Good morning, everyone. That is 10:00 A.M. in Adelaide on my watch. Watching the screen, I think the attendees have probably all got in who wanted to. Welcome to this EGM of shareholders of Investigator . My name is Richard Hillis, and as Chair, Investigator Silver, it's my pleasure to welcome you to this EGM. This meeting is being held virtually, and shareholders will be able to ask questions and cast direct votes at the appropriate times while the meeting is in progress. We acknowledge the traditional owners of the lands in which we operate in South Australia, notably the Gawler Ranges people of our Paris project and the Eyre Peninsula, those being the Barngarla, Kokatha, and Wirangu peoples. I and our head office are in Adelaide, and we also acknowledge the Kaurna people as the traditional owners of the Adelaide Plains.
We pay our respects to all of their elders, past and present, and to any elders from other communities who may be present here today. The Company Secretary's advised me that we have complied with the relevant requirements for convening this meeting and that a quorum is present. As the time is now 10:00 A.M. or 10:02 A.M., I formally declare the meeting open. I'm joined in the webcast by my fellow directors, Andrew Shearer. Andrew, can you give us a wave? Thank you. Also by the company's MD, Lachlan Wallace. Thank you, Lachlan. I also like to welcome our Company Secretary, Anita Addorisio, and Anita will be talking to us shortly about the procedures. The notice of meeting has been given in accordance with the company's constitution. Copies are available on the company's website or on the ASX Market Announcements platform.
I will take the notice of meeting and its accompanying explanatory statement as read. That notice provides all the details of what we're voting on today, but I do want to just give a sort of straightforward explanation. In our March raise, the board accepted AUD 55 million of a capital raise book build that was about AUD 100 million. That AUD 55 million equates to 640 million shares, around 640 million shares at an issue price of AUD 0.086. Approximately 484 million of those shares, or 42 million of 55 million, sit in what we call Tranche 1 and are covered by the provisions of Listing Rules 7.1 and Listing Rule 7.1A, which permit 15% and 10% additional shares to be issued. Those 484 million shares have been issued, and Resolution 1 is to ratify the issue of that Tranche 1 of shares.
Around 155 million shares, or AUD 13 million, of a total 640 million shares, sit in what we call Tranche 2 and are outside the provisions of Listing Rules 7.1 and 7.1A and can only be issued with shareholder approval. Resolution 2 is to approve that issue of Tranche 2 shares. The board gave the matter of the quantum and the price of this raise a great deal of thought. In short, the board's view was and is that share prices tend to languish after the recent DFS, which we've just released and prior to production starting. Our view is that we gain more by removing the overhang of an equity funding through this period than we lost by the discount. Our focus now is on progressing Paris and raising remaining funds required through debt and/or streaming.
Shareholders originally questioned our decision, and you can see Q&A on the topic in our Investor Hub platform on the company's website. In order to further address those questions and before we put resolutions to shareholders, Lachlan will provide an update on company operations and additional commentary on the raise upon which we are voting today. A bit of background there. The format of the meeting will be our Company Secretary, Anita, will provide an overview of the procedures for Q&A and voting. Our MD, Lachlan Wallace, will provide a shareholder update with an opportunity for Q&A update. After that, shareholders will be able to consider and vote on the proposed resolutions set out in the notice of meeting. We will conclude with a Q&A session on the items of business.
Questions and items of business may only be asked in direct relation to the resolution put to the meeting, and a poll will be conducted on all resolutions. We will open the poll when the resolutions are being addressed, and shareholders and their representatives will be able to vote on the resolution as and when they are being addressed. Our Company Secretary will explain this in more detail shortly. Where I, as Chair, have been appointed proxy on behalf of shareholders, I will of course cast their votes on the poll in accordance with their directions. Where shareholders have appointed me as the Chair to vote at the Chair's discretion, I will cast their votes in favor of each of the resolutions as set out in the notice of meeting.
Okay, I'll now pass over to Anita, our Company Secretary, to outline the question and poll procedure for the meeting. Anita, over to you, please.
