Sailfish Royalty Corp. (FISH.V) Investment Analysis

1. Executive Summary

Sailfish Royalty Corp. (TSXV: FISH, OTCQX: SROYF) is a precious metals royalty and streaming company engaged in the acquisition and management of mineral interests, with a strategic focus on assets located in the Americas. Founded in 2014, the company operates under a business model that provides upfront capital to mining operators in exchange for a right to a percentage of future mineral production or revenue, thereby gaining exposure to commodity price upside and exploration success without incurring direct operating costs or capital expenditures.

The company's value proposition is anchored by a concentrated portfolio of high-quality assets at various stages of the mining lifecycle. The current financial foundation is provided by its producing assets, primarily a gold stream and Net Smelter Return (NSR) royalty on the high-grade San Albino gold mine in Nicaragua, which is operated by the closely-aligned Mako Mining Corp..

The company's future, however, is defined by its transformational development assets in the tier-one mining jurisdiction of Nevada, USA. The cornerstone of this growth is an up to 3% NSR on the multi-million-ounce Spring Valley gold project. This world-class asset recently achieved critical de-risking milestones, including federal approval for production, positioning it as a powerful long-term value driver for Sailfish. Complementing this is a newly acquired five-year gold stream on the permitted Mt. Hamilton gold-silver project, also in Nevada. This asset was strategically secured to provide a "bridge" of stable cash flow, ensuring financial continuity until Spring Valley commences production.

The central investment thesis posits that Sailfish Royalty Corp. is significantly undervalued, with its current market capitalization of approximately C$216 million reflecting the value of its current producing assets but failing to adequately price in the immense, de-risked potential of the Spring Valley royalty. As this asset progresses through final permitting and into construction, a substantial re-rating of Sailfish's valuation is anticipated. This opportunity is amplified by a highly aligned and experienced management team, the strong backing of its majority shareholder, Wexford Capital LP, and a firm commitment to returning capital to shareholders through dividends and buybacks.

2. Business Drivers & Strategic Overview

The Royalty & Streaming Business Model

Sailfish operates within the royalty and streaming (R&S) segment of the mining industry. This business model offers distinct advantages over traditional mining operations. R&S companies provide capital to mine developers and operators in exchange for either a "royalty," which is a percentage of the revenue or profit from the mine, or a "stream," which is the right to purchase a percentage of the mine's future metal production at a predetermined, deeply discounted price.

This structure provides Sailfish with a high-margin, scalable business that is insulated from the operating and capital cost inflation that affects mine operators. The company benefits directly from increases in commodity prices, reserve and resource expansion from exploration success, and extensions of a mine's life, all without contributing additional capital. This model allows for the creation of a diversified portfolio of interests, reducing single-asset risk while maintaining leveraged exposure to the upside of the underlying mining projects.

Primary Revenue & Cash Flow Drivers (Present & Near-Term)

Sailfish's current and near-term financial performance is driven by a trio of core assets, with a strategic transition from reliance on a single producing mine to a more diversified cash flow base.

San Albino Gold Stream & Royalty (Nicaragua)

The company's foundational cash-flowing asset is its interest in the San Albino gold mine in northern Nicaragua, operated by Mako Mining Corp.. This high-grade, open-pit operation is considered one of the highest-grade of its kind globally, providing a robust source of revenue. Sailfish's interest consists of two components:

1. A gold stream equivalent to a 3% NSR on the original San Albino mine area (~3.5 sq. km). The stream agreement gives Sailfish the right to purchase 4% of all minerals produced from this area for a fixed price of 25% of the spot gold price.

2. A 2% NSR on the surrounding district-scale land package (~134.5 sq. km), which includes highly prospective exploration targets like Las Conchitas and El Golfo.

In fiscal year 2024, the company earned 782 gold ounces from its stream interests and generated nearly $1 million in royalty revenue, establishing this asset as the primary driver of historical financial performance.

Silver Receivable & Stream

To further bolster cash flow, Sailfish entered into a silver purchase agreement with Mako Mining in May 2023. This agreement entitled Sailfish to purchase 13,500 ounces of refined silver per month for a 24-month term, which is set to conclude in May 2025. In the second quarter of 2025 alone, the company received and sold 27,000 ounces of silver for proceeds of approximately $905,000, demonstrating its material contribution to the company's top line.

