Pegasus Resources: Cessation of Coverage; Final Thoughts on a Lost Year

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We are discontinuing coverage of Pegasus Resources Inc (PEGA). Our price objective, outlook and estimates should not be relied upon going forward.

Located in Utah’s prolific San Rafael Uranium District, the Pegasus projects are host to historic drilling and some historic production of both uranium and vanadium in the mid-1950s. Both the Energy Sands Project (1,560 acres) and the Jupiter Project (960 acres) are located 3km from each other and adjacent to Western Uranium & Vanadium’s (WUC) San Rafael deposit which currently hosts a global resource of over 5.2M lbs U3O8 and over 7.0M lbs V2O5. Once de-risked and developed, provided positive results, in our view, a simple consolidation thesis was evident.

MINIMAL ASSET DE-RISKING

In early 2024, 41 grab samples were collected from the Energy Sands project. A total of 13 samples revealed uranium mineralization above 1.0% U3O8. Highlights included one sample returning 3.5% U3O8 and one sample returning 18.8% (RS-125 handheld spectrometer). Given a good start to developing the asset, drill permits were applied for at the Bureau of Land Management. The drill permits were granted by the BLM in November 2024. With a financing wrapped up on November 15, 2024 (2 tranches, gross proceeds of C$871,120) a detailed drill campaign was outlined for early 2025. Seemingly all set for drilling, sometime in January 2025 a decision was taken to suddenly cancel the maiden drill program despite having a drill crew mobilized on site.

FINANCINGS NOT TRANSLATING INTO DE-RISKING OR DEVELOPING THE PROJECTS

Since the abrupt drill program cancellation in January 2025, two follow-on financings have taken place, one in March 2025 (gross proceeds C$340,354) and one in August (gross proceeds C$250,080). The only news of note this year was a payment of US$75,000 to acquire a 75% stake in the Jupiter Project. In terms of de-risking or developing the Energy Sands or Jupiter projects, nothing has happened since the 41 grab samples. We don’t have any clarity on whether or not the previously planned for 3,200 ft drill program for Energy Sands or the 15,360 ft drill program for Jupiter will be attempted in 2026.

Unfortunately, the positive developments and momentum achieved in 2024 has not translated into meaningful development accomplishments in 2025. We are still left with the 41 grab samples from early 2024 and a handful of historic drill results from the 1970s. Since a share consolidation was announced in April 2023, we’ve gone from 11.7M shares issued and outstanding to a weighted average of 36.2M shares (basic & diluted) as at August 31, 2025 (+209%).

We won’t delve into individual expense line items (namely so-called consulting fees) but suffice it to say, its rather telling.

CESSATION OF COVERAGE

We are discontinuing coverage of Pegasus Resources Inc. Our price objective, outlook and estimates should not be relied upon going forward.