Thank you, Richard. As mentioned earlier, shareholders will be able to comment, ask questions, and cast votes at the appropriate time for each item of business. Visitors are reminded that while we welcome you at this meeting, it is a shareholders' meeting, and you may not make comments or ask questions. We may experience some time lag, and this may cause some delay in your text questions or comments coming to our attention. We encourage you to lodge questions as early as you can. Shareholders can submit questions at any time. Both written and verbal questions may be asked. To do so, please follow the instructions as set out on your screen. Questions of a similar nature will be grouped and answered as and when the relevant item of business is being addressed.
Regarding voting on today's resolutions, all shareholders, proxy holders, and authorized corporate representatives and attorneys of shareholders who are entitled to vote will be able to do so via the webinar poll. It is important to note that if you have lodged a proxy form and voted prior to the meeting, you do not need to vote again at this meeting unless you wish to change your proxy instruction. Voting today will be conducted by way of a poll on all items of business. To provide you plenty of time to vote, we will shortly open voting. When the poll is declared open, a poll window will appear. To vote, simply select the direction in which you wish to cast your vote. The selected option will be marked. To submit your vote, simply click on the Submit button.
You will have the ability to change your vote up until the time voting is closed. I will now hand you back to Richard. Thank you.
Okay, thanks for that explanation, Nita. Only briefly to me, because I will now hand over to Lachlan, to give us an update on what's happening with Investigator.
Thanks, Richard, and good morning, everybody. Today I'm just going to run through the project. As Richard said, the presentation deck is materially the same as one that was delivered and released to the ASX on the March 24th. For those seeking to refer back to this presentation in the future, I'd encourage you to look at that ASX release. The Paris Silver Mine in South Australia is one of a few pure silver development projects in the world, and at current prices delivers very high margins and a payback of less than 12 months. The project is rapidly advancing towards production. In February, we released a DFS. In March, we secured the funding and we're now moving towards execution. As we're all aware, the purpose of today's meeting is to seek shareholder approval for Tranche 2 of the recent placement.
Before I do step through the Paris Silver project, I want to talk to the rationale of the capital raising in a bit more detail, the structure, timing, and quantum. Then we'll walk through the project, and what we've delivered through the DFS, and importantly, what this funding enables us to do into execution. The purpose of the capital raise was really to fund the company through to final investment decision and position Paris for execution. At a high level, the capital is being deployed across three core areas. It's advancing the project technically through the engineering as well as the early works. It's growing, de-risking the resource through further drilling and progressing the permitting and approvals. I'll touch on each of these work streams as I progress through the slide deck. I guess this slide just shows how that capital will be allocated.
The largest component is the execution readiness and early constructions. This is the detailed engineering, early capital works, long lead items, and they're all designed to shorten the path to FID, so the final investment decision, and bring forward that first silver production. We're also allocating capital to drilling. We're drilling right at the moment, to the north of the Paris Project itself. We're doing this both to increase the confidence in the existing resource and to expand the pit and broader corridor. We're also progressing permitting. We're looking at the environmental studies, the heritage works, as well as land access approvals, and all of these are critical item pathways. As you can see, there's also some funding allocated to the corporate and working capital support these activities and provide efficient runway.
Before we get into the capital of the project, I did want to expand on some of Richard's earlier comments about the rationale of the capital raising. At the DFS stage, one of the key risks for a relatively simple project build like Paris is funding certainty. We had around AUD 13 million of cash at the end of the year, and the DFS indicated approximately AUD 260 million of development ahead of us to get to first silver. If we had waited, the market would immediately focus on how and when the project would be funding. That funding uncertainty can dominate trading and distract from what was or what is a very strong DFS outcome. We made a very deliberate decision to remove that uncertainty immediately and secure the balance sheet and move straight towards execution. In terms of pricing, this was quite a large raise.
It was roughly a quarter of the company's market capitalization and structured across two tranches. We ran a full market sounding and book build. The pricing of the raise reflects where demand sat to clear that amount with a degree of certainty. It's also important to put this in context, or in terms of timing. The raise was launched just as the Iranian conflict was unfolding. We knew that would introduce uncertainty into the markets, and that obviously proved to be the case. Since that point, we've seen across all markets a clear shift to risk-off. Small market caps, junior resource equities have all been sold down, even when the underlying commodity has remained strong. In our case, that's been exactly what we've seen. Silver remains strong, but our price has been sold down and the capital markets for companies like ours have tightened materially.
