Amaroq keeps building

and it's time to double down.

Good Morning Team.

Amaroq released Q2 financial results yesterday, and I think it’s worth taking some time to dissect them - alongside the exploration campaign and wider geopolitical landscape.

I remain of the view that Amaroq is the only way to pure-play invest into Greenlandic mining. They are the only ones with the expertise to make the frontier work.

And while I’m still up substantially since investing a few years ago, the stock has drifted down from record highs (arguably driven by Trump’s positivity on the island) to levels last seen a year ago - when the company was less well capitalised, less advanced and had yet to pour first gold.

If you liked it then, then you should like it now.

However, yesterday’s results have seen another share price dip.

I’d argue that this is primarily because the market has not appreciated the nuanced message and has gone blunt instrument.

Previously, AMRQ had projected gold production of 5,000–20,000 ounces for 2025. This guidance has now been revised down to 5,000 ounces, triggering the recent sell-off.

The reason for the adjustment is positive: the company was approached by supportive institutions with fresh capital looking to invest.

As a result, AMRQ’s position has strengthened, and its plans have evolved.

The company is now accelerating optimisation of the Nalunaq production plant. While the initial throughput target of 300tpd by year-end remains on track, the longer-term 450tpd target can now be reached much faster by temporarily halting operations over the summer to carry out optimisation in favourable weather conditions.

In short, this is a production cut for a constructive reason.

And just like AMRQ’s institutional base, I think it’s time to double down.

The company is achieving major operational milestones while simultaneously executing one of the most ambitious exploration campaigns in its history.

Let’s dive in.

Part I: From First Gold Production to Expansion

Nalunaq Gold Mine: Maiden Revenue

Q2 2025 saw Nalunaq achieve its first commercial production, generating maiden revenue of $3.4 million.

This may be a small initial amount - to be expected, this is optimisation year - but the milestone represents the culmination of years of development work and the beginning of Amaroq's transition from a development company to a producing miner.

The company successfully completed its first commercial shipments, exporting doré bars containing 808 ounces of gold.

Of this, 724 ounces were shipped to a refinery facility in Switzerland and subsequently sold to Auramet.

An additional 84 ounces were sent to a specialised refinery in the UK for processing into Single Mine Origin gold, which will be made available for purchase by the local Greenlandic population and jewellry makers.

This demonstrates the company's commitment to community engagement - but for investors, will also drum up some pretty great marketing.

Operational Ramp-Up

The commissioning progress at Nalunaq has been going well, with key performance indicators showing significant improvement.

In the quarter, AMRQ achieved an average processing throughput that was 3.6 times higher, and mining ore production 2.6 times higher, than Q1 2025.

Better yet, this upward trajectory continued into Q3 (the current quarter), with processing throughput reaching approximately 145 tonnes per day in July 2025 on a single shift.

In other words, we’re halfway there to the year-end target.

Actually more than halfway.

CEO Eldur Olafsson notes that between the end of Q2 and today, an additional 36kg of doré bars have been poured and are now stored in the on-site safe - so production momentum has clearly continued.

And the company remains on track to achieve its target nameplate processing capacity of 300 tonnes per day by the end of 2025.

This remains the key target for the year - the share price will look after itself in the medium term as long as this hits.

Strategic Acceleration of Phase 2 Development

As noted above, this is clearly the most important takeaway from the results.

Amaroq enjoyed an oversubscribed and upsized fundraise that raised £45 million in June - so has made the strategic decision to accelerate certain construction and commissioning activities.

Crucially, it’s forwarded the installation of flotation recovery (Phase 2) systems into this half, which requires a temporary shutdown of gold processing.

This decision means that full-year gold production will be around 5,000 ounces, at the bottom end of the previous 5,000 to 20,000 ounces guidance.

But this is good news. It reflects management's confidence in the mine and their desire to optimise the facility faster than previously possible, before winter conditions arrive.

And mining activities will continue uninterrupted.

Once the upgrades are completed, the plant will be calibrated to achieve higher recovery rates, significantly improving cash generation.

Nalunaq Exploration and Resource Expansion

Nalunaq continues to be the primary focus for gold resource expansion.

A reminder of the fourth Mineral Resource Estimate (MRE4) in April 2025:

‘A significant 51% increase in overall contained gold, to 157.6koz Indicated plus 326.3koz Inferred, demonstrating the robust expansion potential of the Nalunaq deposit. The inclusion of a maiden Indicated Mineral Resource category, supporting potential future conversion to Mineral Reserves and advancing the project's development. Total maiden Indicated Mineral Resource of 151kt @ 32.4g/t Au for 157.6koz Au, with an additional 348kt @ 29.2g/t Au for 326.3koz Au in the Inferred category, as reported in accordance with CIM Definition Standards.’

