REG - Meridian Mining plc - Form 51-102f1 Management Discussion and Analysis
14/05/2026 17:15
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RNS Number : 4165E Meridian Mining plc 14 May 2026
FORM 51-102F1
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED MARCH 31, 2026
Introduction
This Management Discussion and Analysis ("MD&A") of the results of
operations and the financial condition of Meridian Mining plc, ("Meridian" or
the "Company") is the responsibility of management and covers the three-month
period ended March 31, 2026. This MD&A takes into account information
available up to and including May 12, 2026 and should be read together with
the Annual Information Form and audited consolidated financial statements and
notes for the year ended December 31, 2025, which are available on the SEDAR+
website at www.sedarplus.ca (http://www.sedarplus.ca) .
All financial information in this document is prepared in accordance with
International Accounting Standard ("IAS") 34, Interim Financial Reporting as
issued by the International Accounting Standards Board ("IASB"). All amounts
are in United States ("US") dollars, and all units of measurement are
expressed using the metric system, unless otherwise stated. References to "$",
"US$" or "dollars" are to US dollars, and references to "C$" are to Canadian
dollars.
Additional information related to the Company is available for view at
www.meridianmining.co or on the SEDAR+ website at www.sedarplus.ca
(http://www.sedarplus.ca) .
This MD&A contains forward-looking information, such as statements
regarding the Company's future plans and objectives that are subject to
various risks and uncertainties, including those set forth in this document
under the headings "Note Regarding Forward-Looking Statements" and "Risk
Factors". The Company cannot assure investors that such information will prove
to be accurate, and actual results and future events could differ materially
from those anticipated in such information. The results for the periods
presented are not necessarily indicative of the results that may be expected
for any future periods. Investors are cautioned not to place undue reliance on
this forward-looking information.
Business Overview
Meridian is a resource development and exploration company with projects in
Brazil. The Company signed a Purchase Agreement on November 6, 2020, to
acquire the rights within the Cabaçal gold ("Au") - copper ("Cu") - silver
("Ag") Volcanic Massive Sulphide ("VMS") belt ("VMS Belt"), that included the
historical Cabaçal Au-Cu-Ag mine ("Cabaçal"), and the separate Santa Helena
Cu-Au-Ag, zinc ("Zn"), and lead ("Pb") mine ("Santa Helena") in the state of
Mato Grosso, Brazil. The Company has separately secured additional licences
across the project's VMS Belt, and in the parallel Jauru and Araputanga
Greenstone Belts to the west of Cabaçal.
The Company also has non-core projects in the State of Rondônia, including
the Espigão Cu-Au polymetallic ("Espigão") project.
Strategy
Meridian's vision is to create sustainable value for its stakeholders by
developing and exploring for high-quality resource assets. The Company is
committed to being a responsible steward of the environment and building
collaborative partnerships with communities, governments, and all other
stakeholders for mutual success.
The Company's focus is on the resource development and exploration of
Cabaçal.
Corporate Outlook
Our priorities are to focus on the potential of the Au-Cu-Ag at Cabaçal and
Au-Cu-Ag & Zn potential at Santa Helena, which are both assets acquired
through the Purchase Agreement with two private Brazilian companies (detailed
below). The priority focus is to advance and complete the feasibility study on
the Cabaçal project whilst continuing exploration and resource definition
work at the Santa Helena project.
In March 2025, the Company published a Pre-Feasibility Study on Cabaçal
("PFS"). During the nine months ended September 30, 2025, the Company
commenced the next phase of studies by initiating Cabaçal's Feasibility
Study. This involves detailed engineering, economic, metallurgical and final
environmental studies. An infill drilling program of the Cabaçal deposit was
undertaken and completed on October 7, 2025.
The Company has been conducting a separate drilling program at Santa Helena to
evaluate the potential for a second open-pit development. From the second
quarter of 2026 and onwards, the program will transition to near-mine and
regional exploration. Company continues its metallurgical program for Santa
Helena with the goal of increasing precious metal recoveries in the fresh rock
zones of the deposit.
Regional exploration along the VMS Belt is planned to progressively cover over
50km of strike of the prospective geology that is held by the Company under
licence. The aim is to identify additional Cu-Au-Ag systems for follow up
drilling.
The Company will continue to develop its Executive Management and Brazilian
teams to meet business needs for the continual growth of the principal asset
of Cabaçal.
Performance Summary for the period ended March 31, 2026
Corporate Highlights
· On February 12, 2026, the Company closed a bought deal offering
through the issuance of 36,392,900 common shares at a subscription price of
C$1.58 per common share, for aggregate gross proceeds to the Company of
$42,226,562 (C$57,500,782).
· The Company also issued:
o 1,574,139 common shares related to the exercise on a cashless basis (net
exercise) of 2,288,198 share purchase stock options, in accordance with the
Company's omnibus plan; and
o 774,380 common shares for cash proceeds of $288,254 pursuant to the
exercise of stock options at prices of C$0.45 and C$1.10.
Cabaçal Highlights
· On February 17, 2026, the Company reported on the acceleration of its
post financing 2026 field and corporate programmes. Capital items with long
lead times, required in the construction of the Cabaçal mine will be ordered
in Q1 2026, and civil works to upgrade bridges and roads to site will be
brought forward to the 2026 dry season. Meridian outlined an expansion of
exploration programmes in 2026 to test the Cabaçal mine-corridor targets,
with field programmes also planned on the Jauru and Araputanga Greenstone
Belts; and Espigão IOCG targets to be tested. Santa Helena Central drilling
returned further high-grade drill results, including CD-806: 2.6m @ 2.4g/t Au,
1.7% Cu, 93.2g/t Ag, 15.7% Zn & 2.6% Pb; CD-796: 5.7m @ 1.0g/t Au, 1.0%
Cu, 27.6g/t Ag, 5.2% Zn & 0.9% Pb; CD-792: 4.6m @ 2.5g/t Au, 0.5% Cu,
47.3g/t Ag, 4.6% Zn & 1.1% Pb; CD-786: 2.0m @ 2.4g/t Au, 4.1% Cu, 73.7g/t
Ag, 6.3% Zn & 0.8% Pb. Meridian also noted that it will consider a London
Stock Exchange dual listing.
· On January 20, 2026, the Company reported results of separate
Mineral Resource Estimates for the Cabaçal deposit and the Santa Helena
Central deposit, concluded by its consultant, with highlights including:
Cabaçal mine's Au-Cu-Ag open-pittable resource expanded: M&I: 70.1Mt @
0.6g/t Au, 0.3% Cu, 1.3g/t Ag; Metal increases of 39.2% for Au, 14.2% for Cu
and 19.3% for Ag; Mineralization remains open down dip. Santa Helena Central's
maiden open-pittable Au-Cu-Ag-Zn-Pb resource declared: M&I: 5.3Mt @ 0.6g/t
Au, 0.4% Cu, 15.5g/t Ag, 1.9% Zn & 0.4% Pb. The Cabaçal VMS Belt's
M&I resources total 1.4Moz Au, 0.6Blbs Cu, 5.6Moz Ag, 217.4Mlbs Zn and
49.9Mlbs Pb and Cabaçal DFS metallurgical studies have optimized recoveries
of Au, Cu & Ag. The Company also reported that ten additional mineral
title applications have been approved for exploration by the ANM in Mato
Grosso, in the Cabaçal, Araputanga and Jauru Belts. With the increasing focus
on copper-gold exploration in Mato Grosso, the Company has decided to
relinquish certain non-core licences in Rondônia (within the Mirante da Serra
and Ariquemes districts).
Except as disclosed elsewhere in this document, there were no other material
subsequent events to the date of this report other than the items noted below:
Subsequent to March 31, 2026:
Corporate Highlights
· On April 27, 2026 the Company announced its application for Listing on
the Main Market of the London Stock Exchange, Publication of Prospectus and
Proposed Fundraising to Raise Up to GBP25 million by way of an institutional
placing and a separate retail offer
· On April 27, 2026, the Company completed an oversubscribed equity
placing to institutional investors, raising gross proceeds of approximately
USD 30.4 million (GBP 22.5 million) through the issuance of 24,456,521 new
ordinary shares at a price of 92.0 pence per share (CAD 1.70 per share).
· On May 1 2026, the Company completed and closed its retail offer,
raising approximately USD 3.4 million (GBP 2.5 million) through the issuance
of 2,717,391 new ordinary shares at an issue price of 92.0 pence per share
(CAD 1.70 per share).
In connection with the fundraising, the Company paid agent's commissions of
USD 1,544,160 and incurred other share issuance costs and LSE/TSX listing
expenses of USD 1,657,012.
