Explorer Advances Billion-Dollar Gold Project in BC

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Thesis Gold Inc. (TAU:TSXV; THSGF:OTCQX; A3EP87:WKN) announced it has engaged two technical services companies to complete a Pre-Feasibility Study (PFS) in accordance with Nationa Instrument 43-101 for its Lawyers-Ranch Project in the Toodoggone Mining District of northern British Columbia.

The PFS will be completed by Ausenco Engineering Canada ULC and Mining Plus Canada Consulting Ltd. and will build on the "strong project economics outlines in the Preliminary Economic Assessment (PEA) filed in September 2024," Thesis said in a release.

That PEA "demonstrated an after-tax NPV (5%) of CA$1.28 billion, an IRR of 35.2%, and a payback period of just two years," the company said.

"We are excited to collaborate with Ausenco and Mining Plus, two highly respected firms recognized for their excellence in engineering and mining studies," said Dr. Ewan Webster, president and chief executive officer of Thesis Gold. "This milestone represents an important step forward as we continue to unlock the value of the project and advance

towards our goal of building a sustainable and profitable mining operation."

According to the release, the PFS is scheduled to be completed in Q4 of this be completed in Q4 of this year.

While initiating coverage of the company in a research report last month, Haywood Capital Markets analyst Jamie Spratt emphasized the economics highlighted in the PEA when giving the stock a Buy rating with a CA$3 per share target price.

The analyst emphasized the project's scale and quality, noting, "Resources have expanded quickly from the maiden resource of 132 koz in 2018 and now place the LR project as one of the largest gold-silver projects in Canada."

"The LR project would rank in the top 15 of operating Canadian gold mines and the bottom quartile of the cost curve," Spratt added.

Discovery Highlights Untapped Potential

In December, Thesis announced a new discovery at the Ring Zone in Lawyers-Ranch after drills intersected high-grade mineralization near the surface, "supporting the potential for new, high-grade deposits to compliment those already outlined in the PEA" for the project.

"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. 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."  

The results released from Ring included 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.  

Follow-Up Exploration Planning Underway

According to Thesis, the Ring 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.

Planning was underway to follow-up on the Ring Zone discovery and explore more targets at Ranch with additional drilling.

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: Gold Hits 4-Week High

After a weaker-than-expected private employment report for December convinced some that the U.S. Federal Reserve may be less cautious raising rates this year, gold hit a near four-week high on Wednesday, Reuters reported.

Spot gold rose 0.3% to US$2,657.38 per ounce Wednesday afternoon, its highest since Dec. 13. U.S. gold futures settled 0.3% higher at US$2,672.40.

Weaker private payrolls are "contributing to gold's move, because ultimately, weaker employment numbers imply that the economy has been weaker than many had expected," said Bart Melek, head of commodity strategies at TD Securities, according to Reuters' Anjana Anil.

"The bigger factor will be U.S. nonfarm payrolls on Friday, the market is expecting a change of 163 (thousand); anything significantly above that will be negative for gold," Melek told Anil.

The price of gold is set to rise further in 2025, say Wall Street analysts. Gold is expected to climb to about US$2,795 per troy ounce by the end of the year, according to the average forecast by banks and refiners surveyed by the Financial Times.

"That is about 7% above current levels," the Times' Leslie Hook wrote. "The yellow metal is expected to continue to benefit from buying by global central banks, which have been diversifying away from the dollar since the U.S. imposed sanctions on Russia following its 2022 full-scale invasion of Ukraine."

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. At the time of writing, its market cap was CA$113.81 million, and it trades in a 52-week range of CA$1.00 and CA$0.37.