The exploration team has incorporated these results into ongoing operations and the 2025 exploration program, which will include both underground and surface drilling components.

Underground drilling will proceed almost continuously, focusing on expanding both the scale and confidence of the resource within the Mountain Block and Target Block areas, allowing for real-time integration of geological information with mining operations, which should help to optimise extraction.

At surface, the company has planned up to 3,500 metres of core drilling across the lower Target Block and the South Block Deeps.

This area is interpreted as a potential down-dip continuation of the Nalunaq Main Vein and is designed to further de-risk the 1.7 million ounce Exploration Target.

This is a significant investment in understanding the full extent of mineralisation beyond the currently defined resource areas, with the hope being for increased resources.

Nanoq Gold Project: Advancing Toward Resource Definition

The Nanoq gold project, located east of Nalunaq within the Nanortalik gold belt, is possibly Amaroq's most promising exploration opportunity.

The 2024 drilling campaign returned encouraging high-grade results, so we’re getting a multi-rig program in 2025. The rigs are on site and about to get cracking.

The planned program includes approximately 5,000 metres of core drilling across the central zone, with additional exploratory drilling possible along the western extension, and is designed to evaluate the scale of the resource opportunity and advance toward defining a maiden Mineral Resource Estimate.

To support operations, Amaroq has established a 45-person camp and supporting facilities near the drill sites.

This means the company can complete core logging, cutting, and sampling on-site, providing the flexibility to adapt the drill plan in real-time as results are received, because the geos will be able to modify their drilling targets based on immediate feedback from ongoing results.

Gold Satellite Projects

Beyond the primary Nalunaq and Nanoq projects, Amaroq is conducting field exploration and geological reconnaissance across the Vagar and Anoritooq licences.

These remain early stage but are worth mentioning, especially because they showcase AMRQ’s systematic approach to regional exploration within the Nanortalik gold belt.

The work targets both historical gold occurrences and new prospects generated by Amaroq in previously unexplored areas, building on structural interpretations from earlier field campaigns, and aiming to define targets with the potential to supply satellite feed to the Nalunaq Gold Mine.

It’s not the potential finds that matter, so much as the fact that AMRQ has a clear multi-decade strategy, and are thinking ahead to when Nalunaq itself starts to run low.

By identifying additional gold sources within trucking distance of the processing facility, the company could potentially extend the mine life and improve project economics.

This hub-and-spoke model is particularly valuable in remoter Greenlandic locations where processing infrastructure becomes practically difficult to implement.

Part II: Strategic Minerals Portfolio - Building Greenland's Mineral Potential

Gardaq Joint Venture Structure

A significant proportion of Amaroq's strategic minerals portfolio operates through Gardaq A/S, a joint venture in which the company holds 51% ownership, with GCAM (ACAM) holding the remaining 49%.

This structure allows Amaroq to participate in Greenland's broader mineral potential while sharing costs and technical expertise with their highly experienced joint venture partner.

The Gardaq portfolio encompasses copper, nickel, and rare earth element projects across the country.

Regional Copper Exploration Program

Under the guidance of Dr Steve Garwin, Amaroq's copper-focused exploration continues to advance across multiple target areas.

But the primary focus remains on the Ukaleq target and additional prospects within the Johan Dahl Land licence areas.

This work extends across the broader South Greenland Copper Belt, with remote sensing datasets and results from previous exploration campaigns guiding targeting efforts.

The copper exploration program aims to delineate epithermal or porphyry-style mineralisation - as you will know, both can host significant copper resources.

The program also retains flexibility to undertake scout drilling on one or more targets during 2025, contingent on positive early results from surface sampling and mapping.

I’m hopeful we will get at least a couple of holes.

For reference, surface sampling and mapping represents the initial phase of regional copper exploration to refine drill targets - the ultimate goal is to define copper deposits that could support standalone mining operations or supplement the company's existing gold operations.

Stendalen and Regional Nickel Exploration

The Stendalen nickel project is building on 2025 exploration activities and new geophysical interpretations.

The current program involves ground assessments alongside geological and structural mapping, designed to refine existing geological models and define the drill targets for 2026.

Beyond Stendalen, the exploration team is looking at a series of regional copper-nickel sulphide targets identified across the broader licence portfolio. For reference, nickel sulphide deposits can be particularly valuable due to their potential to host platinum group elements (PGEs) in addition to nickel and copper.

This regional approach allows Amaroq to assess multiple targets simultaneously while building a comprehensive understanding of the area's mineral potential.

While this pre-drill work is, frankly a bit boring from an investor perspective, nickel sulphide deposits are often associated with very specific geological structures and rock types, making detailed geological mapping essential.

The alternative is flying blind.

2026 it is.

