Getchell Gold (CSE: GTCH)(US-OTC: GGLDF) says a revised preliminary economic assessment (PEA) for its proposed Fondaway Canyon open-pit gold mine in Nevada has boosted the project’s value by 67% thanks to increased resources and output. The stock surged.
Using an 8% discount rate and a $3,200 per oz. average gold price, Fondaway Canyon now has an after-tax net present value (NPV) of $905 million (C$1.3 billion), an internal rate of return (IRR) of 53.1% and a payback period of two years, Getchell said Tuesday in a statement. Initial capital is estimated at $265.3 million, while life-of-mine cash flow is pegged at about $1.59 billion.
The updated study builds on the company’s April 2026 mineral resource estimate, which expanded the project’s resource base by 21% — including a 54% jump in indicated resources. It envisions a conventional open-pit mining operation feeding an 8,000-tonne-per-day mill over 10.1 years.
“Today’s release marks a material upgrade to the size, scale, and economics of the Fondaway [Canyon] project, all achieved in just over one year and only drilling 10 holes in that period,” Ben Pirie, a mining analyst at Atrium Research, said Tuesday in a note.
“Not only does it generate a robust NPV, but with an initial capex of just $265 million, the project should be straightforward to finance, substantially mitigating development risk,” he added. Fondaway Canyon “now ranks among the higher-quality gold development assets in the region.”
Shares of Getchell surged 24% to 28.5¢ apiece Tuesday morning in Toronto, valuing the company at about C$57 million ($41 million). The stock has traded between 21¢ and 47¢ in the past year.
Higher prices
Getchell’s initial PEA, released in February 2025, outlined an after-tax NPV of $543 million at an average gold price of $2,250 per ounce. Higher gold prices and an enlarged resource base account for the subsequent increase in project value.
Fondaway Canyon would produce about 150,000 oz. gold annually over the mine’s life, according to the new study. Life-of-mine operating costs are projected at $1,373 per oz., while cash costs are estimated at $1,740 per oz. of produced gold.
Annual output of 150,000 oz. “would likely place Fondaway Canyon in the top 10 mining operations in Nevada,” Getchell President Mike Sieb said in the statement.
Tuesday’s revised PEA builds on metallurgical testing completed since the original 2025 PEA, while incorporating the updated resource that was released in late April.
That estimate outlined indicated resources of 22.1 million tonnes grading 1.40 grams gold per tonne for 999,000 contained oz. gold and inferred resources of 45.6 million tonnes grading 1.24 grams gold for 1.81 million contained ounces.
Expansion potential
Estimates used in the PEA are limited to the open-pit resource in the project’s central area, Getchell says. Underground resources below the main pit aren’t included in the calculations, nor are the open-pit resources outside the central area.
Gold mineralization remains open along strike and at depth with significant potential for expansion, according to the company.
Located about 170 km east of Reno, Fondaway Canyon is a past-producing gold property with exploration dating back to the 1970s. Getchell acquired the project in 2020 and has since completed multiple drill campaigns that substantially expanded mineralization and identified new zones.
The updated PEA comes about three months after Getchell filed a counter-claim in response to a third party staking on 120 of its 261 claims, including ground covering the conceptual pit area. Getchell has said its claims remain valid and in good standing. Tuesday’s statement by the company didn’t mention the alleged illegal staking.
