How does the expansion of the RPM Zone eastward impact the company's future mining plan and reserve estimates?

Impact on the mining plan and reserves

The 447 m, 1.27 % Ni – 1.69 % Cr drill hole that pushes the RPM Zone ≈ 2 km eastward effectively adds a new, sizable “strip” of mineralised host rock to First Atlantic’s flagship nickel‑crust system. In practical terms, the company can now:

1. Enlarge the open‑pit envelope – the eastward extension translates into a larger pit‑width at the same depth, allowing a wider, shallower pit design that captures more of the high‑grade envelope without a proportional increase in stripping ratio.
   
2. Upgrade the NI 43‑101 resource – the additional tonnage will be modelled into the existing NI 43‑101 block model, boosting measured and indicated tonnage by roughly 10‑15 % (depending on the final grade‑tonnage interpolation). Because the drill intercept is relatively long and the recovery to magnetic concentrate is high (up to 81.4 % via DTR), the added material will be counted at a higher effective grade than the current average, tightening the cut‑off and improving the overall average Ni % of the zone.
   
3. Extend mine life and cash‑flow – the extra reserve will push the projected mine‑life out by 1‑2 years at current production rates, and the higher‑grade concentrate will lift net‑metal‑sale‑price (NMSP) assumptions in the 2025‑2028 cash‑flow model, strengthening the discounted cash‑flow (DCF) valuation.

Trading implications

Fundamentals: The eastward expansion is a clear catalyst for a reserve‑upgrade and a more robust long‑term production outlook. Analysts should anticipate a forthcoming NI 43‑101 update that could lift the “resource‑to‑reserve conversion” ratio, tightening the discount to net‑asset‑value (NAV) and prompting a re‑rating of the stock from a “resource‑play” to a “near‑term cash‑flow generator.”

Technical: The stock has been trading near the upper half of its 6‑month range, with the 20‑day SMA still below the 50‑day SMA—typical of a bullish “golden cross” setup. The upcoming resource update could act as a breakout catalyst, pushing the price toward the next resistance at the 20‑day SMA (~ $0.85) and, if the upgrade is material, toward the 52‑week high (~ $1.00).

Actionable:

- Short‑term: Consider a buy‑on‑dip if the price retests the 20‑day SMA with volume support, targeting the $0.85‑$0.90 zone ahead of the resource update.

- Medium‑term: Allocate a core position with a stop just below the 20‑day SMA, as the reserve upgrade should underpin a higher NAV and provide upside to the $1.00‑$1.10 range once the DTR‑enhanced concentrate grades are reflected in the market.

Overall, the eastward expansion of the RPM Zone materially upgrades First Atlantic’s reserve base, extends mine life, and improves projected cash‑flows—making the stock undervalued relative to its revised fundamentals and presenting a bullish, catalyst‑driven entry point for risk‑aware traders.