Mt. Hamilton Gold Stream (Nevada)

In a pivotal strategic move announced in September 2025, Sailfish acquired a five-year (60-month) gold stream on the permitted Mt. Hamilton gold-silver project in Nevada. Under the terms of the agreement, Sailfish will purchase approximately 341.7 troy ounces of gold per month from the operator, Mako Mining, at a price equal to 20% of the spot price.

This acquisition is a masterstroke of financial planning. It provides a new, immediate source of cash flow from a premier, low-risk jurisdiction (Nevada) and is perfectly timed to commence as the silver receivable from San Albino expires. This transaction effectively creates a financial "bridge," ensuring continuous and growing cash flow to support the company's dividend and general expenses during the development phase of its main growth asset, Spring Valley.

Primary Growth Initiative (Long-Term Value Driver)

While the aforementioned assets provide stability, the transformational growth and long-term value for Sailfish are encapsulated entirely within its royalty on the Spring Valley gold project in Pershing County, Nevada.

Spring Valley Royalty (Nevada)

Sailfish holds an up to 3% NSR on this world-class, multi-million-ounce gold project. The project is operated by Solidus Resources, LLC, which is owned by the private resource fund Waterton Global Resource Management. The scale and quality of this asset cannot be overstated and its advancement represents a fundamental inflection point for Sailfish.

Key highlights from the February 2025 Feasibility Study underscore the project's tier-one status :

• Massive Scale: Proven and Probable Mineral Reserves of 3.8 million ounces of gold.

• Significant Production: A 10-plus-year mine life projected to average over 300,000 ounces of gold production annually, with an average of 348,000 ounces per year over the first five years.

• Robust Economics: A low life-of-mine all-in sustaining cost (AISC) of approximately $1,103 per ounce and a compelling after-tax Net Present Value (NPV) at a 5% discount rate of $1.5 billion.

• Low Technical Risk: A straightforward, large open-pit, heap-leach mine design.

Crucially, the project has been substantially de-risked throughout 2025. In June, the U.S. Bureau of Land Management (BLM) issued the Final Environmental Impact Statement, which was followed in July by the formal federal approval for production—the first such approval for a new gold mine in the United States in over a decade. Furthermore, the project's operator announced a Letter of Interest from the Export-Import Bank of the United States (EXIM) for up to $835 million in financing, which largely covers the estimated initial capital expenditure of $823 million.

At full production, the Spring Valley royalty has the potential to generate tens of millions of dollars in high-margin annual revenue for Sailfish, an amount that would dwarf its current revenue streams and fundamentally transform the company's financial scale, market position, and valuation.

Competitive Advantages & Strategy

Sailfish possesses several unique strategic advantages that differentiate it from its junior royalty peers. The most significant of these is the deep alignment between its management, its controlling shareholder, and the operator of its primary cash-flowing asset. This creates a symbiotic ecosystem that is highly beneficial for risk mitigation and strategic execution. Wexford Capital LP, an experienced private equity firm in the natural resources sector, is the company's largest shareholder, controlling over 66% of the outstanding shares. This provides a stable capital base and sophisticated strategic oversight.

This relationship is further solidified through Akiba Leisman, who serves as the Executive Chairman of Sailfish while also holding the position of CEO at Mako Mining. This dual role creates an unparalleled alignment of interests at the San Albino mine. Unlike typical royalty agreements where the royalty holder is a passive, outside party with limited information, Sailfish possesses direct insight and influence over the operations of its key revenue source. This structure significantly reduces operator risk and facilitates mutually beneficial transactions, such as the silver receivable and the Mt. Hamilton stream deals.

This strategic foundation enables a disciplined and shareholder-focused approach to capital allocation. The company has demonstrated a firm commitment to returning capital to shareholders, evidenced by its consistent quarterly dividend of US$0.0125 per share, initiated in 2021, and its active Normal Course Issuer Bid for share repurchases. This policy is balanced with opportunistic and accretive growth, as demonstrated by the timely and strategic acquisition of the Mt. Hamilton stream.

3. Financial Performance & Valuation

Historical Financial Performance

An analysis of Sailfish's recent financial statements reveals a company that is profitable with exceptionally high margins, characteristic of the royalty business model, though revenues can exhibit quarterly volatility based on the timing of stream deliveries.