· On May 1, 2026, the Company's entire issued share capital was admitted
to the equity shares (commercial companies) category of the Official List of
the Financial Conduct Authority and to trading on the Main Market of the
London Stock Exchange. The Company's shares now trade under the ticker symbol
"MNO", maintaining its dual listing with the Toronto Stock Exchange.
· 139,825 common shares related to the exercise on a cashless basis
(net exercise) of 250,891 share purchase stock options, in accordance with the
Company's omnibus plan.
Cabaçal Highlights
· No subsequent highlights to report.
Cabaçal Project, Mato Grosso, Brazil
Background
The Cabaçal Au-Cu-Ag camp scale VMS project is located in the Alto Jauru
Greenstone Belt, in the Southwest ("SW") margin of the Amazon Craton. The
Company has an option agreement that provides a 100% financial benefit with a
series of milestone-based payments for licences covering an area of 18,462
hectares ("ha"), incorporating an approved mining lease, a mining lease
application, and three exploration licences. The Company holds sixteen
additional exploration licences and applications covering 33,364 ha in the
Cabaçal Belt and 55,452 ha in the Jauru and Araputanga Belts. These cover
gold and base metal anomalies outlined by geochemical and geophysical
exploration by BP Minerals ("BPM").
Purchase Agreement
On November 6, 2020, the Company entered into a purchase agreement with two
private Brazilian companies (the "Vendors") to acquire the rights to the
Cabaçal Copper-Gold Project, located in the state of Mato Grosso, Brazil (the
"Cabaçal Agreement"). On October 5, 2021, the Company assigned the Cabaçal
Agreement to its Brazilian subsidiary, Rio Cabaçal Mineração. The Cabaçal
Agreement provides that a portion of the purchase price may be withheld, at
the Company's discretion, in an indemnification escrow fund (the "Escrow
Fund") to secure the payment of certain obligations of the Vendors. Amounts
held in the Escrow Fund may be used by the Company to settle specific
obligations of the Vendors in accordance with the terms of the agreement.
Under the terms of the Cabaçal Agreement, the Company is required to make
staged payments contingent upon the achievement of specified milestones.
Based on an assessment of the contractual provisions, the Company has
determined that the Cabaçal Agreement represents an executory contract.
Accordingly, staged payments are triggered only as the relevant milestones are
achieved. The measurement of each staged payment is determined at the trigger
date and is capitalized to exploration and evaluation assets as
acquisition-related costs.
Amounts triggered and paid as at March 31, 2026:
· First installment payment: $25,000 payable
within 5 days of the execution of the option agreement (paid);
· Second installment payment: $275,000 payable by October 15, 2021,
as the transfers of the mineral rights to Rio Cabaçal were filed with the
Agência Nacional de Mineração ("ANM"; Brazil's national mining agency)
(paid);
· Third installment payment: $1,750,000 payable on August 1, 2023,
unless accelerated upon completion of an equity financing for gross proceeds
of at least $2,500,000, provided completion of a successful drill program and
historical geophysics database validation, as well as obtaining certain
permits and the access to the surface rights overlapping with the Cabaçal
mineral rights (partially paid);
· Fourth installment payment: 1,000,000 common shares in the capital
of the Company or C$300,000, at the option of the Vendors, within 6 months of
the third payment and subject to completion of a technical report on the
estimate of the resource in accordance with National Instrument 43-101,
whichever occurs later (paid in common shares).
Amounts not yet triggered:
· Fifth installment payment: $1,850,000 plus, at the option of the
Vendors, 1,500,000 common shares in the capital of the Company or C$450,000,
within 9 months of the fourth payment and subject to the successful completion
of the positive economic feasibility study. On January 4, 2024, the Company
amended the terms of this fifth installment to defer the fifth payment to
September 30, 2025, but is subject to the successful completion of the
positive economic feasibility study. The amended terms required the Company to
advance a total of $250,000, divided in monthly installments, from April 2025
to June 2025 (paid), to be deducted from the total amount of the fifth
payment. On April 15, 2025, the Company further amended the terms of the fifth
installment where the payment will be made by June 30, 2026, but is subject to
the successful completion of the positive economic feasibility study. The
amended terms require the Company to advance an additional total amount of
$600,000, divided in monthly installments, from October 2025 to January 2026
(paid), to be deducted from the total amount of the fifth payment; As at March
31 2026, the Company has not issued a positive economic feasibility study and
thus the fifth installment payment, excluding fees pertaining to amendments,
has not been triggered.
· Sixth installment payment: $2,250,000 payable plus, at the option of
the Vendors, 2,000,000 common shares in the capital of the Company or
C$600,000, up to 30 days after the Installation Licence ("LI") of the Cabaçal
plant is issued by the competent authorities; and
· Seventh installment payment: $2,600,000 payable within 45 days after
the signature by the Company of the definitive financing contracts for the
construction of the Cabaçal plant.
During the period ended March 31, 2026, the Company made payments of $150,000
on behalf of the Vendors. These amounts were applied as deductions against the
third and fifth installment payments.
As at March 31, 2026, the remaining balances of $68,008 continue to be
recognized in accounts payable and accrued liabilities in accordance with the
third installments.
Cabaçal is located within the buffer zone of Brazil's frontier ("Border
Buffer Zone"). The Border Buffer Zone is a constitutionally protected zone and
not an economic exclusion zone. The terms of the Cabaçal Agreement give the
Company the option, under certain conditions, to return the mineral rights to
the Vendors on an "as is" basis, without any obligation to make any
outstanding payments and to comply with other obligations.
There is a 1.5% Net Smelter Royalty associated with the Santa Helena area,
which is part of Cabaçal.
Geology and Mineralization Model
The Proterozoic Alto Jauru Greenstone Belt consists of an association of
bimodal volcanic and sedimentary rocks (tholeiitic meta-basalts, felsic
volcanics, and meta-sedimentary rocks, intruded by granites, tonalites, and
gabbroic dykes).
The discovery of Cabaçal has its origins in the 1980s gold rush, during which
local companies backed by BPM carried out extensive mapping, stream and soil
geochemistry, and reconnaissance drilling, which led to its discovery in 1983.
The project operated as an underground mine producing 973,031 t @ 4.91g/t Au
and 0.80% Cu over four years up to 1991. Regional exploration by BPM and then
by RTZ Corporation PLC ("RTZ"), now known as Rio Tinto, consisted of >600
drill holes (~70,000 m of drilling), of which 406 holes were drilled at
Cabaçal. Underground mining was selective and focused on higher grade trends
(>3g/t gold-only cut-off grade). The mine was decommissioned by RTZ after
its acquisition of BPM in 1989, which then completed a successful
environmental rehabilitation.
The Cabaçal deposit is considered to be a deformed Au-rich end member of the
VMS deposit style. Globally, such deposits have been major global hosts of
base metals, gold, and silver. Deposits tend to form in districts that may
contain dozens of periodically spaced mineral centres, related to hydrothermal
convection cells on the ancient ocean floor. With tilting, deposits may now be
at or below the present-day erosional surface. Whilst VMS deposits are well
known for their base metal production, notable examples exist of copper-gold
and gold-only end members, including Mt Lyell (Cu-Au) and Henty (Au) of the Mt
Read Volcanics (Tasmania, Australia), and LaRonde Penna deposit of the
Doyon-Bousquet-LaRonde mining camp (Quebec, Canada).
The immediate host rocks of the Cabaçal deposit consist of foliated cherts
and volcaniclastic rocks, with hydrothermal overprints of variable sericite,
biotite, and chlorite alteration. Cu-Au mineralization has been traced over
~1.9km in the mine environment, although much of the historical drilling was
focused over a 750m sector. Mineralization dips moderately, presenting a good
geometry for potential open pit development. The targeted mineralization forms
a series of stacked sheets, which individually can have widths of ~10-40m and
have been traced ~250-500m down-dip.
A second, copper-gold-silver and zinc focused underground mine was developed
more recently at Santa Helena, but the mine has been closed since 2008, and
the site has ongoing rehabilitation works by the Vendors. The mineralization
present in the Santa Helena mine consists of massive, semi-massive and
disseminated volcanic sulphides (pyrrhotite, chalcopyrite, sphalerite, and
galena), typical of the VMS association.
Exploration
An extensive database of historical geochemical results is available for the
VMS Belt, with reconnaissance exploration programs executed by BPM being
progressively followed by more detailed work programs which defined a series
of target areas. In 1982, semi-detailed geological mapping (1:50,000)
accompanied a detailed stream sediment geochemical program with samples
analysed for Cu, lead ("Pb"), zinc, nickel ("Ni"), and Au (as gold counts). In
1983-1984, the opening of 400 x 50m soil geochemical grids progressed as a
follow up to the stream anomalies generated at the C-4 and C-2 prospects.
