Stifel initiates coverage on Goliath Resources Ltd. (GOT:TSX.V; GOTRF:OTCQB; B4IF:FSE) and its rapidly advancing Surebet discovery. Read how Analyst Cole McGill rates the stock.
Stifel initiated coverage on Goliath Resources Ltd. (GOT:TSX.V; GOTRF:OTCQB; B4IF:FSE) with a Buy rating and a target price of CA$5 per share in a research note on November 3, as compared to CA$2.65 at the time of writing, an 89% return.
Goliath's rapidly advancing Surebet discovery, which includes two of the top five drill holes on North American gold projects since 2020, has produced assay results that suggest the potential for a multi-million-ounce, high-grade discovery in the Golden Triangle, wrote Stifel Analyst Cole McGill.
Coupled with a relative infrastructure advantage being less than 10 kilometers from tidewater with nearby power and road connections McGill said the firm anticipates a fully funded 2026, 40-kilometer program that can continue to build confidence in the discovery. This could lead to multiple expansions as the market recognizes the high-grade, infrastructure-proximal potential of the property.
Over five seasons, Goliath has drilled more than 152 kilometers on the rapidly expanding Surebet discovery in the Golden Triangle, achieving what few other explorers have: a 100% gold hit rate, McGill noted. Of the top 250 assays released on North American gold exploration-stage assets since 2020, Surebet has delivered 18, including two of the top five (ranked on a gram-per-meter basis).
Impressively, McGill said Surebet's first 150 holes are comparable to the former Great Bear Resources Ltd.'s Dixie (acquired by Kinross Gold Corp. [K:TSX; KGC:NYSE] in 2022 for US$1.45 billion) first 150, averaging 124 grams per meter (g/m), versus Dixie's LP Zone at 129, just a 4% difference.
Surebet's weighted average grade/width after 150 holes was 8.63 grams per tonne gold (g/t Au) over 15.64 meters, compared to the LP Zone at 4 g/t Au over 20.73 meters.
"While no two gold systems are the same, and significant differences exist between these two, we think the Surebet discovery is in its early innings, with a further 88 holes from a staggering 64-kilometer 2025 program to be released over the next few months," McGill wrote.
Surebet's location offers one of the more favorable spots in the Golden Triangle. Mineralization is less than 10 kilometers from tidewater at Hastings Arm and less than 30 kilometers from the former company town of Kitsault, B.C., which was purpose-built for the Kitsault Molybdenum mine. The town still has a power connection, seasonal road access from Terrace, accommodations for over 1,000 people, and bathymetry for deep-water port access, all of which greatly enhance the discovery's development prospects.
"Famously endowed, the Golden Triangle has one of the highest discovery rates in North America at 14.9 ounces per meter drilled over the last two years," the analyst wrote. "Equally important to rapid ounce growth is the value the market pays for ounces. Since 2021, gold development assets in the Golden Triangle have traded hands at an average of 3.1% in situ. With a fully funded 40km 2026 program, we think GOT provides strong leverage to exploration dollars."
Inventory analysis suggests a +4-million-ounce (Moz), +5 g/t exploration target, according to the report. Based on preliminary assay analysis, Stifel calculated a 4.3-Moz Au exploration target (22.6 million tonnes at 5.8 g/t Au). Equally important to grade is distribution, and the bulk of these presumed ounces are in two zones Surebet and Bonanza, averaging 8.83 meters in width.
Based on the firm's exploration target, Stifel sees GOT trading at $68/oz (1.7% in situ value), or a grade-adjusted $12/oz, compared to K/GBR acquisition at 16.1% in situ (grade-adjusted $98/oz) or GFI/OSK acquisition at 15.2% in situ (grade-adjusted $38/oz), McGill said.
He emphasized that both these projects saw orders of magnitude more work over Surebet at the time of acquisition, "but it clearly pays to be high grade in North America, with just six pre-construction assets