Spotlight: Global precious metals exploration – Part 2

Record precious metal prices are driving global exploration for gold and silver. Here’s a list of four more companies to keep an eye on.

Mayfair Gold  

Mayfair Gold (TSXV: MFG; NYSE-A: MINE) is focused on its Fenn-Gibb gold project in northern Ontario, about 80 km east of Timmins and 10 km east of McEwen Mining’s (TSX, NYSE: MUX) Black Fox mine project. Highway 101 runs right through the project area.

In January, the company released a pre-feasibility study that estimated average production of 64,100 oz. gold per year over a mine life of 14.3 years at an all-in sustaining cost (AISC) of US$1,292 per ounce.  

During the first six years the mine would produce 71,300 oz. gold per year at an AISC of $1,171 per oz., generating over C$896 million in free cash flow at a base case gold price of $3,100 per oz. and $1.43 billion at the spot price.

The conventional truck and shovel open-pit operation would generate an after-tax net present value (at a 5% discount rate) of C$652 million and an internal rate of return (IRR) of 24%. Initial capital was projected to run to C$450 million, including a 26% contingency, and could be repaid in 2.7 years.

The mine plan only exploits 1.04 million oz. gold (24%) of the total 4.3 million oz. outlined in the resource’s indicated category.

Fenn-Gibb hosts indicated resources of 181.3 million tonnes grading 0.74 gram gold for 4.3 million oz. contained gold; and inferred resources of 8.9 million tonnes grading 0.49 gram gold for 141,000 ounces.

Metallurgical test work has demonstrated overall gold recoveries of about 88.4% for material grading 1.5 grams gold or higher and 82.5% for material grading 0.8 gram gold or higher.

Mayfair says it will make a final investment decision within three years. Construction is forecast to take 18 to 24 months and commercial production could start within five years.

The company is advancing permitting activities, detailed engineering and stakeholder engagement.

Mayfair Gold has a market cap of about C$362 million.

Platinum Group Metals  

Platinum Group Metals (TSX: PTM; NYSE: PLG) is focused on the Waterberg PGM project located on the North Limb of the Bushveld igneous complex in South Africa, about 330 km northeast of Johannesburg. The project has the potential to be one of the largest and lowest-cost PGM mines globally. 

An updated definitive feasibility study in September 2024 envisioned a bulk underground mining operation producing 353,208 combined oz. of palladium, platinum, gold and rhodium (4E) in concentrate annually, over 54 years.  

Capital costs were pegged at $946 million. The study estimated the after-tax NPV (at an 8% discount rate) to be $569 million and an IRR of 14%. Capital costs were forecast to run to $946 million with payback in about 5.8 years.

Proven and probable reserves total 246.2 million tonnes grading 1.88 grams palladium per tonne, 0.85 gram platinum, 0.04 gram rhodium and 0.18 gram gold (2.96 grams 4E) along with 0.08% copper and 0.17% nickel. Combined contained metal comes to 23.4 million ounces.  

At over 100 metres thick in some places, the deposit is among the thickest in southern Africa, and at a depth of about 140 metres vertical at its shallowest, is accessible with decline tunnels.

Waterberg is a joint venture between Platinum Group Metals (37%), Impala Platinum Holdings (JSE, ASX: IMP) (15%), Black Economic Empowerment (BEE) partner Mnombo Wethu Consultants (26%) and HJ Platinum Metals (22%), a special purpose vehicle created by Japan Organization for Metals and Energy Security (Jogmec) and Hanwa. Factoring in Platinum Group’s 49.9% ownership in Mnombo, the company has an effective 50.2% interest in the project. 

In addition to Waterberg, Platinum Group founded Lion Battery Technologies in partnership with Valterra Platinum (JSE: VAL; LSE: VALT) to support the use of platinum and palladium in lithium battery applications.

Platinum Group Metals has a market cap of about C$393 million.

Thesis Gold  

Thesis Gold (TSXV: TAU; US-OTC: THSGF) is advancing its Lawyers-Ranch gold-silver project in British Columbia, 750 km north of Vancouver and about 45 km from Centerrra Gold’s (TSX: CG; NYSE: CCAU) Kemess copper-gold mine. Centerra Gold acquired a 9.9% stake in Thesis Gold last April.

