Gold Co. With New Discovery Upsizes Private Placement

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Thesis Gold Inc. (TAU:TSXV; THSGF:OTCQX; A3EP87:WKN) announced that due to strong investor demand, it has increased its best-efforts marketed equity private placement of CA$7 million to up to CA$10 million.

"This financing ensures that we are well-positioned to continue advancing our 2025 strategic objectives, including the completion of our Pre-Feasibility Study (PFS), the initiation of the Environmental Impact Assessment (EIA), and preparations for a highly anticipated summer exploration program," said President and Chief Executive Officer Dr. Ewan Webster. "With these critical milestones on the horizon, we remain focused on delivering value to our shareholders."

The offering through Clarus Securities Inc. and Cormark Securities Inc. consists of up to 16,666,667 common shares at a price of CA$0.60 per common share for gross proceeds of up to approximately CA$10 million.

It will be conducted on a "best efforts" basis by way of a private placement to "accredited investors," the company noted in a release.

The placement, which the company plans to use for advancing its mineral projects and general working capital, is scheduled to close on or before December 17. It is subject to approval by the TSX Venture Exchange.

New Discovery at Ring Zone

Just last month, Thesis 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 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.

Analyst Jonathan Guy of Hannam & Partners valued the company at CA$2.48 per share in a November 20 research note.

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.

"The discovery at the Ring Zone highlights the untapped exploration potential remaining at Ranch," Webster said at the time. "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."

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.

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.

'A Highly Attractive Acquisition Target'

Analyst Jonathan Guy of Hannam & Partners valued the company at CA$2.48 per share in a November 20 research note, a 249% bump from its CA$0.69 per share price at the time the note was written.

"We value TAU at 0.4x our NAV for Lawyers-Ranch, based on an open pit at Ranch and an open pit and underground mine at Lawyers," Guy wrote. "This generates a target value of CA$2.48/share. The shares are currently trading at 0.10x NAV compared to the industry consensus average of 0.95x; on an EV/Resource basis, TAU trades on US$23/oz vs. an industry average of US$235/oz."

Analyst Phil Ker of Ventum Capital Markets wrote that the company's "success at the Ring Zone demonstrates that the company's exploration strategy using structural analysis, geochemistry, and geophysics is working to identify high-priority targets."

"In our view," Guy continued, "this makes TAU a highly attractive acquisition target with a scalable resource, in a low-risk jurisdiction, and with good relations with First Nation communities in the project area, which should facilitate the permitting process."

Guy also noted that Thesis has staked new claims to the north of Ranch and has completed reconnaissance mapping that could also ultimately augment the project.

Analyst Phil Ker of Ventum Capital Markets wrote in a November 13 research note that the company's "success at the Ring Zone demonstrates that the company's exploration strategy using structural analysis, geochemistry, and geophysics is working to identify high-priority targets."

"The company remains on track to initiate the Environmental Impact Assessment process in 2025 with plans to also commence a PFS," wrote Ker, who rated the stock a Buy with a CA$1.80 per share target price. "Meanwhile, follow-up exploration drilling is expected to continue on high-priority targets through 2025, including the Ring and Golden Furlong zones."

The Catalyst: Gold Bulls Still Here

Gold prices slipped Monday after a four-day winning streak "as the U.S. dollar staged a sharp rally and investors braced for pivotal economic data and Federal Reserve insights on the path of interest rates," Sherin Elizabeth Varghese reported for Reuters.

Spot gold was down 0.6% at US$2,636.54 per ounce Monday afternoon after falling as much as 1% earlier in the day. U.S. gold futures settled 0.8% lower at US$2,658.50.

Gold prices are being pressured by a firmer dollar driven partly by U.S. President-elect Donald Trump's comments that BRICS nations should refrain from trying to replace the dollar, said Peter Grant, vice president and senior metals strategist at Zaner Metals.

"This stoked fears that U.S. interest rates will remain high for a longer period," Varghese wrote. "Such concerns had already triggered a 3% drop in non-yielding gold during November, the sharpest monthly decline since September 2023."

However, Grant noted that with geopolitical uncertainty, downside is limited, and he expects a "choppy, consolidative gold market into year-end," Vargehese reported.

Most experts agree gold's bull market won't go anywhere 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.

About 4% is owned by insiders.

The remaining 30% is retail.

Top shareholders include Van Eck Associates Corp. with 7.18%, Franklin Advisers Inc. with 7.06%, Merk Investments LLC with 6.73%, Sprott Asset Management LP with 3.33%, and Konwave AG with 2.18%. Director Nicholas Stajduhar owns 0.97%.

The company said it has 196 million shares outstanding, 198.9 million fully diluted. Its market cap is CA$121.62 million, and it trades in a 52-week range of CA$1.00 and CA$0.37.