Thesis Gold Inc. (TAU:TSXV; THSGF:OTCQX; A3EP87:WKN) reported drill results from the 4,100 meter (4,100m) summer exploration program at its Lawyers property in British Columbia, reported Jonathan Guy, director of mining research, Hannam & Partners, in an Oct. 24 research note.
"These results suggest the potential for an expansion in scale of both the open pit and underground resource, currently standing at 4,700,000 ounces (4.7 Moz) on a gold equivalent basis, which should improve the production profile and make Thesis more attractive as a mergers and acquisitions target."
173% return noted
Hannam & Partners reiterated its CA$2.48 per share target price on the Canadian explorer, trading now at about CA$0.91 per share, noted Guy.
The difference between these figures implies a 173% return on investment.
"We expect the shares to be driven by ongoing exploration, especially from Ranch, with a prefeasibility study scheduled for completion in late 2025," wrote Guy.
Drill results favorable
The objectives of the recent campaign at Lawyers, targeting Cliff Creek and Dukes Ridge, were infilling, upgrading and expanding the resource in advance of the prefeasibility study.
Highlight intercepts from near-surface drilling, include:
- 22.62m of 1.16 grams per ton (1.16 g/t) gold and 47.08 g/t silver, from hole 24CCDD001
- 8m of 7.29 g/t gold and 327.75 g/t silver, from hole 24CCDD003
These results should enhance both the grade and scale of the open-pit component of the mining operation.
One standout intercept from deeper drilling was 4.89m of 3.82 g/t gold and 119.76 g/t silver, in hole 24CCDD005. Result of hole 24CCDD006 indicated the underground mineable resource could be expanded. Currently, the resource is 444,000 ounces of gold and 13.9 Moz of silver.
Work ongoing at Ranch
Thesis Gold has been conducting work at its Ranch property, too. This summer, it drilled 5,400m, testing targets identified over the past year. It also conducted geotechnical drilling and water monitoring. The company developed a test pit at Ranch to evaluate ground quality at the proposed waste storage site. It collected metallurgical samples to optimize the process flowsheet. Thesis continues its baseline environmental study of Ranch, now in the second year.
The current Ranch resource is 303,000 ounces (303 Koz) in the Measured & Indicated category and 378,000 (378 Koz) in the Inferred category, noted Guy. However, he believes the high-sulphidation epithermal system at Ranch hosts a deposit that is several times larger. Also, Thesis has staked new claims north of Ranch.
Project NAV of CA$1,307M
The preliminary economic assessment (PEA) of Lawyers Ranch, released in September, outlined an open-pit and underground operation producing 215 Koz per year on average, reported Guy. As for costs, for a 12,600 ton per day facility, initial capex is an CA$598 million (CA$598M), and sustaining capex is CA$547M. The average all-in sustaining cost is US$1,013 per ounce (US$1,013/oz), less than the most recent quarterly industry average, US$1,470 per ounce.
"We calculate a net asset value of CA$1,307M for Lawyers Ranch, using the PEA outputs, a US$1,470/oz gold price, a US$25/oz silver price and a 5% discount rate," Guy wrote.
Thesis Gold, in general, Guy purported, is a "highly attractive acquisition target," given its scalable resource, location in a low risk jurisdiction and good relations with area First Nations communities.
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