JANUARY – MARCH 2023

• Capitalized exploration assets at the end of the quarter amounted to KSEK 690,436 (500,981).
• Cash and cash equivalents at the end of the quarter totaled KSEK 248,803 (305,674).
• Equity at the end of the quarter increased 28% to KSEK 984,043 (768,183).
• Result for the quarter amounted to KSEK -7,443 (-3,839).
• Earnings per share for the quarter amounted to SEK -0.00 (-0.01).
• Cash flow for the quarter amounted to KSEK -80,350 (181,383), mainly based on investments in core drilling and the water purification project in Viscaria.
• Total assets at the end of the quarter amounted to KSEK 1,048,601 (841,679).

SIGNIFICANT EVENTS DURING THE PERIOD

• On January 4, 2023, Frida Keskitalo was appointed CFO.
• On February 8, 2023, Copperstone updated its applicable environmental permit application for Viscaria due to the request for supplementary information received from the Land and Environment Court. On February 20, a further request for supplementary information was received.
• On February 9, 2023, Norrlandsfonden chose to invest another approximately MSEK 5.6 in a convertible bond in Copperstone Resources.
• On March 8, 2023, Copperstone again updated its applicable environmental permit application for Viscaria.
• On March 17, 2023, Copperstone submitted supplementary information for the environmental permit application to the Land and Environment Court.
  

CEO COMMENTS
In the beginning of the year we continued our preparations to reopen the Viscaria copper mine in Kiruna. We are now putting several of our plans into action, not least when it comes to our configuration and logistics plans for the area, which highlight the sustainability and financial effectiveness of the construction of the new facility. As new CEO, I’m incredibly excited to see the level of internal engagement as well as the strong support we have been receiving from our partners and from the local community. We remained focused on four important areas: the environmental permit process, preparations to make the reopening of Viscaria go as quickly as possible, financing and, finally, other value-adding measures.

Progress in the environmental permit process
In order to carry out our plans on schedule, it is absolutely vital that we obtain the requisite permits. We will continue to expedite the process through close and constructive dialog with authorities and other stakeholders. Right now we are waiting for a response from the Land and Environment Court regarding the environmental permit application we submitted just over a year ago. After the initial application, we also submitted supplementary information about production terms, logistics, water-related issues, waste rock management and adaptation to the Seveso Directive. Our hope is that the application is now complete and that the main hearing can be held in the relatively near future. This would mean that we could obtain our environmental permit before the end of 2023, and that production could start, as planned, by the end of 2025.

More water treatment capacity
When it comes to practical preparations, in autumn 2022 we installed a pilot facility for water treatment and demonstrated that the innovative technology we intend to use can eliminate up to 97% to 99% of the metal pollutants currently found in the mining water. In January we also started the process of obtaining a separate dewatering permit and we hope that by autumn we will be able to put an additional water treatment station into operation with a capacity of up to 200 m3/h. At the same time, we are planning for a larger permanent facility with a capacity of approximately 600 m3/h.

Favorable preconditions for Viscaria
The preliminary analysis of our financial situation presented in the beginning of the year indicated a mine life for Viscaria of around 15 years, significantly longer than previous estimates of 10 years. Due to a successful conversion to higher classification, our measured and measured & indicated mineral resources increased by 43% and 23%, respectively. We are very pleased about this improvement. Together with additional core drilling in Viscaria, we now have a solid base for a detailed feasibility study. During the period, Norrlandsfonden increased its investments in Copperstone through a convertible loan of MSEK 5.6. At the end of the quarter, we had MSEK 249 in cash and cash equivalents.

A growing organization
In the beginning of 2023, we strengthened our corporate culture through a joint project to establish our core values. This is an important tool as we now continue to expand the organization. Our new CFO Frida Keskitalo began in January and during the quarter we hired a new Geology Manager, Karin Lindgren, who will strengthen the team while Marcello Imaña will continue as Copperstone’s Chief Geologist.

Overall, the preconditions for our Viscaria Project are favorable from a financial, social, geographical and environmental perspective. Demand for responsibly and locally produced copper is expected to increase significantly in the next few years and the company is well positioned to be a leader in this market. We have a very competent and well established team on site in Kiruna and an ownership structure that has made significant investments in an ambitious environmental permit application, infrastructure, exploration and water treatment. I look forward to updating you all again soon.

Henrik Ager, CEO Copperstone Resources