From PEA to PFS: How Gold Developers De-Risk Projects in Canada

Defining the difference: PEA vs. PFS

A PEA and a PFS are both technical reports; the main difference is that they are prepared at different stages. A PEA arrives at an earlier stage, including inferred resources and providing a base-case estimate of project economics. Basically, it is a study that assesses whether a project has potential.

A PFS, while still considered early stage, involves a more comprehensive process. This study looks into a range of options for the technical and economic viability of a project.

Certain key areas also illustrate the difference between the studies, especially in terms of confidence level. For example, metallurgical recovery in a PEA is likely based on historical data or limited testing. By the PFS stage, extensive lab work, such as variability testing, is conducted to prove exactly how much gold can be recovered from rock.

Of course, there’s also a major difference in terms of cost. PEA cost estimates typically have an accuracy range of approximately 35 to 50 percent. A PFS tightens this to about 25 percent, providing investors with much higher certainty regarding capital expenditures and operating costs.

A major identifier is the resource classification, as a significant portion of the "inferred" resources must be upgraded to the "measured" and "indicated" categories through infill drilling to reach the PFS stage.

The reason for this is that measured and indicated resource categories are higher in terms of confidence and can therefore be converted into mineral reserves. Mineral reserves are the actual products that can be legally and economically extracted, paving the way for project advancement.

Fortune Bay: De-risking Goldfields

Fortune Bay is currently in the midst of this value-creation window.

The company’s Goldfields project is among the highest-grade open-pit developments in the Americas with a 95.4 percent gold recovery rate and a 13.9 year mine life. It hosts the Box and Athona gold deposits, with the former historically mined underground between 1939 and 1942, producing 64,000 ounces of gold.

The independent mineral resource estimate for Goldfields, prepared in accordance with the CIM Definition Standards, comprises 24 million tonnes at 1.28 grams per ton (g/t) gold for 0.99 million ounces in the indicated category and 7.4 million tonnes at 0.9 g/t gold for 0.21 million ounces in the inferred category as of September 11, 2025.

Importantly, the updated PEA mine plan incorporates 97 percent indicated resources, which means the company does not need to undertake substantial infill drilling for a PFS, which would be highly costly and dilutive for shareholders.

The company is methodically checking the boxes required to move toward a PFS. Catalysts include advancing key de-risking studies, permitting works such as baseline studies and community engagement and ongoing resource growth drilling.

Fortune Bay has also adopted a formal environmental, social and governance policy for the project and its other assets, ensuring it advances its projects in alignment with community expectations, environmental stewardship and industry best practices.

Capital and funding: How value means confidence

The transition from PEA to PFS typically requires thousand-meter drillings, high-level engineering consultations and rigorous environmental permitting processes. All of these rest on capital — without a strong balance sheet, even the best projects can stall in the "orphan period."

Fortune Bay is in a favorable position because much of the foundation at Goldfields is already in place. The project benefits from previous engineering work, strong metallurgical recoveries, a high proportion of indicated resources in the mine plan and an existing environmental approval for an open-pit mine and mill.

This reduces the amount of new work required compared with many PEA-stage developers and allows the company to focus spending on targeted de-risking activities.

The company’s recent C$8 million financing provides funding to advance these priorities, including permitting work, environmental studies, engineering tradeoffs and exploration drilling near planned infrastructure. This is important because access to capital remains a key test for development-stage mining companies, particularly during the orphan period when projects must continue advancing before they are fully rerated by the market.

For Fortune Bay, the ability to raise capital helps keep Goldfields moving forward without losing momentum. It also supports a more disciplined approach to project advancement, where funds can be directed toward the technical and permitting work most likely to improve project certainty ahead of a future PFS.

Fortune Bay’s Saskatchewan advantage

Geography is a primary factor in de-risking. A project in a jurisdiction with unstable regulations can never truly be de-risked.

Fortune Bay’s Goldfields project sits in Saskatchewan, Canada, which frequently ranks in the top 10 globally for investment attractiveness in the Fraser Institute’s Annual Survey of Mining Companies. The province ranked third in the world in 2025, moving up from its seventh place spot in 2024.

“You're looking at a very stable regulatory environment; the taxation, the royalty system hasn't changed since 2006 … (Saskatchewan’s) very favorable,” CEO Dale Verran told the Investing News Network. “The geology is good. There's infrastructure (and) collaborative communities. It really checks all those boxes.”

“Because metal prices have risen, Saskatchewan will continue to be stable, transparent, and we know that provides investors (with) what they need: the stability over a long period to make an investment in a mine,” he added.

Being located in a tier-one jurisdiction positions Fortune Bay to reap the technical successes achieved in the PFS, setting the stage for a permitted, operating mine.

Investor takeaway

The transition from PEA to PFS is where market confidence is earned.

For many gold developers, this stage is costly, time consuming and dilutive, requiring extensive drilling, new permitting work and major technical studies before a project can be considered development ready.

Fortune Bay is positioned differently. Goldfields already benefits from a high-confidence resource base, strong gold recoveries, a long mine life, existing environmental approval for an open-pit mine and mill and a location in Saskatchewan — one of the world’s top-ranked mining jurisdictions.

With 97 percent of the updated PEA mine plan supported by indicated resources, the company can focus capital on the highest-value de-risking work rather than broad, expensive infill drilling.

That creates a compelling investment setup. Fortune Bay is not simply trying to prove that Goldfields has potential — the PEA has already demonstrated robust economics. The opportunity now is to convert that potential into a more certain, better-defined development case through targeted engineering, permitting advancement, community engagement and resource growth drilling.

In a strong gold market, investors are increasingly looking for projects that combine scale, jurisdictional safety, capital efficiency and a credible path toward development. Goldfields offers that combination.

As Fortune Bay continues to move the project through the orphan period, each step of de-risking has the potential to close the valuation gap between where the company trades today and the value implied by a permitted, advanced-stage gold development asset in a tier-one jurisdiction.

This INNspired article is sponsored by Fortune Bay (TSXV:FOR,OTCQB:FTBYF,FWB:5QN). This INNspired article provides information which was sourced by the Investing News Network (INN) and approved by Fortune Bay in order to help investors learn more about the company. Fortune Bay is a client of INN. The company’s campaign fees pay for INN to create and update this INNspired article.

This INNspired article was written according to INN editorial standards to educate investors.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Fortune Bay and seek advice from a qualified investment advisor.