Lode Gold: 2024 Year-End Review and 2025 Outlook
Lode Gold: 2024 Year-End Review and 2025
Outlook
Toronto, Ontario--(Newsfile Corp. - December 11, 2024) -
Lode Gold Resources Inc. (TSXV: LOD)
(OTCQB: SBMIF) ("Lode Gold " or the "Company") is pleased to provide a year-end update.
Dear Investors,
I am excited to update you on our progress since I took over as CEO less than a year ago, just before
Christmas in December 2023. With the support of the board, key shareholders, and the dedicated Lode
Gold team, we have raised $6M since March 2024 and completed numerous tasks to reorganize the
Company. These efforts have positioned us for future success and growth, and I am grateful for the
continued support and confidence you have shown in our vision.
Strategy: Create Two Pure Play Companies to Unlock Value and Attract New Investors
Last year, around this time, I met with bankers to discuss how we plan to unlock value by spinning out the
Company's assets to create two pure-play companies.
This strategy resonated with many as Lode
Gold has key assets situated in highly prospective mining regions in Canada and the United
States. This initiative immediately creates two $7M companies from one $7M entity, thereby
generating accretive value for shareholders.
Focus on Intrinsic Asset Value vs Market Cap: Do some small-cap stocks outperform large-cap
investments in the long run?
Clifford Asness, who played a key role in building Goldman Sachs' Global Alpha before founding AQR,
and now manages over $33 billion in assets, published a whitepaper that challenged the Efficient Market
Theory.
It stipulated that value may be factored into price with large-cap companies, but it may
not be the case with small-cap stocks
1
.
It states that with small or micro-cap stocks, the Less-
Efficient-Market Hypothesis often holds. Why? The market is inherently inefficient due to a fragmented
shareholder base and a lack of distribution, awareness and liquidity. As such, if capital is patient,
investing in a small-cap stock may result in a higher return on investment in the long run compared to a
large-cap stock.
In the case of Lode Gold, the intrinsic value, verified with a third-party NI 43-101 technical report, has an
NPV USD $370M, yet the market cap trades at a fraction of the real value. Notwithstanding, a planned
spin-out transaction valued at an additional $7.65M (pre-money value to current Lode Gold
shareholders) has already obtained conditional approval.
This is a value proposition, validated by smart money: strategic investors and institutional shareholders;
a total of four own approximately 60%. Intrigued by the potential of this undervalued play, I accepted the
challenge of leading its turnaround and growth.
Near-Term: Gold Orogen spin out to unlock value for shareholders
The company has three key orogenic assets, with proven gold endowment.
To unlock value for shareholders; immediately we are spinning out the Canadian assets into a new
company, Gold Orogen. Each Lode Gold shareholder will get shares of Gold Orogen; via a tax-efficient
spin-out.
Additionally, a $3M raise has been completed at Gold Orogen, based on a $7.65M pre-money valuation.
The current valuation for Lode Gold, the parent company, is at $7M. We are topping up with an additional
$1.5M to ensure a $4.5M investment program for 2025 at Gold Orogen; as such both the assets in
Yukon and NB will be drilled in the upcoming exploration season in the new year. Post-money, Gold
Orogen will be at $12M+.
A gold asset on the Mother Lode Belt with MRE: 1 (M&I) + 2 (Inferred) Moz Au and a 2023 PEA: USD
$370M (NPV 5%) will remain in the parent co, Lode Gold. Lode Gold intends to pursue a high grade
underground mine opportunity. This project sits on 100% privately owned patented land where the mining
license was suspended in 1942 due to the war effort.
Spin Out Unlocks Shareholder Value: Confirmed gold endowment and RIRGS on Tombstone Belt
The spin-out will result in the formation of two pure-play companies, each focused on specific areas of
exploration in Canada and the US.
Company 1: Spin Co - Gold Orogen
Asset 1:
27 km strike, 99.5 km
2
in Yukon, prolific Tombstone Belt (
Snowline, 3 Aces, Sitka Gold)
Total of four Reduced Intrusive Targets (RIRGS)
Asset 2:
New Brunswick: Created one of the largest land packages (420 km
2
)
Geological analogue to New Found Gold, Galway, Calibre Mining and Puma-Kinross
Confirmed gold endowment
Company 2: Parent - Lode Gold
Lode Gold is the first company to evaluate this project from an underground perspective.
Brownfield, previously mined at 8 g/t in the 1940's.
