HAR: Richest section of the California gold rush Mother Lode and fully permitted processing plant…. and we saw it.

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 7,570,066 HAR shares. The Company has been engaged by HAR to share our commentary on the progress of our Investment in HAR over time.

Why am I on a machine that simulates how hard it was for a person to pull an 1840s wooden cart through the desert for 4 to 6 months... over ~3,000km?

It shows the extreme efforts people have gone through to try to find gold.

175 years ago, there was a huge gold rush to the west coast of the United States that transformed the country into an economic powerhouse.

The California Gold Rush of 1848 - 1849:

Fast forward to today, and the gold price is at all time highs, modern day gold developers and producers are attracting capital and attention, particularly those with gold projects in the USA.

It’s in that context we pulled our modern day proverbial “hand cart across treacherous terrain” over part of the old California gold rush trail...

(meaning we drove our air conditioned, automatic rental car across smooth sealed roads)

To visit our Investment Haranga Resources (ASX:HAR) and its newly acquired gold project right in the richest section of the famous California gold rush Mother Lode...

(with a fully built and PERMITTED gold processing plant)

Today we will give you a run through of:

• Everything we saw on site at HAR’s California gold project.
• Share our updated Investment Memo based on HAR’s gold asset.
• Summarise the reasons for increasing our Investment in HAR.
• Cover what we expect to see next for HAR over the coming months.
• BONUS: Exclusive photos of our comprehensive tour of a couple of California Gold Trail historical museums.

HAR is a few days away from completing the acquisition of 100% of a USA gold project with 5.8km of ground in the heart of the famous California gold rush region, a region literally named the “Mother Lode”.

HAR’s project already has a 286,000 oz non-JORC gold resource at 9.28g/t.

(with 2008 data showing it might be up to ~682,000 ounces, more on this below)

...and new drilling planned in the coming weeks.

And some historical drill core and pulp assays even sooner.

With the gold “Mother Lode” and “gold rush that built California” firmly baked into US lore and culture, we can see a scenario where the US mainstream starts to talk about this famous 1840s gold rush region more and more...

... and HAR’s project (with a rare California gold mining permit) in the middle of the historic Californian gold Mother Lode may be front and centre to take in the market interest.

Shortly, we will share some photos of the region and just how established it is for gold mining.

Taking a look at a cross section, below you can see where the historical ~7.7 million ounces of gold production was completed on the great California Mother Lode.

Old mines are shown in red. HAR now has the land shown in green - that green area alone historically produced 3.4 million ounces.

As well as this shallow, 286,000 ounce gold resource (non-JORC), HAR has also acquired:

• A 100% owned built and permitted 350,000 tpa gold processing plant,
• An 880m decline (the tunnel that goes underground to get to the gold),
• Offices and a workshop,
• All up, $90M of sunk capital by previous owners to build it all.

(Source - HAR Presentation)

So if HAR finds more gold, it may be able to quickly mine, process and sell it while the gold price is at all time highs of ~US $3,400 per ounce.

This is all dependent on HAR finding more gold that is economically extractable (and there is no guarantee that that happens).

Post transaction, with ~298M shares on issue, at last traded price of 6.8c, HAR will be capped at ~$20M.

This is a fraction of the $90M in sunk capital, and in the midst of a bull market for gold developers.

We put $200k cash into the capital raise associated with the transaction.

We saw all of HAR’s infrastructure on our recent site visit:

(A big thanks to our host Dan Boitano for showing us around).

Most of it was built around 2012 so it still looks new and in pretty good shape - (at least to armchair gold enthusiasts like us - we are not mining experts).

In addition to walking around the HAR project, we also saw some the historical mines that produced 7.7 million ounces of gold from the famous California “Mother Lode” - all within a few few minutes drive:

Previous drilling on HAR’s ground has only gone down to ~150m depth, however nearby historical mines go deeper than 1.8km.

HAR’s plan over the coming months is to drill deeper below the current limit of previous drilling to grow its gold resource and ultimately prove up the economic viability of going back into production.

Ideally into continually rising gold prices...

