Lahontan Gold Corp., a junior resource company, engages in the acquisition, exploration, and evaluation of mineral properties. It owns gold and silver exploration projects in prolific Walker Lane of Nevada. The company's flagship asset is the 100% owned Santa Fe Project, which covers an area of 19 square kilometers located northeast of Luning, Nevada. The company is headquartered in Toronto, Canada. Lahontan Gold Corp. operates as a subsidiary of Victoria Gold Corp.

Canada

Lahontan Gold Corp.

Basic Materials

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

LGCXF reported revenue of USD 0mn in the last 12 months, down 0% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 47% from FY23 to USD -0.01. Market expects EPS to reach USD -0.02 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 8ppts over past six months and grown 4ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

Lahontan Gold Corp. reported a return on equity (RoE) of -7.8% in the last 12 months, up from -10.6% in FY23. The market consensus projects an RoE of -6.8% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to -7.2% in the last 12 months, an increase from -9.7% in FY23. The market analysts predict that RoA will be -6.3% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) grew to -7.3%, below the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -2.3 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

LGCXF has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is very unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to negligible return on capital. We note an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, LGCXF is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, LGCXF is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is greatly undervalued relative to its peers. 

Lahontan Gold Corp.

$ 0.04

3

Lahontan Gold Corp.

$ 0.04

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 0.04

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