3 million ounces of gold in the ground?
Lahontan Gold is focused on advancing the development of its flagship Santa Fe project in the US state of Nevada with the clear goal of commencing production by the end of 2027. Historically, the 28.3 km² property produced 359,000 ounces of gold and 702,000 ounces of silver from the late 1980s to the mid-1990s. Production was then halted due to a gold price below USD 450 per ounce. With a current gold price of USD 4,500 and significant project progress, the picture has fundamentally changed.
The latest resource estimate for the Santa Fe project from October 2024 indicated 1.95 million ounces of gold equivalent at a gold grade of 0.9 g/t. The company is currently preparing an update. The latest results from the West Santa Fe satellite could significantly increase the resource. At 36.6 m from surface, 3.11 g/t gold equivalent was measured, including a 10.7-meter interval with mineralization of 5.75 g/t gold equivalent. It is entirely realistic that West Santa Fe could deliver an additional resource potential of 1 million ounces of gold. With 3 million ounces of gold in the ground, the company’s valuation is likely to move into a new range or attract the attention of buyers.
Excellent Market Conditions
In many respects, the Canadians are hitting the nail on the head. The big picture, with a current gold price of around USD 4,500 per ounce, shows that the precious metal can hold its own as a safe-haven asset despite likely interest rate hikes. The vast majority of analysts expect further short- and medium-term price increases. Goldman Sachs forecasts USD 5,400 per ounce for the current year. In the medium term, through the end of 2030, expert estimates are significantly higher.
The property’s macro and micro locations are also advantageous. The US state of Nevada is among the best jurisdictions in the world. This significantly reduces risks, which investors reward with higher valuations. Nevada accounts for 75-80% of US production and 5% of global production. Industry giants such as Newmont and Barrick have a massive presence here.
Several significant mineralization trends exist within the “Silver State.” All four of the Canadian company’s gold-silver projects are located within the Walker Lane Trend. This geological corridor stretches from western Nevada to California over a length of approximately 800 km. The Walker Lane Trend is characterized by the fact that it hosts numerous deposits with a cumulative production volume of several dozen million ounces of gold.
A crystal-clear roadmap
The Canadian company has provided a very concrete roadmap for upcoming milestones. From an investor’s perspective, these will be decisive for the company’s valuation, as they will clarify the project’s resource size and economic viability. The phase between developer and producer, in particular, can lead to a windfall for existing investors if the results are favourable and dilution is moderate. Lahontan definitely falls into this category.
Investors can expect an updated resource estimate soon. The company has announced this for June. A new preliminary economic assessment (PEA) is scheduled for presentation in September. The current PEA was prepared at the end of 2024 and, based on a gold price of USD 2,705, indicated a project value of USD 200 million with an internal rate of return (IRR) of 34.2%. At the current gold price, the project value is likely to more than double, indicating that the company is clearly undervalued.
Lahontan expects to receive the operating permit for the Santa Fe Mine by the end of 2026, or by the first quarter of 2027 at the latest; the permitting process is currently underway. The primary goal is to commence gold production by the fourth quarter of 2027 at the latest.
Fully Funded Through 2027
The associated investment requirement amounts to USD 135 million, with 80% to be financed through debt. The high debt ratio is a decisive and advantageous factor for existing investors, as it significantly limits dilution. In connection with the start of production, Lahontan plans to pursue a listing on the NYSE. A broader investor base and improved liquidity can support stronger valuation dynamics.
With the most recent capital increase of CAD 13.6 million at a placement price of CAD 0.41 per share, the Canadian company is fully funded through 2027 to cover all exploration activities and work leading up to the start of production.
The accelerated exercise of warrants from previous capital increases, announced at the end of April and set to run through the end of May 2026, will provide the company with additional funds, as the exercise prices of the warrants are CAD 0.24 and CAD 0.35. Shares are currently trading at CAD 0.375, giving Lahontan Gold a market capitalization of CAD 155 million.
The list of potential catalysts for higher share prices is long. The key milestones in the company’s transition from developer to producer are the updated resource estimate and the new economic feasibility study, both scheduled for release in June and September, respectively. The results could trigger a revaluation. With a current market capitalization of CAD 155 million, Lahontan Gold is undervalued given its potential and tangible catalysts; this will become increasingly apparent in the coming months. Forward-thinking investors are capitalizing on this.
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.
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