Had we waited, there's a very low likelihood that we've been able to get a raise of this amount of capital away, and certainly not with the same amount of certainty. Whilst the discount may have looked expensive at the time, in hindsight, this has positioned the company very well. We've secured funding before the markets turned, and we're now funded to execute whilst others will remain constrained. The other question that naturally comes up is why we didn't let the stock trade post DFS before the capital raising. With a project of this scale, around AUD 260 million of development capital and a relatively modest cash balance at the time, the market would have very quickly focused on how and when that funding would be secured.
In our experience, a funding overhang tends to dominate trading, and that can really result in share price weakness rather than strength as investors anticipate a capital raise. Rather than to allow that uncertainty to develop, we made a very deliberate decision to raise alongside the DFS, remove that overhang immediately, secure the balance sheet, and allow the stock to trade on the underlying project fundamentals and execution once we came out of trading halt. In terms of structure, we prioritize speed and certainty. Retail style offers, at a discount can create an overhang and a short-term selling pressure while they remain open, and that in effect, is amplified in volatile or risk-off markets.
Given the timing around the Iranian conflict and the shift we've seen in risk appetite, we felt it was important to complete the raise cleanly and with certainty rather than introduce additional execution risk. Importantly, this capital is not sitting idle. The funding is deployed immediately, to bring Paris forward through both the engineering, the permitting, as well as the drilling and financing. All of these are being run in parallel to bring forward first silver and increase project value. I guess just summarizing that, this was about removing uncertainty, securing the balance sheet, and putting the company in position to execute. Ultimately, the way we create value for shareholders now is through delivery. With that context, I will now just step through the Paris Project. Can we just go to the next slide, please, Rachel?
At a high level, Paris is a rare combination. It's a pure silver project in a Tier 1 jurisdiction with strong economics, low technical complexity, and a clear pathway to development. Importantly, it produces silver doré, so a silver bar. Unlike most silver projects, which are byproducts of base metals. Silver bar means that we have 100% leverage to the silver price. The ore body is shallow and well-suited to open pit mining. The processing route is conventional. The mine plan is staged to bring forward the higher-grade material, and that drives very strong early cash flow, allowing a rapid payback period. It's located within a 15km silver corridor, offering district-scale upside through further exploration. What we have here is a project that combines margin, simplicity, as well as scalability. Next slide, please.
Briefly on the macro, the Iranian conflict has brought into sharp focus that the world still runs on fossil fuels. When that system gets disrupted, everything gets tight very quickly. That's exactly why the push towards electrification matters. Right at the center of that shift is silver. Silver is the most conductive metal on Earth. It's critical in solar panels, electronics, TVs, everything that underpins electrification. As the world decarbonizes, we'll need more silver, a lot more. Here's a part that I guess a lot of people may not be aware of. The supply side is very tight. Around 75% of global supply comes as a byproduct from other mines, gold, copper, lead, and zinc. These mining companies are not changing their production profiles when the price of silver changes. The supply response is effectively price inelastic.
Of that supply, more than 70% is coming from Latin America, China, and Russia, all areas which are prone to supply disruption. With decarbonization through electrification driving an increasing demand for silver, supply has really not kept up, which has resulted in the silver price hitting records earlier this year. It's into that macro environment that we are building Paris, a pure silver project providing direct unhedged exposure to the silver price. Next slide, please. In terms of project economics, 11-year mine life, AUD 1.9 billion free cash flow, AUD 1.2 billion NPV, 93% IRR. Relatively low capital intensity with an all-in sustaining cost that supports an operating margin of about 64%. As a pure silver project, highly leveraged. Every AUD 1 move in price adds AUD 42 million to free cash generation and AUD 27 million to NPV.
It's that combination of strong margins and rapid payback that's exactly what the lenders are looking for, and it's why we're seeing strong interest in financing for this project's construction. Next slide, please. The project that sits behind these economic numbers is very simple and straightforward. It's located in South Australia, close to the major mining hubs of Whyalla and Port Augusta, so excellent access to labor, equipment, and infrastructure. Importantly, it's a simple, conventional development. Open pit mining, standard processing, and production of silver doré. I'll just step through the mining and processing in a little bit more detail. Next slide, please. The ore body itself is shallow, flat, and tabular. It starts about 10 meters below surface, extends over a kilometer in strike and growing, and has a width of up to 400 meters.
