Prime Mining : Dec 31, 2024 - Management Discussion & Analysis

Published: 2025-03-05 20:51:06 ET PRYM.TO

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the years ended December 31, 2024 and 2023

PRIME MINING CORP.

Management's Discussion and Analysis

For the years ended December 31, 2024 and 2023

(In Canadian dollars, except where noted)

The following is management's discussion and analysis ("MD&A") of Prime Mining Corp. together with its wholly owned subsidiaries (the "Company" or "Prime"), is prepared as of March 5, 2025, and relates to the financial condition and results of operations for the years ended December 31, 2024 and 2023. Past performance may not be indicative of future performance. This MD&A should be read in conjunction with the audited consolidated financial statements ("consolidated financial statements") and related notes for the years ended December 31, 2024 and 2023, which have been prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

The first, second, third, and fourth quarters of the Company's fiscal years are referred to as "Q1", "Q2", "Q3" and "Q4", respectively. The years ended December 31, 2024 and 2023, are also referred to as "fiscal 2024" and "fiscal 2023", respectively. All amounts are presented in Canadian dollars, the Company's presentation currency, unless otherwise stated. References to "US$" and "MXN" are to United States dollars and Mexican pesos, respectively.

Certain information contained in this MD&A may constitute forward-looking statements. Statements in this report that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties, which could cause actual results to vary considerably from these statements. Readers are cautioned not to put undue reliance on forward-looking statements. Refer to the "Risks and Uncertainties" and "Cautionary Note Regarding Forward-Looking Statements" sections of this document.

OVERVIEW OF THE BUSINESS

The Company was incorporated on May 14, 1981 in British Columbia. Prime is a reporting issuer in British Columbia and Alberta, and an issuer on the TSX Exchange ("TSX"). The Company's head office and principal place of business is located at Suite 710 - 1030 West Georgia Street, Vancouver, BC, V6E 2Y3. The Company has wholly owned subsidiaries in Suriname and Mexico although only the Mexican subsidiaries are active. The Company is focused on advancing gold exploration properties in Mexico with the potential to be brought to near-term production.

The Company's common shares are traded on the TSX under the symbol "PRYM", on the Frankfurt Stock Exchange under the symbol "O4V3" and on the OTCQB market under the symbol "PRMNF".

As Prime works to advance the Los Reyes Gold and Silver Project ("Los Reyes" or the "Los Reyes Project"), the Company's focus is on three areas:

During the year ended December 31, 2024, the Company has seen progress in all three areas with continued emphasis on operating under appropriate health guidelines, strengthened exploration team performance and advances in our corporate administration.

PRIME MINING CORP.

Management's Discussion and Analysis

For the years ended December 31, 2024 and 2023

(In Canadian dollars, except where noted)

Los Reyes Gold and Silver Project

Los Reyes is a low-sulphidation epithermal gold-silver project located in Sinaloa State, Mexico. Since acquiring Los Reyes in 2019, Prime has spent $62,666,342 on direct exploration activities and has completed over 220,000 metres of drilling. On October 15, 2024, Prime announced an updated multi-million-ounce high-grade open pit constrained resource based on exploration drilling up to July 17, 2024 (refer to the October 15, 2024 news release for more details).

October 15, 2024 Resource Statement

(based on a $1950/oz gold price, $25.24/oz silver price, economic-constrained estimate)

Mining Method

Class

Tonnage

Gold Grade

Gold

Silver Grade

Silver

Gold Equiv.

Silver Equiv.

and Process

(kt)

(g/t)

Contained

(g/t)

Contained

(g/t)

(koz)

(g/t)

(koz)

Open Pit - Mill

Indicated

24,657

1.13

899

35.7

28,261

1.60

1,265

123.3

97,723

Inferred

7,211

0.89

207

42.8

9,916

1.45

335

111.8

25,911

Underground

Indicated

4,132

3.02

402

152.4

20,243

5.00

664

386.1

51,290

Inferred

4,055

2.10

273

78.6

10,247

3.12

406

240.7

31,380

Total Mill

Indicated

28,789

1.41

1,301

52.4

48,504

2.08

1,928

161.0

149,012

Inferred

11,266

1.33

480

55.7

20,163

2.05

741

158.2

57,291

Open Pit - Heap Leach

Indicated

20,254

0.29

190

8.4

5,492

0.40

261

31.0

20,201

Inferred

5,944

0.30

7.3

1,398

0.40

30.6

5,856

Total

Indicated

49,042

0.95

1,491

34.2

53,995

1.39

2,190

107.3

169,213

1.48

817

Inferred

17,210

0.97

538

39.0

21,561

114.1

63,147

Drilling suggests that the three known main deposit areas (Guadalupe, Central and Z-T) are larger than previously reported. Potential also exists for new discoveries where mineralized trends have been identified outside of the currently defined resource areas. Historic operating results indicate that an estimated 1 million ounces of gold and 60 million ounces of silver were recovered from five separate operations at Los Reyes between 1770 and 1990. Prior to Prime's acquisition, recent operators of Los Reyes had spent approximately US$20 million on exploration, engineering, and prefeasibility studies.

