Q2 Metals Announces PEA with C$13.5 Billion After-Tax NPV8 for 1.7 Mtpa Cisco Lithium Project in Quebec, Canada

Q2 Metals Corp. (QTWO) released the first Preliminary Economic Assessment for the Cisco Lithium Project, reporting an after-tax NPV8 of C$13.49 billion, an after-tax IRR of 38.7%, a pre-tax NPV8 of C$23.05 billion, and a pre-tax IRR of 48.5%. The study outlines a 3-year after-tax payback period from the start of production.

The PEA utilizes an updated May 26, 2026 Inferred Mineral Resource Estimate of 297.3 Mt at 1.36% Li2O, containing 4.06 Mt Li2O and 10.04 Mt LCE. This estimate represents a reclassification of the same 75 holes and 33,343 m drilled through December 2025. Tonnage rose less than roughly 1% versus the April 2026 MRE, with no new drilling added.

The study contemplates a conventional open-pit mine with a 28-year life. The operation would process 264.2 Mt to produce 46.5 Mt of SC5.5, with an average annual production of 1.7 Mt SC5.5. Key operational parameters include a strip ratio of 2.44:1, a lithium recovery of 73.3%, and a concentrate grade of 5.5% Li2O at 0.62% Fe.

Initial capital is estimated at C$2.926 billion, with sustaining capital at C$589 million and total project cost at C$25.225 billion. Site cash operating cost is C$256.16/t SC5.5, and AISC is C$454.3/t SC5.5 before royalties on an FOB Québec basis.

Key assumptions include SC6 at US$1,900/t CIF China, SC5.5 at US$1,647/t FOB Québec or C$2,289/t, a US$/C$ exchange rate of 1.39, an 8% discount rate, and a 42.3% effective tax rate. The capital estimate is AACE Class 5 with an accuracy of -30% to +50%.

The project is not royalty-free; a 1% GOR royalty is modelled, resulting in a LOM royalty cost of C$1.064 billion. A C$42.5 million royalties buy-back is included in initial capital.

Government support is incorporated but not guaranteed. A CTM-ITC refundable investment credit of roughly C$95-101 million is included, while a Quebec tax holiday of up to C$200 million over the first 10 years remains subject to approval.

Infrastructure scope includes a new roughly 200 km, 161 kV transmission line with C$500 million of off-site power capex. The project requires 45-62 MW power demand, 6.5 km access to the Billy Diamond Highway, and roughly 150 km to rail at Matagami.

The resource remains open along strike, and 2026 drilling has intersected wide mineralization outside the PEA pit shell. However, the PEA is based solely on Inferred Mineral Resources, not Mineral Reserves. Metallurgical testwork covers only three composites, and the flowsheet has not been demonstrated in an integrated test program.

Q2 Metals Corp. (QTWO) released a preliminary economic assessment (PEA) on November 10, 2026, marking the company’s first economic study for the project. The analysis establishes a project-level valuation with an after-tax NPV8 of C$13.49 billion against an initial capital expenditure (capex) of C$2.926 billion, resulting in an NPV-to-initial-capital ratio of approximately 4.6:1. The study reports an all-in sustaining cost (AISC) of C$454/t, which the company characterizes as first-quartile. This valuation is significant relative to the company’s market capitalization of roughly C$389 million.

The release aligns with management’s prior guidance for a Fall 2026 PEA. The assessment follows a mineral resource estimate (MRE) in April 2026 and a financing event in May 2026, maintaining consistency with the company’s historical news flow. The updated MRE replaces the April 2026 estimate using the same 75 holes and 33,343 meters of drilling, showing less than 1% growth in tonnage and contained lithium oxide (Li2O). Drilling conducted in 2026, totaling approximately 69,500 meters across 151 holes, is not included in the PEA resource and remains a future catalyst for resource conversion and expansion.

The PEA is based solely on Inferred resources, which do not have demonstrated economic viability, and the study contains no reserves. Classified as an AACE Class 5 study with preliminary metallurgy, the positive economics are conceptual rather than indicative of company-level cash flow. The C$2.93 billion initial capex exceeds the company’s cash balance of C$70.9 million by more than 40 times, highlighting a substantial funding gap.

Sensitivity analysis indicates the project remains economically viable across wide ranges of price, grade, recovery, and cost variables. At a 30% reduction in lithium price, the after-tax NPV8 is C$7.69 billion with an internal rate of return (IRR) of 27.6%. At a 30% reduction in grade, the NPV8 is C$8.13 billion. While these figures support the robustness of the conceptual model, they do not eliminate risks related to construction, permitting, financing, or equity dilution.

Q2 Metals Corp. shares closed at C$1.61 on November 9, 2026, prior to the release. The price is down from a high of C$3.34 in June 2026 and sits below the C$2.45 common-share and C$3.60 flow-through financing levels.

Q2 Metals Corp., listed on the TSX-V under QTWO, OTCQB under QUEXF, and FSE under 458, is a Canadian lithium exploration and development company. Its flagship asset is the Cisco Lithium Project, located in the Eeyou Istchee James Bay region of Quebec. The project comprises 801 claims covering 41,253 hectares, situated approximately 6.5 km from the Billy Diamond Highway and roughly 150 km from rail at Matagami. Q2 holds a 100% interest in the project, which was acquired through an option process involving anniversary and discovery payments.

The deposit is a spodumene pegmatite system with a current Inferred resource of 297.3 Mt at 1.36% Li2O. This resource is split between 271.6 Mt at 1.37% Li2O for open pit operations and 25.8 Mt at 1.30% Li2O for underground operations. No reserves are reported, and mineralization remains open along strike and at depth.

Development activity has progressed rapidly, with discovery occurring at acquisition in 2024. An inaugural MRE was released in April 2026, followed by the first PEA in November 2026. To date, approximately 69,500 m have been drilled across 151 holes. The PEA utilizes only the 33,343 m and 75 holes completed through December 2025. Management includes Alicia Milne as President and CEO, Keith Phillips as Executive Chair, and Neil McCallum as VP Exploration and director. No analyst ratings, target prices, or consensus estimates were provided.