For the full fiscal year ended December 31, 2024, Sailfish reported total revenues of $2.84 million, a gross profit of $1.87 million, and net income of $550,033. This performance was driven by the delivery of 782 gold ounces from its stream interests and royalty revenue of $974,644.

For the first six months of 2025, the company generated total revenues of $1.30 million, a gross profit of $1.25 million, and net income of $109,598. While gold ounces earned from the stream were lower in this period, the top line was supported by strong royalty revenue of $1.16 million and proceeds from silver sales of $2.15 million. The gross profit margin for the first half of 2025 was an exceptional 96%, underscoring the high profitability inherent in the business model.

Key Metrics & Current Valuation

As of October 2025, Sailfish Royalty Corp. has the following key market metrics:

• Share Price (CAD): $2.87

• Market Capitalization: Approximately C158 million)

• Shares Outstanding: Approximately 75.4 million

• Dividend Yield: Approximately 2.4% (based on an annual dividend of US$0.05)

The company's valuation multiples based on trailing financial data can be misleading. Its Price-to-Sales (P/S) ratio of over 50x is elevated due to the relatively small current revenue base. This metric fails to capture the enormous, de-risked, and embedded growth from the Spring Valley project. A Price-to-Book (P/B) multiple of approximately 4.2x provides a more grounded, asset-based valuation perspective. The company's valuation is best understood not by its trailing performance, but by the net present value of its future cash flows, which are set to grow exponentially.

Peer Group Comparison

To contextualize Sailfish's valuation, it is useful to compare it against a curated group of junior and mid-tier precious metals royalty companies. This comparison highlights the significant valuation gap and re-rating potential that exists for Sailfish as it transitions from a single-asset producer to a company underpinned by a world-class development asset in a top-tier jurisdiction.

Note: Market data is as of October 2025. TTM Revenue and multiples are based on available data from sources. Peer selection based on.

The peer comparison reveals several important points. Sailfish trades at a significantly lower absolute market capitalization than its peers, despite possessing what is arguably a superior cornerstone development asset in Spring Valley. While its trailing P/S ratio is high due to its current small revenue base, so are those of its peers like Metalla and Gold Royalty, who also have portfolios dominated by development-stage assets. The analysis strongly suggests that as Spring Valley moves toward production and its future revenue stream becomes more certain, Sailfish's absolute market capitalization has substantial room to grow to align more closely with its peer group, implying a significant potential re-rating for the stock.

4. Risk Assessment & Macroeconomic Considerations

A comprehensive investment analysis requires a thorough examination of the risks that could impede the realization of the investment thesis, as well as the broader macroeconomic factors that could influence the company's trajectory.

Company-Specific Risks

• Operator & Counterparty Risk: Sailfish's business model is fundamentally reliant on the operational and financial success of its third-party mining partners. Any unforeseen technical challenges, production shortfalls, delays, or financial insolvency at the San Albino, Mt. Hamilton, or Spring Valley mines would directly and materially impact Sailfish's revenue and cash flow. This risk is inherent to the royalty model, as Sailfish has limited to no direct control over mining operations. This risk is partially mitigated by the deep strategic alignment with Mako Mining (operator of San Albino and Mt. Hamilton) and the fact that Spring Valley is backed by Waterton, a large and experienced private resource fund.

• Jurisdictional Risk: The company's primary source of current cash flow, the San Albino mine, is located in Nicaragua. This exposes the company to heightened geopolitical, regulatory, and fiscal risks compared to more stable mining jurisdictions. Changes in mining laws, tax regimes, or political instability could adversely affect the economics of the operation. This risk is significant, but it is undergoing a strategic dilution. The company is in the midst of a "jurisdictional pivot" toward Nevada. As revenue from Mt. Hamilton begins and Spring Valley eventually comes online, the company's revenue mix will shift dramatically from being nearly 100% derived from Nicaragua to potentially over 90% from Nevada. This fundamental de-risking of the company's geopolitical profile should, in time, warrant a higher valuation multiple from the market.

• Project Development & Financing Risk: While the Spring Valley project has been significantly de-risked by federal approval and the EXIM Letter of Interest, it is not yet fully financed or in construction. Risks remain related to securing the final, binding financing agreements, potential for capital cost overruns, construction delays, and obtaining all necessary state-level permits. A material delay in the project's timeline would postpone the anticipated transformative cash flows and could negatively impact investor sentiment.

