Lahontan Gold: The Next Price Drivers Are Just Around the Corner
The gold price rose sharply in early August and is once again trading at just over USD 4,400 per ounce. Lahontan Gold, with its Santa Fe project in Nevada, could benefit particularly strongly from this. The company aims to bring a historic gold and silver mine back into production and can draw on existing infrastructure and data from its previous operations. Between 1988 and 1995, Santa Fe produced a total of 359,202 ounces of gold and 702,067 ounces of silver. The current resource comprises 1.539 million ounces of gold equivalent in the “indicated” category, as well as an additional 411,000 ounces “inferred”. The majority of the mineralization is near-surface and oxidized. This enables relatively low-cost extraction via open-pit mining followed by heap leaching.
The first preliminary economic assessment (PEA) from 2024 already provided robust key figures. Assuming a gold price of USD 1,950 per ounce, Lahontan calculated a net present value after taxes of USD 200 million and an internal rate of return of 34.2%. Initial investments were estimated at USD 135 million. Given the current gold price, those assumptions are now long outdated. The revised PEA announced for late August is expected to incorporate the latest drilling data, metal prices, and metallurgical findings.
At a gold price of around USD 4,000 per ounce, CEO Kimberly Ann valued the project at approximately USD 472 million after taxes, with an internal rate of return (IRR) of an impressive 66.6%. This means that the invested capital would pay for itself in less than two years. By way of comparison: Lahontan’s current market capitalization stands at just over USD 122 million, or the equivalent of about CAD 170 million. Currently, the gold price is trading as high as 10% above that level at USD 4,400. And the higher the gold price rises, the greater the leverage becomes. In the medium term, the gold price could once again target the record high of over USD 5,000. Meanwhile, costs do not rise in direct proportion to the gold price. Additional revenues therefore have a disproportionately large impact on the project’s profitability.
First, the new resource estimate is due. It forms the basis for the PEA and the subsequent permitting steps. At the end of June, Lahontan had indicated that the report would be released within a few weeks. The timeline for the planned start of construction in 2027 is expected to remain on track despite the delay.
The latest drill results suggest that Santa Fe has not yet been fully explored. In early August, Lahontan reported 12.2 m grading 1.25 g/t gold of oxidized material from Calvada East. The hit is located near the base of the open-pit mine modeled to date. Another drill core contained an average of 1.01 g/t gold and 7.1 g/t silver over 13.7 m.
For the first time at Santa Fe, significant gold and silver mineralization in Tertiary volcanic rock was identified along the Summit Fault. This has created a new exploration target that could extend beyond the previously delineated resources. At Slab West as well, drillers once again encountered broad, oxidized gold zones that are open in multiple directions.
Back in July, a drill hole at Calvada Central, originally intended for geotechnical investigations, intersected 30.8 m grading 0.93 g/t gold equivalent (AuEq). This included 10.7 m grading 2.18 g/t. This hit could also expand the resource.
The tailings from the former mining operation provide additional potential. Approximately 16 million metric tons of material were processed at four heap leaching pads. Lahontan has completed nearly 100 Sonic drill holes there and at an adjacent stockpile.
The initial results were a pleasant surprise. In the stockpile, previously classified as low-grade, 2.40 g/t gold and 50.7 g/t silver were measured over 9.9 m. Three drill holes averaged 2.3 g/t AuEq. The material that has already been mined and is freely accessible could provide Santa Fe with additional ounces at a comparatively low cost. However, further results and metallurgical tests must first confirm the potential.
The coming weeks will be decisive. The drilling data will be incorporated into an updated resource estimate and subsequently into a revised PEA. This study is intended to show how large a future mine could be, what investments would be required, and at what costs gold and silver could be produced. At the same time, Lahontan is moving forward with the permitting process. The stated goal is to resume production in 2027.
The stock’s momentum is thus fundamentally underpinned. New gold zones, higher grades in previously mined material, and the prospect of a growing resource provide several points of reference for a revaluation. Since Lahontan Gold is currently transitioning from an explorer to a developer, the stock is also considered a potential acquisition target. This is because revitalizable projects like the Santa Fe Mine, with existing infrastructure and advanced development, are rare and highly sought after, making them prime targets for major mining conglomerates.
