Vancouver - Spanish Mountain Gold Ltd. ('Spanish Mountain' or the 'Company') (TSX-V: SPA; FSE: S3Y; OTCQB: SPAUF) is pleased to announce the results of a Preliminary Economic Assessment and Mineral Resource Estimate Update (the ' PEA ', or 'PEA Update', 'MRE' on the Spanish Mountain Gold Project (the 'Project') located within the Cariboo Gold Corridor, British Columbia, Canada.
The PEA Update is a conceptual study showing improved potential economic viability of the Main Deposit. The PEA will be published in an independent National Instrument ('NI') 43-101 Technical Report within 45 days of this news release and filed on SEDAR+. Once filed on SEDAR+, the PEA will supersede the Company's existing technical report on the Project. The PEA Update study was commissioned by the Company and prepared by consultants led by BBA Engineering Ltd. (' BBA '). The PEA envisions a conventional open pit mining and milling operation with a projected 25.8-year life of mine ('LOM') producing 3.33 million ounces ('Moz') of payable gold, with a front-weighted production profile and attractive economics.
Highlights
Robust Economics: Base case after-tax NPV5% of US$2,156 million (C$2,910 million) with an after-tax IRR of 35.2% using a gold price assumption of US$3,600/ounce ('oz'). Using a spot gold price of US$4,400/oz gold, after-tax NPV5% increases to US$3,142 million (C$4,242 million) and the after-tax IRR to 46.3%.
Significant Production and Low Cost: 207 koz average annual gold production in the first 5 years at an all-in sustaining cost net of by-product credits ('AISC') of US$1,098/oz (C$1,482/oz) and 129,518 oz average annual gold production over a 25.8-year LOM at an AISC of US$1,450/oz (C$1,958/oz).
Rapid Payback of Capital Expenditures: US$1,050 (C$1,418million) initial capital paid back over 1.8 years at PEA Update base case and decreasing to 1.5 years at spot gold price of $4,400/oz gold.
Increased gold production: Updated drilling and resource definition has increased the tonnes and gold ounces included in the mine plan, when compared to the previous 2025 PEA. A larger open pit, with a lower overall strip ratio, is targeted, providing a longer mine life at an increased mill throughput rate. Additionally, ounce production has been brought forward in time in the schedule, and the overall ratio of Measured to Indicated Mineral Resources included in the mine plan has been increased.
Process Flowsheet Optimization: The Company advanced a significant flowsheet optimization initiative through the integration of coarse particle flotation and clean gangue rejection technologies. The optimized flowsheet has the potential to increase feed grades ahead of rougher flotation through early waste rejection, enabling higher throughput while maintaining strong gold recovery. The resulting design is more robust and operationally flexible, with benefits extending beyond metallurgical performance to include improved dry-stack tailings characteristics and reduced operating costs. These advancements strengthen the technical basis for the 2026 PEA update and FS trade-off studies while reinforcing the Company's objective of developing a high-performing, environmentally responsible mining operation.
Significant Opportunities: Potential to further enhance Project economics and expand production rate have been identified with the addition of the maiden Phoenix deposit MRE, ongoing endowment potential extensions, and preconcentration technologies such as mineralized material sorting to boost mill feed grade, that will be examined during the FS as an expansion option.
Strong Discovery Growth Potential: The 2026 Exploration diamond drill program has completed 31,587 meters (m) of a 60,000 m program on plan to complete Q4 2026.
Environmental, Permitting & Community: From March to August 2026, SMG worked closely with BC Environmental Assessment Office ('BCEAO'), Impact Assessment Agency of Canada ('IAAC'), participating Indigenous Nations and local communities to secure authorization in August from BCEAO to resume the previously paused combined provincial and federal Environmental Assessment ('EA') processes. This authorization, received in August from BC EAO avoids EA termination and reduces duplicate components of early engagement and the Initial Project Description processes. Consequently, pending geotechnical and condemnation drill results, SMG is on track trending towards delivering an updated draft Detailed Project Description ('DPD') in Q4 and formal submission of the DPD in Q1 2027. These are the next steps in resuming the EA process to advance to Spanish Mountain Gold project towards a build decision in 2028.
Key PEA Update Improvements and Optimizations vs. 2025 PEA
The PEA Update incorporates several important improvements and de-risking initiatives compared to the 2025 PEA, all of which better positions the Project for a successful next phase of development. Notable changes include:
Improved Mine Production Schedule Gold Produced: Increased gold production in the first 10 years from an average of 153 koz to 173 koz per year. Total of 1,533 koz to 1,734 koz (excluding pre-production), increasing 13.1% in the first 10 years of production.