• Asset Concentration Risk: Sailfish's portfolio is highly concentrated in its three main assets. While these are high-quality assets, this concentration means that an adverse development at any one of them would have a more pronounced impact on the company's overall valuation compared to larger, more diversified royalty companies.

Macroeconomic Considerations

• Commodity Price Volatility: Sailfish's financial results are directly correlated with the market prices of gold and silver. A significant and sustained decline in precious metals prices would reduce the company's revenues, profitability, and the underlying net asset value of its royalty and stream interests.

• Favorable Long-Term Outlook for Precious Metals: The company is positioned to benefit from a strong macroeconomic tailwind. A consensus of long-term forecasts points to a bullish environment for precious metals through 2030. Projections for the price of gold are particularly strong, with some analysts forecasting levels between $6,000 and $7,000 per ounce by the end of the decade. This outlook is predicated on structural factors including persistent inflation, geopolitical instability driving safe-haven demand, record global debt levels, a trend of de-dollarization by central banks, and sustained physical buying. Silver prices are also forecast to rise, supported by both their monetary characteristics and growing industrial demand from solar energy and electric vehicle manufacturing. This favorable backdrop enhances the potential returns from Sailfish's asset portfolio.

• Interest Rates and Inflation: The value proposition for gold, and by extension gold-linked equities like Sailfish, is heavily influenced by the interest rate environment. Periods of low or negative real interest rates (nominal rates minus inflation) reduce the opportunity cost of holding non-yielding gold, increasing its attractiveness. The current macroeconomic environment, characterized by persistent inflation and the prospect of future interest rate cuts by central banks, is highly supportive of higher gold prices.

5. 5-Year Scenario Analysis

This section presents a detailed, fundamentals-driven scenario analysis to project a potential range for Sailfish Royalty's share price at the end of a five-year forecast period (YE 2030). The analysis is built from the bottom up, modeling the attributable production and revenue from each of the company's key assets under three distinct scenarios: Low, Base, and High.

Core Modeling Assumptions:

• Shares Outstanding: 75.44 million, held constant for simplicity. This is a conservative assumption as it excludes the potential accretive impact of future share buybacks.

• Valuation Methodology: A Price-to-Sales (P/S) multiple is applied to the projected 2030 total revenue. The selected multiple for each scenario is justified based on the peer group analysis in Section 3 and adjusted for the company's projected growth rate, jurisdictional risk profile, and asset quality in 2030.

• Currency: All financial projections are in USD. The final share price is converted to CAD using a 1.30 USD/CAD exchange rate.

The analysis hinges on two primary variables: the future price of precious metals and the execution timeline of the Spring Valley project. The commodity price assumptions for each scenario are outlined below.

Table: Commodity Price Deck Assumptions (2026-2030)

Base Case Scenario

This scenario assumes the successful and on-schedule development of Spring Valley, coupled with a moderately bullish outlook for precious metals prices, reflecting consensus long-term forecasts.

• Narrative & Key Assumptions:

  • Spring Valley: Construction begins in late 2026, with the first gold pour achieved in mid-2028. The mine ramps up to its nameplate capacity of 348,000 ounces per year by 2029. Sailfish's royalty is modeled as an effective 2.5% NSR.

  • Mt. Hamilton: The stream performs as contracted, delivering 4,100 ounces of gold annually from 2026 until its term expires in Q3 2030.

  • San Albino: Production remains stable, contributing approximately 2,000 Gold Equivalent Ounces (GEOs) annually to Sailfish.

Table: Base Case - Asset Production & Revenue Build-up

• Valuation: By 2030, Sailfish would be a high-growth, dividend-paying royalty company with the majority of its revenue derived from a tier-one asset in Nevada. This profile justifies a 15.0x P/S multiple.

High Case Scenario

This scenario models a highly favorable outcome, characterized by a strong bull market for precious metals and flawless, accelerated execution at Spring Valley.

• Narrative & Key Assumptions:

  • Spring Valley: An expedited timeline sees the first gold pour in early 2028, achieving full production within that year.

  • Mt. Hamilton & San Albino: Both assets perform as expected, with San Albino benefiting from a 20% production increase by 2029 due to successful exploration at its satellite deposits.

  • Commodity Prices: Gold and silver prices rally significantly, following the more bullish forecasts.

