An April 10 research note indicated that Beacon Securities Ltd. initiated coverage on Allegiant Gold Ltd. (AUAU:TSX.V; AUXXF:OTCQX) with a Speculative Buy rating and a CA$0.90 per share price target. The stock is currently trading at around CA$0.45 per share. "We consider Allegiant shares to be an attractive investment for exploration success, with a quality exploration team (with extensive experience and gold discoveries) working in a low political risk jurisdiction," wrote analyst Michael Curran.
Allegiant is a gold explorer with a Nevada focus but also assets in Utah, New Mexico and Arizona. It was spun out from Columbus Gold Corp. (CGT:TSX; CGTFF:OTCQX) on Jan. 18, 2018. "Several of these properties have above average potential for new gold deposit discoveries," Curran highlighted. "This U.S. portfolio. . . .can now get the attention it deserves."
To Allegiant's advantage, several of its projects are drill ready. Two rigs are currently drilling at Eastside, "with the goals of both increasing gold resources and reducing the strip ratio in the proposed open pit," Curran reported. "As an initial target, we believe the current 0.65 million ounce resource at Eastside can grow to 1.5 million ounces." Another benefit is the Eastside project is in Nevada, "one of the best jurisdictions globally for mining investment," noted Curran. In addition to Eastside, Allegiant plans to drill at some of its other properties during the next 12 months.
Curran purported the potential for rerating of Allegiant's stock, now listed on the TSX Venture Exchange, exists in the short term once the company finishes initial drilling at Eastside. Further upside, in terms of another rerating or heightened market interest, could likely come from the several other portfolio assets, which "have potential for new deposit discovery."
As far as the team to get the exploration done, the company has a "solid leader" in CEO Andy Wallace," Curran said. "He and his Cordex team have been credited with nine gold discoveries over the years in Nevada, the majority of which became gold mines (Marigold, Stonehouse/Lone Tree, Daisy, Sterling, Dee)." Russell Ball and Norm Pitcher, new members of the board, bring "extensive experience in all aspects of project development (exploration, feasibility and operations), having worked with producers such as Newmont, Goldcorp and Eldorado Gold."
About Allegiant's 2018 exploration program, Curran concluded that it "can deliver new discovery and/or expansions of existing resources. Longer term, we see potential to achieve even higher gold resources and achieve future mine development."
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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Allegiant Gold and Columbus Gold. Click here for important disclosures about sponsor fees.
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Disclosures from Beacon Securities, Allegiant Gold Ltd., Initiating Coverage, April 10, 2018
Does Beacon, or its affiliates or analysts collectively, beneficially own 1% or more of any class of the issuer's equity securities? No
Does the analyst who prepared this research report have a position, either long or short, in any of the issuer’s securities? No
Has any director, partner, or officer of Beacon Securities, or the analyst involved in the preparation of the research report, received remuneration for any services provided to the securities issuer during the preceding 12 months? No
Has Beacon Securities performed investment banking services in the past 12 months and received compensation for investment banking services for this issuer in the past 12 months? Yes
Was the analyst who prepared this research report compensated from revenues generated solely by the Beacon Securities Investment Banking Department? No
Does any director, officer, or employee of Beacon Securities serve as a director, officer, or in any advisory capacity to the issuer? No
Are there any material conflicts of interest with Beacon Securities or the analyst who prepared the report and the issuer? No
Is Beacon Securities a market maker in the equity of the issuer? No
Has the analyst visited the head office of the issuer and viewed its operations in a limited context? No
Did the issuer pay for or reimburse the analyst for the travel expenses? No
Analyst Certification: The Beacon Securities Analyst named on the report hereby certifies that the recommendations and/or opinions expressed herein accurately reflect such research analyst’s personal views about the company and securities that are the subject of the report; or any other companies mentioned in the report that are also covered by the named analyst. In addition, no part of the research analyst’s compensation is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.