These were closed on a 100 x 25m grid in areas (C-4A, C-4B, C-2A and C-2B,
C-2C, C-5A and C-5B). In 1985, the implementation of a 400m x 50m soil grid
survey continued regionally along the VMS Belt (C-6). In the geochemical
prospecting work carried out by BPM / RTZ, samples were analysed for Cu, Pb,
Zn, Ni and gold counts, and results presented in maps in scales of 1:10,000,
1:5,000 and 1:2,500.
Historical geophysical programs were similarly expansive. In 1982, BPM carried
out a survey covering ~6,800 km2, capturing ~2,800-line km of magnetic /
electromagnetic data through an INPUT Survey. This delineated the principal
volcanic belts and 81 targets, 13 of them in the Cabaçal range area. The
INPUT / MAG aerial survey was carried out in September 1982 by Prospec S/A,
with the technical supervision of Questor Canada. Terrestrial geophysics was
also conducted and as at September 1985, 45 km of gradient array IP
arrangement, 13 km of pole-dipole IP, and 163 km of max-min applied potential
surveys have been concluded. Results from these programs are presented in a
series of maps and plans.
The most recent geophysical program was a VTEM magnetic and conductivity
survey undertaken in late 2007 ("Rio Branco Survey") by Microsurvey
Aerogeofísica e Consultoria Geofísica Ltda. The survey involved survey lines
at spacings of 300m, oriented NE (perpendicular to stratigraphy). At least 20
bedrock anomalies have been modelled from this survey.
A series of near mine and satellite targets have been defined through a
combination of geophysical and geochemical methods, with an historical VTEM
survey in particular highlighting extensions of the prospective stratigraphic
horizon. These will be progressively followed up to test the potential of the
30-kilometre strike length of the prospective belt.
Permitting, Corporate Social Responsibility and Environment
The Company is leveraging its successful "Espigão" social licence to operate
the Cabaçal project and has established an open and positive dialogue with
the local stakeholders. Programs being executed are under an agreement with
the local landholders, and under an environmental licence issued by the state
environmental agency, SEMA.
Cabaçal Mineral Resource Estimate - 2025 PFS
Mineral consultancy GE21 Consultoria Ltda ("GE21") was engaged to conduct a
Mineral Resource Estimate ("MRE") for the Cabaçal Copper‐Gold Deposit PFS.
The MRE defined Open Pit Measured and Indicated Resources of 51.43 Mt @
0.55g/t Au, 0.40% Cu & 1.5g/t Ag for 904.31koz of gold, 204.47kt of
copper, and 2,480.72koz of silver and Underground Inferred Resources of 0.26
Mt @ 0.96 g/t Au, 0.49% Cu, 1.36 g/t Ag for 8.15koz of Gold, 1.29kt of Copper
and 11.54koz of Silver.
Open pit resources were prepared in accordance with the CIM Standards, and the
CIM Guidelines, using geostatistical and/or classical methods, plus economic
and mining parameters appropriate to the deposit. Mineral Resources are not
ore reserves and are not demonstrably economically recoverable. Grades are
reported using dry density. The effective date of the MRE was November 15,
2024. The QP responsible for the Mineral Resources is geologist Leonardo
Soares (MAIG #5180). The MRE numbers provided have been rounded to the
estimate relative precision. Values cannot be added due to rounding. The MRE
is delimited by Mining licence areas. The MRE was estimated using ordinary
kriging in 10m x 10m x 5m blocks with sub-blocks of 5.0m x 2.5m x 1.25m. The
MRE report table was produced in Leapfrog Geo software. The MRE was restricted
by a pit shell defined using metal prices of US$2,119/oz Au, Mining cost of
US$2.11/ton mined, processing cost of US$8.20/ton processed, metallurgical
recovery calculated block by block based on metallurgical tests, G&A costs
of US$1.66/ton processed, and US$1.64/ton processed logistics. Equivalent Gold
grade was calculated with the following formulae: AuEq = (Au_grade *
%Au_Recovery) + (1.346*(Cu_grade * %Cu_Recovery)) + (0.013*(Ag grade *
%Ag_Recovery)). The resource cut-off grade applied for low- and high-grade
domains in Measured and Indicated resources was 0.188 g/t AuEq, and for the
mineralized background was 0.25g/t AuEq.
Underground Inferred Resources are reported inside an underground grade shell.
The mineral resource estimates were prepared in accordance with the CIM
Standards, and the CIM Guidelines, using geostatistical and/or classical
methods, plus economic and mining parameters appropriate to the deposit.
Mineral Resources are not ore reserves and are not demonstrably economically
recoverable. Grades are reported using dry density. The effective date of the
MRE was November 15, 2024. The QP responsible for the Mineral Resources is
geologist Leonardo Soares (MAIG #5180). The MRE numbers provided have been
rounded to the estimate relative precision. Values cannot be added due to
rounding. The MRE is delimited by Mining licence areas. The MRE was estimated
using ordinary kriging in 10m x 10m x 5m blocks with sub-blocks of 5.0m x 2.5m
x 1.25m. The MRE report table was produced in Leapfrog Geo software. The MRE
was restricted by underground optimized stopes defined using metal prices of
2,119 US$/oz Au, Mining cost of 32.0 US$/ton mined, processing cost of 8.20
US$/ ton processed, metallurgical recovery calculated block by block based on
metallurgical tests, G&A costs of 1.66 US$/ton processed, and 1.64 US$/ton
processed logistics. Equivalent Gold grade was calculated with the following
formulae: AuEq = (Au_grade * %Au_Recovery) + (1.346*(Cu_grade * %Cu_Recovery))
+ (0.013*(Ag grade * %Ag_Recovery)). The resource cut-off grade applied to
underground Inferred resources was 0.96 g/t AuEq.
Cabaçal Mineral Resource Estimate Update and Santa Helena Central
Mineral consultancy GE21 was engaged to update the Mineral Resource Estimate
for the Cabaçal Copper‐Gold Deposit, which was disclosed in the Company's
News Release of 20 January 2026: Measured and Indicated resources were
reported of 70.10Mt grading 0.56g/t Au, 0.33% Cu, 1.31g/t Ag for 1,259.22koz
of gold, 233.48kt of copper, and 2,960.36koz of silver. GE21 also provided the
Santa Helena Central's maiden open-pittable Au-Cu-Ag-Zn-Pb Mineral Resource
Estimate, with Measured and Indicated resources of: 5.29Mt @ 0.56g/t Au, 0.43%
Cu, 15.45g/t Ag, 1.86% Zn & 0.43% Pb for 95.79koz of gold, 22.84kt of
copper, 2,629koz of silver, 98.63kt of zinc, 22.62kt of lead.
The Mineral Resource Estimates have been prepared in accordance with the CIM
Standards and CIM Guidelines by Mr. Leonardo Moraes Soares, MAIG. Mr. Soares
is an independent Qualified Person as such term is defined under NI 43-101.
The updated Mineral Resource Estimate for the Cabaçal Project was reported as
one of the initial workstreams completed for the DFS and will be used for
further studies in connection with the DFS. The Company did not apply any
economic analysis to the updated resource beyond that required to state a
Mineral Resource Estimate and does not consider the updated resource to be
material to Cabaçal Project or the Company. It does not supersede the results
of the Company's 2025 PFS, and the Mineral Reserve Estimate set out in the
2025 PFS is considered to remain current.
Mineral Reserves - 2025 PFS
The Cabaçal Mineral Reserves, estimated by GE21, define a total 41.70 Mt of
ore with an average grade of 0.63 g/t Au, 1.64 g/t Ag and 0.44% Cu, at a
cut-off of 0.249 g/t AuEq, containing a total of 849.876koz of gold,
405.384Mlbs of copper and 2,194.414koz of silver. The life of mine is 10.6
years.
