They're also making previously marginal projects look far more attractive.

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That's exactly what happened at Freeman Gold (TSX-V: FMAN).

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The company just released a feasibility study for its Lemhi Gold Project in Idaho, and the numbers represent a meaningful improvement over its 2023 preliminary economic assessment.

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Most notably, the study values the project at an after-tax net present value (NPV) of $696 million, a 227% increase from the earlier estimate. Much of that improvement comes from higher gold prices, which have climbed roughly 130% since the original study was completed.

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A larger reserve and longer mine life

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The updated study also established 1 million ounces of proven and probable gold reserves, giving Lemhi its first formal reserve estimate.

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Freeman now expects the project to operate for approximately 15 years, four years longer than previously projected, with an average annual production rate of roughly 76,000 ounces of gold over the life of the mine.

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The economics also strengthened.

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The project's after-tax internal rate of return (IRR) increased to 34.4%, up from roughly 22% in the earlier study, even as estimated initial capital costs rose to approximately $330 million.

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Gold prices are doing much of the heavy lifting

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To be sure, these improved economics aren't solely the result of new drilling.

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The feasibility study assumes a base-case gold price of $3,650 per ounce, well above the assumptions used in the company's earlier economic assessment. That reflects today's market reality but also means the project's economics remain highly sensitive to future gold prices.

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If gold remains elevated, Lemhi becomes substantially more valuable.

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If gold prices retreat meaningfully, those economics become less compelling.

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That's simply the nature of the mining business.

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Still plenty of work ahead

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A positive feasibility study doesn't mean construction begins tomorrow.

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Freeman must still complete permitting, arrange project financing, and ultimately decide whether to move into mine construction. Those steps can take years and often require significant additional capital.

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Still, the latest study removes one of the biggest uncertainties surrounding the project.

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Instead of asking whether Lemhi can become an economic mine, we can now begin evaluating how and when the company might finance and develop it.

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For a junior mining company, that's meaningful progress.

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And if gold prices remain near current levels, Freeman has given investors a much stronger economic case than it had just a few years ago.

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