Heap Leaching as a Profit Driver: Is Lahontan Gold the Missing Piece of the Puzzle for Equinox and Kinross Gold?

Equinox and Orla Mining Set Standards in Heap Leaching

The mid-sized producer Orla Mining has demonstrated in the past how profits can be maximized through the targeted use of the heap leaching process. With its flagship Camino Rojo project in Mexico, the company—which has since merged with Equinox Gold—established itself as one of the most cost-effective gold producers on the North American continent. Acquisitions such as the Musselwhite Mine, as well as the merger with Equinox, boosted annual production to more than 1.1 million ounces of gold. The South Railroad project on the Carlin Trend in the US state of Nevada also promises to provide a boost. A feasibility study estimates the initial investment required for this project at USD 395 million. Over its 10-year operating life, the company plans to process 66.6 million metric tons of ore with an average grade of 0.71 g/t gold. Orla Mining is targeting annual production of 130,000 ounces of gold in the first 5 years of operation. With all-in sustaining costs (AISC) of USD 1,505 per ounce over the mine's entire life, the project underscores the strength of the company's overall position—which has been operating under the name Equinox Gold since the end of July.

Kinross Gold: Economies of Scale on a Grand Scale

Kinross Gold is also known for its successful use of heap leaching in large-scale projects. This year, Kinross is targeting total production of approximately 2.0 million ounces of gold equivalent. Thanks in part to total liquidity of USD 3.9 billion, management is pushing forward with activities in Washington, Nevada, and Alaska. At its flagship Round Mountain mine, the company is extending the mine's life well into the 2030s. Together with other expansion projects, Kinross is thus generating an additional output of 3.0 million ounces of gold equivalent. At a gold price of USD 4,300 per ounce, the combined net present value (NPV) of these expansion projects totals USD 4.1 billion. Kinross's all-in sustaining costs (AISC) are expected to be USD 1,730 per ounce.

Lahontan Gold Brings a Historic Gold Area in Nevada Back to Life

In the shadow of the gold giants, up-and-coming developer Lahontan Gold is positioning itself. The company controls properties in the renowned Walker Lane Trend in the US state of Nevada. The focus is on the flagship Santa Fe project, from which operators previously produced approximately 359,000 ounces of gold and 700,000 ounces of silver between 1988 and 1995. A comprehensive preliminary economic assessment (PEA) by experts from Kappes, Cassiday & Associates and RESPEC confirms that the property holds attractive potential for open-pit mining. The plan calls for the construction of a leaching plant with a processing capacity of 12,500 metric tons per day, or 4.6 million metric tons of ore per year.

For the construction of the infrastructure, the consultants estimate an initial investment of USD 135.1 million, including a 20% buffer. Over the planned 9-year operating period, the company aims to produce a total of 27.7 million metric tons of ore with average grades of 0.63 g/t gold and 3.3 g/t silver. The waste-to-ore ratio is extremely favorable at 1.54 to 1. Over the entire project life, planners forecast production of 336,700 ounces of gold and 714,700 ounces of silver. Operating costs are a modest USD 14.28 per metric ton of ore processed, with processing itself expected to cost only USD 5.00. Regarding the recovery rate, the PEA assumes a gold recovery rate of 71% for oxide ore. The project's key financial metrics demonstrate significant leverage in the event of rising precious metal prices. While the base case scenario, assuming a gold price of USD 2,025 per ounce, yields a net present value after taxes of USD 56.5 million, this figure jumps to USD 200.0 million at a price of USD 2,705 per ounce. In this case, the internal rate of return climbs from 14.0% to a robust 34.2%.

Lahontan Gold as a Potential Takeover Target

In addition to the key data from the PEA to date, Lahontan Gold's portfolio holds further potential. Thanks to recent drill results from the West Santa Fe zone, management plans to update its resource estimate. The production plan is also set to be adjusted. CEO Kimberly Ann's team aims to achieve higher annual production through optimization. The timeline for the overall project has also been set. Once environmental and construction permits are finalized with the Bureau of Land Management, the decision to build the facility is expected as early as 2027. The goal is to commence commercial operations in 2028. Since permit-eligible oxide deposits are scarce in the US state of Nevada, Lahontan Gold is likely to increasingly attract the attention of larger companies. The combination of manageable investment requirements and an excellent location makes the company an attractive prospect. Investors should take a closer look at the stock.