Terra Metals [ASX: TM1]

Metals & Mining

Investment Thesis Advances on Maiden MRE & New Drill Programme Underway

We update Terra Metals (ASX: TM1) with a revised target price of A$0.283 per share, representing a total upside of 86.2% from the current share price of A$0.152 and a higher bull-case valuation of A$0.321, equating to 111.4% upside. This upgrade reflects the increasing scale, geological confidence, and strategic importance of TM1’s flagship Dante Project in Western Australia - a district-scale polymetallic system, often referred to as the “Bushveld of Australia”, hosting copper, titanium, vanadium, PGEs, and gold across an 80km mineralised corridor. The company has delivered significant recent milestones, including its maiden 148Mt JORC-compliant Mineral Resource Estimate @1.38% CuEq, strong institutional support with A$19 million in funding from recent placements, and the commencement of its largest drilling program to date. Early results from this campaign have been highly encouraging, highlighted by the thickest mineralised interval ever recorded at Dante, a 58m titano-magnetite reef, reinforcing the project’s exceptional scale and discovery potential.

Combination of Scale, Grade and Metallurgical Quality

With an impressively low discovery cost of just A$0.07 per tonne of resource defined, Dante’s flat-lying, laterally continuous, and outcropping mineralisation - analogous to a coal seam - allows for rapid, low-cost exploration and resource growth. The project is strategically located with ready access to transport, power, and export infrastructure, and is surrounded by major tenement holders including BHP, Rio Tinto, and KoBold Metals. Metallurgical testwork has further validated Dante’s world-class potential, producing three clean, high-grade saleable concentrates with outstanding recoveries, all achieved through conventional, lowcost flotation methods, ranking among the best metallurgical results globally:

Copper - 28% Cu, 17g/t Au, 22.4g/t PGM (95.6% Cu recovery) Vanadium - 1.81% V₂O₅ concentrate (90.5% V₂O₅ recovery) Titanium - 40% TiO₂ concentrate (65% TiO₂ recovery)

Updated Valuation Reflects Higher Upside

We value TM1 at A$0.245 in our base case (60.9% upside) and A$0.321 in the bull case (111.4% upside), establishing a midpoint target price of A$0.283. This updated assessment reflects a material increase from our initial valuation, underpinned by higher geological confidence following the release of the maiden 148Mt MRE, alongside excellent metallurgical recoveries, near-surface mineralisation conducive to low-strip, open-pit mining, and a fully funded threerig drilling program supported by a strong A$19m cash position. With multiple high-priority targets currently being tested and the potential for a district-scale resource we estimate at 425–981Mt, our valuation leaves room for re-rating as TM1 continues to deliver exploration success and advance toward development.

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