Rare Earth Elements Exploration

Following the award of additional exploration licences focused on REE mineralisation, Amaroq has significantly expanded its regional exploration across the Gardar Igneous Province.

This province is a well-known host of REE mineralisation, making it a strategic target for the company's diversification efforts.

The current work focuses on assessing both confirmed and newly identified REE targets, with a view to establish resource potential and scale of opportunity.

Securing REE resources outside of traditional supply chains has become a strategic priority for many jurisdictions, particularly the US - more on that in a moment.

The Gardar Igneous Province represents one of Greenland's most prospective areas for REE mineralisation.

Minturn IOCG Project: Northern Expansion

Amaroq has applied for a new licence covering the Minturn Iron Oxide Copper Gold (IOCG) target in Inglefield Land, Northwest Greenland, with approval expected shortly.

Upon confirmation, the company will conduct a reconnaissance visit to consider the logistical considerations and collect a comprehensive suite of geochemical samples - providing initial data on mineralisation styles and metal content - supporting detailed targeting and planning for the 2026 exploration season.

The Minturn project represents Amaroq's furthest northern exploration target and demonstrates the company's approach to evaluating Greenland's mineral potential across multiple geological provinces.

Like nickel sulphides, IOCG deposits can be particularly valuable due to their potential to host multiple commodities in a single deposit.

Given the remote location in Northwest Greenland, careful planning with regards to access routes, seasonal operating windows, and infrastructure requirements will all be critical.

West Greenland Hub: Strategic Geographic Expansion

In June, Amaroq announced acquisitions of the past-producing Black Angel mine and Kangerluarsuk licences, creating what the company now calls the West Greenland Hub.

This acquisition reconfirms Amaroq's strategic position as the largest acreage holder in Greenland while geographically diversifying operations into the highly prospective northwestern region of the country.

Further, the West Greenland Hub represents a significant strategic expansion beyond the company's southern Greenland focus.

Initial reconnaissance of the newly acquired assets has commenced, with the company reviewing historical data from both the Black Angel zinc, lead, and silver mine and the proximal Kangerluarsuk zinc/lead project.

The company has identified encouraging resource growth potential at both the Glacier and Deep Ice zones, with further technical and logistical assessments scheduled ahead of a comprehensive exploration program planned for 2026.

The aim is to define resource growth potential and develop a re-development strategy for Black Angel.

It’s the Nalunaq strategy - refurbish a brownfield operation and get producing.

On-site facilities include accommodation for a 20 person camp, helicopter hangers, cable car equipment, a deep water harbour, and other existing mine infrastructure.

This will deliver big news next year.

Part III: Strategic Government Support: Capitalising on Critical Minerals Policy

Infrastructure and Logistics Considerations

The scale of Amaroq's 2025 exploration program presents significant logistical challenges, as it covers active drilling plans ranging from the southern fjords to the newest projects in the north and across the West Greenland Hub.

This is a good thing. It means only AMRQ can make it work.

But the logistical complexity of operating across such a broad geographic area will require careful coordination of equipment, personnel and supplies.

The company's establishment of field camps, particularly the 45-person facility at Nanoq, shows the will is there.

But seasonal operating windows in Greenland add another layer of complexity. Realistically, the Arctic summer is short, so there is only a limited window for field activities.

Amaroq's early mobilisation of equipment and establishment of field camps positions the company to maximize productive field time - but if they want to get 8,500+ metres of drilling done along with pre-drill work across seven active project areas, there is limited room for error.

Fortunately, these guys are the specialists.

Environmental and Community Considerations

Like all miners, Amaroq's operations require careful attention to environmental ethics and community engagement.

However, this is perhaps more important in Greenland than elsewhere, which has made very clear that it wants to maintain a careful balance between mining income and retaining its wild beauty.

The company has published its inaugural Sustainability Report, highlighting its strong commitment to responsible development across four key areas: corporate governance, environment, people, and community.

The plan for Single Mine Origin gold for the local Greenlandic market demonstrates Amaroq's commitment to community engagement and local value creation.

And I will 100% be buying a signet ring with the company’s logo if they make one.

An Amaroq is a gigantic wolf from Inuit mythology, often depicted as a solitary hunter who stalks and attacks those who foolishly hunt alone at night.

That’s got to look awesome in gold.

The company continues to work on finalising its Impact Benefit Agreement (IBA) with the Government of Greenland and Kommune Kujalleq - though in my view, this is a negotiation between friends and should conclude without issue.

Financial Position and Strategic Outlook

The successful completion of the oversubscribed £45 million equity fundraise back in June has strengthened Amaroq's financial position significantly.

The company reported group liquidity of $75.0 million at the end of Q2, consisting of cash balances of $86.0 million, and an undrawn revolving credit facility of $8.9 million, less trade payables of $19.8 million.

