TNR Gold Corp (TSX-V:TNR, OTC:TRRXF) is on the brink of generating significant royalty revenue from its stake in Ganfeng Lithium's Mariana lithium project in Argentina as it heads toward commercial production, Fundamental Research analysts believe.
The analysts have raised their share price target for TNR from $0.24 to $0.28 per share, highlighting the imminent cash flow potential from this strategic investment.
TNR Gold’s portfolio spans various mining assets, with a key focus on its Shotgun gold project in Alaska and royalties in two advanced-stage projects in Argentina: the Mariana lithium project, owned by Ganfeng Lithium, and the Los Azules copper-gold project, held by McEwen Copper.
The company's holdings are now set to generate substantial returns, particularly from the Mariana project, which is poised to enter production this month.
In the report, Fundamental Research analysts reiterated their "Buy" rating for TNR Gold, while adjusting the fair value estimate. They noted that the current share price of $0.055 is undervaluing not only the Shotgun project but also TNR’s overlooked royalty interests. Analysts expect the Mariana project, set to begin commercial production in the coming weeks, to provide immediate revenue streams through royalties, offering a timely cash flow boost for TNR.
First royalty payments
The Mariana lithium project, located in Argentina, will be one of the first to deliver royalty payments for TNR, potentially as early as March 2025. At current spot lithium prices, analysts project annual royalty revenue of approximately $1.2 million for TNR.
The timing is particularly advantageous as lithium prices are currently hovering around $10,000 per ton—near the break-even point for many large-scale development projects. Fundamental Research anticipates a rebound in lithium prices to at least $15,000 per ton, which would significantly enhance the economic viability of projects like Mariana and spur further development across the sector.
TNR Gold is also positioned to benefit from its royalty interests in McEwen Copper's Los Azules project, a large copper-gold deposit in Argentina. The project recently secured an environmental permit for construction and completed a $56 million equity financing. Infill and expansion drilling have extended the mineralization at depth, with an updated resource estimate and feasibility study expected in the coming months.
Analysts estimate annual royalty revenue of $6.5 million from Los Azules, based on conservative copper price assumptions.
M&A heats up
At the same time, TNR continues to pursue a joint venture partner to advance its Shotgun gold project in Alaska, which holds inferred resources of 706,000 ounces at a relatively high grade of 1.1 grams per ton.
With gold and copper prices near record highs, analysts expect increased mergers and acquisitions (M&A) activity over the next 12 months, with larger mining companies likely to target juniors like TNR Gold to expand their portfolios. TNR’s royalty interests, particularly in the Mariana and Los Azules projects, could make it an attractive acquisition target in the coming year.
Looking ahead, key catalysts for TNR Gold include the commencement of production at the Mariana lithium project, the release of updated resource estimates and a feasibility study at Los Azules, and the potential for a joint venture partner for the Shotgun project.