Pasofino Gold Ltd. (VEIN:TSX.V; EFRGF:OTCQB; N07:FSE) garnered additional research coverage, by Red Cloud Securities, when Ron Stewart, managing director and mining analyst, initiated on the mining company with a Buy rating and a CA$2.80 per share (CA$2.80/share) target price, he reported in a Nov. 12 research note.
"Today, Pasofino finds itself well-positioned with a rare breed, Tier 1 gold asset and a committed shareholder base that we expect will translate into a smooth ride to progress and profits for both the company itself and equity investors," Stewart wrote.
The mining analyst explained that the gold company's name and Spanish phrase "paso fino" translates in English to "fine step." The Paso Fino horse is breed with a smooth, elegant gait and endurance. Stewart went on to describe Pasofino the company's efforts between 2019 and 2022 to own 100% of Dugbe as a "series of fine steps."
438% Return Implied
At the time of Stewart's report, Pasofino's share price was about CA$0.52/share, a discount to a peer group of 10 gold developers and producers on an enterprise value:ounce basis, the analyst noted.
From CA$0.52/share, the return to Red Cloud's CA$2.80/share target price is 438%.
Pasofino's 52-week range is CA$0.38–0.64/share
To Fast Track Asset
Pasofino wholly owns the Dugbe gold project spanning 1,600 square kilometers in the western margin of the Birimian gold province in Liberia, West Africa. This jurisdiction boasts a well-established mining industry, supported by a stable, democratic government and a mining code based on Australian regulations.
"Despite the fact that the project ranks as one of the best gold development projects in Africa, it is virtually unknown," Stewart wrote.
The Toronto, Ontario-based gold explorer intends to accelerate advancement of its flagship project to a construction decision and receive its final Class A mining license, both by year-end 2026. Then, after two years of construction, the mine would be commissioned in early 2029 with commercial production occurring by midyear.
Robust Reserve
Dugbe encompasses two gold deposits, five drill-ready prospects and 10 additional target areas, noted Stewart. The project boasts a high-grade, open-pit reserve of 2,760,000 ounces (2.76 Moz) of 1.3 grams per ton (1.3 g/t) gold between the Tuzon and Dugbe F deposits. Both remain open at depth and along strike, offering expansion potential.
FS v. Red Cloud Model
The June 2022 feasibility study of Dugbe outlined a conventional open-pit mine and processing plant with annual throughput of 5,000,000 tons per annum and total production of 2,270,000 ounces (2.27 Moz) of gold over its 14-year life at an all-in sustaining cost (AISC) of US$1,005 per ounce (US$1,005/oz). Initial capex is US$435 million ($435M), and sustaining capital is US$98M. During the first five years, annual production is to exceed 200,000 ounces (200 Koz).
In comparison, Red Cloud models Dugbe producing 2.3 Moz over the mine's 14 years at an average AISC of US$1,426/oz. Over the first six years, production is expected to average 197 Koz at an AISC of US$1,300/oz.
As for the project economics, the feasibility study indicated a US$524M after-tax net present value (NPV), a 23.6% after-tax internal rate of return (IRR) and a payback period of 3.3 years. These figures are based on US$1,700/oz gold.
Based on US$3,000/oz gold, Red Cloud's model has the project generating a US$1.57 billion (US$1.57B) after-tax NPV5% and a 36.4% IRR with a 1.6-year payback period.
Using gold's current spot price of US$4,000/oz, the after-tax NPV5% jumps 65% to US$2.6B, the IRR increases to 37.7% from 31% and the payback period decreases to 1.1 years.
Immediate Plan of Action
For Pasofino to obtain a mining license, or mineral development agreement (MDA), for Dugbe, it must submit a feasibility study, an environmental and social impact assessment, an environmental and social management plan and a permit granted by the Liberian Environmental Protection Agency. In August 2025, the company prepared a comprehensive work program to accomplish all of this and do so by mid-2026.
Tasks include completing a definitive feasibility study. This will encompass 16,000 meters of infill and stepout drilling, results of which will be incorporated into an updated mineral resource estimate. The feasibility study will include a redesign of the reserve pits, additional metallurgical testing to improve gold recovery to as high as 90% from 83%, a review of the process flowsheet, power generation options, infrastructure needs, a new mining schedule and cost estimates.
Also on the to-do list are finalizing the environmental and social impact assessment (ESIA) and preparing and submitting a resettlement action plan (RAP).
Higher Cash Balance
As of July 31, 2025, the end of Pasofino's Q1 of fiscal year 2025 (Q1 FY25), the company had CA$2.06M in assets and CA$26.2M in liabilities. It had CA$1,600 in cash and a CA$24.6M working capital deficit. However, a $12M capital raise in October increased Pasofino's cash balance to CA$13M.
For Q1 FY25, the junior miner reported a net loss of CA$2M, or CA$0.02/share.
Experienced Leadership
Stewart named and provided bios for Pasofino's seven members of its management team and its board. The company's chief executive officer, since December 2024, Brett Richards has an extensive, 37-year history in the mining and metals industry, specifically in operational management, project development, construction and corporate business development. Plus he has significant experience in West Africa. In the past, he was CEO of Goldshore Resources Inc.
Chief Financial Officer (CFO) Lincoln Greenidge has worked in the mining and manufacturing industries for 20-plus years. Previously, he was CFO for LSC Lithium Corp. and LeadFX Inc. and has worked at Enirgi Group Corp., Hudbay Minerals Inc. (HBM:NYSE) and IAMGOLD Corp. (IAG:NYSE).
Upcoming Catalysts
Stewart listed Pasofino's many potential share price-boosting events expected next year. Investors should watch for results from the 16,000m drill program at Dugbe, and completion of an updated mineral resource estimate and definitive feasibility study, all expected in Q2/26. Pasofino intends to submit the ESIA and revised RAP for approval and start project financing, in H2/26. The gold company is aiming to have received a Class A mining license and to have made a final investment decision by YE26.
Ownership and Share Structure
Insiders own 2.74% of Pasofino. Hummingbird Plc, Dugbe's previous owner, has 50.9%. Institutional shareholders hold about 3.5%. Regent Mercantile Holdings owns 3.1%. Retail investors hold the remaining shares.
The gold explorer has 151 million basic shares outstanding. Its market cap is CA$78.5M, the third lowest in a group of 10 developer and producer peers, each of whose market cap ranges from CA$44M–$1.3B, noted Stewart. This is despite Pasofino having the largest reserve base and fourth highest average total grade, in the peer group.
"We are of the opinion that as Pasofino advances Dugbe, its value should begin to approach that of these peer issuers," wrote Stewart.
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