Mineral Reserves estimates were prepared in accordance with the CIM Definition
Standards for Mineral Resources and Reserves and the economic portion of the
Measured and Indicated Mineral Resources and Mineral Reserves were estimated
by Porfírio Cabaleiro, BSc (Min Eng), FAIG, a GE21 associate, who meets the
requirements of a "Qualified Person" as established by the Canadian Institute
of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral
Resources and Mineral Reserves (May 2014) ("the CIM Standards"). The Mineral
Reserves are reported with an effective date of February 11, 2025. The
reference point at which the Mineral Reserves are defined is the point where
the ore is delivered from the open pit to the crushing plant. Mineral Reserves
were estimated using the Geovia Whittle 4.3 software and following the
geometric and economic parameters. Geometric and economic parameters include:
Mine recovery of 97% and dilution 3%, copper, gold, silver selling cost of
US$4.16/lb, US$ 2,119/oz, US$26.89/oz, respectively, Mining costs of US$2.98
per ton for mineralization and waste, Processing costs of US$9.83 per ton of
ore feed, General and Administrative (G&A) costs of US$2.11 per ton of
process ore, Copper, Gold, Silver selling cost of US$2.77 per ton of process
ore. Exchange rate: $1.00 = R$5.99, Specific values for the Deposit: Pit slope
angles ranging from 35° to 54°, Copper concentrate metallurgical recovery of
93.25%, Gold overall metallurgical recovery of 90.89%. Silver overall
metallurgical recovery of 68.82%, Strip Ratio 2.33 (tonne per tonne).
Metallurgical Studies
The Cabaçal PFS project envisages that two mined products will be generated
at Cabaçal: gold and silver in doré bars, and copper and gold concentrate.
The beneficiation process is simple due to relatively clean ore, with low
impurities and an absence of organic material. This results in amenability to
flotation at a relatively coarse grind of 200 μm, with rapid kinetics of the
Cabaçal mine's chalcopyrite, allowing for a simple flotation flowsheet to
give copper recoveries up to 95% to a clean concentrate. Gold is recovered via
gravity circuit (concentrator and shaking tables), and via flotation, with
copper. The rougher tailings are treated in a pyrite flotation stage, with the
main objective of separating most of the sulfur in a low mass stream, reducing
the risks of final tails dewatering and disposal. Both tailings streams are
filtered for disposal. Rougher concentrate is reground and refloated in a
cleaner circuit, consisting of a vertimill and a Jameson Cell, with the
concentrate reporting to the dewatering circuit.
Reporting has been completed on three test work programs since 2022.
· In 2022, a new drilling campaign and test work program was completed,
where Meridian drilled ten metallurgical holes. Seven of these holes were used
for sample selection to confirm historical performance with a new round of
test work at SGS Lakefield, Canada. The holes provided samples from the four
known main VMS systems, namely the Central Copper Zone, the Eastern Copper
Zone, the Southern Copper Zone and the Cabaçal Northwest Extension. Most of
the samples were within the expected head grade range for the deposit.
Comminution, gravity and flotation tests were run on samples from different
metallurgical domains, as well as on a master composite sample.
· In 2023, 23 variability samples from across the deposit (including
nine through the vertical profile of drill hole CD-228) were collected,
covering oxidized, transition and sulphide zones. Samples were tested at SGS
Lakefield, Canada. In this program, all samples were subjected to Bond ball
mill work index and SMC testing. In addition, metallurgical samples were
tested for flotation flowsheet and reagent dosage optimization, and once the
optimal flowsheet was defined, variability samples were tested to generate
enough information to create recovery curves for the project. Thickening and
filtration tests were also performed.
· In 2024, a revised process flowsheet labelled RevC was developed with
the main differences to the PEA flowsheet being:
o The use of copper and gold specific collectors Aerophine 3148A and Aero 208
to replace PAX in rougher flotation;
o Extended rougher float time; and
o Pyrite minerals were then floated from the rougher tails for separate
storage.
Updated grade recovery curves for Cabaçal were developed at the completion of
the testwork, with metal recoveries being based on the following formulae:
· Copper 𝑅𝑒𝑐 = 3.906 Ln(𝐺𝑟𝑎𝑑𝑒) + 95.27 up to
3.0% copper. Above 3.0% Cu a cap of 97% recovery was applied
· Gold 𝑅𝑒𝑐 = 5.402 ∗ 𝐿𝑛(𝐺𝑟𝑎𝑑𝑒) +
88.66 up to 4.0g/t gold. Above 4.0g/t Au a cap of 97% recovery was applied
· Silver 𝑅𝑒𝑐 = 30.354 ∗ 𝐿𝑛(𝐺𝑟𝑎𝑑𝑒) +
43.691 up to 4.0g/t silver. Above 4.0g/t Ag a cap of 87.6% recovery was
applied
Equivalent gold grade was calculated with the following formulae: AuEq =
(Au_grade * %Au_Recovery) + (1.346*(Cu_grade * %Cu_Recovery)) +
(0.013*(Ag_grade * %Ag_Recovery)), based on metal prices of US$ 2,119/oz for
gold, US$ 4.16/lb for copper, and US$ 26.89/oz for silver (CIBC November 2024
Consensus Commodity Prices).
Metal equivalents for Santa Helena Central are based on a metallurgical
testwork program on samples sent to SGS Lakefield, Canada. Equivalent gold
grade was calculated with the following formula:
· Fresh Rock Gold Equivalent: AuEq(g/t) = (Au_ppm * 57.0%Rec) +
(0.970 * Cu_pct * 76.9%Rec) + (0.270 * Zn_pct * 90.6%Rec) + (0.203 * Pb_pct *
78.3%Rec.) + (0.011 * Ag_ppm * 83.7%Rec.).
· Transition Zone Gold Equivalent: AuEq(g/t) = (Au_ppm * 83.1%Rec) +
(0.970 * Cu_pct * 75.3%Rec) + (0.270 * Zn_pct * 77.4%Rec) + (0.203 * Pb_pct *
51.4%Rec) + (0.011 * Ag_ppm * 80.1%Rec).
· Oxide Zone Gold Equivalent: AuEq(g/t) = (Au_ppm * 78.1%Rec.) +
(0.011 * Ag_ppm * 62.3%Rec.).
Cabaçal Mining and Economic Assessment
Key elements of the PFS mining study and economic analysis are:
· 10.6-years shallow open pit mining operation proposed with total
feed inventory of 41.70 Mt;
· High-grade year 1 mill feed of 1.45 g/t gold and 0.54% copper, with
average grade LOM of 0.63 g/t gold, 0.44% copper, and 1.64 g/t silver;
· Low life-of-mine strip ratio of 2.33;
· Average annual production of 141,000 AuEq ounces over 10 years;
· First 5 years production of 178,000 AuEq ounces annually;
· Initial capital costs are estimated at US$248M, an expansion capital
of US$56M, and a sustaining capital over the LOM estimated at US$54M;
· LOM operating costs are estimated at US$838M over the LOM;
· Closure and reclamation costs are estimated at US$47M;
· LOM royalties are estimated at US$75M;
· LOM costs for treatment and refining are estimated at US$73M; and
· The NPV discounted at 5% is US$984M, and the IRR is 61.2%.
Cabaçal will be mined using the open pit method in 3 alternating shifts,
operating 24 hours a day, 365 days a year. The mining movements were designed
to produce enough RoM to feed an ore processing plant with a nominal capacity
of 2.50 Mtpa for the first three years, 4.50 Mtpa for the last 7.6 years and a
total LOM of 10.6 years of production.
The mining will operate with a block model of 10x10x5m and slope angle in the
hanging wall of 54° inter-ramp of the fresh rock and following the
mineralized material slope in the footwall.
Mining operations, mechanical blasting, loading and haulage will be fully
outsourced. Ore is relatively soft with an average Bond ball mill work index
of 11.2 (metric). Blasting will be conducted with a load ratio of 200 g/t for
mineralized material and 155 g/t for waste. A dilution factor of 3% and mining
recovery of 97% were considered. The transport distance from the mine to the
RoM yard varies from 1.58 km in the pre-stripping to a maximum of 1.98 km in
year 8. For the waste, the transport distance will range from 1.96 km to 2.61
km in year 10.
The transport of ore and waste will be carried out by 55 t trucks manufactured
in Brazil, a fact that contributes to the reduction in the OPEX costs. For
work associated with these trucks, 74t hydraulic excavators were dimensioned,
which means 5.9 passes per truck loaded with mineralized material and 5.8
passes per truck loaded with waste.
Trucks will transport ore for discharge directly into the crusher or to the
RoM stockpile. A 30.3 t wheel loader will be used to recover ore from the RoM
stockpile as needed. The waste will be sent directly to the 3 projected waste
dumps; each trip being directed to the pile closest to the pit region in
mining activities at that time. From the 5th year onwards mining in the
southeast extension of the pit will have been completed. There is an
opportunity to return part of the waste material to this area in the mine,
with the possibility to reduce costs and footprint.