Table: High Case - Asset Production & Revenue Build-up

• Valuation: In this bull market scenario, the company's premium asset base and high growth would command a premium valuation, justifying a 20.0x P/S multiple.

Low Case Scenario

This conservative scenario models the impact of a weaker commodity price environment combined with a significant, two-year delay in the Spring Valley project timeline.

• Narrative & Key Assumptions:

  • Spring Valley: Final investment decision and construction are delayed until 2028, resulting in a first gold pour only in mid-2030. The project contributes only a half-year of ramp-up production within the forecast period.

  • Mt. Hamilton & San Albino: Both assets perform as expected under their existing terms, providing a stable cash flow floor.

  • Commodity Prices: Gold prices remain flat at $2,200/oz throughout the period.

Table: Low Case - Asset Production & Revenue Build-up

• Valuation: With growth significantly deferred and sentiment dampened by project delays, the company would trade at a lower multiple, justifying a 10.0x P/S multiple.

Scenario Summary & Probability-Weighted Outcome

The outcomes of the three scenarios are summarized below, along with subjective probabilities assigned to each case to derive a weighted-average potential price target.

Table: 5-Year Scenario Summary & Share Price Trajectory

Note: Current share price of C0.33 in dividends over 5 years.

Probability-Weighted 5-Year Price Target:

The probability-weighted average of the three scenarios yields a potential 5-year price target for Sailfish Royalty Corp. of C$14.25.

This analysis indicates that even in a conservative low-case scenario with significant project delays, the company's existing cash flows and the eventual contribution from Spring Valley provide a positive return. The base and high cases, however, illustrate the profound and asymmetric upside potential as the market begins to price in the full, de-risked value of the company's world-class asset portfolio.

TRANSFORMATIVE UPSIDE POTENTIAL

6. Qualitative Scorecard

This scorecard provides a systematic rating of Sailfish Royalty on ten key qualitative factors, offering a nuanced view of the company's strengths and weaknesses beyond the quantitative analysis. Each metric is scored on a scale of 1 (poor) to 10 (excellent).

DE-RISKED GROWTH STORY

7. Conclusion & Investment Thesis

The comprehensive analysis of Sailfish Royalty Corp. reveals a compelling and asymmetric investment opportunity. The company combines the stability of existing, high-margin cash flow from its San Albino and Mt. Hamilton assets with a truly transformative, de-risked growth catalyst in its Spring Valley royalty. The company is at a clear inflection point, transitioning from a small, single-asset-focused entity into a more significant, diversified royalty company underpinned by a world-class asset in a premier jurisdiction.

The central investment thesis is that Sailfish Royalty Corp. represents a deeply undervalued call option on the production of a tier-one gold asset. The current market valuation appears to be anchored to the company's present, Nicaragua-centric cash flows, while ascribing minimal value to the $1.5 billion NPV Spring Valley project. This is despite the project having achieved critical de-risking milestones, including full federal approval and a clear path to financing. As Spring Valley advances through its final milestones and into construction, a significant valuation re-rating is expected. This re-rating will be driven by two powerful forces: the exponential growth in revenue and cash flow as the mine comes online, and a simultaneous expansion of the company's valuation multiple as its asset base shifts dramatically toward the lower-risk, higher-quality jurisdiction of Nevada.

Key Catalysts:

• Announcement of a Final Investment Decision (FID) for the Spring Valley project by its operator.

• Securing the final, binding financing package for Spring Valley's construction.

• Commencement of construction activities at Spring Valley.

• Continued exploration success and resource expansion at the San Albino district.

Primary Risks:

• A significant delay in the Spring Valley construction and production timeline beyond the conservative estimates.

• A major, unforeseen operational or geopolitical event impacting the San Albino mine.

• A sharp and sustained downturn in the price of gold, which would negatively impact revenues and project economics.

DEEPLY UNDERVALUED ASSET

8. Technical Analysis, Price Action & Short-Term Outlook

The stock has experienced a strong upward trend throughout 2025, rising from a 52-week low of $1.17 to a high of 2.87 remains well above its 200-day moving average, indicating a technically strong, bullish long-term trend. The short-term outlook is constructive, with positive momentum likely to continue as news flow regarding Spring Valley's final state-level permits and financing provides further catalysts.

POSITIVE MOMENTUM