Newmont and Barrick Mining are desperately seeking new projects, and Lahontan is located in one of the world’s most attractive gold districts. This lends the penny stock additional upside potential.
Financially, Lahontan took precautions in the spring. A private placement raised more than CAD 13.6 million gross. According to the company, this funds ongoing work through at least 2027. The shares were issued at CAD 0.41, and the warrants can be exercised at CAD 0.60. The current share price of around CAD 0.35 is below the placement price.
With the resource estimate, the PEA, and further results from the historic tailings piles, Lahontan has several short-term catalysts. Nevertheless, the stock remains speculative. Before production can begin, permits must be obtained and construction financing arranged. However, if the studies prove convincing, Santa Fe could take the next major step toward becoming a financially viable mine.
Deutsche Telekom: EUR 5 Billion Share Buyback
Things continue to go well at Deutsche Telekom. In the second quarter, organic revenue rose by 3.3% to EUR 29.9 billion. Adjusted EBITDA after leasing increased organically by 7.3% to EUR 11.8 billion. Adjusted net income improved by 11.1% to EUR 2.8 billion, while free cash flow after leasing rose by 3.1% to just over EUR 5 billion. Profit growth is thus once again significantly outpacing revenue growth.
T-Mobile US remains the biggest driver of earnings. The subsidiary increased its service revenues by 8.9% to USD 19 billion and its adjusted EBITDA after leasing by 12.1% to USD 9.3 billion. As a result, Telekom raised its full-year forecast for free cash flow after leasing from more than EUR 19.8 billion to around EUR 20 billion. The targets of EUR 47.5 billion for adjusted EBITDA after leasing and EUR 2.20 for adjusted earnings per share remain unchanged.
The Executive Board also increased the share buyback program by up to EUR 3 billion. This means that treasury shares totaling up to EUR 5 billion can be purchased by the end of the year. The majority of these shares are to be retired, thereby increasing earnings per share on a pro forma basis.
There were, however, some weak spots. In the German broadband business, the number of customers declined by 20,000, and at T-Systems, order intake fell by 13.4%. In addition, net debt, including leases, remains high at EUR 138.4 billion. Nevertheless, the combination of growth, share buybacks, and dividends continues to make the T-share an attractive investment. Following its strong price performance, it is no longer a bargain, but it remains a promising defensive DAX stock.
Berkshire Hathaway: Greg Abel Opens the Purse Strings
At Berkshire Hathaway, too, all eyes are on a new chapter. Second-quarter results came in better than expected. Operating profit rose 16% to USD 12.98 billion. Industrial, service, and retail operations, as well as the energy business, performed particularly strongly. Net income doubled to USD 25.67 billion, though it was heavily influenced by unrealized gains in the stock portfolio.
The use of capital is more revealing. Berkshire repurchased USD 4.5 billion of its own shares in the second quarter and invested USD 23.5 billion in publicly traded companies. This included a USD 10 billion investment in Alphabet. In July, at least an additional USD 10.1 billion was allocated to share buybacks and the acquisition of homebuilder Taylor Morrison. As a result, cash and cash equivalents decreased from USD 380.2 billion to USD 364.7 billion.
Abel is thus sending a clear signal: Berkshire remains disciplined in its capital allocation but is once again ready to deploy large sums when suitable opportunities arise. Risks exist, among other places, in the insurance business, where higher claims payments and price pressure could weigh on the company. At the same time, the still-huge cash position limits the risk of setbacks and creates room for further acquisitions. The Class B stock is therefore less suited for a quick price surge than for investors seeking a broadly diversified, high-quality investment with long-term potential.
Conclusion: Three Promising Stocks, Three Risk Categories
Deutsche Telekom stands for steady growth and high dividends, while Berkshire Hathaway represents substance and financial flexibility. Lahontan Gold offers the greatest percentage potential—along with the highest risk. Upcoming studies must show how much of the gold price rally, the new drill hits, and the historic tailings will actually be incorporated into a robust mining plan. If this can be demonstrated, Santa Fe’s current valuation is likely to be reassessed.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as “Relevant Persons”) may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a “Transaction”). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
For this reason, there is a concrete conflict of interest.
The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.
Risk notice
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.
The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.
Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein. For full disclaimer information, please click here.