It’s a good time to be an ASX gold developer trying to grow a resource...

The gold price is back up to all time highs of around US$3,400 per ounce and ASX listed USA-based gold projects are running again...

Here is the 5 year gold price chart:

(Source)

Dateline Resources has a gold and rare earths project in California and was up more than 50x in the last 45 days off the back of some US government attention. (source)

Our latest Investment Resolution Minerals is up around 400% in the last 10 days after announcing its US based gold, antimony and tungsten project (Source)

NOTE: The past performance of Resolution Minerals and Dateline Resources is not an indicator of future performance of HAR.

HAR’s project currently has a non-JORC 286,000 oz gold resource at 9.29g/t of gold.

And there is at least up to ~682,000 ounces of gold that HAR thinks could be there based on data from back in 2008 (again this is non JORC data):

(Source - non-JORC resource from 2008)

HAR is drilling deeper into its historically producing mines in the coming weeks to test if they may have more gold...

... and according to section 3(a) of HAR’s post transaction completion market cleansing statement released a few days ago it looks like HAR is already well underway with re-assaying ~200 samples from historical drill cores and drilling pulps with assay results due “in the near term”.

So we should be seeing some assay results from HAR very soon...

Our HAR Big Bet:

“HAR re-rates to a market cap greater than $200M by making new gold discoveries in California and progressing towards production or is acquired at a multiple of our initial entry price.

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is a lot of work to be done, many risks involved including exploration risk, commodity price risk and processing risk - just some of which we list in our HAR Investment Memo. Success will require a significant amount of luck. There is no guarantee that our Big Bet will ever come true

9 things that we saw on our visit to HAR’s gold project in California

1. HAR already has a fully built and operational site office

Below are some photos of us entering HAR’s offices on site.

The office is built and looks very new, and contains all the historical documents and past plans for the project collected up from multiple previous owners over the decades:

Plenty of important office space and amenities ready to go if HAR restarts this gold project, plus some small gold nuggets just lying around...

Even the staff locker room, showers and gym are in excellent condition and ready to be used IF HAR decides to put its project back into production:

2. HAR has a built, stocked and staffed workshop - this place looked almost brand new

3. HAR has 100% owned, built and permitted 350,000 tpa gold processing plant

This plant was built by previous owners back in 2011-2012.

Last time it was running was back in 2022 (when gold had a weak year down to US$1,600, gold is currently at ~US$3,400).

Everything looked in fairly good condition.

We have seen some real, rusty old shockers in some pitch decks when companies have spoken about having a “gold plant" in the past (not the ones in our Portfolio though)...

HAR’s processing plant definitely surprised us to the upside with its current condition:

Of course, while it does look in very good nick, HAR still has work to do before it can start utilising this plant, and will need to continue to prove up more gold resources to justify restarting it.

Restarting “switched off” plants takes time and money, HAR hasn't revealed its plans for the plant just yet.

We hope that by that time, HAR has defined a giant gold resource to justify the restart expense, and the company’s market cap is bigger than it is now. (which of course may or may not happen - it will be determined by HAR’s upcoming the deeper drilling exploration results)

Here’s the ore loading bay for the mill and some of the leftover ore from when the last time the plant was operating (we were told was back in 2022):

As part of the facilities there was a “waste storage area” ready for use IF HAR move into production:

4. HAR’s 880m decline (the tunnel to the gold)

We had the opportunity to open the gate to the decline and peek inside. We couldn’t go in yet because HAR was still pulling together the safety team required to be in place for non-HAR staff to enter:

An interesting takeaway from the sign on the decline gate is that the decline was originally being developed with “planned access to” the Talisman, Medean, South Springs, Keystone and Eldorado mines...

These are the same places HAR is planning to drill to prove up a 1 million oz gold resource - it was good to see the previous owners thought the same thing:

6. Back to the site offices...

Here is some of the expensive, mandatory safety gear - already bought and paid for by previous owners:

Here we are trawling through historical files about the project:

7. The laydown yard, and meeting locals that know the project well

A laydown yard is a designated area used for storing and organising materials and equipment supplies for industrial projects.

