Loncor Gold Inc.
Unsolicited Bid Sparks Increased Market Attention
Published: Jul 31, 2025
Author: FRC Analysts
*Loncor Gold Inc. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Sector: Basic Materials | Industry: Gold
Ticker Symbols: LN.TO – TSX LONCF – NASDAQ
Report Highlights
* QP: Peter N. Cowley, President of Loncor Gold
- Loncor has formed a special committee to evaluate an unsolicited, confidential, and non-binding offer related to a potential transaction. In May 2025, the company closed a C$9.4M equity financing.
- The company is advancing its Imbo project in the Democratic Republic of the Congo (DRC), located 220 km from Barrick’s (TSX: ABX) Kibali mine, the largest gold mine in Africa.
- Loncor’s largest shareholders include Resolute Mining (ASX: RSG; MCAP: C$1.2B) with a 19.9% stake, and founder/chairman Arnold Kondrat, who holds 18.8%.
- We believe recent peace efforts, increased foreign investment, and infrastructure upgrades are enhancing the DRC’s appeal as a mining jurisdiction. These developments position Loncor well for potential acquisition or partnerships.
- We have previously highlighted Loncor’s potential as an attractive M&A candidate. LN is currently trading at a 48% discount to its peers (C$43/oz vs. a sector average of C$83/oz), based on 100% of measured and indicated resources, and 50% of inferred resources. In our view, the market is placing undue emphasis on the risks of operating in the DRC, while underappreciating the potential value that could be unlocked through a strategic partnership or acquisition.
- Imbo hosts three open-pittable deposits, Adumbi, Kitenge, and Manzako, as well as several high-priority exploration targets, with mining permits already in place. The flagship Adumbi deposit, which has potential to produce 300+ Koz ever year, hosts a large/high-grade resource totaling 3.7 Moz gold (2.3 g/t). A 2021 Preliminary Economic Assessment (PEA) returned an AT-NPV5% of $1B, and an attractive AT-IRR of 29%, using $1,840/oz gold vs the spot price of $3,295/oz. LN is trading at just 8% of the AT-NPV.
- Initial results from Adumbi’s ongoing drill program, targeting underground resources below the open-pit shell, have returned wide, high-grade intercepts, highlighting underground resource expansion potential.
- With gold trading near record highs, we anticipate an increase in M&A activity over the next 12 months. We maintain a positive outlook on gold prices, anticipating continued US$ weakness, strong demand for safe-haven assets amidst economic and geopolitical uncertainties, and the potential for a global slowdown in GDP.
- We believe the unsolicited offer has drawn greater attention to the company. Key upcoming catalysts include updates from the special committee’s review of the offer. With increased market attention, we see a stronger likelihood of the share price aligning closer to our fair value estimate.
Improving Investment Climate in the DRC
A U.S.-brokered peace accord and growing international cooperation are helping stabilize key mining regions in the DRC
Western-backed firms, including KoBold Metals, are committing over $1B to DRC projects, signaling growing investor confidence
The Democratic Republic of the Congo (DRC) is a key global supplier of critical minerals, including cobalt, copper, and gold. While the country continues to face challenges such as regional instability and infrastructure limitations, recent geopolitical, financial, and operational developments are enhancing its attractiveness to foreign investors.
Notable Developments Driving Investment Momentum:
- Peace Accord Signed: A U.S.-brokered peace deal between the DRC and Rwanda (June 2025) aims to de-escalate conflict in the east. Although M23 rebel activity remains in the region, it is localized and has not disrupted major mining operations like Barrick’s Kibali Mine or Loncor’s assets.
- Western Investment Rising: KoBold Metals, backed by Bill Gates and Jeff Bezos, is actively exploring opportunities in the DRC, with potential lithium investments exceeding US$1B.
- International Collaboration: The U.S., EU, and DRC are working together to support responsible mineral sourcing, environmental standards, and community engagement—further strengthening investor confidence.
- Infrastructure Improvements: Key projects like the Lobito Corridor rail line, and new hydropower facilities, are helping improve logistics and power reliability in mining regions.
- Growing Exploration Activity: In 2024, the DRC led the continent in exploration spending, with over $130M invested—highlighting growing interest in its resource potential.
We believe the combination of peace initiatives, infrastructure upgrades, and growing international interest is improving the investment landscape in the DRC. For a junior miner like Loncor, the most likely path to value realization is through acquisition by a larger, DRC-experienced operator.
Currently, the market appears to be valuing Loncor based on its ability to advance the Imbo project independently, raising concerns about operating in a complex environment. This likely contributes to LN trading well below intrinsic value, and sector multiples.