Summary of activities in the three months ending March 31, 2026
On March 10, 2025, the Company announced the positive results of the
Preliminary Feasibility Study ("PFS") led by Ausenco do Brasil Engenharia Ltda
and Ausenco Engineering Canada ULC, supported by GE 21 Mineral Consultants Ltd
for the advanced Cabaçal gold-copper-silver deposit in Brazil. In preparation
for the commencement of the Cabaçal detailed feasibility study, the Company
announced that it is expanding the team for the engineering and potential
financing and development of the Cabaçal mine project.
On May 8, 2025, the Company announced that it had appointed Ausenco do Brasil
Engenharia Ltda to undertake the Definitive Feasibility Study for its advanced
Cabaçal Au-Cu project in Mato Grosso, Brazil. Meridian also signed a
Corporate Agreement with Aurubis AG to facilitate a technical exchange to
optimize Cabaçal's Cu + Au-Ag sulphide concentrates.
Work completed within the VMS Belt from January to March 2026 included:
Cabaçal
· Feasibility Study engineering by Ausenco and issue of tenders for
long lead time capital items;
· Follow up metallurgical tests to address questions arising from
earlier metallurgical programs;
· Studies of access routes to the Cabaçal site to specify upgrades
to roads and bridges;
· Development of the route for power lines to the Cabaçal site from
the electricity grid, obtaining required permits and approvals and execution
of commitments to supply the power required for the Cabaçal mine operations;
· Geotechnical tests of the areas designated for the process plant and
the storage of waste rock and other mining by-products;
· Thickener and filtration tests of pilot plant products;
· Environmental tests of pilot plant products;
· 19 geotechnical holes for 204m;
Santa Helena
· 14 surface diamond holes for 1,225m, for resource definition;
· Engineering and environmental work to provide data for a
preliminary licence application;
Regional Exploration
· 10 surface diamond holes for 1,901m;
· 46 auger holes for 48m;
· Surface geophysics, with 1.55 line kilometers of gradient array
induced polarization survey and 17.3 line kilometers dipole-dipole surveys;
· Borehole electromagnetic ("BHEM") surveys, with 6 holes surveyed;
· Surface geochemistry, with 697 soil samples collected;
· Regional mapping and reconnaissance; and
· Georeferencing, vectorization and integration of historical maps
over the regional licence application areas.
Espigão Project, Rondônia, Brazil
The Espigão Project is located in the Proterozoic Rondônia-Juruena Province,
in the southwest margin of the Amazon Craton. The licences cover an area of
62,275 ha and incorporate an approved mining lease, mining lease applications,
and exploration tenure. Past mining activity has focused on manganese oxide
production from colluvial and vein mineralization. Exploration was focused on
testing the polymetallic Cu-Au potential.
The manganese and ferruginous vein systems show a spatial relationship with a
series of fractionated granites, marked by an elevated response in Total Count
Radiometrics. Geophysical modelling shows the presence of conductors and
magnetic anomalies underpinning the surface veins. These anomalies remain to
be systematically tested at depth. An ongoing exploration objective is to test
the potential for vertical and lateral transitions to domains dominated by
base metal and precious metal assemblages, as part of the zoned mineral
system.
The Company believes that the extensive polymetallic soil anomalies,
associated pathfinder minerals and coincident geophysical conductivity
anomalies reflect Cu-Au potential and will be evaluated for IOCG or intrusive
related porphyry mineralization.
Impairment of exploration and evaluation assets
As at December 31, 2024, the Company identified an indicator of impairment of
the exploration and evaluation assets related to the Espigão project, as the
Company will no longer allocate resources for substantive expenditures on
further exploration, including an initial drilling program to further evaluate
the Iron Oxide Copper Gold potential at the Espigão project.
The Company determined the recoverable amount of the Espigão project using
the fair value less costs of disposal ("FVLCD") approach. As there are no
estimated mineral resources for the Espigão project, the Company concluded
the recoverable amount was nominal. As a result, the Company recognized an
impairment of $4,976,904 in the consolidated statements of loss and
comprehensive loss for the year ended December 31, 2024.
Additional grassroots licences at Ariquemes and Mirante da Serra Project in
Rondônia were subject to ongoing strategic review in 2025.
2026 Business Outlook
The Company continued to advance the Cabaçal and Santa Helena projects during
2025. Key objectives for the Company during the year included initiating
Cabaçal's Feasibility Study (which is currently underway), granting of the
Preliminary Licence (granted October 31, 2025), subject to authorities' review
(formalised November 3, 2025), and the publication of the inaugural Santa
Helena Central resource statement. In parallel, the Company is advancing the
greater VMS Belt's exploration licences to keep them in good standing. The
Company is looking to achieve this during a period when its principal
commodity prices of gold and copper remain robust and an increased interest in
natural resource equities is occurring.
Qualified Person
Mr. Erich Marques, B.Sc., FAIG, Chief Geologist of Meridian, is a qualified
person as defined by National Instrument 43-101 - Standards of Disclosure for
Mineral Projects, who has reviewed and verified the scientific and technical
information provided in this MD&A, and who is responsible for the
technical information not directly related to the MRE or PFS in this MD&A.
The PFS Technical Report was prepared for the Company by Tommaso Roberto
Raponi (P. Eng), Principal Metallurgist with Ausenco Engineering Canada ULC;
Scott Elfen (P. E.), Global Lead Geotechnical and Civil Services with Ausenco
Engineering Canada ULC; John Anthony McCartney, C.Geol., Ausenco Chile Ltda.;
Porfirio Cabaleiro Rodriguez (Engineer Geologist FAIG), of GE21 Consultoria
Mineral; Leonardo Soares (PGeo, MAIG), Senior Geological Consultant of GE21
Consultoria Mineral; Norman Lotter (Mineral Processing Engineer; P.Eng.), of
Flowsheets Metallurgical Consulting Inc.; and Juliano Felix de Lima (Engineer
Geologist MAIG), of GE21 Consultoria Mineral. All authors of the Cabaçal
Gold-Copper Project NI 43-101 Preliminary Feasibility Study Technical Report,
Mato Grosso, Brazil dated March 31, 2025 (with an effective date of March 10,
2025) (the "2025 PFS") are independent Qualified Persons as defined by NI
43-101. The 2025 PFS may be found on the Company's website at
www.meridianmining.co (http://www.meridianmining.co) or under the Company's
profile on SEDAR+ at www.sedarplus.ca (http://www.sedarplus.ca) . Readers are
encouraged to read the entire 2025 PFS.
Quarterly Financial Summary:
Qtr 1 Three Months Ended March 31, 2026 Qtr 4 Three Months Ended December 31, 2025 Qtr 3 Three Months Ended September 30, 2025 Qtr 2 Three Months Ended June 30, 2025
$ $ $ $
Revenues - - - -
Loss for the period (6,340,727) (5,037,478) (5,200,337) (3,615,624)
Total Comprehensive Loss (6,238,606) (5,178,809) (5,196,969) (3,602,584)
Loss per share, basic (0.02) (0.01) (0.01) (0.01)
Loss per share per share, diluted (0.02) (0.01) (0.01) (0.01)
Qtr 1 Three Months Ended March 31, 2025 Qtr 4 Three Months Ended December 31, 2024 Qtr 3 Three Months Ended September 30, 2024 Qtr 2 Three Months Ended June 30, 2024
$ $ $ $
Revenues - - - -
Loss for the period (3,149,205) (8,483,791) (3,418,492) (3,779,818)
Total Comprehensive Loss (3,068,999) (9,399,695) (3,235,269) (4,543,872)
Loss per share, basic (0.01) (0.03) (0.01) (0.01)
Loss per share per share, diluted (0.01) (0.03) (0.01) (0.01)
Loss and Total Comprehensive Loss in Q4 2024 was impacted mainly by the
impairment of exploration and evaluation assets expense of $4,976,904 related
to the Espigão project.
Discussion of Quarterly Results and Result of Operation:
For the three months ended March 31, 2026:
· Exploration and evaluation expenses increased to $2,481,347 (three
months ended March 31, 2025 - $1,692,970). The increase relates mainly to
environmental licensing, monitoring programs and EIA/RIMA studies for the
Santa Helena project, in addition to environmental and technical support
activities associated with the Definitive Feasibility Study ("DFS") for the
Cabaçal project.
· General and administration expenses increased to $1,572,382 (three
months ended March 31, 2025 - $792,294). The increase was mainly due to higher
payroll, employee benefits, management and consulting costs associated with
the expansion of the workforce and corporate structure, including the hiring
of a new executive and changes in compensation for certain executives and
directors during the three months ended March 31, 2026 compared to the same
period in 2025.
· Professional fees increased to $577,578 (three months ended March 31,
2025 - $553,550). Professional fees include mainly audit, legal and financial
advisory fees and remained generally consistent period over period.