... we were told that HAR is currently leasing access to the laydown yard to the same guys that originally built the decline on the project.

We got to meet that team and it was genuinely surprising hearing how well versed they were in the project's history and how passionate they are about it coming back online.

It was a good sign for us that HAR has access to local contractors who know the project inside and out, particularly when the time comes to (hopefully) get the project back into production again.

8. HAR’s project is surrounded by old gold mines, ~7.7 million ounces of historic gold production

As we’ve said above, HAR is surrounded by historical mines from the California gold rush era, show in red in the image below:

Most of the old mines were deeper than the mines that HAR is working on (shown in yellow above). HAR’s theory (and the reason they acquired the asset) is that its gold mineralisation will go deeper too.

We drove around to see some of the historical mines - each mine was just a couple of minutes drive away from the next:

This short video shows how close the two biggest historical mines are to each other (Kennedy and Argonaut - the two big, deep red blobs on the left of the image above)

And finally a quick few minutes drive back to the Lincoln Mine (HAR’s project):

9. A quick stop in the mining town next to HAR’s project

On the way back to HAR’s project we stopped by a memorial showcasing the region's rich gold mining history:

The exhibits were literally related to HAR’s project area - even the map looked familiar from HAR presentations and announcements:

With our detective hats on, we noticed a quote on the maps from 2011 - it appeared as though there were previous discussions to re-start HAR’s project back in 2011, when the gold price was just US$1,200/oz.

Gold is currently at all time highs ~US$3,400/oz.

HAR’s investor deck maps (and the same maps that were on display in the middle of town in the image above) only mention the bigger mines in the area.

BUT, we also saw the following map which showed over a hundred more smaller mines scattered throughout the region - along the yellow gold mineralisation - HAR’s project is in the middle of the map:

The yellow shows the gold mineralisation, and the X’s show over 100 smaller gold mines that are not mentioned in HAR’s documents.

On the way out of town, we also drove past a few operating quarries in the area.

The perfect way to sign off on the trip, seeing mining like operations active and thriving in California:

California Gold Rush still echoes in museums thousands of kilometers away

The California gold rush was such a big deal in the USA that even the “trail west to find gold” has museums about it thousands of kilometers away in the middle of the USA.

Below is a “Road to the California Gold Rush” museum in Wyoming - well over 1,500km away from California gold territory.

When we were in Wyoming before making our way to California, we learnt about the magnitude of the 1849 California gold rush and just how strongly it is etched into US history...

Hundreds of thousands of people made the trek west to try and find their gold fortune in California, passing through Wyoming to get to there.

When we finally got to California, we stopped at a museum in Sacramento, which is actually the capital city of California (not Los Angeles or San Francisco as you might expect), and it was the main city that grew out of the gold rush that started in 1849:

HAR’s Transaction to acquire the project.

Post transaction, with ~298M shares on issue, at last traded price of 6.8c, HAR will be capped at ~$20M, with ~$5M in the bank.

HAR will also have ~25% of the company (120M shares) in performance shares on issue (at 5c),

(Source)

These performance shares are progressively unlocked when HAR achieves certain milestones like commencement of drilling, a 300,000 oz JORC resource and a 400,000 JORC resource.

A key part of the deal we liked was that HAR pays for the asset almost exclusively with shares (~60M shares and 120M performance options).

AND almost all of the shares (and performance options) are escrowed for 4-6 month periods.

The escrows are good for current HAR holders, because it will give HAR time to deliver strong newsflow and hopefully build some momentum in its share price without the new transaction shares weighing on the company’s share price.

We put $200k cash into the HAR transaction capital raise at 5.5c, increasing our original position in HAR where we Invested at 11c back in September 2023.

(Originally we invested in HAR for its uranium project in Senegal)

The 8 key reasons we Increased our position in HAR:

1. Advanced gold project in the USA - Gold macro thematic is very strong right now, especially in the USA.

The gold price recently broke out into all time highs above US$3,400 per ounce and is setting new highs every day.

We think gold explorers/developers will do well in this macro environment.