4 km strike on the 190 km mineralized Mother Lode Belt: 50,000,000 oz produced
100% owned private and patented land: 3,351 acres, Mariposa County
California: 700 permitted mines; 14 gold
Mine suspended in 1942 due to gold prohibition in WWII
Target: 2 Moz underground 5 g/t Au
Typical Orogenic Deposit with Structural Controls
3 Step-Out Holes hit structure (up to 1,200 m)
2 nearby mines were up to 1,800 m deep at 13 g/t
43,000 m drilled with 23 km of underground workings
11% of the veins (2 of 7 deposits) exploited; mostly in the first 250 m
2023 MRE: 1 Moz (M&I) + 2 Moz (Inferred)
2023 PEA at USD $2,000/oz Au: After-tax NPV (5%) USD $370M, 31% IRR, 11 years LOM
Close to road, rail, power, water
Milestones Achieved in 2024:
1.
Executed Spin Out Plan
Received conditional acceptance from the TSXV for the spinout transaction
2.
Improved Capital Structure
Lode Gold added two additional key institutional and strategic shareholders
For $3M, a 19.9% strategic joint venture partner with strong technical expertise, was added to the
new Spin Co
Tight share structure: 10:1 consolidation. About 40.000,000 shares outstanding for both
companies
3.
Cleaned Up Balance Sheet
Converted a secured debt holder to be the second-largest shareholder
Repaid shareholder working capital loan
Resolved a legacy lawsuit and eliminated a $1.6M liability
4.
Enhanced Value of Assets in Yukon, New Brunswick and California
New Brunswick:
Created one of the largest land packages in the province, potentially a district play
Completed comprehensive geophysics and soil sampling to define drill targets
Yukon:
Identified four RIRGS targets for exploration work in 2025
Confirmed RIRGS at WIN; high bismuth : gold ratio, gold-bearing sheeted quartz veins,
hosted in hornfels
California:
The first to review the project from an underground perspective
Completed Geological Model:
11% of the veins exploited, in 2 out of 7 deposits. Most
extraction in the first 250 m.
3 step-out holes at depth, mineralized and hit structure, a typical
orogenic deposit
Commissioned NI 43-101 to update the 2023 MRE
5.
Strengthening the Lode Gold Team
Enhanced bench strength by adding key personnel to the technical and marketing teams, visit our
website to view their full bios
(lode-gold.com)
Addition of Martin Stratte, Lode Gold's former Director of the Board, to our Advisory Team. He was
previously on the permitting team at Castle Mountain, Equinox Gold (2018-2021). The project was
acquired for $200 million in 2018, and it was permitted in 2021
Upcoming Catalysts in 2025
Spin Co: Shareholders get shares of a new company
Drilling to investigate 4 RIRGS reduced intrusive targets in Yukon Tombstone Belt, 200 km from
Snowline
Drilling in New Brunswick assets upon systematic exploration: geophysics, soil sampling,
mapping, geochemistry
California: Revised NI 43-101 Mineral Resource Estimate (updating 2023 MRE and investigating
high grade underground potential)
California: Evaluate reactivating a previous mine, where the license was suspended during WWII
Invest in One Company, Get Shares of Two Companies: Optionality on three key assets
Investing in Lode Gold presents an exciting opportunity for shareholders to benefit from an advanced
gold exploration project and a forthcoming spinoff with two high-value assets. This strategic move is
aimed at unlocking maximum value for investors, who will gain exposure to three highly prospective gold
assets through shares in two separate companies.
Wishing you a season filled with joy and prosperity.
Yours truly,
Wendy T. Chan. CEO & Director
About Lode Gold
Lode Gold (TSXV: LOD) is an exploration and development company with projects in highly prospective
and safe mining jurisdictions in Canada and the United States.
In Canada, its Golden Culvert and WIN Projects in Yukon, covering 99.5 km
2
across a 27-km strike
length, are situated in a district-scale, high grade gold mineralized trend within the southern portion of the
Tombstone Gold Belt. A total of four RIRGS targets have been confirmed on the property. A NI 43-101
technical report has been completed in May 2024.
In New Brunswick, Lode Gold has created one of the largest land packages with its Acadian Gold JV
Co; consisting of an area that spans 420 km
2
and a 42 km strike. McIntyre Brook covers 111 km
2
and a
17-km strike in the emerging Appalachian/Iapetus Gold Belt; it is hosted by orogenic rocks of similar
age and structure as New Found Gold's Queensway Project. Riley Brook is a 309 km
2
package
covering a 25 km strike of Wapske formation with its numerous felsic units. A NI 43-101 technical report
has been completed in August 2024.
In the United States, the Company is advancing its Fremont Gold project. This is a brownfield project
with over 43,000 m drilled and 23 km of underground workings. It was previously mined at 8 g/t Au in the
1940's.