In our view, investor focus should shift toward the project’s strong fundamentals and management’s ability to secure strategic partnerships, either through a joint venture or acquisition, supported by exploration progress.
Fundamental Research Corp. Equity Rating Scale:
Fundamental Research Corp. Equity Rating Scale (ratings are not a recommendation to acquire, dispose of, or take no action regarding a security; the definition of our ratings are explained below):
- Buy – Fair value is 12% above the current market price; or risk and reward is favorable
- Hold – Fair value is between 5% to 12% above the current market price
- Sell – Fair value is 5% above, or less, than the current market value; or risk and reward is unfavorable
- Suspended or Rating N/A – Coverage and ratings suspended until more information can be obtained from the company regarding recent events.
Fundamental Research Corp. – Risk Rating Scale:
- (Low Risk) – The company operates in an industry where it has a strong position (for example a monopoly, high market share etc.) or operates in a regulated industry. The future outlook is stable or positive for the industry. The company generates positive free cash flow and has a history of profitability. The capital structure is conservative with little or no debt.
- (Below Average Risk) – The company operates in an industry where the fundamentals and outlook are positive. The industry and company are relatively less sensitive to systematic risk than companies with a Risk Rating of 3. The company has a history of profitability and has demonstrated its ability to generate positive free cash flows (though current free cash flow may be negative due to capital investment). The company’s capital structure is conservative with little to modest use of debt.
- (Average Risk) – The company operates in an industry that has average sensitivity to systematic risk. The industry may be cyclical. Profits and cash flow are sensitive to economic factors although the company has demonstrated its ability to generate positive earnings and cash flow. Debt use is in line with industry averages, and coverage ratios are sufficient.
- (Speculative) – The company has little or no history of generating earnings or cash flow. Debt use is higher. These companies may be in start-up mode or in a turnaround situation. These companies should be considered speculative.
- (Highly Speculative) – The company has no history of generating earnings or cash flow. They may operate in a new industry with new, and unproven products. Products may be at the development stage, testing, or seeking regulatory approval. These companies may run into liquidity issues and may rely on external funding. These stocks are considered highly speculative.
Definition of FRC’s Fair Value Estimate – Our fair value estimate is the theoretical value of the company’s equity using widely accepted methods of valuation such as discount cash flow or comparables. IT IS NOT A TARGET PRICE or PREDICTION OF THE FUTURE STOCK PRICE.
Disclaimers and Disclosure
Analyst Certification: The views expressed in this report accurately reflect the personal views of the analyst, and no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed.
Any “forward looking statements” are our best estimates and opinions based upon information that is publicly available and that we believe to be correct, but we have not independently verified with respect to truth or correctness. There is no guarantee that our forecasts will materialize. Actual results will likely vary. The analyst and Fundamental Research Corp.
Fundamental Research Corp. “FRC” owns shares of the subject company: No. The analyst owns shares of the subject company: No , does not make a market or offer shares for sale of the subject company, and does not have any investment banking business with the subject company.
Annual fees ranging from $15,000 to $30,000 have been paid to FRC by Loncor Gold Inc. to commission this report and research coverage including update reports. This fee creates a potential conflict of interest which readers should consider. FRC takes steps to mitigate conflicts including setting fees in advance and utilizing analysts who must abide by CFA Institute Code of Ethics and Standards of Professional Conduct. Additionally, analysts may not trade in any security under coverage. Our full editorial control of all research, timing of release of the reports, and release of liability for negative reports are protected contractually. The issuer has agreed to a minimum coverage term and coverage cannot be unilaterally terminated. Distribution procedure: our reports are distributed first to our web-based subscribers on the date shown on this report then made available to delayed access users through various other channels for a limited time.
The distribution of FRC’s ratings are as follows: BUY (71%), HOLD (3%), SELL / SUSPEND (28%). Loncor Gold Inc.
This report contains “forward looking” statements. Forward-looking statements regarding the Company and/or stock’s performance inherently involve risks and uncertainties that could cause actual results to differ from such forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company’s products/services in the marketplace; acceptance in the marketplace of the Company’s new product lines/services; competitive factors; new product/service introductions by others; technological changes; dependence on suppliers; systematic market risks and other risks discussed in the Company’s periodic report filings, including interim reports, annual reports, and annual information forms filed with the various securities regulators. By making these forward-looking statements, Fundamental Research Corp. and the analyst/author of this report undertakes no obligation to update these statements for revisions or changes after the date of this report. A report initiating coverage will most often be updated quarterly while a report issuing a rating may have no further or less frequent updates because the subject company is likely to be in earlier stages where nothing material may occur quarter to quarter.
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