Gold Explorer Announces Near-Surface Discovery in BC

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Thesis Gold Inc. (TAU:TSXV; THSGF:OTCQX; A3EP87:WKN) has announced a new discovery at the Ring Zone in its 100%-owned Lawyers-Ranch Project in the Toodoggone Mining District of northern British Columbia.

The company said drills have intersected high-grade mineralization near surface, "supporting the potential for new, high-grade deposits to compliment those already outlined in the Preliminary Economic Assessment (PEA)" for the project.

"The discovery at the Ring Zone highlights the untapped exploration potential remaining at Ranch," President and Chief Executive Officer Ewan Webster said. "With robust PEA results from our 4.7 Moz (million ounce) deposit, these latest results confirm significant exploration upside within the main resource area, which also remains open for expansion. This discovery underscores our technical team's ability to leverage data to target near-surface, high-grade zones and opens the door to future discoveries across this expansive land package."  

Released in September, the updated PEA highlighted strong economics for the project with an after-tax NPV 5% of CA$1.28 billion, an IRR of 35.2%, and a two-year payback period.

Discovery Details

The results released Wednesday from Ring include Hole 24RNGDD001, which intersected 1.21 grams per tonne gold (g/t Au) over 13.13 meters, including 0.45 meters of 5.92 g/t Au beginning at 28.47 meters. The hole also intersected 3 meters of 2.22 g/t Au beginning at 36 meters downhole.

In addition, Thesis said Hole 24RNGDD002 intersected 1 meter of 11.32 g/t Au beginning at 55.20 meters downhole and Hole 24RNGDD003 intersected 1.85 meters of 3.49 g/t Au beginning at 27.15 meters downhole.

Even before the Ring discovery, Analyst Jonathan Guy, director of mining research for Hannam & Partners, wrote in an October research note that results reported by the company "suggest the potential for an expansion in scale of both the open pit and underground resource."

Guy reiterated the firm's CA$2.48 per share target price on the stock, which was trading at CA$0.65 on Tuesday.  

Exploration Potential Across a Wide Area

According to Thesis, the results show a "long-lived hydrothermal system" with multiple stages of fluid flow, highlighting the potential for both near-surface, high-grade mineralization and larger-scale mineralized systems at depth.

Even before the Ring discovery, Analyst Jonathan Guy of Hannam & Partners, wrote that results reported by the company "suggest the potential for an expansion in scale of both the open pit and underground resource."

"All three drill holes at the Ring Zone intersected volcanic rocks with various styles of alteration and mineralization," the company said in the release. "

Drill holes 24RNGDD001 and 24RNGDD002 encountered broad fault damage zones, revealing major structures through the Ring Zone. Mineralization in these holes appears within faulted zones, suggesting rocks were initially altered and mineralized before being subsequently faulted. In contrast, drill hole 24RNGDD003 intersected mineralization more closely associated with silica-supported hydrothermal breccias."

The Ring Zone and another exploration zone, Golden Furlong, also show exploration potential in that they are within a 40-square-kilometer area that contains more than 20 targets, many of which have never been drilled, the company said.

Follow-Up Planning Underway

Thesis said planning already is underway to follow-up on the Ring Zone discovery and explore more targets at Ranch with additional drilling.

The company is "working closely with its First Nation partners, (and) is on track to enter the environmental impact assessment (EIA) process in 2025."

In addition, Thesis said all work has been completed for it to start a preliminary feasibility study (PFS) early next year, as well.

Analyst Phil Ker of Ventum Capital Markets, in an updated research note on October 23, called earlier results from this year's 4,100 meters of drilling "positive."

"High-grade intervals near surface support potential for enhanced economics from shallower horizons expected to be captured within open-pit mining, while deeper high-grade intervals align with anticipated underground mining stopes," wrote Ker, who rated the stock a Buy with a target price of CA$1.55.

The Catalyst: Short-Term Dips Won't Stop Gold Bulls

After hitting a fresh record high at the end of October, gold slipped more than 2% on Monday, "weighed down by the greenback's continued rise and broader implications of Donald Trump's victory in the U.S. presidential election on fiscal policy and interest rate cuts," Reuters reported.

With the dollar index rising 0.5% to its highest level since early July, gold became less attractive to non-dollar buyers. Last week, the index surged more than 1.5% to 105.44 following the announcement of Trump's victory, Reuters said.

"The market's attention has focused to the second-order effect since the red wave," said Daniel Ghali, commodity strategist at TD Securities, according to Reuters.

However, most experts agree the gold bull market is not disappearing soon. Ian Salisbury wrote for Barron's that "most of the arguments gold bulls make — and have been making throughout 2024 — look stronger after Trump's win."

"We are still relatively constructive on gold," said Taylor Krystkowiak, investment strategist at Themes ETFs, according to Salisbury's report. "Why does gold go up? It's geopolitical uncertainty, it's deficit spending, and it's inflation. Right now, all those stars are aligned."

Ownership and Share Structure

According to Thesis, about 66% of the company is owned by institutions, and about 4% is owned by insiders. The remaining 30% is retail.

Top shareholders include Franklin Advisers Inc. with 7.82%, Merk Investments LLC with 7.58%, Delbrook Capital Advisors Inc. with 5.5%, Sprott Asset Management LP with 4.63% and Van Eck Associates Corp. with 2.45%. Director Nicholas Stajduhar owns 1.09%.

The company said it has 196 million shares outstanding, 198.9 million fully diluted. Its market cap is CA$137.3 million, and it trades in a 52-week range of CA$1.00 and CA$0.37.