Mining was halted in 1942 due the gold prohibition in WWII just as it was ramping up production. Unlike
typical brownfield projects that are mined out; only 11% of the veins - in 2 out of 7 deposits have been
exploited. The Company is the first owner to investigate an underground high grade mine potential at
Fremont.
The project is located on 3,351 acres of private and patented land in Mariposa County. The asset is a 4
km strike on the prolific 190 km Mother Lode Gold Belt, California that produced over 50,000,000 oz of
gold and is instrumental in the creation of the towns, the businesses and infrastructure in the 1800s gold
rush. It is 1.5 hours from Fresno, California. The property has year-round road access and is close to
airports and rail.
Previously, in March 2023 the company completed an NI 43 101 Preliminary Economic Assessment
("PEA"). Project Valuation has an after-tax NPV (5%) of USD $370M at $2000 2 /oz gold, IRR 31% and
an 11-year LOM, averaging 118,000 oz per year. At $1,750 /oz gold, NPV (5%) is $217M. The project
hosts an NI 43-101 resource of 1.16 Moz at 1.90 g/t Au within 19.0 MT Indicated and 2.02 Moz at 2.22
g/t Au within 28.3 MT Inferred. The MRE evaluates only 1.4 km of the 4 km strike of Fremont property.
Three step-out holes at depth (up to 1200 m) hit structure and were mineralized.
All NI 43-101 technical reports are available on the Company's profile on SEDAR+ (
www.sedarplus.ca
)
and the Company's website (
www.lode-gold.com
).
QUALIFIED PERSON STATEMENT
The scientific and technical information contained in this press release has been reviewed and approved
by Jonathan Victor Hill, Director, BSc (Hons) (Economic Geology - UCT), FAusIMM, and who is a
"qualified person" as defined by NI-43-101.
ON BEHALF OF THE COMPANY
Wendy T. Chan, CEO & Director
Information Contact
Winfield Ding
CFO
+1-416-915-4257
Kevin Shum
Investor Relations
+1 (647) 725-3888 ext. 702
Cautionary Note Related to this News Release and Figures
This news release contains information about adjacent properties on which the Company has no right to
explore or mine. Readers are cautioned that mineral deposits on adjacent properties are not indicative
of mineral deposits on the Company's properties.
Cautionary Statement Regarding Forward-Looking Information
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.
This news release includes "forward-looking statements" and "forward-looking information" within the
meaning of Canadian securities legislation. All statements included in this news release, other than
statements of historical fact, are forward-looking statements including, without limitation, statements
with respect to the completion of the transaction and the timing thereof, the expected benefits of the
transaction to shareholders of the Company, the structure, terms and conditions of the transaction and
the execution of a definitive agreement, the timing of submission to the CSE and TSXV, Gold Orogen
raising an additional $1,500,000 and the anticipated use of proceeds. Forward-Looking statements
include predictions, projections and forecasts and are often, but not always, identified by the use of
words such as "anticipate", "believe", "plan", "estimate", "expect", "potential", "target", "budget" and
"intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be
achieved and other similar expressions and includes the negatives thereof.
Forward-Looking statements are based on a number of assumptions and estimates that, while
considered reasonable by management based on the business and markets in which the Company
operates, are inherently subject to significant operational, economic, and competitive uncertainties,
risks and contingencies. These include assumptions regarding, among other things: that the
Company and GRM will be able to negotiate the definitive agreement on the terms and within the time
frame expected, that the Company and GRM will be able to make submissions to the CSE and TSXV
within the time frame expected, that the Company and GRM will be able to obtain shareholder
approval for the transaction, that the Company and GRM will be able to obtain necessary third party
and regulatory approvals required for the transaction, if completed, that the transaction will provide the
expected benefits to the Company and its shareholders.
There can be no assurance that forward-looking statements will prove to be accurate and actual
results, and future events could differ materially from those anticipated in such statements. Important
factors that could cause actual results to differ materially from the Company's expectations include
adverse market conditions, general economic, market or business risks, unanticipated costs, the
failure of the Company and GRM to negotiate the definitive agreement on the terms and conditions
and within the timeframe expected, the failure of the Company and GRM to make submissions to the
CSE and TSXV within the timeframe expected,
the failure of the Company and GRM to obtain
shareholder approval for the transaction, the failure of the Company and GRM to obtain all necessary
approvals for the transaction, and r other risks detailed from time to time in the filings made by the
Company with securities regulators, including those described under the heading "Risks and
Uncertainties" in the Company's most recently filed MD&A. The Company does not undertake to
update or revise any forward-looking statements, except in accordance with applicable law.
1
Asness, Clifford S. "The Less-Efficient Market Hypothesis," SSRN, August 30, 2024. Available at SSRN (papers.ssrn.com).
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