Forge Resources Corp: A Junior Miner Breaking the Mould

Most junior miners follow a familiar path. They spend years drilling, proving up a resource, and raising money to keep the project alive. Investors either wait for a major discovery or watch as the company dilutes its stock to fund exploration. Few ever reach the stage where they generate real cash flow.

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Forge Resources (CSE: FRG, OTCQB: FRGGF, FSE: 5YZ) is taking a different approach. The company has two core assets: a fully permitted coal project in Colombia that is on the verge of producing revenue and a gold-copper exploration project in the Yukon with promising early results. Instead of relying on constant fundraising to advance both projects, Forge is positioning itself to use coal revenue to support exploration.

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This strategy sets Forge apart from most junior miners. With cash flow on the horizon, an aggressive exploration program planned for 2025, and a management team with a track record of execution, the company is creating a unique blend of near-term income and long-term growth potential.

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The La Estrella Coal Project – A Cash Flow Machine in the Making

Most junior miners are years away from generating revenue, but Forge is preparing to ship its first bulk sample within months. The company’s La Estrella coal project in Colombia is fully permitted and positioned to reach production in 2025. With an initial 20,000-tonne bulk sample expected to generate around $4 million CAD, this project has the potential to provide a steady cash flow source that could help fund Forge’s broader strategy.

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Before diving into the project details, it is important to understand why coal remains a strong market and how Forge’s position in Colombia gives it an advantage.

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Coal Market Dynamics

Coal remains one of the most important industrial commodities in the world. 37% of global electricity and over 70% of the world’s steel production still rely on coal, reinforcing its role in both power generation and heavy industry. Even with the push toward renewables, coal is projected to remain the world’s largest single source of electricity in 2040, with emerging markets like Southeast Asia still relying on it for nearly 40% of their power needs.

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The coal market is divided into two key segments:

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Metallurgical coal, used in steelmaking, remains essential for global infrastructure and industrial growth.

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Thermal coal, burned for electricity, continues to be a dominant energy source in developing economies.

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Steel demand continues to rise, fueled by urbanization, transportation projects, and industrial expansion. While some industries are shifting toward decarbonization, steel production still requires metallurgical coal at scale, as there is no viable alternative for producing high-strength steel.

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Colombia plays a key role in this market, acting as a major exporter of both metallurgical and thermal coal. Its high-calorific-value coal is preferred by steel mills and power plants, and with a well-developed mining infrastructure, Colombian coal remains competitive on the global stage.

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Forge Resources is positioned to benefit directly from these trends. La Estrella produces both metallurgical and thermal coal, making it a versatile asset in a market that continues to see strong demand. With a fully permitted mine, established infrastructure, and buyers lined up, Forge is stepping into a market that still holds long-term relevance, particularly in regions where coal remains a dominant energy and industrial input.

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Property Overview

La Estrella is a coal project located in Santander, Colombia, a region known for its high-calorific-value coal and established mining infrastructure. Forge now holds a 60% controlling interest in the project, having recently increased its stake from 40%. This expanded ownership secures greater control over operations and future cash flow.

The project is structured for long-term scalability, with an extensive resource base and the infrastructure needed for efficient transportation. With Colombia being a top coal-exporting country, La Estrella is positioned to serve both domestic and international buyers.

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Infrastructure and Logistics

La Estrella benefits from strong infrastructure and direct access to Colombia’s well-established coal transportation network, positioning the mine for efficient exports through the Port of Santa Marta, a key hub for international coal trade.

Portal Construction Nearing Completion

Forge Resources has been advancing portal construction at La Estrella, a key development that will provide underground access to deeper coal seams. This new entry point is essential for long-term mining operations, allowing for efficient coal extraction and safer underground development.

Construction has been progressing steadily, and as of January 23, 2025, the portal is 90% complete. Designed with reinforced supports, advanced ventilation, and modern safety measures, the portal ensures stability for mining crews while minimizing environmental impact. Additionally, slope stabilization work is underway to strengthen the surrounding terrain, enhancing overall site safety.

With the portal nearly complete, Forge is moving closer to full-scale underground operations, a critical step in advancing La Estrella toward steady production and securing long-term coal output.

Two Key Transportation Routes to Export Coal

Once extracted, coal from La Estrella can be transported via two primary routes to the Port of Santa Marta:

• Truck Route – A 575-kilometer National Highway, taking approximately 10 hours by truck.
• Rail Route – A 350-kilometer truck journey to the Chiriguaná Train Station, followed by a 220-kilometer rail shipment to Santa Marta.

