Pacific Ridge Exploration Ltd. (“PEX” or the “Company”) is a Canadian exploration company with assets in British Columbia and the Yukon. The Company holds nine assets, including its flagship project the Kliyul Copper-Gold Project (“Kliyul”), located in the Quesnel Trough, approximately 50km Southeast of Centerra Gold Inc.’s (“Centerra”) (CG:TSX) past producing Kemess Mine. PEX had a highly successful 2021 drill program at Kliyul, with all three holes yielding over 300 gold gram-meter (g-m) intersections, and defined priority targets for this year’s program. The Company’s 6,800m drill program at Kliyul, which launched in July, is fully funded and is the largest ever drill program at Kliyul; initial results are expected this fall. We are initiating coverage on Pacific Ridge with a BUY rating and a target price of $0.60/share.

INVESTMENT THESIS

• Sizable drill programs at Kliyul and RDP Copper-Gold Project (“RDP”). The two drill programs total, over 8,600m and we expect that the Company will return a number of significant mineralized intervals.

• Kliyul project showing early signs of scale. Two untested IP anomalies flank the Kliyul Main Zone (“KMZ”) that are 1.5km apart. If this year’s drill campaign confirms similar mineralization at the two anomalies, the project could quickly become a large scale project with the potential to host a multi-billion lb Cu resource (or multi-million-ounce Au resource).

• Downside risk is well hedged. The management team has strategically acquired other copper-gold porphyry projects in B.C. that are also strong enough to become a flagship project if the results from this year’s drill program at Kliyul don’t meet expectations.

• Yukon projects pose substantial liquidation opportunities. PEX has stated that its four Yukon projects are not a focus of the Company and present an opportunity to be sold off to provide non-dilutive capital to be put towards the primary assets or spun out as a new company.

• Management are proven winners. CEO Blaine Monaghan has extensive capital markets experience and a strong track record of creating shareholder value through his various positions at True Gold Mining, Canplats Resources, Western Prospector Group, and others. Blaine works alongside a strong board of directors that includes Gerald Carlson, Bruce Youngman, Borden Putnam III, and Gary Baschuk.

• Potential takeout target. Pacific Ridge’s core BC projects are located in the prolific Quesnel Trough which hosts many large deposits and operations controlled by Centerra Gold, Teck Resources (TECK.B:TSX), South32 (S32:ASX), and many other smaller explorers.

• Potential Partnerships. PEX is currently partnered with Antofagasta Minerals S.A. (“Antofagasta”), a subsidiary of Antofagasta PLC (ANTO:LSE), who is funding the program at RDP; however, there exists an opportunity for other partnerships with companies in the area.

CATALYSTS

• Drill results from Kliyul & RDP – Q4/22

• Potential asset sales – ongoing

• Potential M&A - ongoing