Amaroq's Rise

We're still just getting started.

Good Morning Team.

In Q4 last year, I laid out the investment case for Amaroq in detail. Shortly afterwards, the Black Angel germanium and gallium discovery transformed the strategic picture overnight.

In December, I told you that 2026 was shaping up to be the year this stock re-rates hard.

This morning, Amaroq released their 2026 production guidance and exploration update.

The good news: all is going to plan.

Production Numbers

I have repeatedly called for 40,000-50,000 ounces annually at steady-state operations, with Q2-Q3 2026 being the quarters that prove up the thesis.

Management has guided for 25,000-35,000 ounces for the full year, with H1 weighted toward 7,000-10,000 ounces as Phase 2 flotation is commissioned, and Q4 delivering 10,000-12,000 ounces.

This is exactly the ramp profile I described. The back-end weighting reflects the Phase 2 commissioning timeline I outlined — flotation recoveries jumping from roughly 60% on the gravity circuit to 90-95% once the flotation circuit is fully online.

That step-change in recovery rates is the engine of the investment thesis, and it’s arriving precisely as expected.

The full annualised run-rate implied by Q4 guidance (40,000-48,000 ounces) lands squarely in the middle of my 40,000-50,000 ounce target.

By year-end 2026, the production profile I argued for will be visible and provable.

The market will no longer be able to argue about whether it’s achievable.

Optimisation year is over and profit year is underway.

Cost Structure: Owner-Operator Thesis Playing Out

I flagged the transition to owner-operated mining as a key efficiency driver. Today’s guidance confirms it explicitly — management is pointing to lower H2 costs specifically driven by the contractor-to-owner-operator transition across drilling, processing and camp support.

The cash generation story I described is arriving. Not in the theoretical future — this year.

What This Means at $5,000 Gold

Let’s run the numbers at $5,000 — a level that increasingly looks like a floor rather than a ceiling — because the implications for Amaroq look insane.

Q4 2026 guidance is 10,000-12,000 ounces at AISC of $1,250-1,450 per ounce. At $5,000 gold, that’s a margin of $3,550-3,750 per ounce. On 11,000 ounces at the midpoint, that’s roughly $40 million in free cash flow from a single quarter.

Annualised from that Q4 run-rate: $160 million in free cash flow per year. From one mine. Before Nanoq. Before Black Angel. Before any government support.

For the full year 2026, using the midpoint of 30,000 ounces: revenue of $150 million against full-year AISC of $69-73 million, leaving approximately $78-81 million in free cash flow for the year — and that’s heavily skewed by the lower-production H1 before Phase 2 is fully commissioned.

A company generating $80 million in free cash flow this year, ramping to $160 million annualised by year-end, with district-scale exploration upside and critical minerals optionality on top, should not be trading where it is.

At $5,000 gold, the valuation gap will close - because AMRQ will this year valued by producer metrics and not explorer ones.

Exploration Program Continues

However, the exploration continues.

The 2026 exploration program reads like a direct confirmation of the thesis laid out in this Substack over the past few years.

Nanoq is advancing exactly as I described — phased systematic drilling of the Central Zone targeting a Maiden Mineral Resource Estimate. I said Nanoq results would be a major catalyst.

The work to establish that resource is now formally underway.

Black Angel is moving toward a Phase 1 mining operation in 2028, with rehabilitation of surface facilities and feasibility studies beginning immediately. I called 2028-2029 as a realistic first production timeline.

Management is now targeting exactly that.

The Minturn IOCG — which I highlighted as potentially hosting copper, gold, uranium and rare earths in a single system — is receiving surface geophysical work and a scout drilling program following identification of what the company describes as a mineral system of significant scale.

That language is notable. Companies don’t use the phrase ‘significant scale’ lightly in regulatory announcements.

Stendalen nickel-copper, the Ilua REE project, satellite gold targets across the Nanortalik belt — the entire portfolio is active and advancing simultaneously. The $11-29 million exploration budget, scalable depending on market conditions, is the kind of disciplined flexibility I expected from management.

