Approaching four years into a robust, yet early-inning bull market in gold and silver, up +168% & +285% from 4-yr. lows, speed to market for promising projects remains lacking. Where’s the urgency?
Government agencies & politicians are saying positive things, but complex permitting/environmental regulations, and local community support agreements take forever.
In Canada, an additional fire lit under regulators is the bullying/threats from the U.S. government. I believe Canadian projects will start to move faster, but not super fast like in China.
Thesis Gold & Silver (TSX-v: TAU) / (OTCQX: THSGF) could be in production within five years, which might sound like a long time, but it’s not. Readers could gain reasonable conviction in a 2031 first pour for a critical reason. Strategic backing. The Company has not one, but two strong investors. Mid-tier Centerra Gold, and Major AngloGold Ashanti.
Thesis has a district-scale, 495 sq. km land position in the Toodoggone Mining District of Northern B.C. It has a large gold-silver resource of 4.6M Au Eq. ounces, (Measured & Indicated only). Importantly, that includes 97.9M ounces of silver (“Ag“).
I estimate 97.9M ounces is a top 10-15% sized Ag-only endowment among junior miners globally. Another company with a substantial Ag kicker is fellow B.C. junior Skeena Gold & Silver. Although 3 years ahead of Thesis and fully-funded, Skeena is valued at C$793/oz. vs. Thesis at $167/oz.
Readers should note that $167/oz is in the top quartile of valuations, but Thesis has A LOT going for it. Compared to comps, it has a larger resource than many, a superior jurisdiction, is closer to first production, has lower op-ex per ounce, a higher proportion of Measured & Indicated vs. Inferred ounces, and has two strategic investors, while most peers have none.
As M&A picks, two recent takeouts stand out. G2 Goldfields and Rupert Resources were acquired by G Mining Ventures & Agnico Eagle, respectively, for more than C$550/oz in the ground. Although those two have higher grades, Lawyers-Ranch is the same or better in other key respects, like some of the factors mentioned above.
Clearly, the PFS economics is attracting considerable interest. In the below image, using the midpoint between spot and upside case, the post-tax NPV(5%) would be ~C$6.2B, with an IRR of ~102%. The payback period would be under a year. Note, Ag is now ~$67/oz, and Au ~$4,300.
At spot, the first full year of production (nearly 300,000 Au Eq. ounces) would generate post-tax free cash flow of ~C$1.1 billion (assumes US$1,600/oz cost vs. AISC of $1,185). Yet, Thesis Gold’s fully-diluted enterprise value {market cap + debt – cash} is ~C$870M.
These are tremendous economics, but are they only due to high precious metals? Improved mine sequencing strengthened the economics. Optimization work pulled high-margin ore forward, and boosted mill throughput. The importance of the Ranch portion, prioritizing higher-grade underground feed, and stockpiling ore was established.
As a result, Ranch ore was moved into the initial years of production, and the underground cut-off grade was raised to 2.2 g/t Au Eq., increasing prospective margins.
Operating costs, as measured by All-in-Sustaining-Costs (“AISC“) came in at a bottom quartile level of US$1,185/Au Eq. ounce, -32% below the industry avg. (1Q/26) of US$1,744/oz (avg. of GDX 25 holdings).
I’m comforted by the fact that even if AISC rises to say $1,600/oz., project economics at $4,300/$67 would remain spectacular. I’m not suggesting AISC will rise by that much, but a dozen producers I track saw their AISCs rise an avg. of +15% in 1Q/26 vs. 1Q/25.
The ratio of NPV/upfront cap-ex came in strong at 3.2x, and at current prices, it’s ~8x. This is a highly attractive and comfortably affordable project that, (in my view), could be developed by any company valued north of C$5B.
I see roughly three dozen (mostly gold, some silver) producers that could pay a over C$1.5B to acquire Thesis, plus invest C$736M (cap-ex in PFS) over the next 3-4 years.
The list of potential suitors is long, and almost certainly includes surprises. For example, Mexico’s Ag-heavy Fresnillo made an unexpected move into Canada by acquiring Quebec’s PEA-stage Probe Mining.
Of course, this may be a moot point now that Freeport, AngloGold, Newmont & Centerra are front-runners to acquire Thesis and other juniors in the Toodoggone area. Importantly, since the Company’s cashed up, it would only consider selling on favorable terms.
Centerra enjoys the best synergy opportunities, and would make itself meaningfully more attractive to Freeport, AngloGold, Newmont, and others if it were to acquire Thesis.
Newmont dominates B.C.’s Golden Triangle. It should care about the Toodoggone district, there are regional operating synergies.
Circling back to the PFS, Lawyers-Ranch has a 15-yr. mine life that could be extended upon drilling as the resource remains open along strike and at depth. However, management is careful about spending too much on ounces that would be added to years 16-20+.
Instead, they continue to look for new discoveries & higher grade, near-surface mineralization that could be exploited in the initial quarter/third of mine life. In my view, if a much larger player wanted to drill more aggressively, there’s plenty to be found.
Expanding resource ounces on the Lawyers portion of Lawyers-Ranch has been compelling because there’s only a 0.5% NSR royalty on that property vs. a 2.0% NSR on Ranch. The vast majority of the current resource resides at Lawyers.
For instance, ore sorting at Ranch seems promising, (potentially enabling higher-grade concentrate to be trucked to a mill). The technical team is also exploring options to steepen portions of the open pit at Ranch.
Steepening pit walls reduces waste rock, (lowering the strip ratio, cap-ex & op-ex). More of the ore becomes economic, boosting NPV & IRR. As Inferred resource ounces are upgraded to Indicated, that could (over time) enable a mine life extension.
Centerra’s experience in the district will be very useful, not to mention its ability to possibly help fund the BFS (C$4.2B market cap, C$1.1B in net current assets + investments in juniors at 3/31/26).
A key takeaway from the PFS is that ~300,000 Au Eq. ounces/yr is logistically feasible. Nearly that amount is slated for year 1. Therefore, a potential acquirer could presumably (over time) expand to 20 years at that level, making it a significant Canadian mine.
In a bull market for Au/Ag, and Canada anxious to fortify its economic/trade interests away from the U.S. due to the Trump Administration’s threats & bullying, I believe Centerra, Freeport, AngloGold and/or Newmont could potentially fast-track Lawyers-Ranch into production this decade.
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At the time this article was posted, Thesis Gold & Silver was an advertiser on [ER] and Peter Epstein owned shares in the company, acquired in the open market.
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