Pasofino Finds Excellent Gold Opportunity in Liberia

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* Disclosure for the quote from the Clive Maund article published on April 8, 2025

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The quoted article represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be  only be construed as a recommendation or solicitation to buy and sell securities.

The results of a gap analysis to account for higher gold prices in its feasibility study for the Dugbe Gold Project in Southern Liberia are expected in as little as two weeks, Pasofino Gold Ltd. (VEIN:TSX.V; EFRGF:OTCQB; N07:FSE) Chief Executive Officer Brett Richards told Ron Stewart of Red Cloud Securities during a recent webinar.

Pasofino initiated the update to enhance optimization efforts following the July 2022 feasibility study. This updated study will maintain the current throughput rate of 5 million tonnes per year, focusing on refining economic and technical aspects to align with current market conditions.

"Everything is breaking out" in terms of gold prices, Richards noted. "There is a lot of growth potential for the gold price. But junior gold is still at CA$12-15-18-20 per ounce in inventory. And we are no different. We are trading at CA$15 per ounce in the ground. And yet we have a project that has gone through significant development phases in the last six years."

Pasofino is currently developing Dugbe, considered one of the country's leading strategic gold assets. Richards joined the company in late 2024 to relaunch development following a period of inactivity tied to financial distress at former partner Hummingbird Resources. The company also expects to do drilling to validate the resource, metallurgical test work, and an updated NI 43-101 technical report.

'No Surprises' in Gap Analysis So Far

Dugbe's previously reported feasibility study included a 14-year mine life, with average annual gold production of 172,000 ounces, peaking at 200,000 ounces in the first five years, and a life-of-mine head grade of 1.30 grams per tonne. The 2022 feasibility study estimated capital expenditures at US$435 million and projected a post-tax net present value (NPV) of US$530 million at a gold price of US$1,700 per ounce, with a post-tax internal rate of return (IRR) of 23.6% and a 3.3-year payback period. With spot gold now trading closer to AU$3,360 per ounce, the project's potential economic returns appear even more promising based on sensitivity analyses included in the study.

"There is significant potential for a re-rating, just based on the quality of resources and, of course, the stage of development," Richards said.

Dugbe spans 2,078 square kilometers within the Birimian Supergroup, a well-known host of West African gold deposits. It comprises two defined deposits, Dugbe F and Tuzon, which together contain a Measured and Indicated mineral resource of 3.3 million ounces at an average grade of 1.37 g/t gold, and 0.6 million ounces in the Inferred category. The current Mineral Reserve Estimate includes 66 million tonnes at 1.30 g/t, totaling 2.76 million ounces. Pasofino holds a 100% interest in the Dugbe Project, subject to a 10% free carried interest held by the Government of Liberia. The project operates under a 25-year Mineral Development Agreement signed in 2019, which provides a 3% royalty rate on gold production, a 25% income tax rate, and reduced fuel duties.

Richards told Stewart that so far, there have been "no surprises" in the gap analysis.

"We will probably have about 8 to 10 months of work ahead of us before we can complete the feasibility study update," Richards said. "Once we get there, we will meanwhile create an updated resource model and ultimately an updated version (NI) 43-101 . . .  We need to submit all permits by the end of this year, but definitely by the first quarter of next year, so that everything is in good shape for our final investment decision once we have secured project financing."

Richards said he would like construction activities to start in September of this year, given the timing of the rainy season at the site, "but they will probably start sometime in September next year once Pasofino's major shareholder is comfortable with an investment decision to finance (pro-rata) and build Dugbe."

'We Are Ready to Build a Mine'

Richards said finding success with the project is "all about execution."

"There is no discovery risk. In my opinion, there is no geopolitical risk. There is no logistical risk. There is no potential risk that something is wrong with the casing or the metallurgy," Richards noted. "All these things have been tested, and we will actually improve them. So, it's a very, very compelling story when we talk about the earnings potential and the potential for an increase in the stock price in the next 12, 18, 24, 36 months."

He continued, "We have coordinated all this work we are doing with the Ministry of the Interior and the EPA, so there are no surprises. You know what we are working with. And then we move on to construction and commissioning. And we are talking about a construction time of 28 to 30 months and a commissioning time of 6 to 8 months. So, we could be at the forefront in terms of the latest developers, probably one of the newest in our field. That's the story, you know, and I am really grateful."

