Lahontan Gold (TSX.V: LG) (OTCQB: LGCXF) has announced positive results from a preliminary economic assessment (PEA) for its Santa Fe Mine gold-silver project in Nevada, outlining a post-tax net present value at a 5% discount rate of $820 million and an internal rate of return of 40.1%. This updated assessment represents a more than fourteenfold increase in post-tax net present value compared with the company's 2024 PEA, underscoring a significant improvement in project economics that could reshape the company's development trajectory.
The PEA, based on gold prices of $3,600 per ounce and silver prices of $49 per ounce, projects $3.68 billion in life-of-mine revenue and $1.32 billion in after-tax net cash flow over an 11-year active mine life, followed by one year of residual leaching. Average annual production is estimated at approximately 91,900 gold-equivalent ounces, with initial capital costs of $172 million and a projected payback period of 3.7 years. At higher spot-price assumptions, the post-tax net present value increases to approximately $1.13 billion, further highlighting the project's sensitivity to favorable market conditions.
The substantial increase in net present value is a critical development for Lahontan Gold, as it demonstrates the potential for the Santa Fe Mine to become a robust, high-margin operation. The company plans to use the mine plan and production schedule to inform its final Mine Plan of Operations submission to the U.S. Bureau of Land Management and expects to secure federal and state construction permits in 2027. This timeline positions the project for potential construction and production later this decade, which could transform Lahontan from an exploration company into a mid-tier gold producer.
Beyond the updated economics, Lahontan has identified potential opportunities for resource expansion through additional exploration and evaluation of historic heap leach pads. These initiatives could extend the mine life or increase production beyond the current 11-year plan. However, the PEA remains preliminary, includes Inferred Mineral Resources, and does not establish economic viability or Mineral Reserves. Investors should note these caveats, as further technical studies are required to confirm the project's full potential.
For those seeking more details, the full press release is available at https://ibn.fm/QeKC5. Lahontan Gold Corp. is a Canadian mine development and mineral exploration company that holds, through its US subsidiaries, four top-tier gold and silver exploration properties in the Walker Lane of mining-friendly Nevada. Its flagship property, the 26.4 km2 Santa Fe Mine project, had past production of 359,202 ounces of gold and 702,067 ounces of silver between 1988 and 1995 from open pit mines utilizing heap-leach processing. The company's website is www.lahontangoldcorp.com, and the latest news and updates relating to LGCXF are available at http://ibn.fm/LGCXF.
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