It's only 175 meters depth at maximum depth, so really low complexity. The geometry lends itself to simple, low-cost, bulk open pit mining. As you can see in the image, we stage the development to bring forward the higher-grade, lower-strip material in earlier years, which drives strong early cash flow and rapid payback. Because of the scale and continuity of the ore body, we actually build some really large stockpiles, which not only allows us to preferentially feed higher-grade material but also decouples the mine from processing, which provides operational flexibility and project resilience in the event of short-term schedule variances. Next slide, please. In terms of processing, the key point is simplicity. This is a conventional primary silver flow sheet, crushing, grinding, whole-of-ore cyanide leach with Merrill-Crowe recovery.
It uses standard, proven, off-the-shelf processing equipment and does not rely on any novel process technology. Importantly, as I've said before, we produce silver doré, not a concentrate, so no concentrate handling issues, no complex logistics, no opaque offtake agreements, and no argument with smelters at this point over concentrate quality. The outcome here is just a simple, low-risk process route. It's reliable and predictable. Next slide, please. In terms of costs and capital, the key point here is this is a financeable development. The operating cost base is straightforward. It has an all-in sustaining cost of around $40 an ounce. That's $28 . That supports some really strong margins across the life of the project. Importantly, these costs are not theoretical. In most cases, they've been built up from market pricing and third-party input, so they're grounded and defendable.
Development capital is around AUD 260 million, so $180 million. That's fully loaded all the way through to steady-state production. Again, this is based on conservative DFS design basis, which is intended to stand up to lender scrutiny. In a number of areas, we've taken a very conservative assumption, sort of a process, to support the financing rather than try to optimize every single line item up front. As the project develops through the detailed engineering, I suspect that we'll see improvement opportunities in terms of both cost as well as outcome. As this combination of defendable costs, manageable capital load, and embedded upside from the conservatism is why we think Paris is a project that can be financed and built. Next slide, please. This following section is all about the forward-looking work plan. Next slide, please. In terms of permitting, Paris is very well positioned.
If you take a look at the image, it's flat, it's dry, it's sparsely vegetated country. The groundwater is too saline to support livestock. There is basically no competing land use. South Australia is one of the best mining jurisdictions globally. About one in 15 of the state economy comes from mining, and the government is stable, supportive, and provides a clear permitting framework towards development, which we're a long way down the path of. The Fraser Institute ranks South Australia number one globally for mineral potential, but more importantly, number four globally and number one in Australia for mining investment attractiveness. This is a true tier one investment jurisdiction. Importantly, this is not the first time we've delivered a project in this state. I led the development of the Kanmantoo Underground copper mine from exploration to positive cash flow on time, on budget.
That track record matters because the state spends a lot of resources and time into the permitting process, and they want a proponent that will build the project once it's permitted and provide that economic benefit to the state. As a result, we're seeing a great deal of support from the state government. We're targeting submission of the mining lease around the middle of 2026. Next slide, please. With the DFS complete, the focus now really shifts towards execution. We've raised AUD 55 million subject to today's vote, and that sees us fully funded to progress the project through the detailed engineering, early contractor engagement, some pre-FID construction, so things like camp, road construction, as well as the permitting and financing towards FID. These work streams are being progressed in parallel to bring that project forward as efficiently as possible. Next slide, please.
The funding also enables some growth-related drilling. The pit was optimized at $48 an ounce , and the current price is around $80. There's more than about 6 million ounces of silver sitting below the cut-off grade at $48. Within the pit, that now makes margin if $80 remains the prevailing price. Instead of being that waste, that will then become ore treated and sold, obviously increasing both mine life as well as margin and project economics. Even at the lower prices, however, the optimization, so the pit optimization we do through a program called Whittle, was pushing the pit to the north, the south, and the east, which is shown. There's black boxes on the screen. These areas were or are inferred, so they're shown in blue. That's inferred material, higher degree of classification being in the red.