Larger Project Scale: The Study has increased the process throughput (ROM Mill Feed) from 26 ktpd to 31 ktpd, which increases the LOM average gold production profile by 6% to 129 koz per year (from 122 koz per year). For the project, this will bring greater efficiency, lower unit costs, and uplift to the NPV, in addition to expanding Life of Mine (LOM) from 24.5 to 25.8 years and total gold production from 3.0 Moz to 3.33 Moz, a 11.0% increase over LOM. Further pre-concentration of mill feed to uplift feed grade such as mineralized material sorting was investigated during the PEA. It was identified as a target case opportunity to 'bolt-on' to the base case which will be further assessed during the next stages of project development.
Increase Throughput from Improved Flowsheet Design: Updated metallurgical studies and testing has resulted in modification to a coarse mill feed flotation circuit with the use of coarse particle flotation to upgrade ore feed into the main crushing circuit of the proposed processing plant. Increased process throughput from 26ktpd to 31ktpd, an increase of 19%.
Open Pit Mine Design Expansion and Growth: Through targeting lower strip ratios based upon improved geotechnical assessments, additional resources included in the mine plan and better stockpile management, an optimum open pit was selected to maximize efficiency. The LOM waste to resource strip ratio reduces to 1.8:1 in the PEA Update from 2.0:1 in the 2025 PEA, a 10% reduction.
Mineral Resource Estimate: Additional drilling, the resultant assays, and a new pit design using US$3,400 per ounce gold, increased the Main deposit Measured, Indicated contained gold ounces by 500 koz. Inferred ounces in the Main Deposit increased by 227 koz.
President and CEO, Peter Mah stated: 'The results of the PEA Update reflect steady improvements to the overall project economics and further scaling up of proposed gold production now projected higher than 3.3 Moz life of mine. This PEA with updated mineral resource estimate marks another key milestone for the Company as it prepares to complete a feasibility study (FS) and build decision by H1 2028. Our ongoing 60 km drill program to support the FS is approximately 50% complete and expected to be completed towards the end of Q4 2026. The drilling is expected to provide further opportunities to enhance scale, assist with locating proposed mine infrastructure and important technical information to complete the FS that will also enable permitting to advance. We are pleased to see years 1-10 gold production grew from 1.53 Moz to 1.73 Moz while LOM strip ratio of waste to gold mineralized material reduced from 2.0:1 to 1.8:1. LOM all-in sustaining costs and Initial Capex increased marginally from US$1,338 to US$1,450 and from US$ 926 million to US$1,050 (C$1,250 million to C$1,418 million) respectively primarily due to escalation, water treatment plant requirements, and an NSR due to the project financing secured April 20, 2026 (refer to news release dated April 20, 2026)
Mineral Resource Estimate for the Main Deposit
Note: The Main Deposit is included in the financial modelling for the 2026 PEA.
The updated MRE for the Main deposit is based on the amalgamation of what have been historically described as the Main Zone, North Zone, Slipper Zone, and K Zone, effective May 19, 2026, and it is reported at a 0.15 g/t gold cut-off. There is no certainty that Mineral Resources will be converted into Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Mineral Resources include Inferred Mineral Resources which have had insufficient work to classify them as Indicated Mineral Resources. It is uncertain but reasonably expected that Inferred Mineral Resources could be uplifted to Indicated Mineral Resources with additional drilling.
Geological and resource domain modelling and estimation for the Project was completed using Leapfrog 2026.1. The lithological model was developed based on data from the extensive re-logging program of 170,000 m drill core that was completed in 2023 and 2024, in addition to geochemical classification of sampled intervals eligible for such analysis, which includes both historical and modern drilling. Mineralization domains are modelled by identifying zones with gold values greater than 0.3 g/t over a minimum width of 3 m. Two primary styles of mineralization were recognized. Early mineralization includes disseminated stratiform mineralization in argillite-bearing lithologies. Late mineralization includes gold associated with late-stage quartz veins. Three high-confidence faults were modelled, including the North Fault, South Fault, and Fault 1. The Main Block is bound by the North and South Faults, representing significant discontinuities in stratigraphy and mineralization. Within the Main Block, Fault 1 introduces a minor offset in the main block.