I usually liken the optimisation phase to the first year of an wild animal’s life. One mistake, and for companies loaded with debt, it’s CLNs, a death spiral and game over.

At Amaroq, the usual risks are not there. The business is highly capitalised with cash derived from a placing at a premium to the current share price.

Optimisation is going well.

And there is almost no risk of dilution here. If there is, it’ll be at the bid as always.

The company has also established complementary business lines to further profit from its Greenland expertise.

Suliaq has been incorporated as a standalone business to provide equipment and services to Greenland's growing mining sector, with JLE Group Ltd committing to invest £4 million for a 10% shareholding.

Additionally, plans are advancing for at least one megawatt of hydro power generation near Nalunaq, with the hydro electric business expected to be formally incorporated as IMEQ by year-end.

Growing State-Backed Interest in Greenland's Mineral Potential

The geopolitical landscape surrounding critical minerals has fundamentally shifted since the pandemic, with both the United States and European Union finally recognising the strategic importance of supply chain security.

Yes, I’ve been banging this particular drum for some time.

And this attitude shift has brought unprecedented attention to Greenland's vast mineral wealth, positioning Amaroq at the centre of a new era of state-backed mining investment.

Olafsson recently revealed to Bloomberg that Amaroq is actively engaged in discussions with several state-backed agencies across both sides of the Atlantic:

‘They are looking for ways to either back businesses, back mining projects, back energy projects…They're looking for ways to secure supply of certain minerals to the US, for example. And we see the same thing on the Danish side and the European side.’

Denmark's state-backed investment fund EIFO pledged $15.4 million to the recent raise, alongside investors from both sides of the Atlantic who participated enthusiastically.

Olafsson also noted that the company wasn't actively seeking capital but chose to capitalise on the unprecedented investor interest.

In other words, the guidance reduction (and ramped-up optimisation) will have been factored into institutional expectations.

And Trump's renewed focus on Greenland during his second presidential term has clearly intensified investor motivation, building on growing interest that began during his first presidency in 2019:

‘We've seen a lot of interest, and it's all beneficial for Greenland.’

In Greenland specifically, signs of state-backed momentum are growing. The US Export-Import Bank is considering a loan of as much as $120 million for the Tanbreez rare earths project.

The EU, meanwhile, has designated Nalunaq’s neighbour, Amitsoq, as a strategic project, making it eligible for support under the bloc’s critical raw materials strategy.

Trump has repeatedly argued that the US needs control over Greenland for security reasons (as the Arctic ice melts, expect more of this), while Republicans in general have consistently pointed to the island’s vast mineral wealth as a key strategic asset.

Possibly the most important recent development was MP Materials, the largest rare earth mining and processing company in the Western Hemisphere, securing a $150 million loan from the US Department of Defense, alongside a price floor and $400 million of direct equity investment.

This is the only operational rare earths mine in the US.

Nearby Guardian Metal Resources, which owns what is considered to be the largest undeveloped tungsten deposit on US soil, has also started to benefit from grant funding.

As a hint for what’s next, China has placed export controls on graphite, two REEs, antimony and tungsten. Titanium will be next.

But MP’s precedent-setting transaction demonstrates the willingness of US government agencies to provide substantial financial backing for critical mineral projects that enhance the country’s national security interests.

I won’t list all the funding possibilities here - but there are billions of dollars waiting to find a home - with the US at China’s mercy until it can develop its own minerals supply.

Amaroq's Strategic Positioning for Government Support

The good news is that Amaroq's portfolio positions the company exceptionally well to capitalise on government support programs, targeting multiple critical mineral categories.

The company's gold production provides immediate cash flow and operational credibility, while its strategic minerals portfolio across copper, nickel, and rare earth elements aligns directly with US government priorities for supply chain security.

The company's discussions with state-backed agencies include state loans, offtake agreements, and direct investments.

This multi-faceted approach will be highly valuable, especially as guaranteed sales contracts have historically been challenging to secure for Greenlandic mining projects - this, other than the weather and remoteness, has been a key problem in developing the island for some time now.

And Amaroq's position as the largest acreage holder in Greenland provides additional strategic value to government partners.

Rather than supporting individual projects, government agencies can partner with Amaroq to support the development of an entire mining hub capable of producing multiple critical minerals from the entire island.

This approach offers economies of scale and reduces the complexity of managing multiple partnerships across different projects and operators.

AMRQ has already set everything up to make this work, including an ALS lab on site:

In 2026, you could have a company backed by the US government, producing 30,000+ ounces of gold a year, with tens of millions of dollars in the bank and the largest exploration program the island has ever seen from a single company.

It’s not hard to see why institutions are happy to back them.