We deliberately excluded those areas from the DFS. We're now drilling. We're just drilling, particularly to the north, the left-hand side of the screen there. I fully suspect that as we do that infill drilling, we'll see some upgrade to the classification and then we'll be able to assess that. If remaining viable, that pit will expand, increasing project life and value. In preparation for this growth, we've built expansion into the design, in particular the tailings storage facility, which now has enough storage in the current design to not only store the entire mining that's in the DFS, but a further four years. Importantly, the crest is actually 30 meters wide rather than a normal engineering build, which might be 5 or 6 meters wide.
that means that we can easily accommodate further lifts with every one meter of lift, giving about an extra year's worth of processing. all of this comes without material additional capital spend and without additional hurdles with regards to permitting. This is a really low risk, near-term upside opportunity. Next slide, please. Beyond the pit, Paris sits within a mineralized corridor of more than 15 km. We already have some really nice strong intercepts above the current Paris pit. to the north, about five kilometers, we have a hit there, 8 meters, 1,262 grams a ton. To the south, down at areas we're earning into, such as Athena and Hestia, we have some nice hits there, including 20 meters at 160 grams a ton.
Obviously, given the proximity of these to the proposed Paris plant and the tails infrastructure, these satellite projects have a much lower economic and permitting hurdle to become mines. While the DFS defines around an 11-year operation, two of construction, nine of producing, the broader opportunity is long-term district scale, and that's what the Paris infrastructure will enable. Next slide, please. In terms of timing, over the next 12 months, we are very much focused on permitting the engineering and execution readiness as well as the financing prep, leading to a final investment decision towards the second half of 2027, with first production late 2028, early 2029. Next slide, please. This is the final slide. Just to close, Paris is a high margin, pure play silver development.
It's in a tier one jurisdiction with strong economics, low technical risk, and a clear pathway through to development. From here, as I've been saying, the focus is very much on execution. I want to thank you for the opportunity to present and bring you up to date of where we're at and happy to throw it open to any questions. I see there's quite a few in the chat, so perhaps we'll have a look at that. Anita, if you can sort of disseminate some of those for me.
Yeah, sure. Thank you so much. We have received to date, four questions from Mr. Stephen Mayne, who's on the call. I'll read out question one. I think we have partly already addressed that. Why weren't retail shareholders offered a share purchase plan when we launched the AUD 55 million selective placement at AUD 0.086 in March, particularly given it was priced at such a large discount to the previous close of AUD 0.12? And then also please explain the treatment of retail shareholders and how this is in the best interest of the company.
Thanks.
Yes.
Lachlan, I'll go first on these and then please jump in. Thanks, Anita. Yeah. The directors gave careful consideration to a share purchase plan. As the book build went on, it was quite an unstable period with both the silver price and the Iran war.
We decided that we would review the share price afterwards, and in fact, the share price has traded well below the issue price. There has been an opportunity for shareholders to participate at below that AUD 0.086 issue price. In the end, we decided there was no value in an SPP when the share price was trading below the issue price. I don't know if my fellow directors want to add anything there.
Yeah, I think just as I said, the retail style offers at discount create an overhang, and that short-term selling pressure while they remain open, and we didn't want the stock to remain open with that short-term pressure. We want the DFS to actually trade in its own merits. Now, as it happened, with the Iranian conflict, all junior equities were sold off in any case. That's just the nature of being in a volatile market. Yeah. That's the answer to your question, Stephen.
Anita, do you want to?
Thank you.
Go on to the second one?
Sure. Thank you. Question two: Why did we receive four different brokers, Barrenjoey, Canaccord, Moelis, and Alpine Capital, sharing the excess of 5% cash fee on the latest placement?
Just a quick comment from me. I think the net was actually 4.4%, with terms listed and whatnot. Obviously, a percentage is a percentage. Doesn't matter if it goes to one or to four. We chose our various supporters in terms of trying to build the best book and get the best institutions and the stickiest shareholders participating that we could. That's my comment there. I don't know if my directors wish to add anything.
I think probably in addition to that, each of those brokers offers something different in terms of jurisdictional reach. With the, I guess, the market more mature in the U.S. with regards to understanding of silver, there is a value in opening up some of those markets, and we definitely have seen some opportunities through both Asia and the U.S., and those brokers were selected on the basis that they give us different access to different jurisdictions because that's where their relative strength is. That was part of that. In addition to that, the more retail or the more brokers involved, the more opportunities there are for further support post-raise, which we're seeing. There's been some really good support post-raise from all the brokers in terms of getting us further meetings, further opportunities to get to funds that didn't necessarily participate in the initial raise.