· Foreign exchange result was a loss of $1,612,420 (three months ended
March 31, 2025 - loss of $117,297). The increase in the foreign exchange loss
was mainly due to fluctuations in exchange rates during the quarter and the
higher cash balances held in foreign currencies.
· The results for the period ended March 31, 2026, included other
comprehensive income of $102,121 (three months ended March 31, 2025 - loss of
$80,206) comprised of foreign currency translation, which is related primarily
to the translation of the Company's Brazilian operation.
Liquidity and Capital Management
As at March 31, 2026, the Company reported working capital of $72,678,837
(December 31, 2025 - $38,799,209) which included cash of $74,373,481 (December
31, 2025 - $41,709,473) and prepaid expenses and other assets of $631,048
(2025 - $285,219). Included in current liabilities on March 31, 2026 are
accounts payable and accrued liabilities of $1,817,544 (December 31, 2025 -
$2,665,576), current provisions of $369,347 (December 31, 2024 - $351,967) and
taxes and fees payable of $138,801 (December 31, 2025 - $177,940).
On February 12, 2026, the Company closed a bought deal offering through the
issuance of 36,392,900 common shares at a subscription price of C$1.58 per
common share, for aggregate gross proceeds to the Company of $42,226,562
(C$57,500,782).
Subsequent to March 31, 2026, the Company completed equity financings in
connection with its London Stock Exchange admission, including an
institutional placing and retail offer, raising aggregate gross proceeds of
approximately USD 33.8 million (GBP 25.0 million) through the issuance of
27,173,912 new ordinary shares at a price of 92.0 pence per share (CAD 1.70
per share).
The capital structure of the Company consists of equity attributable to common
shareholders, comprising of share capital, share premium, reserves, and
deficits. The Company's objectives when managing capital are to safeguard the
Company's ability to continue as a going concern to: (i) preserve capital,
(ii) obtain the best available net return, and (iii) maintain liquidity.
The Company has historically relied upon equity financings to maintain an
adequate level of cash to satisfy its capital requirements and will continue
to depend heavily upon equity financings. As of March 31, 2026, the Company
does not have any other sources of funding. The Company will continue to
assess new sources of financing available and to manage its expenditures to
reflect current financial resources in the interest of sustaining long-term
viability.
To continue as a going concern, the Company will need to secure new funding.
The ability of the Company to arrange additional financing in the future will
depend, in part or in combination thereof, on the prevailing capital market
conditions, the advancement of Cabaçal's Feasibility Study program, resource
development success at Santa Helena and regional exploration successes. There
can be no assurance that these initiatives will be successful, or sufficient
financing, including financing from its shareholders, will be available or
that positive market conditions may be present. These material uncertainties
cast significant doubt as to the ability of the Company to meet its business
plan and obligations as they become due and, accordingly, the appropriateness
of the use of accounting principles applicable to a going concern.
Contractual Obligations
As at March 31, 2026, contractual obligations from continuing operations are
as follows:
Less than 1 year Less than 2 years 2 years or greater Total
Accounts payable and accrued liabilities $ 1,817,544 $ - $ - $ 1,817,544
Provisions 369,347 - - 369,347
$ 2,186,891 $ - $ - $ 2,186,891
Cash flows used by operating activities
During the three months ended on March 31, 2026, operating activities used
$5,706,808 of cash compared to $2,558,651 in the same period in 2025. The
variance was driven mainly by the increase in the Cabaçal and Santa Helena
exploration activities and studies to support the PFS and the increase in the
general and administrative expenses.
Cash flows used in investing activities
In the first three months of 2026, investing activities used $363,177 of cash
compared to $53,954 in the same period in 2025. The increase was mainly driven
by exploration and evaluation assets disbursements of $150,000 related to the
partial payment of the fifth installment for Cabaçal, compared to $8,739 paid
in the same period in 2025. In addition, there was an increase of $213,177
related to additions to property, plant and equipment and intangible assets
compared to $ 45,215 in the same period.
Cash flows provided by financing activities
During the three months ended March 31, 2026, the Company received proceeds
from the bought deal offering, net of costs of $39,942,021 (2025 -
$12,047,264), and $288,254 (2025 - $580,620) related to the exercises of stock
options
Use of Proceeds
(a) August 2025 Offering:
On August 7, 2025, the Company completed a brokered private placement of
64,102,564 common shares at a subscription price of C$0.78 per common share,
for aggregate gross proceeds of $36,383,500 (C$50,000,000). The Company paid
agent's commissions of $1,371,655 (C$1,884,997). The Company incurred other
share issuance costs of $252,943 on this private placement. Total transaction
costs incurred in this private placement, allocated to share premium, were
$1,624,598.
The following table summarizes the actual use of proceeds from the Life
Offering filed on August 7, 2025, related to the August 2025 Offering, as at
March 31, 2026:
Description of intended use of available funds listed in order of priority Assuming 100% of the Offering Actual Use of Over/(Under)-
Proceeds
Expenditure at
March 31,2026
Advancing Cabaçal Project through the Feasibility Study 24,000,000 4,705,725 (19,294,275)
Advancing Santa Helena 4,500,000 1,513,780 (32,986,220)
Expanding Regional Exploration Programs on the Wider Mato Grosso Licence 10,100,000 3,897,024 (6,202,976)
Portfolio
Corporate general and administration costs 13,000,000 5,592,210 (7,407,790)
Unallocated general working capital 13,700,000 - (13,700,000)
Remaining in treasury - 49,591,261 49,591,261
Total 65,300,000 65,300,000 -
(b) February 2026 bought deal:
On February 12, 2026, the Company closed a bought deal offering through the
issuance of 36,392,900 common shares at a subscription price of C$1.58 per
common share, for aggregate gross proceeds to the Company of $42,226,562
(C$57,500,782). The Company paid agent's commissions of $1,927,737
(C$2,625,039) on this offering. The Company incurred other share issuance
costs of $353,334 on this offering. Total transactions costs incurred and
allocated to share premium was $2,281,071.
The following table summarizes the actual use of proceeds from the bought deal
offering completed on February 12, 2026, as at March 31, 2026:
Description of intended use of available funds listed in order of priority Assuming 100% of the Offering Actual Use of Over/(Under)-
Proceeds
Expenditure at
March 31,2026
Derisking of the development of the Cabaçal Project through the purchase of 27,850,000 - (27,850,000)
long lead items, including; placing deposits for the SAG mill, purchasing
power transformers, engineering work linked to the installation of the power
line and early infrastructure works including road upgrades and bridge
strengthening
Regional exploration on the company's Mato Grosso exploration licences 5,000,000 - (5,000,000)
Unallocated general working capital 14,100,646 - (14,100,646)
Remaining in treasury - 49,950,646 49,950,646
Total 49,950,646 49,950,646 -
As at March 31, 2026, the proceeds from the February 2026 bought deal remained
in treasury, as the financing was completed shortly before quarter-end and the
Company continued to utilize the remaining proceeds from the August 2025
offering to fund ongoing activities during the quarter.
Related Party Transactions
The Company transacts with key management personnel, who have authority and
responsibility to plan, direct, and control the activities of the Company and
receive compensation for services rendered in that capacity. Salaries,
benefits, consulting fees, and directors' fees are recorded on a cost basis,
while share-based compensation is measured at the fair value of the
instruments issued, with the expense recognized over the relevant vesting
periods.
Key management personnel transactions for the period ended March 31,2026,
included compensation paid to the Company's independent Directors (Ms. Susanne
Sesselmann, Messrs. John Skinner, Douglas Ford, Neil Gregson, Bruce McLeod),
as well as the Company's Chief Executive Officer ("CEO") and Director (Mr.
Gilbert Clark), President and Director (Dr. Adrian McArthur), Chief Financial
Officer (Mr. David Halkyard), Senior Vice-President - Strategy and Projects
(Mr. Martin McFarlane), Senior Vice-President of Corporate Development (Mr.
James McLucas), Chief Development Officer (Mr. Vitor Belo).
a) Key management compensation
March 31, 2026 March 31, 2025
Directors' fees $ 32,853 $ 29,021
Salaries and consulting fees $ 665,777 $ 316,734
Total $ 698,630 $ 345,755
b) Other related party transactions
As at March 31, 2025 the Company had the following balances due to/from
entities related by way of common directors and/or management. These amounts,
unless otherwise noted, were unsecured and non-interest bearing.
March 31, 2026 December 31, 2025
Other liabilities - management and directors' fees $ 58,232 $ 815,302
Share Capital
Outstanding Share Data
The Company is authorized to issue an unlimited number of common shares with a
par value of €0.01.