This dual transportation network ensures logistical flexibility, allowing Forge to optimize costs and delivery efficiency while maintaining reliable coal exports.

Permitting and Resource Classification

La Estrella is fully permitted under Colombian law, with an environmental license and a long-term mining concession in place. The project has been approved for 180,000 tonnes per year of production, allowing Forge to transition directly into commercial operations.The deposit has been independently verified through a NI 43-101 compliant report, initially published by SRK Consulting (UK) Ltd. in 2012 and updated in 2024 by Paul Bright, P.Geo. The report confirms the following coal resource estimates across eight known seams:

• Measured Resources: 1.85 million tonnes
• Indicated Resources: 4.34 million tonnes
• Inferred Resources: 16.47 million tonnes

This extensive resource base provides long-term production potential, reinforcing La Estrella’s viability beyond the initial bulk sampling phase.

Coal Quality and Strategic Positioning

La Estrella’s coal deposit is evenly split between high-volatile coking coal and thermal coal, giving Forge a built-in market advantage. Coking coal is in steady demand from global steelmakers, while thermal coal remains a core energy source in developing markets.What sets La Estrella apart is its high calorific value and metallurgical properties, making it a sought-after resource for industrial buyers. The combination of both coal types allows Forge to sell into multiple markets, reducing reliance on any single demand cycle.This flexibility means Forge can adapt to pricing conditions, targeting steel mills when metallurgical coal prices are strong and shifting more output toward thermal buyers when energy markets are favorable. With global supply chains facing disruptions and shifting trade policies, having both metallurgical and thermal sales channels gives Forge a degree of stability rarely seen in junior coal producers.With established infrastructure in Colombia and an export-ready product, La Estrella’s coal is positioned for rapid commercialization once bulk sampling confirms final specifications.

Bulk Sampling: The First Step Toward Production

As mentioned, Forge Resources is advancing La Estrella beyond the exploration stage with a 20,000-tonne bulk sample. This phase serves two key purposes: proving coal quality to buyers and generating early revenue to support operations. Unlike many juniors that extract bulk samples without a clear sales plan, Forge already has Letters of Intent from top-tier coal buyers to purchase 100% of the bulk sample and future production. Securing buyers at this stage reinforces the commercial viability of the project before it even moves into full-scale mining.

Underground Exploration and Sampling Strategy

The bulk sampling program will extract coal from six key seams: M200, M180, M160, M140, M120, and M110. Three of these, M160, M140, and M110, have been identified as having strong metallurgical coal potential, with Free Swelling Index (FSI) values of up to 8, making them well-suited for steel production.Drilling results show a Gross Calorific Value (GCV) averaging 12,400 BTU, with some samples reaching 13,900 BTU. These high-energy values make La Estrella's coal an attractive resource for industrial buyers seeking premium thermal and coking coal. Forge has already completed the necessary engineering and geotechnical work, ensuring a seamless transition into extraction without permitting delays.

Bulk Sample Revenue Potential

With buyers already in place, the 20,000-tonne bulk sample is expected to generate around $4 million CAD in revenue based on current pricing. Forge has outlined multiple pricing scenarios:

‍At $204 per tonne (current market price): ~$4.08M CAD

At $247 per tonne (high market scenario): ~$4.94M CAD

At $155 per tonne (low market scenario): ~$3.1M CAD

‍If Forge chooses to sell coal Free on Truck (FOT), where buyers pick up directly from the mine site, the company can still generate $3.2M CAD at the current FOT pricing of $160 per tonne. This structure reduces transportation costs while maintaining strong cash flow.

With production costs estimated at CAD $46 per tonne, Forge is looking at a gross profit of $158 per tonne under current conditions, translating to a 77% production margin. Even at lower pricing scenarios, the project remains highly profitable.

Beyond the immediate revenue, Forge sees La Estrella as the financial backbone for its broader growth strategy. CEO PJ Murphy has stated recently in an interview that the company intends to  revenue from the coal property to self-fund exploration at its Alotta gold-copper project in the Yukon. While this bulk sample is just the first step, it sets the stage for a revenue-generating operation that could reduce the company’s reliance on external fundraising and provide internal capital to advance high-potential assets.

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The Alotta Gold-Copper Project – A High-Upside Exploration Play

With La Estrella on track to generate cash flow, Forge is using this advantage to ramp up drilling at its high-potential Alotta project in the Yukon. Alotta is Forge Resources’ gold-copper exploration project, covering 4,723 hectares across 230 mineral claims in the Dawson Range, a district known for hosting some of the most promising undeveloped deposits in North America.