HIGHLIGHTS AND KEY DEVELOPMENTS

Summary of Exploration Activities During Fiscal 2024

PRIME MINING CORP.

Management's Discussion and Analysis

For the years ended December 31, 2024 and 2023

(In Canadian dollars, except where noted)

Z-T Trend - Expansion Drilling and Interpretation

During fiscal 2024, the Company's drilling continued to encounter high grades and wide zones of mineralization at the Z-T Trend, supporting expansion of the Au-Eq grade shell.

Drilling at silver-rich Tahonitas extended mineralization 400 m to the southeast.

High-grade plunging shoots were extended and remain open at depth and along strike in multiple areas along the Z- T Trend. While Prime has drill tested high-grade mineralization along a more than 4km strike length at Z-T, surface mapping has defined a strike length of more than 5km for the Z-T structure.

Z-T Drill Highlights

High gold grade area remains open, and continues at depth and along trend:

Demonstrated high-grade nature of the Z-T Trend and its continuity at depth and along strike:

Extension of mineralization 550m along strike from the southeast Z-T pit (2023 MRE) crest:

Guadalupe Trend - Expansion Drilling and Interpretation

The Guadalupe Trend, in particular Guadalupe East, hosts significant high-grade material. In 2024 drill hole 24GE- 159 returned one of the highest-grade silver intercepts recorded at the Project at 20.5 gpt Au and 2,620 gpt Ag (54.41 gpt AuEq over 0.7 m ETW). This hole expanded the very-high grade mineralization to the west outside the 2023 resource pit.

PRIME MINING CORP.

Management's Discussion and Analysis

For the years ended December 31, 2024 and 2023

(In Canadian dollars, except where noted)

Guadalupe Drill Highlights

High grade silver values in addition to gold:

High grade mineralization 400 m from main Estaca vein and 300 metres from the Echeguren Shaft:

Las Primas - Generative Drilling and Interpretation

Las Primas, located between the Central and Guadalupe Trends, was first identified through historical records and the Company's earlier sampling and mapping work. Las Primas mineralization lies entirely outside of the 2023 MRE and contains high-grades and significant thicknesses. The precious metals mineralization is in high-grade plunging shoots containing multiple gram-per-tonne AuEq centers with outer, lower-grade halos.

In 2024, drilling at Las Primas followed up on previous drilling and confirmed the continuity of multiple anastomosing structures ranging from less than a metre to 30 metres in width. Drilling at Las Primas intercepted several new high grade mineralized structures that appear to have many similarities to Guadalupe East, which is located 500 m to the northeast. Early mineralization modeling suggests a vertical extent of over 300 m and 500 m which is open along strike.

Las Primas Area - Prime discovery

High Grade intersection, high grades at shallow depths:

Central Trend - Expansion Drilling and Interpretation

2024 drilling at Noche Buena, located in the southeastern-most end of the Central Trend, targeted the gap between Noche Buena and San Miguel East to the north and was incorporated in the 2024 MRE. The drilling demonstrated mineralization continues along the structure in this gap and confirms the ongoing expansion of potential gold-silver resources in addition to and not included in the Company's MRE. Additionally, Prime has continued drilling to the southeast to extend the known mineralization at Noche Buena.

PRIME MINING CORP.

Management's Discussion and Analysis

For the years ended December 31, 2024 and 2023

(In Canadian dollars, except where noted)

Fresnillo - Generative Drilling and Interpretation

Fresnillo, located between the Z-T and Central Trends, was identified through the Company's detailed mapping and geochemical sampling.

Drilling at Fresnillo in 2024 expanded previous mineralization to the south and was incorporated in the 2024 MRE.

Exploration Activities During Q1 2025

In Q1 2025, the Company plans to focus drilling activities in the following areas:

Drilling was paused on January 28, 2025. Refer to the 2025 Outlook section below for more details regarding the 2025 drill program.

During the quarter, the Company highlighted certain drill results from 2024 in the following news releases (further summarized in the above-noted 2024 summary of exploration):

Prime Tahonitas Footwall Discovery: Intersects New Continuous High-Grade Veins at Tahonitas in the Z-T Trend (January 15, 2025)

Expansion Drilling Highlights at Z-T

The Company is reporting 25 core holes at the Z-T Trend, 14 of which are from Tahonitas, located in the southeast end of the Z-T Trend, with the following highlights:

Prime's Central Trend Continues to Deliver Strong Grades and Continuity, Defining a 400-metre High-Grade Shoot at Noche Buena (January 30, 2025)

Expansion Drilling Highlights in the Central Trend

The Company is reporting 14 core holes at the Central Trend, 9 of which are from Noche Buena, at the southernmost part of the trend, with the following highlights:

PRIME MINING CORP.