As at the date of this MD&A, the Company has 485,513,514 (December 31,
2025 - 419,458,358) issued and fully paid shares outstanding.
Stock Options and Agent's Compensation Options
The Company has an omnibus incentive plan pursuant to which the Company is
able to award stock options, RSUs and DSUs in compliance with the policies,
rules and regulations of the Toronto Stock Exchange. The maximum number of
shares of the Company available for issuance at any time pursuant to awards
granted under the omnibus incentive plan shall be equal to ten percent (10%)
of the Company's issued and outstanding shares.
The following stock options were outstanding at the date of this MD&A:
Number Exercise
of options and warrants outstanding Price (C$) Expiry Date
Stock options 2,707,477 1.10 October 27, 2026
100,000 1.10 February 6, 2027
75,000 ( ) 1.10 February 24, 2027
390,000 0.95 May 17, 2027
2,122,500 0.50 January 25, 2028
695,000 0.50 July 26, 2028
950,000 0.50 October 11, 2028
1,000,000 0.35 October 27, 2028
2,833,825 0.50 November 28, 2028
180,000 0.50 February 28, 2029
6,080,000 0.63 April 15, 2030
100,000 0.89 June 13, 2030
250,000 0.79 July 2, 2030
400,000 ( ) 1.57 December 8, 2030
17,883,802
( )
Significant Accounting Judgments and Estimates
Significant accounting judgement and estimates are disclosed in Note 3 of the
consolidated financial statements for the year ended December 31, 2025.
Contractual Obligations
Except as described above, herein or in the Company's financial statements,
the Company had no other material contractual obligations.
Off-Balance Sheet Arrangements
At March 31, 2026, the Company had no material off-balance sheet arrangements.
Proposed Transactions
Except as elsewhere disclosed in this document, there are no other proposed
transactions under consideration.
Risk Factors
Companies in the exploration, development and mining stage face a variety of
risks and, while unable to eliminate all of them, the Company aims to managing
risks where the rewards are considered commensurate and otherwise reducing
such risks as much as possible. The Company faces a variety of risk factors
such as project feasibility and practicability, risks related to determining
the validity of mineral property title claims, commodities prices, changes in
laws and environmental laws and regulations. Management monitors its
activities and those factors that could impact them in order to manage risk
and make timely decisions.
Significant risk factors have been identified by the Company and are listed
below. Further discussion and additional risk factors are also available in
the Company's most recent Annual Information Form, as filed on SEDAR+ at
www.sedarplus.ca (about%3Ablank)
Risks and uncertainties the Company considers material in assessing its
consolidated financial statements are described below.
Meridian will require additional funding
As at March 31, 2026, the Company had positive working capital of $72,678,837,
which included cash of $74,373,481, prepaid expenses and other assets of
$631,048, and accounts payable and accrued liabilities, provisions, and taxes
and fees payable of $2,325,692.
The Company has historically relied upon both equity and shareholder
contributions, loan facilities, private placements and offerings to satisfy
its capital requirements and will likely continue to depend upon these sources
to finance its activities. The Company will require additional capital to
carry out planned exploration and development programs. There can be no
assurances that the Company will be successful in raising the desired level of
financing.
Meridian is subject to government regulation
The Company's mineral activities, including exploration, development and
mining activities, are subject to various laws governing exploration,
development, production, taxes, labour standards and occupational health, mine
safety, environmental protection, toxic substances, land use, water use and
other matters. Failure to comply with applicable laws and regulations may
result in civil, administrative, environmental, or criminal fines, penalties,
or enforcement actions, including orders issued by regulatory authorities
curtailing the Company's operations or requiring corrective measures, any of
which could result in the Company incurring substantial expenditures. No
assurance can be given that new rules and regulations will not be enacted or
that existing rules and regulations will not be applied in a manner which
could limit or curtail exploration, development, or mining operations.
Exploration, development and mining activities can be hazardous and involve a
high degree of risk
The Company's operations are subject to all the hazards and risks normally
encountered in the exploration, development and mining industry, including,
without limitation, unusual and unexpected geologic formations, seismic
activity, rock bursts, pit-wall failures, cave-ins, flooding and other
conditions involved in the drilling and removal of material, any of which
could result in damage to, or destruction of, mines and other producing
facilities, damage to life or property, environmental damage and legal
liability. Milling operations, if any, are subject to various hazards,
including, without limitation, equipment failure and failure of retaining dams
around tailings disposal areas, which may result in environmental pollution
and legal liability.
Meridian may be adversely affected by fluctuations in mineral prices
The value and price of the Company's common shares, the Company's financial
results, exploration, development, mining activities of the Company, if any,
may be significantly adversely affected by declines in commodity prices.
Mineral prices fluctuate widely and are affected by numerous factors beyond
the Company's control such as interest rates, exchange rates, inflation or
deflation, global and regional supply and demand, and the political and
economic conditions of mineral producing countries throughout the world.
Infrastructure
Exploration, development and ultimately mining and processing activities
depend, to one degree or another, on the availability of adequate
infrastructure. Reliable air service, roads, bridges, railways, power sources
and water supply are significant contributors in the determination of capital
and operating costs. Inadequate infrastructure could significantly delay or
prevent the Company exploring and developing its projects and could result in
higher costs.
Meridian does not and likely will not insure against all risks
The Company's insurance will not cover all the potential risks associated with
a mining company's operations. The Company may also be unable to maintain
insurance to cover these risks at economically feasible premiums. Insurance
coverage may not continue to be available or may not be adequate to cover any
resulting liability. Moreover, insurance against risks such as environmental
damages, pollution, or other hazards as a result of exploration and production
is not generally available to the Company or to other companies in the mining
industry on acceptable terms. The Company might also become subject to
environmental liability or other hazards which may not be insured against or
which the Company may elect not to insure against because of premium costs or
other reasons. Losses from these events may cause Meridian to incur
significant costs that could have a material adverse effect upon its financial
condition and results of operations.
Meridian is dependent on key personnel
The Company's success depends in part on its ability to recruit and retain
qualified personnel. Due to its relatively small size, the loss of the
services of one or more of such key management personnel could have a material
adverse effect on the Company. In addition, despite its efforts to recruit and
retain qualified personnel, even when those efforts are successful, people are
fallible, and human error could result in a significant uninsured loss to the
Company.
Meridian's officers and directors may have potential conflicts of interest
Meridian's directors and officers may serve as directors and/or officers of
other public and private companies and devote a portion of their time to
manage other business interests. This may result in certain conflicts of
interest. To the extent that such other companies may participate in ventures
in which the Company is also participating, such directors and officers may
have a conflict of interest in negotiating and reaching an agreement with
respect to the extent of each company's participation. However, applicable law
requires the directors and officers to act honestly, in good faith, and in the
best interests of the Company and its shareholders and in the case of
directors, to refrain from participating in the relevant decision in certain
circumstances.
Operations in Brazil and Regulatory Requirements
The Company's principal properties are located in Brazil and mineral
exploration, and mining activities may be affected in varying degrees by
changes in political, social, and financial stability, inflation and changes
in government regulations relating to the mining industry. Any changes in
regulations or shifts in political, social, or financial conditions are beyond
the control of the Company and may adversely affect its business. Operations
may be affected in varying degrees by government regulations with respect to
restrictions on production, price controls, export controls, income taxes,
expropriation of property, environmental legislation, and mine safety.
Brazil's status as a developing country may make it more difficult for the
Company to obtain any financing required for the exploration and development
of its properties due to real or perceived increased investment risk. Since
January 1996, there are no restrictions on the repatriation from Brazil on the
earnings of foreign entities, provided that the foreign investments are duly
registered with the Central Bank of Brazil. Capital investments registered
with the Central Bank in Brazil may similarly be repatriated. The only
restrictions to repatriation on the earnings/dividends of foreign entities
deriving from Brazilian invested companies are in the cases of subscribed
capital not fully paid in by the foreign investor, or in case the Brazilian
invested company has accumulated losses registered in its balance sheet. In
any case, there can be no assurance that restrictions on repatriation of
earnings and capital investments from Brazil will not be imposed in the
future.
Mine construction is complex and requires detailed planning. Equipment for
mining operations has long lead times for manufacture which are beyond the
control of the Company. Delays in supply of mining equipment could result in
delays to commissioning of mining operations.
Permits, licenses and approvals
In Brazil where Meridian currently carries out exploration activities,
subsurface minerals resources are owned by the Federal Government, and the ANM
grants and regulates the right to explore for and extract minerals in return
for royalty payment, subject to environmental permitting. Access agreements
with surface rights holders may also be required. Government policy or surface
rights holders' permission to access the land could change. Any change that
affects Meridian's rights to conduct these activities could have a material
and adverse effect on the Company.