They’re being surgical.

Balance Sheet Fortress, With a Caveat

I described Amaroq’s balance sheet as fortress-like throughout these articles. The year-end position tells a nuanced story: CAD$27.2 million in cash plus CAD$8.9 million undrawn facilities, with net debt of CAD$15.3 million — the first time the company has carried net debt.

This deserves context. The net debt position reflects the accelerated Phase 2 investment, underground mining equipment purchases, and camp expansion — all capital deployed to build the asset base that generates the cash flow we’ve been modelling.

The company has CAD$24.2 million in inventory, total assets of CAD$352.6 million, and a clear path to strong free cash flow generation in H2 2026.

The important distinction I drew throughout — that Amaroq would never be forced into dilutive capital raises at market bottoms — holds.

The balance sheet has been deployed strategically, not defensively.

And one would imagine offers for further cash, which is unlikely to be needed, are numerous.

Suliaq Signal

Olafsson has also confirmed ongoing discussions regarding independent financing of the Suliaq support services and logistics business.

Suliaq has previously been valued at £40 million. Independent financing — whether through a partial sale, JV, or debt facility secured against the business — would crystallise that value on the balance sheet without diluting the mining operations. It would also validate the hub-and-spoke services model I described as a key competitive advantage.

Amaroq is essentially building the only petrol station on the M5, and now people are queuing up to co-invest in the forecourt.

Watch this space.

Ever More Institutional Validation

Two announcements this week that deserve their own spotlight.

Cavendish has initiated coverage on Amaroq with a target price of 204p. The stock is currently trading at 115p — itself already up over 70% in the past six months.

That’s formal sell-side initiation with a price target implying roughly 77% further upside from here, on top of the very substantial gains already banked.

I said the Main Market uplisting would trigger expanded analyst coverage and institutional mandates that cannot touch AIM-listed stocks.

It’s happening, right on cue.

More significantly, Citi has taken Amaroq on as a client as the company prepares for its London Main Market uplisting.

This is one of the largest investment banks on the planet. They only back companies it have been subjected to forensic due diligence.

And when Citi backs a mining company’s Main Market debut, it opens doors to institutional capital at a scale that simply wasn’t accessible before.

I described the Main Market uplisting as a structural buying event — index inclusion, passive fund inflows, mandated allocation from institutions that require main market listings. The engagement of Citi means the process is real, imminent, and being handled at the highest level.

The market is beginning to figure this out. But if Cavendish’s 204p target is even approximately right, and if the institutional flows that follow a Citi-backed Main Market listing materialise as expected, the move so far is the opening act.

US government funding will come - and remember the AMRQ major shareholder list already includes some serious international and quasi-state players.

The Thesis, Three Months On

I have long argued that the market has been valuing AMRQ as a single-asset development story while ignoring district-scale exploration upside, critical minerals optionality and an operational moat that competitors would need a decade or more to replicate.

Today’s announcement advances every single element of that thesis:

Production is ramping toward 40,000+ annualised ounces by Q4. Costs are falling as the owner-operator model takes hold. Nanoq is progressing toward a maiden resource. Black Angel is targeting 2028 production.

The critical minerals portfolio — Minturn, Stendalen, Ilua REE — is active across multiple fronts. Citi is involved. Cavendish is on board with a 204p target. And gold, that wonderfully obliging metal, is heading in entirely the right direction.

Nothing in today’s release changes the investment case. Everything in it confirms it.

The sceptics remain fixated on the complexities of Greenlandic mining and the H1 production weighting.

They’re missing the forest for the trees, just as they missed it when they sold on last year’s guidance reduction, and just as they’ll explain very patiently at some future London meeting why they nearly bought it but decided not to.

By Q4 2026, when Nalunaq delivers 10,000-12,000 ounces at $1,250-1,450 AISC with Phase 2 fully commissioned and gold remaining at record highs — this story will STILL only just be getting started.