It’s only been ~3 months since HAR announced its planned acquisition, but the gold price is up another ~US$400 per ounce.

2. The “Mother Lode” is in one of the most prolific gold producing jurisdictions, ever

HAR’s project is in Amador county - one of the epicentres of historical California gold production - this is a county that has produced at least 7.7 million ounces of gold.

Overall the state of California has produced over 115 million ounces of gold and was the centre of one the biggest gold rushes in history.

Back in the late 1840s the world descended on California in search of gold.

HAR will now own 100% of a ~6km trend where there has previously been ~3.4 million ounces of gold production in the past.

3. High-grade gold resource with expansion potential

HAR’s project area has a current non-JORC 286,000 ounce gold resource at 9.29g/t of gold.

And there is at least up to ~682,000 ounces of gold that HAR thinks could be there based on data from back in 2008 (again this is non JORC data):

We think that HAR has the potential to expand this gold resource with a targeted exploration program.

4. Exploration upside - target to grow to >1 million ounces of gold

Most of the mines in the region have produced gold down to depths of ~1,800m.

HAR’s resource is based on drilling down to depths of ~150m.

We think that with some drilling (and luck), HAR can grow its resource beyond the current 286,000 ounce number.

5. Permitted processing plant with district scale consolidation opportunity

HAR holds a Conditional Use Permit (CUP) for its 350,000 tpa processing plant.

The CUP means HAR can operate its project without having to go through a lengthy permitting process.

Permitting in California can be a 15+ year process and so this puts HAR in a strong position to leverage its permits to potentially “roll up” regional opportunities.

California’s permitting landscape has historically been challenging, but HAR’s Lincoln Mine acquisition avoids many of these obstacles by already holding key approvals.

AND, anyone who wants to monetise their resources in the area will likely have to speak to HAR.

(Source)

6. There’s A$90M in sunk capital into the project - including a 350,000 tpa processing plant

Over A$90M has been invested into the project to date including into a 350,000 tpa processing plant which was built in 2011-2012.

This is a BIG mine complex that little HAR has managed to get its hands on:

If HAR is able to build a large enough resource, then it could justify moving into production relatively quickly, without the large capital outlay to re-develop all of this mining infrastructure.

7. Conventional, simple metallurgy with high recovery rates.

The project is also technically de-risked from a metallurgical perspective. Previous metallurgical test work showed recoveries ranging between 64-99% using fairly common processing methods.

When it comes to metallurgy, simplicity is key.

HAR’s project is a well understood style of mineralisation which has been mined and processed for many decades.

8. HAR’s geology is well understood by the mining industry and the ASX market

Australian investors understand the type of geology on HAR’s project - high grade vein mineralisation - and understand how to value it accurately.

One of the most profitable mines in the world is the Fosterville mine in Victoria which is a similar deposit style geologically to the type of gold HAR is chasing.

We think that the market will be more open to re-rating HAR if a big enough resource is proven because of the listed examples of successful companies that have worked on this style of geology.

Our HAR Investment Memo

Opened: 25-Jun-2025

Shares Held at Open: 7,570,066

What does HAR do?

Haranga Resources (ASX:HAR) will hold 100% of the Lincoln gold mine, a high grade gold project in the “Mother Lode” region in California, USA.

HAR’s project already has a 286,000 oz non-JORC resource, HAR will be drilling to first define a JORC resource, then target an upgrade to 1 million ounces of gold.

What is the macro theme?

Gold is a precious metal often used as a hedge against inflation, which remains persistently high, and the gold price is trading at all-time highs at the time of this memo.

Gold demand in the USA is at all time highs, and Trump just signed an executive order which explicitly mentions gold as one of the minerals that the USA needs to increase production of.

We think HAR is well-positioned to benefit from these macro tailwinds.

Our HAR Big Bet:

“HAR re-rates to a market cap greater than $200M by making new gold discoveries in California and progressing towards production or is acquired at a multiple of our initial entry price.

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is a lot of work to be done, many risks involved including exploration risk, commodity price risk and processing risk - just some of which we list in our HAR Investment Memo. Success will require a significant amount of luck. There is no guarantee that our Big Bet will ever come true

Why are we Invested in HAR?