In December, a pre-feasibility study for Lawyers-Ranch outlined a 15-year mine life processing 76 million tonnes, with average annual production of 145,000 oz. gold and 3.4 million oz. silver in the first three years for total production of 2.1 million oz. gold and 52.9 million oz. silver. AISC were pegged at $1,185 per gold-equivalent ounce.

The study forecasted an after-tax NPV (at a 5% discount rate) of C$2.37 billion and an IRR of 54% using a base case price of $2,900 per oz. gold and $35 per oz. silver.  

Initial capital of C$736 million could be repaid post-tax in 1.1 years and the sum did not consider potential revenue of C$91.1 million from processing stockpiles as part of the initial commissioning and ramp-up.

The PFS also excluded inferred resources and did not include recovery of the crown pillar between the open pit and underground workings.

Lawyers-Ranch is an underground and open pit project, consisting of four pits in the Lawyers portion and eight pits in the Ranch area.

The project hosts 117.5 million measured and indicated tonnes grading 0.88 gram gold and 25.9 grams silver for 3.3 million contained oz. gold and 97.8 million oz. silver. There are also 16.2 million inferred tonnes grading 1.05 grams gold, 14.7 grams silver and 0.04% copper for 547,000 oz. gold, 7.6 million oz. silver and 7,000 tonnes copper.  

In January, drill results from the project’s Steve zone sent the company’s shares to an almost four-year high. The Steve zone was not included in the Ranch resource or prefeasibility study. Highlight drill hole 25STVDD005 cut 77 metres grading 1.86 grams gold from 262 metres depth, including 38 metres at 3.62 grams gold and 12.41 metres grading 8.06 grams gold.

In September, Thesis announced an equity investment of 0.3% by the Kwadacha, Tsay Keh Dene and Takla First Nations.

Thesis Gold has a market cap of about C$715 million.  

Troilus Mining  

Troilus Mining (TSXV: TLG; US-OTC: CHXMF) is focused on restarting the former namesake gold and copper mine northeast of Val-d’Or, Que.

The mine produced 2 million oz. gold and nearly 70,000 tonnes of copper between 1996 and 2010. Inmet Mining shut it down when reserves dwindled and Troilus picked it up in 2018.

Today the 435-sq.-km Troilus project in the Frotet-Evans Greenstone Belt ranks among Canada’s largest undeveloped gold-copper assets and boasts $500 million worth of inherited infrastructure.

A 2024 feasibility study outlined average annual production of 244,600 oz. gold, 17.3 million lb. of copper and 446,700 oz. silver over a 22-year mine life.  

At base case prices of $1,975 per oz. gold and $4.05 per lb. Copper, the study projected a post-tax NPV (at a 5% discount rate) of $885 million and a 14% IRR. Initial capital for the 50,000-tonne-per-day open-pit operation was put at $1.1 billion, with a payback of 5.7 years. 

The project hosts 508.3 million indicated tonnes grading 0.57 gram gold, 0.07% copper and 1.09 grams silver for 9.3 million oz. gold, 729.5 million lb. copper and 17.8 million oz. silver. Inferred resources add 80.5 million tonnes grading 0.58 gram gold, 0.07% copper and 1.47 grams silver for 1.5 million oz. gold, 115.4 million lb. copper and 3.8 million oz. silver.  

Troilus aims to produce doré bars and copper-gold-silver concentrate. The company has negotiated a memorandum of agreement for the long-term offtake of copper-gold concentrate with Aurubis of Germany, a global copper smelter and recycler. The company also has a preliminary offtake agreement with Boliden.  

Last year the company mandated a syndicate of global financial institutions, led by Société Générale, KfW IPEX-Bank and Export Development Canada, to arrange a senior project debt facility of up to $1 billion. Project due diligence is well advanced, and the arrangements are expected to be finalized this year.

In November the company strengthened its balance sheet through a C$172.5-million bought-deal offering, which was the second-largest common share offering by a Quebec-headquartered company in over a decade and the second-largest financing on the Toronto Stock Exchange in 2025.

The company submitted its Environmental and Social Impact Assessment to both federal and provincial authorities last June.

Troilus Mining has a market cap of about C$1.2 billion.