Lahontan Gold: Stock in the Sweet Spot

It is the Infrastructure That Matters

Whether a mine ever goes into production depends on the financing of its construction. Infrastructure is the decisive lever here, pulling in one direction or the other. Or as a real estate agent would say: Location, location, location! Deposits in an established mining region with road access, railways, power, and water are a clear advantage here. The state of Nevada in the southwestern US is one of these global mining epicentres. Gold has been mined here for decades, and accordingly, the world's largest gold producers, such as Barrick and Newmont, operate major gold mines here.

Excellent Environmental Conditions

Lahontan Gold has also established itself in this area. The Canadian company is developing the historic Santa Fe Mine. The infrastructure is top-notch, and previous work facilitates exploration and development. Between August 1988 and 1995, Corona Gold Inc. already mined the precious metal here. A total of 359,202 ounces of gold and 702,067 ounces of silver were produced in open-pit mining. Lahontan has already made significant progress on the project. CEO Kimberly Ann expects to receive the final operating permit as early as the first quarter of 2027. The actual construction period by the contractors will subsequently take only around six months. If everything goes according to plan, the mine will be operational next year, allowing the first gold to be poured as early as the fourth quarter of 2027.

Free Gold in Old Pads

Until then, however, the Lahontan team still has a lot of work to do. This year, they are pursuing a two-pronged exploration strategy. The drilling program on the historic heap leach pads is already underway, but it is not targeting hard rock. Analysis of these pads revealed that an estimated 200,000+ ounces of gold with an average grade of approximately 0.34 g/t lie untapped on surface. Previous operators left this untapped. To incorporate these ounces into the official mine plan, the drilling program is starting with the Sonic Rig, which does not damage the lining of the pads. A total of 96 short holes will be drilled. Since the rock on the surface is already crushed, there should be no technical issues here. The CEO refers to these ounces as "free gold" because they can be extracted extremely cost-effectively (see video interview below).

Two Drilling Rigs at Santa Fe

In addition to this work, a classic RC and core drilling program is being conducted to expand the resource. To date, the resource comprises approximately 1.9 million ounces of gold equivalent, although this refers only to the main Santa Fe project. In addition, Lahontan Gold is targeting several satellite deposits, such as West Santa Fe. This deposit is located about 13 km directly across from the main Santa Fe project. The ore is easily transportable by truck on the road, so there is no need to build an expensive on-site processing plant. Baseline studies for this are already underway and will take about two years. Past metallurgical tests show recovery rates of 70% for gold and 50–55% for silver. However, the company's own new studies yielded significantly better results of 81% for gold and 60% for silver. Furthermore, West Santa Fe has a higher grade than the main deposit. Recent drill results showed intervals of 3.11 g/t gold over 41 m, as well as 6 g/t gold intervals and significant silver deposits.

Lyndsay Malchuk of the IIF sits down with Lahontan founder and CEO Kimberly Ann.

https://www.youtube.com/watch?v=QGRV7IfTWec

Lahontan Gold: The Next Steps

While drilling is underway, the next steps are already on the horizon. The updated resource is expected to be released in the coming weeks. It will not yet include the gold data from the old heap leach pads. In addition, the Preliminary Economic Assessment (PEA) is being updated. The report is expected to be released in early fall. The current estimate assumes annual production of 70,000 to 80,000 ounces of gold over eight years. Cash costs are expected to be below USD 1,300 per ounce. However, this PEA was based on a gold price of just USD 1,950. Currently, an ounce of gold costs more than USD 4,000. Accordingly, the performance metrics in the new PEA should become even more attractive.

Significant Upside Potential

In terms of valuation, Lahontan Gold shares still have significant upside potential. The market capitalization is approximately CAD 160 million. Assuming a conservative production rate of 70,000 ounces per year, revenue at current gold prices would exceed USD 300 million. That is roughly CAD 414 million. In this regard, now is a good time to enter the position with a two- to three-year horizon. Since the stock has been trading sideways recently, it is worth entering the position gradually with multiple orders.

Lahontan Gold is currently in a sweet spot. The market has not yet priced in the opportunity for production to begin in late 2027. Every upcoming milestone (new resource estimate, PEA, permits) should gradually drive the stock higher. According to CEO Ann, the initial mine construction costs of approximately USD 135 million could be recouped within 12 to 18 months at current market prices. It is typical for this phase that industry analysts have not yet taken notice of the stock. Should there be movement from this side as well, it is likely to attract a new, larger group of investors!