Several commodities have had a great 2025, most notably –> silver +127%, platinum +114% & palladium +89% YTD. Yet, gold (Au) is +65%, and that’s after being +27% in 2023 & +26% in 2024.
Majors & large mid-tier producers Newmont, Barrick, Agnico Eagle, AngloGold Ashanti, Gold Fields, Kinross, Lundin Gold & Fresnilo plc are up an average of +240% from 52-week lows!
Think about the buying power producers have to make acquisitions. Seven of the eight named above have more cash than debt.
Even after increasing dividend payouts & buying back shares, free cash flow generation will be much higher in 2026 vs. 2025. Today’s futures price of $4,360/oz is +27% above the YTD average.
Therefore, acquisitions are absolutely essential for producers to justify soaring valuations. Buying growth vs. developing mines internally is, without question, the optimal path in bull markets.
Many high-quality juniors remain significantly undervalued. As those eight producers have more than tripled, top junior explorers / developers should be up a lot more.
We are seeing an uptick in M&A, but it’s barely begun and will last years, not months. Recent deals include a merger of equals —Contango Ore + Dolly Varden, Torex Gold’ s acquisition of Prime Mining, and IAMGOLD announcing two deals, Northern Superior & Mines d’Or Orbec.
McEwen Inc. acquired Canadian Gold Corp., AngloGold purchased Augusta. In a surprise move, Mexico’s Fresnillo made its first foray into Canada through the takeover of Probe Gold. Australia’s Robex Resources is acquiring Predictive Discoveries in a C$2.5B transaction.
Given the foregoing, Fortune Bay Corp. (TSX‑V: FOR / OTCQX: FTBYF) stands out as not just undervalued, but substantially so. Led by CEO Dale Verran, Fortune Bay is cashed up (~C$7M) and under no pressure to sell.
Instead, it will maximize the value of its assets BEFORE selling out. The Company holds two 100%-owned Au projects, alongside a few low-cost uranium prospects (farmed out), which might be worth something like C$8-$10M, with meaningful discovery potential.
Fortune Bay is prudently advancing its two project Au portfolio with the commencement of exploration drilling at its 100%-owned, PEA-stage Goldfields project in northern Saskatchewan, Canada.
At spot Au, Goldfields has a post-tax NPV of nearly C$1.7B, and an IRR of 90%+. At spot, the ratio of NPV/upfront cap-ex is a tremendous 5.6 to 1. This is a strong low-to-medium sized project with plenty of exploration upside.
The program includes 17 holes (~3,250 m) targeting multiple high‑priority zones such as Box, Athona, Frontier Lake, Golden Pond, and Triangle, aiming to expand resources / enhance project economics.
Three holes have been completed, and initial drill results are expected in late January or in the first half of February. Since my last article on Fortune Bay, an issue has popped up at the Company’s Mexican project Poma Rosa, causing the share price to fall below C$0.70.
A Mexican state-level protected area decree issued by the Government of Chiapas overlaps with ~11% of the Poma Rosa project. Yet, the concessions remain valid under federal Mexican mining law, so management will mount a legal challenge to contest the application of the State decree.
Management believes it will prevail in maintaining full property rights, and points out that 89% of the concessions are not impacted. It’s unfortunate because the Mexican team had been making good inroads with local communities and mining officials.
With the selloff in the share price, the Company’s two Au projects are valued at just C$14/oz in the ground compared to C$95/oz for peer PEA & pre-PEA projects with similar grades. This represents an approximate 86% discount relative to the 10 comps shown above.
Notice that Torex Gold paid C$190/oz for Prime Mining’s assets, which had a similar number of ounces, slightly higher grade, but was pre-PEA. Fortune Bay has a strong management team & board, and only 79M fully-diluted shares versus an average of 375M among the peers.
Investors may under appreciate Fortune Bay due to its dual-project structure, the historical, non-NI 43-101 compliant resource at its Poma Rosa, (and recent news there) or perceptions of northern Saskatchewan being too remote.
In reality, northern Saskatchewan is quite accessible with several major uranium operations within 350 km. Management could potentially spin out Poma Rosa into a separate publicly-listed vehicle, while retaining the flagship Goldfields project.
Both projects host sizable resources of over 1.2M Au Eq. ounces at > 1.2 g/t Au Eq. (total of ~2.9M Au Eq. ounces at ~1.3 g/t). I believe that Poma Rosa’s non-compliant historical resource could be monetized for at least C$10/oz, leaving Goldfields valued at ~C$18/oz.
Having said that, management has no plans to sell Poma Rosa. Goldfields is located in Saskatchewan, a Tier-1 mining jurisdiction ranked #1 in Canada and #7 globally in the latest annual Fraser Institute Mining Survey. How cheap is C$14-$18/oz.? Bottom 10%!
Goldfields benefits from roads, low-cost hydroelectric power, mining & municipal services, a commercial airport, and barge/ice road access.
It also has a provincially-approved Environmental Impact Statement (“EIS“) from 2008, upon which ongoing baseline studies & permitting updates are being done to align it with current regulatory requirements.
Key risks include maintaining social license, infrastructure logistics, and funding, but those are routine development risks, not red flags. In a bull market, projects like Goldfields are likely to have access to funding, leaving local engagement & infrastructure as primary risks.
Management has robust community relationships, with agreements in place supporting a Definitive Feasibility Study (“DFS“), expected by 2H/27.Goldfields has the potential to produce 100,000 oz/yr for 15+ years, with additional output above this threshold requiring further permitting.
At 100,000 ounces/yr, and assuming all-in sustaining costs of US$1,500/oz,, (vs. $1,330/oz in the PEA), Goldfields could generate roughly C$394M/yr, compared to a fully-diluted enterprise value of ~C$40M.
This exercise ascribes no value to Poma Rosa, which I believe is worth tens of millions. Total cap-ex is projected at C$301M, with equity dilution somewhat mitigated through strategic partnerships, debt, or pre-paid off-take agreements.
Royalty & streaming arrangements could also be considered after the PFS stage. Additional regional infrastructure investment by Saskatchewan would further benefit Fortune Bay, neighboring projects, and surrounding communities.
When compared to the 10 peers, Fortune Bay’s Goldfields project demonstrates a compelling combination of ounces, grade, and jurisdictional advantage, at a steep discount.
With mid-tier & Majors actively pursuing acquisitions, Fortune Bay is positioned as a highly attractive takeover target, capable of delivering incredible value to shareholders in the context of a robust bull market.
Disclosures/disclaimers: The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about Fortune Bay, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is not to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market-making activities. [ER] is not directly employed by any company, group, organization, party, or person. The shares of Fortune Bay are highly speculative, and not suitable for all investors. Readers understand and agree that investments in small-cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making investment decisions.
At the time this article was posted, Fortune Bay was an advertiser on [ER] and Peter Epstein owned shares in the company purchased in the open market.
Readers understand and agree that they must conduct due diligence above and beyond reading this article. While the author believes he’s diligent in screening out companies that, for any reason whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover events & news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector or investment topic.