Thank you very much. Another question is: Is this meeting being recorded, and will a copy of the recording be made available on our website for the benefit of the 5,000 plus retail shareholders who didn't tune in live today? If not, doesn't this become a selective briefing for the small number of participants?
I think the meeting is being recorded. I don't think we intended to put it on the website because there's, in terms of Lachlan's presentation, there's no new information in that. It's similar to one previously lodged, and the results will come up. I don't think we intend to put it up. I'll stand corrected if anyone sees differently.
No. It's effectively the same presentation I delivered on the March 24th, which is available on the website for anyone to view. I'm not too sure that we need to duplicate it for the purpose.
Thanks. Anita, one more question.
Thank you. Yes, one further question. Why didn't any of the directors participate in the placement to demonstrate their confidence in the company's future and the attractiveness of the investment opportunity?
I'm very glad you asked that question, Stephen. I suppose first comment, directors have to get shareholder approval to participate in the SPP, and in the end, we didn't do that because I bought on market after the issue. I'm quite happy to behave like the retail shareholder that I appreciate you defending in the first question, and I'm quite happy to buy after the issue on market if it's a placement with no SPP. That's what I did in this raise, and that's what I've done in the previous raise.
Personally, I have supported the company in previous raises, but my personal situation at this point in time meant that I couldn't do it right now, but like Richard, I intend to going forward as well.
Thanks, Anita. There's also an opportunity for people just to ask questions orally, isn't there, if they wish on Lachlan's presentation. Those were written ones, so we dealt with those first.
Yep. Just confirming, no further questions have been received so far, Richard.
Okay. Well, I think in the interest of time then we should proceed, which will be to the motions. Just to remind you can still ask a question, any item of business. That'll be after we do them, as after we put the motions. We'll address your questions after the last resolution. Before opening the poll, I wish to remind shareholders that the poll will remain open for additional time after we have considered all resolutions. You just get a little bit of time to make sure you can digitally exercise your vote. I now declare the poll open and move to Resolution 1. The first item of business is Resolution 1, which is for the ratification of prior issue of Tranche 1 placement shares. Hopefully, that's been fully explained.
The following percentage of proxies have been received for Resolution 1 and are outlined in the presentation. You can see them on your screen, beneath the voting. Currently in favor 2.35%, against 6.8%, proxies discretion 10.85%. I therefore move that shareholders consider, and if thought fit, pass that ordinary resolution. Got the poll there. We'll now go to Resolution 2, which relates to the approval of issue of shares under Tranche 2 placement shares. The following percentage of proxies have been received for this Resolution 2 and are outlined. Yes, that's up on the screen. 83.66% in favor, 6.5% against, and again, around 10% at the proxy's discretion, my discretion. I move that shareholders consider, and if thought fit, pass the ordinary resolution number two. That's the two resolutions put. We'll now go to shareholders' questions.
I can't see any written, but I'll just take the chance for Anita to confirm whether there's any other questions relating to the resolutions that we should cover off on.
Thanks, Richard. I confirm no questions have been received via text or verbal.
Okay. Thank you, ladies and gentlemen. That concludes the Q&A session. We now provide a little bit of time just to make sure you get your votes in. I think it's 30 seconds, and I think Anita's going to put her clock on to make sure you get your 30 seconds. We'll just pause, to make sure everyone can get their votes in.
Thank you, Richard. I confirm that time is now up.
Thank you. I hope everyone who wishes to has managed to vote okay. That concludes the formal business of today's meeting, and I declare the poll closed. After the votes have been counted, the results of the poll will be released to the ASX later today. The company has not received notice of any other business, and as such concludes the formal business of today's meeting. I thank you for your attendance and now declare the formal meeting closed. More informally, thanks for coming along. Thanks for your interest in the company, and we do look forward to your continued support as we move into a really exciting phase in the build of Paris. Thanks very much, everyone.
Thank you all. That concludes our EGM webinar. Thank you.