Gold Surges Past US$4,900 as New Project Shows 61% IRR Under Spot Pricing

1. Galway Metals Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$3,000 and US$6,000. 
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1.Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

Galway Metals Inc. (GWM:TSX.V; GAYMF:OTCQB)  announced results from an independent Preliminary Economic Assessment (PEA) for its 100%-owned Estrades Project in Québec's Abitibi region. The study evaluated a conceptual toll milling scenario and was prepared by BBA E&C Inc. and SLR Consulting (Canada) Ltd. in accordance with National Instrument 43-101. No toll-milling agreement is currently in place, and the scenario is presented for evaluation purposes only.

According to the company, the base-case scenario used long-term metal price forecasts, including a gold price of US$3,137 per ounce. This scenario returned an after-tax internal rate of return (IRR) of 33% and a net present value (NPV) at a 5% discount rate of CA$212 million. Under spot pricing, the after-tax IRR increased to 61% and the NPV rose to CA$518 million. Initial capital expenditures were estimated at CA$117 million. Post-tax payback was calculated at 4.7 years using long-term pricing and 3.8 years using spot pricing.

Chief Executive Officer Rob Hinchcliffe stated in a company news release, "As the gold price moves higher, it only boosts the returns on this high-grade gold-zinc project." He added, "We are delighted that Estrades is now creating value for Galway shareholders." Hinchcliffe noted that Galway is considering both a toll-milling and on-site mill development path, with the toll-milling option providing a lower capital entry point.

The PEA evaluated an 8-year underground mine life producing 245 million pounds of payable zinc, 30 million pounds of payable copper, and 171,000 ounces of payable gold. Financial metrics were also provided for a mill-at-site option, which showed a CA$186 million after-tax NPV at long-term pricing and CA$496 million at spot pricing. The all-in sustaining cost (AISC) for the toll-milling scenario was estimated at US$1,987 per ounce of gold equivalent.

The updated resource estimate included 1.75 million tonnes of indicated resources at 0.97% copper, 0.48% lead, 5.76% zinc, 2.86 g/t gold, and 94.4 g/t silver. Inferred resources totaled 2.68 million tonnes grading 0.86% copper, 0.28% lead, 4.75% zinc, 1.81 g/t gold, and 77.4 g/t silver.

The Estrades deposit, originally mined in 1990 for one year, shipped ore to the Matagami Concentrator 135 kilometers away. Today, the project is envisioned as an underground operation with a targeted production rate of 1,500 tonnes per day. The modified Avoca long-hole mining method was selected. The conceptual toll-milling scenario estimates a total capital cost of CA$236.2 million, including CA$116.7 million in initial capital and CA$119.5 million in sustaining capital.

Operating costs were estimated at CA$680 million over the life of mine, with mining costs of CA$71 per tonne, surface transportation of CA$35 per tonne, and toll processing costs of CA$46 per tonne. The total AISC was projected at CA$250 per tonne, equal to US$1,987 per gold equivalent ounce.

The flowsheet was designed to integrate into existing concentrators within 150 kilometers of Estrades. Bench-scale flotation testwork supported the metallurgical assumptions, with modifications to a flotation circuit included in the toll-milling case. A separate scenario for an on-site mill was also evaluated, requiring higher capital investment but reducing reliance on third-party infrastructure.

The Estrades Project is located 95 kilometers north-northeast of La Sarre, Québec. Galway completed 31,720 meters of drilling across 92 holes between 2019 and 2022, contributing to the 2024 resource estimate. The technical report for the PEA is expected to be filed within 45 days.

Geopolitics, Debt, and Distrust: The Forces Driving Gold Higher

In a January 20 report, GOLDINVEST noted that gold prices briefly surpassed US$4,700 per ounce (at US$4,937.50 at the time of this writing). The article attributes the rise to heightened geopolitical tensions and ongoing trade uncertainty. The publication described the metal as a traditional "safe haven," linking its strength to growing investor reliance on hedging strategies. The article referenced the World Economic Forum's Global Risks Report 2026, which identified "geo-economic confrontation" as the top risk among global leaders.

Also on January 20, Stewart Thomson highlighted gold's role as a counterweight to fiat currency instability and debt-based economic policies. He referred to gold as the currency of "citizen kings" and said demand is being fueled by increasing public distrust in governments and financial systems. "The fundamentals in favour of gold are ‘through the roof'," Thomson wrote, pointing to central bank accumulation and global unrest.

On January 21, GoldFix reported that Poland's central bank had authorized the purchase of up to 150 tons of gold, potentially raising its reserves to 700 tons. "This will place Poland among the elite 10 countries with the largest gold reserves in the world," the central bank stated. According to the report, the move reflects a broader shift in sovereign reserve strategies amid deepening geopolitical and financial fragmentation.

External Views on Company Positioning

In a January 12 report, John Newell of John Newell & Associates wrote that Galway Metals Inc. fits the profile of a junior transitioning from neglect to recognition as confidence returns to the CDNX. He stated, "The chart reveals a repeating pattern of accumulation, breakout, and consolidation, consistent with a market gradually revaluing the company's asset base."

Newell also included Galway among a select group of companies he identified as representative examples of juniors that "combine constructive charts with credible fundamentals." He explained that these companies "spent the downcycle quietly rebuilding while investors looked elsewhere," and observed that "as the index transitions from capital starvation to capital reallocation, these names often respond early, sometimes dramatically, as liquidity returns and valuation gaps begin to close."

In a January 16 corporate update, Ron Stewart of Red Cloud Securities wrote, “We view this agreement positively as it speaks to the quality and upside potential that is still available at the property,” referring to Galway Metals’ option and joint venture term sheet related to the Estrades Project.

Stewart stated that the agreement “sets the value of a 100% interest in Estrades at US$55M (CA$77M)” and wrote that Estrades “would account for >65% of the current market cap of CA$94M.” He also noted that “GWM currently has an EV/oz value of ~US$20/oz vs. peers at a median of US$54/oz, representing a >60% discount.”

Work Program Advancing with Geophysical Survey and Drilling

Galway Metals plans to carry out a geophysical survey at the Estrades Project in early March, followed by a drilling program to explore the western extent of the deposit and mineralization at depth. Metallurgical studies will continue with the goal of improving metal recoveries. An Environmental Baseline study is expected to begin in the second quarter of 2026, alongside continued work on the company's community outreach program.

Galway also intends to continue drilling at Estrades to upgrade the mineral resource. At the Clarence Stream Project, three drill rigs are currently operating, with two focused on the Southwest Deposit and one at the North Deposit. The company stated it is considering adding a fourth rig to target new discoveries. A metallurgical test program is underway at Clarence Stream, with recent results showing recoveries up to 98% for both gold and antimony. An updated mineral resource estimate for Clarence Stream is targeted for mid-2026. A scoping study for Estrades is also expected to be released imminently. 

Ownership and Share Structure

Insiders own 7.46% of Galway, of which President/CEO Hinchcliffe, the No. 1 shareholder, has 6.76%. Eight institutions have 18.88%. Of these, the Top 3 are Van Eck Associates Corp. with 4.54%, Caisse de Depot et Placement du Quebec with 3.4% and Mackenzie Investments with 3.35%. Retail investors own the rest.

Galway has 125.76 million shares outstanding. Its market cap is CA$71.24M. Its 52-week range is CA$0.32–0.93/share.