Prime Mining Corp.'s Los Reyes Project: A High-Grade Catalyst for Long-Term Value Creation

Prime Mining Corp. (TSXV: PRYM) stands at a pivotal moment in its history with its Los Reyes gold-silver project, as the company prepares to release a landmark Preliminary Economic Assessment (PEA) led by engineering powerhouse Ausenco Engineering Canada ULC. This study, due by Q3 2025, could transform Los Reyes from a high-grade resource into a cornerstone of the company's future growth. Investors should take note: the project's combination of premium-grade resources, strategic scalability, and low capital intensity positions it as a rare opportunity in today's mining sector.

The Strategic PEA: A Blueprint for Value

The PEA, spearheaded by Ausenco—a firm with a proven track record on projects like Silvercrest's Las Chispas and Discovery Silver's Cordero—will define Los Reyes' economic potential. The study's focus on a 5,000-tonne-per-day mill fed by both open-pit and underground mining strikes a critical balance between capital efficiency and long mine life. Crucially, Ausenco's inclusion of a higher throughput sensitivity scenario opens the door to scalability, allowing Prime to expand production if metallurgical and geological data prove even more favorable than anticipated.

What makes this PEA particularly compelling? The project's high-grade gold and silver resources—including underground zones grading over 3.0 g/t Au and 150 g/t Ag—suggest margins that could rival top-tier assets. Metallurgical recoveries of 95.6% for gold and 81% for silver in mill processing further underscore the project's economic strength, while heap-leach recoveries (73% for gold) provide flexibility for lower-cost processing of lower-grade material.

Unlocking the High-Grade Potential

Los Reyes' resource base is a standout in today's mining landscape. As of October 2024, the project hosts 2.2 million gold-equivalent ounces in Indicated Resources, with grades that improve at depth and along strike. The Z-T Area, Guadalupe East, and Central Area (including the high-grade Noche Buena and San Miguel East zones) are already delivering exceptional results, but exploration is just beginning to tap into the property's full potential.

Prime's 2025 drilling program, with six rigs targeting 40,000 meters, aims to expand these high-grade zones and unlock new discoveries at emerging targets like Las Primas and Fresnillo. The project's historical legacy—producing 1 million ounces of gold and 60 million ounces of silver between 1770–1990—hints at its vast untapped potential, and Prime's modern exploration efforts are systematically mapping this into updated resource estimates.

A Low-Capital, High-Margin Model

The PEA's emphasis on low capital expenditure is a game-changer. With Prime having already invested $64 million in exploration (including 221,000 meters of drilling), the project is de-risked and ready for development. The company's focus on cost optimization—from efficient processing to leveraging existing infrastructure—aligns with a sector hungry for projects that deliver strong returns without excessive upfront costs.

The scalability of Los Reyes is further bolstered by its long mine life, which could extend for decades given the resource size and exploration upside. This not only reduces per-unit costs but also creates a stable revenue stream for investors.

Risks and Mitigants

No project is without risks. Commodity price volatility, permitting delays, and geological uncertainty are key concerns. However, Prime's strategic partnerships—including Ausenco's expertise, local community engagement programs, and rigorous QA/QC protocols—mitigate these risks. The company's strong cash position ($21.24 million as of Q3 2024) and focus on gold-silver price hedging also provide a buffer against market swings.

The Investment Case: Act Now

The PEA's release in Q3 2025 is a binary event for Prime Mining. Positive results could catalyze a re-rating of the stock, as investors recognize Los Reyes' potential to deliver high NPV and IRR metrics. With the project's low capital needs and high-grade resources, it could become a cash flow machine once in production.

For investors seeking exposure to a high-margin, scalable asset in a politically stable jurisdiction like Mexico, Los Reyes is a standout opportunity. The time to act is now—before the PEA's results unlock this project's full value.

Prime Mining Corp. (PRYM) is a buy for investors with a strategic eye on long-term mining value.

Disclosure: This article is for informational purposes only and should not be construed as financial advice. Readers are encouraged to conduct their own due diligence.