Gold Co. With Huge Potential in Liberia Updates Feasibility Gap Study

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

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Pasofino Gold Ltd. (VEIN:TSX.V; EFRGF:OTCQB; N07:FSE) announced the completion of its Phase One update to the 2022 feasibility study of the Dugbe Gold Project in Sinoe County, Liberia.

The company engaged MineScope Services Pty Ltd. of Australia to conduct a gap analysis of the Dugbe July 2022 feasibility study and to outline the roadmap for various work streams needed to fully update and optimize the study.

"The gap analysis indicates that the Dugbe 2022 feasibility (study) has no fatal flaws," the company said in a release. "However, several areas of 2022 study require additional work to validate the resource model, mine plan, infrastructure to support a large-scale mining operation, and other associated activities related to environment, social and governance initiatives."

The gap analysis also clearly identified various work streams that are required to update the 2022 study "to a current level regarding capital costs, production profile over its life of mine, metallurgical processing methods, and recovery of gold, operating costs, power requirements, associated other infrastructure needed to support the operation, and deliver economic models reflecting an updated gold price environment from 2022, suitable for project financing of the Dugbe project."

The release said the work streams are expected to take a further 12 months to complete, with the company conducting as many work activities in parallel to compress the timetable where possible.

"I am pleased to announce the result of the MineScope gap analysis, so as we can present a clear and defined path to the market of completing the update to the feasibility study, and show visibility towards project financing, final investment decision, and eventually project construction," Chief Executive Officer Brett Richards said. "I continue to maintain that Dugbe is one of the strongest late-stage gold projects in Africa today; and Pasofino is one of the most under-valued gold developers in the capital markets today as well."

Gap Study Findings

Here are some highlights:

• Geology: MineScope proposes a 16,000-meter drill program, including infill, step-out, and definition drilling, to enhance confidence in the resource model.
• Mining: Updates to mining pit shells, design, sequencing, scheduling, and costs are planned.
• Process and Metallurgy: A comprehensive metallurgical test work program will address variability in low-sample areas, with samples stored in Perth, Australia.
• Processing Trade-Off Study: A study will assess the economic viability of flotation versus Carbon in Leach (CIL) processes, using recovery data from the 2022 study.
• Power Generation Trade-Off Study: Various power generation methods, including diesel, heavy fuel oil, solar, biofuel, and hydro, will be evaluated.
• Infrastructure Reviews: Areas such as tailing storage, road and bridge work, and water management will be reviewed to reduce costs and impact.
• Comprehensive Geochemistry Data Review: A detailed review of waste rock types will be conducted to understand water management aspects.
• Logistics Review: A comprehensive logistics review will focus on supply chain management and necessary road and air logistics.
• Environmental, Social Impact Assessment (ESIA) Review: Final reviews of the ESIA and Resettlement Action Plan will be submitted to Liberia's EPA.
• Project Schedule and Costs: The feasibility study update is expected to take 12 months and cost approximately US$6-8 million.
• Additional Costs Under the Mineral Development Agreement (MDA): Obligatory costs include US$0.3 million for ESIA and RAP submission and a US$1.5 million application fee for a Class A Mining license.
• Ongoing Negotiations with the Government of Liberia: The government of Liberia denied certain customs exemptions from 2019 to 2021, increasing the overdue amount of payments owed by the company to US$3.5 million. Pasofino is negotiating a flexible payment plan to avoid a potential default under the MDA, which could lead to its cancellation.

Potential Returns Even More Promising

The previously reported feasibility study for Dugbe outlined a 14-year mine life, with an average annual gold production of 172,000 ounces, reaching up to 200,000 ounces in the initial 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, the company has said.

Dugbe covers 2,078 square kilometers within the Birimian Supergroup, a well-known host of West African gold deposits.

The CEO has 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 has 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."

Analyst: Stock Looks Like 'A Good Value'

*In an April 8 report, Technical Analyst Clive Maund highlighted that the company was significantly undervalued, citing 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 rise, supported by strong gains in gold prices. 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. He 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.

He updated his 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: Fed Rate Cut Likely

While speculation about inflation and the broader interest rate environment remains high, there's also increased interest in the precious metals market, as reported by Matt Johnson on August 26 for CBS News MoneyWatch. For those who have invested in gold or are considering it, the price of this precious metal is a key factor. Gold prices have surpassed numerous records since the start of 2024 and are now about 64% higher than they were at that time. However, at US$3,374.77 per ounce, the price was down from a recent peak. The question remains: could prices continue to fall, or should investors act now before being priced out of the market?

The likelihood of a rate cut by the Federal Reserve in September appears increasingly probable, the site noted. According to the CME Group's FedWatch tool, there's currently more than an 87% chance the central bank will cut rates at its next meeting on August 17. If this happens, gold prices might rise instead. This was observed last year when the Fed cut rates three times in the final months of 2024, yet gold prices continued to climb. Lower interest rates typically boost demand for gold, driving prices upward. However, "typically" doesn't guarantee outcomes. Historical norms regarding gold prices may differ now compared to when gold was priced under $2,000 per ounce.

In this context, investors seeking a hedge against inflation or additional diversification should explore ways to invest in gold below cost. This could involve strategies like dollar-cost averaging (buying gold at consistent intervals regardless of price), fractional gold investments, and more, Johnson wrote. There will be opportunities to invest, even if prices don't decline this September, though it may require more effort than if prices fell naturally.

However, Garrett Goggin, the lead analyst for the Golden Portfolio, highlighted on June 16 that despite ongoing positive developments in the gold market, gold stocks remain significantly undervalued.

For the first time in 50 years, gold prices have surged dramatically, yet gold stocks have not followed suit. He referenced a recent report indicating that international traders are increasingly choosing to receive payments in their own currencies rather than in U.S. dollars. Additionally, foreign investors have been decreasing their U.S. dollar holdings.

Goggin stated, "That kind of bond destruction is part of the reason why I believe this gold trend is not just an ordinary, short-term uptrend. It's a long-term, widespread sea change in the currency markets."

Ownership and Share Structure

According to Refinitiv, nine 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$59.85 million. Its 52-week trading range is CA$0.38–CA$0.80 per share.