Lahontan Gold Corp (OTCMKTS: LGCXF) (CVE: LG) (FRA: Y2F) has significantly expanded its land package in the surrounding area of Nevada’s Santa Fe Mine.
The company revealed last week that it now holds an additional 27 mining claims immediately southeast of the flagship site and its neighbouring Santa Fe West project.
Lahontan believes they hold the potential to boost the gold and silver resources at the site’s previously defined York deposit. As such, these new claims have been named the “York Claims.”
“Modelling of drill data during the mineral resource estimation process suggests that gold and silver mineralization likely extends onto the York claims,” Lahontan specified in a news release on Oct. 23.
Lahontan says the York system will be the target of additional drilling this fall.
Emergent Metals Corp (CVE: EMR) (OTCMKTS: EGMCF) (FRA: EML), the claims vendor, will be receiving 2 million Lahontan shares in exchange. Additionally, Emergent will get a US$50,000-dollar promissory note with a 1 per cent monthly interest rate and a 1 per cent net smelter royalty on the claims.
Lahontan’s Sante Fe project is comprised of four open pits. It produced over 359,000 ounces of gold and 702,000 silver ounces in the late 1980s and early 1990s before shutting down due to low commodity pricing at the time. Today, it is estimated to still hold over 1.5 million ounces of gold equivalent.
The Santa Fe West operation, 13 kilometres west, is a satellite project that could potentially add 0.5 to 1 million ounces of precious metals to Lahontan’s land holdings. The junior is targeting a maiden resource estimate with a 6,300-metre drill campaign this quarter. High precious metal prices have been providing incentive to do so.
Gold and silver’s bull run has also been a source of inspiration for other small-to-mid size Nevada operators. NevGold Corp (CVE: NAU) (OTCMKTS: NAUFF) (FRA: 5E50), Nevada King Gold Corp (CVE: NKG) (OTCMKTS: NKGFF) and Borealis Mining Company Ltd (CVE: BOGO) (OTCMKTS: BORMF) (FRA: L4B0) are a few others.
“Lahontan now controls a district-scale land package that, despite prolific past production and the completion of over 1,200 drill holes, remains largely unexplored with multiple targets for resource expansion and new discoveries,” said CEO Kimberly Ann last week.
Read more: NevGold targets U.S. critical mineral supply chain with new antimony-gold find
Lahontan strengthens balance sheet
The company just announced that it has received C$4.3 million from the exercise of warrant and stock options.
Funds will be utilized for exploration and mine development work at Lahontan’s projects in Nevada’s Walker Lane gold belt and for general corporate expenses, the company highlighted.
“The exercise of such a significant number of warrants and options over the last four months is evidence of incredible shareholder support for the company’s vision and business plan to continue advancing the Santa Fe Mine Project towards production,” Ann boasted.
“The receipt of these funds leaves the company fully financed for the planned Fall drilling programs at both Santa Fe and West Santa Fe, which we expect to commence shortly.”
She says Lahontan is aiming to break ground and start progressing toward commercial production in early 2027. The jurisdiction the company is working in is well-regarded.
On the negative side, one of Lahontan’s most recent setbacks occurred when a major shareholder, Victoria Gold, had a catastrophic life-ending heap leach pad failure incident at its Yukon mining operation. Victoria held a 23.8 per cent stake in the company with 49 million shares. Victoria’s receivership proceedings created a significant share overhang that was lowering Lahontan’s stock price until they were able to be sold in February.
“What happened with Victoria Gold was absolutely devastating,” Ann stated in a recent interview.
However, she likes to believe Lahontan has bounced back from that unfortunate business.
Overall, Lahontan Gold is a high-risk, speculative junior mining play. Its future success is reliant on the price of precious metals remaining high and operational successes. The mine’s life is only expected to last eight years.
Lahontan has been burning C$2 million to C$3 million per year on drill campaigns and is still at least 1.5 years away from achieving production.
Read more: NevGold Expands Gold-Antimony Potential at Limousine Butte in Nevada
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