In addition, mineral exploration and mining activities can only be conducted
by entities that have obtained or renewed exploration or mining permits and
licenses in accordance with the relevant mining laws and regulations. The
duration and success of each permitting effort are contingent upon many
factors we do not control. In the case of foreign operations, government
approvals, licenses and permits are, as a practical matter, subject to the
discretion of the applicable governments or governmental officials. There may
be delays in the review process. There is no guarantee that we will be granted
the necessary permits and licenses, that they will be renewed, or that we will
be in a position to comply with all conditions that are imposed.
All mining projects require a wide range of permits, licenses and government
approvals and consents. It is not certain that Meridian will be granted these
at all, or in a timely manner. If it does not receive them for its mineral
projects or is unable to maintain them, it could have a material and adverse
effect on the Company.
Risks Inherent in Acquisitions
The Company may actively pursue the acquisition of exploration, development,
and production assets consistent with its acquisition and growth strategy.
From time to time, the Company may also acquire securities of or other
interests in companies with respect to which it may enter into acquisitions or
other transactions. Acquisition transactions involve inherent risks, including
but not limited to: accurately assessing the value, strengths, weaknesses,
contingent and other liabilities and potential profitability of acquisition
candidates; ability to achieve identified and anticipated operating and
financial synergies; unanticipated costs; diversion of management attention
from existing business; potential loss of the Company's key employees or key
employees of any business acquired; unanticipated changes in business,
industry or general economic conditions that affect the assumptions underlying
the acquisition; and decline in the value of acquired properties, companies or
securities. Additionally, the legal form of these acquisitions may result in
the Company becoming liable for the historical operations of the acquisition.
To acquire properties and companies, the Company may be required to use
available cash, incur debt, issue additional Common Shares or other securities
and may incur delays negotiating purchase agreements, or a combination of any
one or more of these. This could affect the Company's future flexibility and
ability to raise capital, to explore, develop and operate its properties and
could dilute existing shareholders and decrease the trading price of the
Common Shares. There is no assurance that when evaluating a possible
acquisition, the Company will correctly identify and manage the risks and
costs inherent in the business to be acquired. There may be no right for the
Company's shareholders to evaluate the merits or risks of any future
acquisition undertaken by the Company, except as required by applicable laws
and regulations.
Information System Security
Mining, exploration and development generate large amounts of data and
management of Company data requires complex systems that rely on third-party
supply or storage. Data security is a major challenge and constantly evolving.
There is no guarantee that the Company's data will not be compromised,
potentially impacting the Company's assets or operations.
Other Requirements
Additional information relating to the Company is available on SEDAR+ at
www.sedarplus.ca (about%3Ablank) and on the Company's website
www.meridianmining.co (about%3Ablank) .
Disclosure Controls and Procedures
Disclosure controls and procedures are designed to provide reasonable
assurance that material information is gathered and reported to senior
management, including the Chief Executive Officer ("CEO") and Chief Financial
Officer ("CFO"), as appropriate to permit timely decisions regarding public
disclosure.
The Company's management, including the CEO and CFO, have as at March 31,
2026, designed Disclosure Controls and Procedures (as defined in National
Instrument 52-109 of the Canadian Securities Administrators), or caused them
to be designed under their supervision, to provide reasonable assurance that
material information relating to the issuer is made known to them by others,
particularly during the period in which the interim or annual filings are
being prepared; and information required to be disclosed by the issuer in its
annual filings, interim filings or other reports filed or submitted by it
under securities legislation is recorded, processed, summarized and reported
within the time periods specified in securities legislation.
Internal Control Over Financial Reporting
The management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting. Internal Control Over
Financial reporting ("ICFR") is a process designed by, or under the
supervision of, the CEO and CFO, and affected by management and other
personnel to provide reasonable assurance regarding the reliability of the
Company's financial reporting and the preparation of financial statements for
external purposes in accordance with IFRS.
Internal control over financial reporting includes maintaining records that in
reasonable detail accurately and fairly reflect the Company's transactions and
dispositions of the assets of the Company; providing reasonable assurance that
transactions are recorded as necessary for preparation of the Company's
consolidated financial statements in accordance with IFRS; providing
reasonable assurance that receipts and expenditures are made in accordance
with authorizations of management and the directors of the Company; and
providing reasonable assurance that unauthorized acquisition, use or
disposition of the Company's assets that could have a material effect on the
Company's consolidated financial statements would be prevented or detected on
a timely basis. Because of its inherent limitations, internal control over
financial reporting is not intended to provide absolute assurance that a
misstatement of the Company's consolidated financial statements would be
prevented or detected. Management will continue to monitor the effectiveness
of its internal control over financial reporting and disclosure controls and
procedures and may make modifications from time to time as considered
necessary.
Management adheres to the Committee of Sponsoring Organizations of the
Treadway Commission's ("COSO") revised 2013 Internal Control Framework for the
design of its internal control over financial reporting. In accordance with
National Instrument 52-109, the evaluation of ICFR under COSO's 2013 Internal
Control Framework was carried out under the supervision of and with the
participation of management, including the Company's CEO and Interim CFO. For
the quarter ended March 31, 2026, the CEO and CFO concluded that Meridian's
internal controls over financial reporting are designed to provide reasonable
assurance regarding the reliability of information disclosed in its annual and
quarterly financial statements prepared in accordance with IFRS.
There have been no material changes in the Company's internal control over
financial reporting or in other factors that could affect internal controls
during the three months ended March 31, 2026.
Note Regarding Forward-Looking Statements
This MD&A contains certain statements that may constitute "forward-looking
statements" for the purposes of applicable securities laws. Forward-looking
statements include but are not limited to, statements regarding future
anticipated exploration programs and the timing thereof, and business and
financing plans, and are based on material factors and assumptions and subject
to a variety of risks and uncertainties which could cause actual events or
results to differ materially from the forward-looking statements. These
include, without limitation, material factors and assumptions relating to, and
risks and uncertainties associated with, the availability of financing for
activities when required and on acceptable terms, the accuracy of the
interpretation of drill results and the estimation of mineral resources and
reserves, the geology, grade and continuity of mineral deposits, the
consistency of future exploration, development or mining results with our
expectations, metal price fluctuations, the achievement and maintenance of
planned production rates, the accuracy of component costs of capital and
operating cost estimates, current and future environmental and regulatory
requirements, favorable governmental relations and support for the development
and operation of mining projects, the threat associated with outbreaks of
viruses and infectious diseases, risks related to negative publicity with
respect to the Company or the mining industry in general, reliance on a single
asset, planned drill programs and results varying from expectations;
litigation risks, the availability of permits and the timeliness of the
permitting process, local community relations, dealings with non-governmental
organizations ("NGOs"), the availability of shipping services, the
availability of specialized vehicles and similar equipment, costs of
remediation and mitigation, maintenance of title to our mineral properties,
industrial accidents, equipment breakdowns, contractor's costs, remote site
transportation costs, materials costs for remediation, labour disputes, the
potential for delays in exploration or development activities, the preliminary
nature of the Cabaçal PFS and the Company's ability to realize the results of
the Cabaçal PFS, timing and successful completion of the Cabaçal Feasibility
Study, the granting of Cabaçal's Environmental Installation Licence, and the
successful advancement of Santa Helena, the inherent uncertainty of production
and cost estimates and the potential for unexpected costs and expenses,
commodity price fluctuations, currency fluctuations, continuing global demand
for base metals, and other risks and uncertainties, including those described
under "Risk Factors" in the Company's most recent Annual Information Form.
Although the Company has attempted to identify important factors that could
cause actual actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or intended.
The Company provides no assurance that forward-looking statements will prove
to be accurate. Should one or more of these risks and uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from any conclusions, forecasts or projections described
in the forward-looking statements. Accordingly, readers are advised not to
place undue reliance on forward-looking statements. Except as required under
applicable securities law, the Company undertakes no obligation to publicly
update or revise forward-looking statements, whether as a result of new
information, future events or otherwise.
Historical results of operations and trends that may be inferred from this
MD&A may not necessarily indicate future results from operations. In
particular, the current state of the global securities markets may cause
significant reductions in the price of the Company's securities and render it
difficult or impossible for the Company to raise the funds necessary to
continue operations.
All of the Company's public disclosure filings, including its most recent
management information circular, Annual Information Form, material change
reports, press releases and other information, may be accessed via
www.sedarplus.ca (about%3Ablank) .
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