Columbus Gold Corp. (CGT:TSX; CGTFF:OTCQX) made an intelligent business decision when they determined they should vend their non-core assets into a new company. They are retaining substantial ownership in the new vehicle but investors now have clear choices between two entirely different vehicles.
I wrote about the company and the spin-out in early December. Columbus Gold will continue to advance their 45% owned gold project in French Guiana. But their partner is Russian, Nordgold, and has no particular reason to be interested in the remaining fourteen exploration projects in Nevada.
The spinout company is called Allegiant Gold Ltd. (AUAU:TSX.V; AZLLF:OTCBB) and began trading on January 30, 2018. The timing could have been better as luck would have it. The overall market crash generated margin calls for many investors and they began to sell everything liquid. Columbus was trading at $0.54 post split and since dropped to $0.38. I heard someone make an interesting analogy about how even good stocks get dumped in a crash. He said, "In an airplane crash, even the pretty girls die." So I stole it.
Allegiant is run by Andy Wallace, the discoverer of half a dozen major gold projects in Nevada. That's his stomping ground and Allegiant has a total of eleven drill-ready gold projects in the state. The primary focus of Allegiant is the Eastside gold project that has a current 43-101 resource of 721,000 gold equivalent ounces in addition to a historic resource of 272,000 ounces.
Part of the spinout deal required Allegiant to raise money. They closed a private placement for just over $4 million in December of 2017. Allegiant plans an aggressive drill program starting with Eastside where the goal is to double the inpit ounces and reduce the strip ratio at the same time.
At the same time, Andy Wallace's expert team intends to move forward aggressively on ten of the other projects. These are all projects Columbus has sat on for years and got no value for. Now the market can determine what Columbus Gold's 1.23 million ounces in reserves at Montagne d'Or in French Guiana is worth as Allegiant moves forward in the US.
I'm not totally certain just who did the corporate presentation for Allegiant but it is one of the best I have ever seen. In simple terms it explains why the Allegiant story is so compelling. I highly suggest all interested investors at least give it a glance if for no other reason than to see excellent writing.
Allegiant is an advertiser. I own shares in both Allegiant and Columbus Gold and participated in the latest Allegiant private placement. Naturally I am biased so you are as always responsible for your own due diligence.
Allegiant Gold
AUAU-V $0.60 (Feb 14, 2018)
AZLLF-OTCBB 46.7 million shares
Allegiant website
Bob and Barb Moriarty brought 321gold.com to the Internet almost 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.
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Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Allegiant Gold and Columbus Gold. Allegiant Gold is an advertiser on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
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