Management's Discussion and Analysis

For the years ended December 31, 2024 and 2023

(In Canadian dollars, except where noted)

Prime's Fresnillo Generative Target Extended by 120 metres (February 24, 2025)

Generative Drilling Highlights: Fresnillo - A Prime Original Discovery

The Company is reporting 14 core holes, two that intersected only Fresnillo structures, four that intersected both Noche Buena and Fresnillo structures, and eight that intersected Mariposa structures. Fresnillo is located between the Z-T and Central Trends with the following highlights in today's results:

Drilling Summary

Fiscal

2024

Drill holes completed

142

Drilling metres

11,341

10,331

11,867

17,335

50,874

Fiscal

2023

Drill holes completed

184

Drilling metres

17,215

11,768

14,201

15,712

58,896

Project Expenditures

Project expenditures during the years ended December 31, 2024 and 2023, are summarized as follows:

Fiscal

2024

2023

Drilling

7,334,264

8,215,329

Salaries and personnel

3,661,076

3,896,133

Resource assaying, estimation and technical services

1,939,471

2,534,064

Equipment and field supplies

1,145,095

1,474,474

Land payments and maintenance

394,933

487,214

General and administrative

442,548

508,702

14,917,387

17,115,916

Review of expenditures for Q4 2024 compared to Q4 2023

Drilling decreased to $1,669,756 compared to $2,309,570 during Q4 2023. The Q4 2024 exploration program has drilled fewer metres than Q4 2023 exploration program decreasing expenditures.

Salaries and personnel decreased to $1,305,204 compared to $1,458,511 during Q4 2023. Staffing levels and bonuses are consistent with Q4 2023 leading to similar personnel expenditures.

PRIME MINING CORP.

Management's Discussion and Analysis

For the years ended December 31, 2024 and 2023

(In Canadian dollars, except where noted)

Resource and estimation and technical services decreased to $475,436 compared to $931,301 during Q4 2023. As a result of fewer metres drilled during Q4 2024, assaying expenditures have decreased. Furthermore, the cost per sample for assaying has decreased due to improved contracted rates. This decrease was offset by increased spending on project and technical studies.

Equipment and field supplies decreased to $220,190 compared to $377,272 during Q4 2023. Fewer field supplies, such as core boxes, were required as a result of decreased metres drilled.

Land payments and maintenance decreased to $52,513 compared to $71,086 during Q4 2023. Road works and land payments to the Ejido were similar in both periods.

General and administrative expenditures relate primarily to local consulting, accounting, and legal support. Expenditures were $103,250 compared to $98,081 during Q4 2023, reflecting only minimal changes in support requirements.

Review of expenditures for fiscal 2024 compared to fiscal 2023

Drilling decreased to $7,334,264 compared to $8,215,329 during fiscal 2023. The fiscal 2024 exploration program drilled fewer metres compared to the fiscal 2023 program leading to less expenditures.

Salaries and personnel decreased to $3,661,076 compared to $3,896,133 during fiscal 2023. Staffing levels are consistent with fiscal 2023 leading to similar personnel expenditures.

Resource and estimation and technical services decreased to $1,939,471 compared to $2,534,064 during fiscal 2023. As a result of fewer metres drilled, assaying expenditures have reduced. Furthermore, the cost per sample for assaying has decreased due to improved contracted rates. This decrease was offset by increased spending on project and technical studies.

Equipment and field supplies decreased to $1,145,095 compared to $1,474,474 during fiscal 2023. A fewer amount of field supplies, such as core boxes, were required as a result of fewer metres drilled.

Land payments and maintenance decreased to $394,933 compared to $487,214 during fiscal 2023. Property concession payments have remained consistent with fiscal 2023. Road works and additional land access payments to Ejido members decreased during fiscal 2024.

General and administrative expenditures relate primarily to local consulting, accounting, and legal support. The expenditures decreased to $442,548 compared to $508,702 during fiscal 2023. There has been decreased legal and consulting expenses as a result of a reduction in review of mining law changes in Mexico and work with the Ejido as this work was substantially completed during fiscal 2023.

PRIME MINING CORP.