The property sits 40 kilometers southeast of Western Copper & Gold’s Casino deposit, one of the world’s largest undeveloped gold-copper assets. Casino contains 21 million ounces of gold and 10 billion pounds of copper. Alotta shares the same intrusive complex, an indicator that suggests strong mineralization potential.

Unlike many early-stage exploration projects, Alotta benefits from road access and established mining infrastructure in the Yukon. The absence of glaciation in the area has preserved in-soil geochemical anomalies, providing Forge with clear targets for further exploration.Encouraged by early results, Forge expanded its land position in 2024, increasing its total claims by 55 percent. The company is now focused on defining the scale of the gold-copper system through drilling.

Past Drilling

Forge kicked off drilling at Alotta in late 2023, targeting geophysical and geochemical anomalies. Early exploration outlined a four by one kilometer hydrothermal system with coincident gold and copper anomalies, suggesting the potential for a large porphyry system similar to Casino.

The first two drill holes confirmed the presence of gold mineralization, with broad intercepts pointing to a well-developed system.

‍2023 Drill Highlights

• ALT-23-001 returned 211.65 meters of 0.46 g/t gold, including 22.45 meters at 1.20 g/t gold.
• ALT-23-002 hit 99.14 meters of 0.30 g/t gold.

These results are characteristic of porphyry deposits, where long mineralized intervals indicate a large, low-grade system with bulk-mining potential. Encouraged by these results, Forge followed up with four additional holes in mid-2024.

All six holes drilled to date have intercepted gold mineralization, giving the company a 100 percent success rate so far. The latest phase of drilling tested deeper sections and step-outs from the initial discovery holes, with assays currently under review.

Future Exploration Plans

Forge is ramping up exploration at Alotta, with drilling set to resume in May 2025. The program will test high-priority undrilled targets across a one by four kilometer area, building on the 100 percent hit rate from earlier drilling.

The 2025 drill campaign will focus on three key targets.

• Payoff Zone, the most advanced target, where past drilling intercepted broad intervals of gold mineralization. Follow-up drilling will step out to confirm continuity.
• Alimony Target, a high-chargeability anomaly with no prior drilling, making it a top priority for testing. Chargeability highs in this region could indicate sulphide-rich mineralization.
• Commission Target, a new area with coincident geophysical and geochemical anomalies, similar to what was seen at Payoff before drilling began.

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The program will consist of three to five holes, with planned depths of 250 to 300 meters. By expanding known mineralized zones and testing new high-priority targets, Forge aims to refine its exploration model and define the broader scale of the system.

Broader Strategy and Management Strength

Forge isn’t just focused on developing its current assets. The company is actively positioning itself for long-term growth, leveraging an experienced management team and a strategic approach to acquisitions.

CEO PJ Murphy recently stated that Forge is evaluating multiple acquisition opportunities, particularly in the coal sector. The company is looking to expand beyond La Estrella by adding additional coal assets in Colombia and the U.S., creating a scalable operation with sustained cash flow.

This mirrors the strategy used by Matt Warder, a key advisor and a recognized coal industry expert. Warder helped grow a coal producer from $3 to $400 per share through aggressive acquisitions. Now, he is working closely with Forge to identify and secure high-quality coal properties, including potential U.S.-based assets in West Virginia. His expertise in energy markets and supply chains adds a level of strategic insight rarely seen in junior miners.

On the financial side, Forge benefits from Russell Ball, the former CFO of Newmont and Goldcorp. His leadership strengthens the company’s financial planning as it moves toward generating cash flow from La Estrella and expanding exploration at Alotta.

In Colombia, Forge has assembled a strong local team, led by Country Manager Boris Cordovez Vargas. With a decade on the board of Colombia’s coal association and ties to major players like Vale and BHP, Vargas brings the connections and regulatory expertise needed to navigate the region. His network has already helped Forge secure permits and buyers, a rare advantage for a junior miner. As Forge scales its operations, the combination of experienced leadership, strong advisory support, and a self-sustaining business model positions it uniquely in the market. Instead of relying on outside fundraising, the company is aiming to fund exploration internally, reducing dilution risk for shareholders.

With an aggressive exploration campaign planned for Alotta, revenue approaching from La Estrella, and a leadership team actively scouting acquisitions, Forge is taking a differentiated approach that could redefine how junior mining companies grow.

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Sources

Information in this article was sourced from Forge Resources' official website, recent press releases, and investor presentations.