Richards noted that he was "hired to build a mine," and he's "not here to keep kicking the ball down the field and waiting for happier days."

"We are ready to build a mine," he said. "As soon as we have completed and updated a feasibility study, we will be able to procure our project financing and start the project."

Stock Undervalued, Analyst Agrees

*In an April 8 report, Technical Analyst Clive Maund agreed that the company was significantly undervalued, pointing to both technical and fundamental factors. Despite a period of share price weakness due to limited takeover activity, Maund noted that the intrinsic value of the company's flagship Dugbe Gold Project continued to increase, bolstered by strong gains in the gold price.

The stock's recent recovery — following a cooperation agreement with Hummingbird Resources and Nioko Resources — was seen as a technical breakout from a multi-month downtrend. Maund described Dugbe as a large-scale, economically attractive gold project in Liberia, which he characterized as politically stable and supportive of mining development.

Maund also emphasized the project's robust infrastructure, long projected mine life, and untapped exploration potential. According to the report, only a small portion of more than 15 known targets across the project area has been drill tested, leaving significant room for resource expansion.

Maund provided an updated analysis on June 27, writing, "Pasofino Gold is looking (like a) very good value here. Following a decline from its September highs, a base pattern has formed this year that may be described as a hybrid between a Double Bottom and a Head-and-Shoulders bottom. Long-term charts reveal that this Double Bottom sits within a much larger low base pattern that started to form back in 2022."

He continued, "With upside volume building up this year, especially since April and its Accumulation line trending higher since early 2022 and even making new all-time highs in recent weeks, Pasofino Gold appears to be building up to begin a major new bull market and it is accordingly rated a strong buy here, especially as it has just dipped to a good entry point not far above its rising 50-day moving average."

The Catalyst: Powell Setting Stage For Cut?

Gold prices have surged significantly as Federal Reserve Chair Jerome Powell seems to be setting the stage for a possible interest rate cut next month, Neils Christensen wrote for Kitco News on Friday. In his highly anticipated speech at this year's Federal Reserve central bank symposium, Powell maintained a cautious, neutral stance. He acknowledged the rising risks of inflation and the slowing pace of economic growth. However, he also suggested that despite balanced risks, a change in U.S. monetary policy might be necessary.

"In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside — a challenging situation," he said. "When our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate. Our policy rate is now 100 basis points closer to neutral than it was a year ago, and the stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance."

He continued, "Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance."

Following Powell's remarks, the gold market rallied to session highs. Spot gold last traded at US$3,353.60 an ounce, marking a 0.5% increase on the day. Powell noted that while the U.S. economy has shown resilience, emerging risks are becoming apparent. He explained that the economy is encountering new challenges as significantly higher import tariffs are altering the global trading landscape. He also highlighted that stricter immigration policies have led to a slowdown in labor force growth.

Economists observe that Powell has been closely monitoring the labor market, as its stability has been a key factor in the central bank's reluctance to lower interest rates.

Alongside the sharp rise in gold prices, analysts noted that markets have once again fully priced in a rate cut at next month's monetary policy meeting, Christensen reported. Additionally, the CME FedWatch Tool indicates that markets are anticipating at least one more rate cut before the year ends.

Many still below that gold's bull market will rise even higher. Florian Grummes shared with Jeremy Szafron of Kitco News on July 29 that a significant breakout is on the horizon, and those who remain patient will see rewards.

"We're in a crack-up boom overall," stated Grummes, managing director of Midas Touch Consulting, during the interview with Kitco News. "That means everything will move higher because they destroy the purchasing power of your fiat money — whether it's the euro, the dollar, or the Canadian dollar."

Ownership and Share Structure

According to Refinitiv, eight strategic entities own 66.45%, or the lion's share, of Pasofino. Of these investors, the Top 3 are Hummingbird with 46.78%, ESAN with 8.84%, and Mansa Resources with 4.07%.

The rest is in retail.

Pasofino has 127.03 million outstanding shares and 42.62 million free float traded shares. Its market cap is CA$56.68 million. Its 52-week trading range is CA$0.38–CA$0.80 per share.