Reasonable prospects for eventual economic extraction were evaluated by performing a pit optimization using the Lerchs-Grossman algorithm with the following parameters: gold price of US$3,400/oz, silver price of US$45/oz, and gold selling costs of US$5.19/oz (C$7/oz) for offsite charges, and a 1.5% royalty. Mining costs for mineralized material and waste are US$2.59/t (C$3.50/t), with incremental mining costs of US$0.02/t (C$0.03/t). Processing costs are US$8.52/t (C$11.50/t) for mill processing and include site G&A. Payability for gold is 99.8%, and payability for silver is 90%. Process recovery for gold is 90%, while process recovery for silver is 50%. The exchange rate used is C$0.73 to US$1.
Total Measured and Indicated Mineral Resources for the Main deposit includes 342.0 Mt at an average grade of 0.42 g/t gold and 0.66 g/t silver, for a total of 4.7 M contained ounces of gold (12% increase over the 2025 gold MRE) and 7.2 M contained ounces of silver (17% increase over the 2025 silver MRE). Total Inferred Mineral Resources for the Main deposit includes 42.4 Mt at an average grade of 0.28 g/t gold and 0.86 g/t silver, for a total of 0.4 M ounces of gold and 1.2 M ounces of silver.
About the Company
Spanish Mountain Gold Ltd. is focused on advancing its 100%-owned Spanish Mountain Gold Project (Project) towards construction of the next gold mine in the Cariboo Gold Corridor, British Columbia. The Company will publish, within 45 days of this news release, a new NI 43-101 Technical Report setting out the new executable vision to advance the Project. This new NI 43-101 Technical Report, with a de-risked and optimized Preliminary Economic Assessment (PEA) with an updated Mineral Resource Estimate (MRE), will supersede the prior technical report of the Company. On May 1, 2026, the Company received the first instalment of US$22.5 million in connection with the sale of a 1.5% NSR to Wheaton Precious Metals for US$55 million. In Q2 2026, the Company initiated a feasibility study on the Project, which is fully funded and will position the Company to make a construction decision in H1 2028.
The Company is seeking new ways to achieve optimal financial outcomes that are safer, minimize environmental impact and create meaningful sustainability for communities, which the Company terms 'The Relentless Pursuit of Better Gold'. Details on the Company are available on www.sedarplus.ca and on the Company's website: www.spanishmountaingold.com .
Contact:
Ranbir Kalan
Investor Relations
Tel: +1 (604) 601-3651
Email: info@spanishmountaingold.com
Cautionary Statement on Mineral Resource Estimates
All Mineral Resource estimates of the Company disclosed or referenced in this news release have been prepared in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum ('CIM') Definition Standards on Mineral Resources and Mineral Reserves dated May 10, 2014 ('2014 CIM Definition Standards'), whose definitions are incorporated by reference in National Instrument 43-101 - Standards of Disclosure for Mineral Projects ('NI 43-101'):
Mineral resource: is a concentration or occurrence of material of economic interest in or on the earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable.
Inferred mineral resource: is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. An inferred mineral resource has a lower level of confidence than that applying to an indicated mineral resource and must not be converted to a mineral reserve. It is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated mineral resources with continued exploration.
Indicated mineral resource: that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed. An indicated mineral resource has a lower level of confidence than that applying to a measured mineral resource and may only be converted to a probable mineral reserve.
Measured mineral resource: that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity. A measured mineral resource has a higher level of confidence than that applying to either an indicated mineral resource or an inferred mineral resource. It may be converted to a proven mineral reserve or to a probable mineral reserve.
FORWARD-LOOKING INFORMATION:
Certain of the statements and information in this press release constitute 'forward-looking information'. Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as 'expects', 'anticipates', 'believes', 'plans', 'estimates', 'intends', 'targets', 'goals', 'forecasts', 'objectives', 'potential' or variations thereof or stating that certain actions, events or results 'may', 'could', 'would', 'might' or 'will' be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be considered forward-looking information. The Company's forward-looking information is based on the assumptions, beliefs, expectations and opinions of management as of the date of this press release and include but are not limited to information with respect to, projections; outlook; guidance; forecasts; estimates; other statements regarding future or estimated financial and operational performance, gold and silver production, revenues and cash flows, capital costs and operating costs, including projected cash operating costs and AISC, future or estimated mine life, metal price assumptions, recovery rates, strip ratios, throughput, ore processing; statements regarding anticipated exploration, drilling, development, construction, permitting and other activities or achievements of Spanish Mountain; the project life, total gold production, net present value, after-tax cash flow and payback periods; the timing of a feasibility study and build decision; the completion of the ongoing drill program; the expansion of the Project through additional activities at the Phoenix Deposit; the exercise of buy-down rights in the royalties encumbering the Project and the ability of the Company to further de-risk the project through the completion of additional engineering studies and technical work;. . Other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking information if circumstances or management's assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking information.
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