Analysts at Stifel Nicolaus have responded to the latest drilling results from Canadian gold explorer Goliath Resources (TSXV GOT / WKN A2P063) with a quick “flash note.” In it, they point out that Goliath continues to demonstrate “high gold grades over mineable thicknesses” at its Surebet discovery.
Just yesterday, Monday, the company founded and led by CEO Roger Rosmus presented the results of four drill holes, with the highlight, according to the experts, being drill hole GD-25-377, which returned 15 meters at 5.2 g/t gold, including 7.02 meters at 10.25 g/t gold. On average, Stifel added, drilling in the Bonanza and Goldzilla zones yielded 6.7 meters with 7.14 g/t gold. This, it continued, represents an increase of about 20% over the average grade drilled in the system to date (weighted average of 5.89 g/t gold over 8.83 meters).
The market misunderstands the ounces Goliath keeps drilling
According to Stifel analysts, the market misunderstands the quality of the ounces proven by Goliath, which opens up the opportunity for a revaluation. They consider the results from the Goldzilla zone to be interesting, as the newly reported drill hole has extended the Goldzilla GZ1 vein by 80 meters to 580 meters overall to the northwest. Stifel has not yet included Goldzilla in its mine plan for Goliath, as this zone only accounts for around 6% of their exploration target of 4.28 million ounces of gold. However, they added that further extensions of the scale and quality of the Goldzilla zone could justify potential inclusion at a later point, which could mean further upside for the current valuation.
Stifel emphasizes that drilling in the Bonanza Zone has increased confidence in the high-grade resource that could potentially be mined in the future. This is because drilling in the Bonanza BN1 vein has returned high grades over mineable thicknesses (7.02m @ 10.25g/t gold in hole GD-25-377), close to the material that analysts expect to be mined early at Bonanza. And that is positive for the project’s economics.
Stifel estimates that the higher-grade “starter package” of the Bonanza BZ2 vein contains 3.1 million tons with a grade of 7.17 g/t, which corresponds to approximately 710,000 ounces. This material is located near the surface, would require less underground development, and represents a scenario with a short payback period for the first three years of the mine’s life, during which production would ramp up to 4,000 tons per day. According to the experts, drilling in the BN1 vein helps to increase confidence in an emerging ounce bank that would be addressed early in the mine’s operation.
Stifel analysts see opportunity for a revaluation
The company’s valuation is based on the analysts’ belief that the market is underestimating the quality of the ounces that Goliath is regularly drilling. In addition, it is expected that a further 80 drill holes will be reported to the market by the first quarter of 2026, which will increase awareness of the discovery and open up the opportunity for a revaluation. Goliath Resources is currently trading at 0.22 times the spot P/NAV value, or, based on exploration phase metrics, at $12/oz (grade-adjusted) compared to G2 Goldfields at $97/oz (grade adjusted) or Great Bear at $98/oz (grade adjusted) at the time of its acquisition, the analysts explain. They also remind readers, that Surebet’s first 150 drill holes are similar to the first 150 drill holes of the Dixie discovery by the former Great Bear (acquired by Kinross in 2022 for $1.45 billion) with an average grade of 124 g*m compared to 129 g*m in the LP zone at Dixie, a difference of only 4%.
Overall, Stifel considers the announcement regarding Goliath Resources’ latest drilling results to be “slightly positive” and is maintaining its price target of CAD 5.00.
