
Indicated mineral resources:
has increased by 333%;
increased from 117.1 million tonnes to 507.4 million tonnes; and
constitutes 51% of total resources.
Inferred mineral resources:
has reduced by 18%;
decreased from 605.3 million tonnes to 496.0 million tonnes;
constitutes 49% of total resources; and
includes a high-grade component of 93.1 million tonnes at 0.59 %Cu, 0.41 g/t Au, 5.31 g/t Ag and 0.0025%Mo, and 0.80 %CuEq, at a cut-off of 0.5%CuEq.
Contained Metals have increased to:
6.7 billion pounds Copper, 29% increase;
6.0 million ounces Gold, 43% increase;
79.8 million ounces Silver, 43% increase; and
53.7 million pounds Molybdenum, 85% increase.
Waste:Mineral ratio reduced from 2:1 to 0.65:1 for the Base Case
Resource remains open to northeast and southwest and at depth
Multiple new exploration targets identified into the Cotabambas property
Strong Community relations demonstrated over more than a decade
Current environmental permit allows an additional 450 drilling platforms