AXCAP VENTURES
We are initiating coverage of Axcap Ventures with a Buy recommendation, based on its significant gold resource base in Tier-1 jurisdictions and a disciplined business model that supports value creation. The company controls 7.9Moz of gold resource across Nevada, Wyoming, and British Columbia, with 6Moz concentrated at its flagship Converse Project on the Battle Mountain trend. The strategy is centered on acquiring stranded or under-capitalized projects at low entry costs (typically <US$5/oz) and applying targeted technical work such as updated resource modeling, metallurgy, and permitting to re-rate the assets. This approach reduces exposure to early-stage exploration risk, keeps capital requirements low, and positions the portfolio for valuation uplift relative to peers, which trade at an average US$47/oz, compared to Axcap at US$3/oz on an EV/oz basis.
With gold prices providing a supportive backdrop for sector consolidation, and a management team experienced in both technical execution and capital markets, we see multiple pathways for Axcap to unlock value, whether through asset sales, spin-outs, or royalties.
Investment highlights
- Tier-1 resource base: Axcap controls approximately 7.9Moz across Nevada, Wyoming, and British Columbia, anchored by ~6Moz at the Converse Project on Nevada’s Battle Mountain trend. The deposit is near-surface, drill-ready, and permitted for exploration, with favourable heap-leach metallurgy and proximity to existing infrastructure.
- Attractive valuation relative to peers: The company has acquired ounces at less than US$5/oz in the ground, compared with peer developers trading at US$47/oz. It is currently trading at US$3/oz on an EV/oz basis. Incremental de-risking through updated resource models, metallurgy, and engineering is expected to drive material valuation re-rating.
- Converse development case: Our conceptual scenario outlines the production of ~155,000
ounces per year over a 16-year mine life at an AISC of ~US$1,845/oz, supporting an after-tax
NPV5% of ~$434M (at US$2,700/oz gold). Importantly, re-rating potential is embedded in
Axcap’s cost base versus peer multiples, rather than dependent on higher gold prices. - Valuation & recommendation: We initiate coverage with a Buy rating and a $0.60 price target, based on a blended 0.5x NAV ($1.20/share) using our long-term gold price assumption of US$2,700/oz. Our valuation assigns $434M (NPV 5%) to Converse and applies an in-situ multiple of approximately $27/oz to Rattlesnake Hills and Newton.
- Capital-light, two-phase strategy: Phase 1 involves acquiring stranded or under-capitalized projects and applying targeted technical work to increase credibility. Phase 2 emphasizes monetization through asset sales, joint ventures, spinouts, or royalties. This approach crystallizes value at the optimal point in the risk curve while minimizing shareholder dilution.
- Supportive gold market backdrop: Sustained gold prices and limited organic growth among
producers have driven heightened M&A activity in Tier-1 jurisdictions. Axcap’s portfolio is
directly aligned with the types of projects sought by small to mid-tier acquirers. - Experienced management team: Leadership combines technical capability with capital
markets expert ise. VP Exploration Blake McLaughlin (ex-Argonaut Gold) leads technical
execution. The board and advisory group, which includes co-founders Mario Vetro (K92 Mining)
and Tyron Breytenbach (ex-Cormark, Aris Mining), add further depth in project development
and M&A. - Key upcoming catalysts (H2/2025): Near-term catalysts include (1) drill results from step-out
holes at Converse, (2) metallurgical test results including SART optimization, and (3) completion
of a PEA on Converse in 2026.
