PEA Due Out Next Month Should Improve Project Economics

Source: Hannam & Partners 08/23/2024

This is one of four key points Hannam & Partners makes about the gold-silver project based on its site visit, the investment bank noted in a report.

Thesis Gold Inc. (TAU:TSXV; THSGF:OTCQX; A3EP87:WKN) hosted Hannam & Partners at its Lawyers-Ranch gold-silver project in British Columbia on Aug. 13, and the analysts shared their takeaways in an Aug. 18 research note.

“We expect the shares to rerate as Thesis Gold continues to expand the size of Lawyers-Ranch through exploration whilst also advancing through to development,” the analysts wrote.

165% Return Potential

The investment bank has a CA$2.04 per share target valuation on Thesis, noted the analysts, which they would raise to CA$3.20 were a likely combined development to become the base case.

In comparison, the Canadian gold and silver explorer is trading now at about CA$0.77 per share, from which the return to the current target is 165%.

Project at a Glance

Hannam & Partners analysts described Thesis’ Lawyers-Ranch project. It is two projects in one, together spanning 352 square kilometers (352 sq km) and linked by a refurbished, permitted road. The current joint resource is 4 million ounces (Moz) of 1.51 grams per ton gold equivalent (1.51 g/t Au eq) in the Measured & Indicated category and 727,000 ounces (727 Koz) of 1.82 g/t Au eq in the Inferred category.

Lawyers comprises 46 contiguous claims over 14,392 hectares, and has a 0.5% royalty with Royal Gold Inc. (RGLD:NASDAQ; RGL:TSX) in play. To the north of Lawyers is 180-sq km Ranch, where a previous owner holds a 2% non-smelter return royalty.

Thesis also owns exploration licenses on property to the east of Ranch and is doing early exploration work there.

What to Know

The analysts shared these four key points about Lawyers-Ranch after their site visit:

1) The Lawyers-Ranch preliminary economic assessment (PEA), expected next month, should reveal enhanced project economics. Both Lawyers and Ranch will be covered in this version versus only Lawyers in the previous one. The new PEA will contain evaluations of an open-pit and underground mine at Lawyers and an open-pit operation at Ranch.

“We expect this to materially enhance the economics of the project, with our NAV for Lawyers-Ranch being 69% higher than for Lawyers alone,” the analysts wrote.

2) Exploration potential at Ranch should expand the combined resource.

Ranch is the main focus of Thesis Gold’s in-progress exploration program. There, the company is testing nine targets, following up on two previously drilled targets and potentially expanding the existing 681 Koz resource encompassing five surface mineralized zones: the Thesis Corridor, Bonanza Ridge, Bonanza South, JK and BV.

“We believe Ranch has the potential to ultimately be comparable to other large-scale, high-sulphidation epithermal systems and host a deposit several times larger than its current size,” the analysts commented.

3) Management is engaged with all stakeholder First Nations communities.

Thesis has an exploration cooperation and benefit agreement in place with the Tsay Keh Dene Nation, the Kwadacha Nation and the Takla Nation. With the Tahltan Nation, it has an exploration agreement. The company has formed a committee tasked with informing the groups about project updates and possible economic opportunities, which should help Thesis obtain the necessary project permits.

4) Project access and nearby infrastructure exist. These include water, power, a road, nearby town and airstrip.

Catalysts on the Horizon

In the near term, investors can expect events that could boost Thesis’ stock, Hannam & Partners reported.

One is the release of a completed PEA on Lawyers-Ranch due out this September. The other is drill results from the 2024 summer program at Ranch.

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1. Thesis Gold Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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