Lahontan Gold: Critical Phase
The Canadian company is focused on bringing its flagship Santa Fe gold project in the US state of Nevada into production. The mine previously produced a total of 359,000 ounces of gold and 702,000 ounces of silver from 1988 to 1995. With the release of an updated mineral resource estimate and a revised preliminary economic assessment (PEA), two important milestones are approaching that could gradually lead to a higher valuation of the stock. Gold production is scheduled to begin next year.
Since Santa Fe has produced in the past, extensive geological data and the necessary infrastructure are already in place. This reduces both risks and investment costs. The US state of Nevada also offers excellent conditions; it is considered one of the world’s most attractive mining regions and is home to some of North America’s largest gold deposits.
In recent years, the company has systematically developed the approximately 28 km² property. Numerous drilling programs have confirmed and expanded the known gold mineralization. According to the resource estimate from fall 2024, Santa Fe contains nearly 2 million ounces of gold equivalent. Away from the main zone, the West Santa Fe satellite deposit, located just 13 km away, offers significant additional resource potential due to its exceptionally high mineralization grades.
Most recently, the company reported further drill results. Particularly notable was a 30.8 m interval grading 0.93 g/t gold equivalent (AuEq), including a 10.7 m interval with high-grade mineralization of 2.18 g/t AuEq in the central Calvada area.
More good news came from the Sonic drilling program. Initial results showed gold and silver grades in a historic tailings pile, with the values coming in higher than the company had expected. In addition, management believes that the material can be processed cost-effectively due to its favourable metallurgical properties.
The share is currently trading at around CAD 0.35, giving Lahontan Gold a market capitalization of CAD 151 million or USD 107 million. By way of comparison, the “old” PEA from late 2024 had already calculated a project value of USD 200 million based on a gold price of around USD 2,700 per ounce. Now, an ounce of gold is selling for around USD 4,000. Everything points to a significant discrepancy between the project’s value and the company’s market value.
IIF host Lyndsay Malchuck interviews CEO and founder Kimberly Ann.
Newmont: Profits Are Soaring
The US company is the world’s largest gold producer. High precious metal prices act as a powerful lever for profitability. The latest quarterly figures underscore this impressively. Newmont generated free cash flow of USD 2.2 billion and earnings per share of USD 2.10 in the second quarter. At the same time, the company reaffirmed its full-year forecast of 5.3 million ounces of gold production. A dividend payment of USD 0.26 per share was announced for the quarter, and share buybacks will continue.
Nevertheless, Newmont, like all major producers, faces a demanding strategic challenge. The companies must continuously replenish their reserves, as their production base is shrinking due to high annual output levels—without new deposits or reserves. For this reason, producers are increasingly investing in advanced projects. Lahontan Gold could also appear on the list of desirable targets at some point.
Currently, the shares are trading at around USD 93, giving the company a market capitalization of approximately USD 98 billion. The valuation multiples are considered moderate, with a P/E ratio of 9.5 for the current year and 8.7 for 2027. On average, analysts have set a price target of USD 130, which corresponds to upside potential of around 40%.
First Majestic Silver: 50% Upside
The company operates several underground mines in Mexico and is one of the best-known silver producers. The Canadian firm is benefiting significantly from the positive price trend of the precious metal. Unlike gold, silver is not only used as a store of value but is also in high industrial demand.
In the second quarter, the company increased its silver production to 3.8 million ounces. It also produced 34,660 ounces of gold, 16.5 million pounds of zinc, and 9 million pounds of lead. The Santa Elena and La Encantada mines performed particularly well. Based on these positive developments, the company raised its production guidance for the current year by approximately 10% to a range of 14.6 to 15.5 million ounces of silver.
The share is currently trading at around CAD 23, nearly 50% below its high from this past spring. Analysts have set an average price target of CAD 34.75, which corresponds to an upside of just over 50%.
Conclusion
Lahontan Gold is on the verge of reaching two important milestones that could close the significant gap between the company’s market value and the project’s value in the short term. In 2027, the start of gold production and the planned US stock market listing could provide additional momentum. Newmont and First Majestic are benefiting from historically high precious metal prices, which are lifting earnings, cash flows, dividends, and share buybacks to new levels.
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