Management's Discussion and Analysis

For the years ended December 31, 2024 and 2023

(In Canadian dollars, except where noted)

Aggregate Los Reyes Project expenditures

Project expenditures since acquisition, are summarized as follows:

Total

Drilling

30,511,551

Salaries and personnel

14,183,525

Resource assaying, estimation, and technical services

9,328,921

Equipment and field supplies

5,269,123

Land payments and maintenance

1,591,186

General and administrative

1,782,036

62,666,342

Resource Estimate

On October 15, 2024, the Company reported significant open pit expansion and new underground resources in its 2024 Mineral Resource Estimate ("MRE") based on the addition of Prime's drilling up to July 17, 2024 of 86,650 metres drilled by Prime since the cutoff of the May 2023 MRE. In total, the 2024 MRE is based on 240,172 metres of drilling, of which Prime has drilled 191,451 metres. Prime's discovery cost is just over US$20 per Resource ounce added since acquisition. The new 2024 MRE (contained within economically constrained pits or underground stope shapes) comprised 49.0 million tonnes Indicated resources (1,491,000 ounces contained Au at 0.95 g/t and 54.00 million ounces contained Ag at 34.2 g/t) and an additional 17.2 million tonnes (538,000 ounces contained Au at 0.97 g/t and 21.56 million ounces contained Ag at 39.0 g/t) of Inferred material.

Indicated Resources have increased 49% to 2.2 million AuEq ounces and Inferred Resources have increased 11% to

0.8 million AuEq ounces compared to the May 2023 MRE. Open-Pit Milled Indicated and Inferred Resources have grown to 1.27 million ounces AuEq (24.7 million tonnes at 1.60 g/t AuEq) and 335,000 ounces AuEq (7.2 million tonnes at 1.45 g/t AuEq), respectively. New Underground Milled Indicated and Inferred Resources of 664,000 ounces AuEq (4.1 million tonnes at 5.00 g/t AuEq) and 406,000 ounces AuEq (4.1 million tonnes at 3.12 g/t AuEq), respectively. Open Pit Heap Leach Indicated and Inferred Resources have grown to 261,000 ounces AuEq (20.3 million tonnes at 0.40 g/t AuEq) and 76,000 ounces AuEq (5.9 million tonnes at 0.40 g/t AuEq), respectively.

This MRE was completed under the supervision of John Sims, a member of the American Institute of Professional Geologists since 2004, an 'Independent Qualified Person' as defined by NI 43-101 guidelines, with over 35 years of related experience. In support of this resource update, Prime filed an updated Technical Report on November 27, 2024, in accordance with NI 43-101.

PRIME MINING CORP.

Management's Discussion and Analysis

For the years ended December 31, 2024 and 2023

(In Canadian dollars, except where noted)

Corporate

Management

During February 2024, Mr. Scott Hicks, assumed the role of Chief Executive Officer. Mr. Daniel Kunz remained as a strategic advisor and director.

Directors

During January 2024, Mr. Scott Hicks was appointed to the Board of Directors, concurrent with his CEO appointment.

During September 2024, Sunny Lowe was appointed to the Board of Directors.

Deferred share units grants

During January and September 2024, deferred share units ("DSUs") were granted to acquire 661,202 and 88,415 common shares, respectively. These DSUs, issued to directors, have fully vested.

Restricted share units grant

During January 2024, restricted share units ("RSUs") were granted to purchase 455,846 common shares. The RSUs will vest over a three-year period, with one-third vesting on the first-year anniversary of the grant, one-third on the second-year anniversary, and one-third on the third-year anniversary. Settlement will occur at the end of the third year.

Stock options grants

During January 2024, stock options were granted to purchase up to 991,626 common shares at a price of $1.83 per share. The stock options granted have a five-year life with one-third vesting on the first anniversary of the grant date, one-third vesting on the second anniversary of the grant date, and one-third vesting on the third anniversary of the grant date.

Mining law ruling

Following a process commenced by the Company in July 2023, a Federal judge in Mexico has granted its applications for Federal protection, or 'Amparos', to conduct its activities under the previous (1994) mining-related laws, and is thereby not subject to the 2023 reforms for both the Los Reyes Project, as well as the adjacent El Rey claim once the latter claim is granted.

Critical to the rulings, the granted applications protect the Los Reyes Project and El Rey claims constitutionally from any further changes to mining related laws in Mexico. This protection extends to the 2023 mining-related laws, which included reforms to water usage, reclamation considerations and the scope and term of mining concessions.

The ruling is currently under appeal by the Mexican government.

Annual general meeting

During June 2024, the Company held the annual general meeting which resulted in the election of all the directors listed as nominees in the management's information circular dated May 3, 2024, as well as the approval of all matters presented. Mr. Daniel Kunz ended being a strategic advisor and director.

ESG

During May 2024, the Company issued its 2023 sustainability report.

Financial advisory firm fee

During June 2024, the Company issued 64,286 common shares and 64,286 warrants to pay a financial advisory firm fee. Each warrant is exercisable into one common share at an exercise price of $2.47 until June 10, 2027.

Disclaimer

Prime Mining Corp. published this content on March 06, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 06, 2025 at 01:50:07.180.