1. Advanced gold project in the USA - Gold macro thematic is very strong right now, especially in the USA.
2. The “Mother Lode” is in one of the most prolific gold producing jurisdictions, ever
3. High-grade gold resource with expansion potential
4. Exploration upside - target to grow to >1 million ounces of gold
5. Permitted processing plant with district scale consolidation opportunity
6. A$90M has been invested in the project to date, including a 350,000 tpa processing plant
7. Conventional, simple metallurgy with high recovery rates.
8. HAR’s geology is well understood by the mining industry and the ASX market

What do we expect HAR to deliver?

Objective #1: Deal completion

We want to see HAR complete the acquisition, raise its cash and issue all of the consideration shares.

Milestones
✅ DD completion

🔲 Deal completed

Objective #2: Convert existing resource into a JORC resource

We want to see HAR convert its existing non-JORC 286,000 ounce gold resource into a maiden JORC compliant resource.

Milestones
🔲 Drill results

🔲 Maiden JORC resource:

• Bear case = JORC resource of <200k ounces of gold
• Base case = JORC resource of 200-250k ounces of gold
• Bull case = JORC resource >250k ounces of gold

Objective #3: Make new high grade discoveries at priority targets

All of HAR’s current resource is made up from drilling down to depths of ~150m. We want to see HAR drill deeper holes to test for new discoveries/extensions to the current resources.

Milestones
🔲 Drilling commences

🔲 Drilling results

Objective #4: Upgrade the JORC resource

Once HAR defines its maiden JORC resource (Objective #2 above), we want to see the company upgrade it and bring the overall project resource closer to the targeted longer term 1 million ounce number.

Milestones

🔲 Upgrade JORC resource:

• Bear case = JORC resource of <280k ounces of gold
• Base case = JORC resource of 300-500k ounces of gold
• Bull case = JORC resource >500k ounces of gold

Bonus Objective - District scale consolidation

We want to see HAR leverage its Conditional Use Permit (CUP) and its existing infrastructure to pick up projects nearby.

Milestones
🔲 Deal #1 on new ground/resource

🔲 Deal #2 on new ground/resource

What could go wrong?

Commodity Price Risk

The performance of commodity stocks are often closely linked to the value of the underlying commodities they are seeking to extract.

Should the gold price fall, this could hurt the HAR share price.

Exploration risk

There is no guarantee that HAR’s upcoming drill programs are successful and HAR may fail to find economic gold deposits.

Funding risk/dilution risk

As a small cap, HAR is reliant on capital markets to advance its projects.

If something negative happens at a macro or company level, HAR could struggle to access capital on favourable terms. These capital raises may take place at a discount, and result in the issuance of new shares which incur dilution to existing shareholders.

Market risk

There is always the possibility that broader market sentiment gets worse and shares as a whole trade lower, taking HAR’s share price with it.

Alternatively, there could be further sector specific pain ahead where junior explorers suffer a lot more than the broader market.

Development/delay risk

Should any or all of the above risks materialise, HAR could wind up stuck in “development purgatory” where newsflow dries up and the project remains stagnant for a prolonged period of time, hurting the share price.

Additionally, if delays occur in terms of material newsflow, the market could turn on HAR.

Production Risk

Should HAR go into production, the ability of the HAR to achieve production targets or meet operating and capital expenditure estimates on a timely basis cannot be assured. As a producer, HAR is subject to risks such as but not limited to, labour costs and availability, energy prices as well as HAR’s internal ability to forecast costs like these and budget effectively.

Investment Plan

We are Invested in HAR to see the company make new discoveries and make a decision to mine at the Lincoln project in California.

Our plan is to hold the majority of our position in HAR for 3 to 5 years which we hope is enough time to see HAR achieve gold production (see “our long term bet” above).

After 12 months we will apply our standard de-risking strategy.

We may look to sell up to 20% of our holding if the company delivers on one or more of our Investment Memo objectives and/or the share price materially re-rates.

Any sell downs will be in accordance with our trading and hold policy disclosure.