Spanish Mtn partner Xatll cancels all agreements

Ms. Rhonda Phillips of Xatll First Nation has announced the termination of all agreements with Spanish Mountain Gold Ltd. (SPA), including both the 2012 protocol agreement and the 2021 engagement protocol. The First Nation stated that the project has undergone significant and fundamental changes, rendering the prior agreements unable to reflect the proposed project or provide the necessary framework for a collaborative and mutually beneficial relationship.

According to the release, the termination timeline began in April 2026 with formal notice terminating the 2021 engagement protocol, effective immediately. A subsequent notice in September 2026 terminated the 2012 protocol agreement. The First Nation confirmed that there are no other agreements in place between Spanish Mountain Gold and Xatll.

The release clarified that a formal relationship agreement was never finalized; the 2012 and 2021 documents served only as protocols to support negotiations toward such an agreement. The Chief’s statement framed the land in cultural, spiritual, and ecological terms, committing to being intentional about how industrial activity proceeds. While this language suggests a conditional stance rather than a permanent refusal, no specific terms for re-engagement were stated.

Spanish Mountain Gold Ltd. (SPA) announced the September 2026 termination of its 2012 protocol with the Xatśūll First Nation, confirming that zero agreements remain between the parties. This development follows disclosures in the company’s Q1-2026 MD&A, which noted that negotiations were ongoing with the Xatśūll First Nation, which had requested a renegotiation. The termination marks the collapse of the remaining 2012 framework and the finality of the engagement instruments with the directly affected Secwepemc Nation.

The company is currently in a pre-permitting, pre-construction phase, with its ~C$155M market value dependent on reaching a build decision targeted for the first half of 2028. This decision requires a completed combined provincial and federal Environmental Assessment (EA). In August 2026, the company received authorization from the BC Environmental Assessment Office to resume the EA, with a draft Detailed Project Description (DPD) expected in Q4 2026 and a formal submission planned for Q1 2027. The loss of formal engagement instruments immediately before the DPD submission presents a direct hit to the EA’s schedule, cost, and probability, contrasting with the "strong community relationships" and "positive community relations" framing found in the company’s investor presentations.

The termination also impacts the company’s US$55M Wheaton royalty financing, which is tranched. US$20M of the remaining US$32.5M is payable only upon receipt of EA approvals under the BC Environmental Assessment Act. The permitting process now carries incremental First Nation risk. Separately, a US$12.5M tranche is tied to completing 60,000 m of drilling. As of the 2026-09-21 PEA release, the program stood at ~31,587 m, roughly half complete.

No relationship agreement ever existed, meaning nothing contractually binding has been cancelled. The Xatśūll First Nation’s language is not an outright veto and leaves room for a new, differently scoped agreement. The stock had already fallen from C$0.40 on Sept 21–22, following the PEA uplift release, to C$0.30 by Sept 30, prior to this release.

Spanish Mountain Gold Ltd. (TSX-V: SPA | OTCQB: SPAUF | FSE: S3Y) is a pre-production gold developer whose sole material asset is the 100%-owned Spanish Mountain Gold Project in the Cariboo District of British Columbia. The site is located 70 km from Williams Lake, with a paved highway 6 km from the site. Presentation materials describe the location as a Tier 1 jurisdiction. The deposit style is a large-tonnage, low-grade, near-surface open-pit and mill operation. Mineralization is hosted in early strata-bound and later quartz-vein systems, with the Orca Fault Corridor identified as the primary structural control on higher-grade intervals.

Per the 2026-09-21 release, effective 2026-05-19, the Main Deposit Measured and Indicated (M&I) resource stands at 342.0 Mt at 0.42 g/t Au for 4.66 moz Au (plus 7,219 koz Ag), and Inferred of 42.4 Mt at 0.28 g/t Au for 0.38 moz. The Main M&I increased 12% versus the prior 2025 MRE. A maiden Phoenix Deposit MRE added 0.72 koz Indicated and 629 koz Inferred. Consolidated resources total 4.66 moz M&I and 1.01 moz Inferred at a 0.15 g/t Au cut-off.

The July 2025 PEA, per the investor presentation, assumed 26,000 tpd, a 24.5-year mine life, ~3 moz LOM gold, after-tax NPV5% of C$1.0B at US$2,450/oz and C$3.2B at US$3,900/oz. The September 2026 PEA Update raised throughput to 31,000 tpd, mine life to 25.8 years, and LOM production to 3.33 moz payable. This update reported an after-tax NPV5% of US$2,156M (C$2,910M) and IRR of 35.2% at a US$3,600/oz base case, and NPV5% of US$3,142M / IRR 46.3% at US$4,400/oz spot. Initial capital rose to US$1,050M (C$1,418M) — a C$165M increase over the 2025 PEA attributed to tailings/water management, coarse particle flotation and NSR buydowns. LOM AISC is US$1,450/oz (US$1,098/oz in years 1–5), with average LOM recovery of 89% gold and only 44% silver.

Releases from October 2025 through February 2026 repeatedly referenced a construction decision "in 2027" or "by or in 2027." From the April 2026 royalty release onward, that target became 2028, with a build decision in H1 2028 and FS completion in early/H1 2028. This represents a roughly one-year deferral that was not framed as a delay.

Peter Mah serves as CEO, Mark Ruus as CFO, and Julian Manco is Director of Exploration and the NI 43-101 Qualified Person. BBA Engineering Consultants leads the Feasibility Study per the Q1-2026 MD&A.