Over the last month, central Yukon gold explorer White Gold Corp. (WGO:TSX.V; WHGOF:OTCQX; 29W:FRA) reported that it has achieved a litany of accomplishments at its extensive district-scale property portfolio, including new game-changing discoveries, positive drill results, raised resource estimates, and a capital infusion from a strategic investment partner via a private placement.
White Gold Corp. is a gold exploration firm headquartered in Toronto, Ont. that operates solely in the White Gold District of Yukon, Canada. The region has historically produced over 20 Moz placer gold since the first gold rush there in 1896. The district has undergone a renaissance since around 2010 when several large hard rock gold discoveries were made in the area.
White Gold owns claims covering more than 420,000 ha, which encompass greater than 40% of the District, including its "flagship" White Gold property, host of the Golden Saddle and Arc deposits, which have an Indicated resource of around 1.14 Moz of 2.28 g/t Au and an Inferred resource of 402.1 Koz Au at 1.39 g/t. Located just 11 km north of Golden Saddle is the firm's VG Deposit, which hosts an Inferred resource of 267 Koz of 1.62 g/t Au.
In a conversation with White Gold Corp.'s CEO & Director David D'Onofrio, he stated that White Gold Corp. offers unique potential for growth.
The district is home to two large known deposits including Newmont Corp.'s (NEM:NYSE) Coffee project and White Gold's Golden Saddle project, each of which was initially discovered by White Gold's co-founder and Chief Technical Advisor Shawn Ryan and subsequently bought for $139M and $520M respectively. Not very far from White Gold's Golden Saddle deposit is Western Copper and Gold Corp.'s (WRN:TSX; WRN:NYSE.MKT) Casino project, which has been shown to contain enormous gold and copper deposits. “With such large deposits already discovered and the prospectivity of additional deposits, this district is truly one of Canada’s emerging gold camps,” said D'Onofrio.
Furthermore, the Resource Gateway project announced in 2017 will rapidly improve the economics of mine development in this emerging district. This jointly funded project by the Federal and territorial governments will see over $468M of infrastructure upgrades throughout the Territory. These infrastructure upgrades will include improvements of existing road infrastructure among other initiatives to provide more reliable access in areas of high-mineral potential and to support future mine development. "With the planned road upgrades running straight through the heart of White Gold’s massive land package," D'Onofrio explained, "White Gold will certainly be one of the primary benefactors of this project."
Strong Vote of Confidence From WGO’s Strategic Partner & Investor
On November 25, 2021, the Company announced a non-brokered private placement of approximately CA$9,000,000 led by existing strategic partner and investor Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE).
The transaction included two tranches of flow-through common shares at prices of CA$0.98 and CA$0.80 per each respective tranche along with common shares priced at CA$0.70 per share. The announcement is particularly encouraging as Agnico will be increasing total ownership interest in White Gold to 19.9%. This level of participation by Agnico represents a strong vote of confidence for the Company, providing strong financial support of the Company’s future exploration efforts in Yukon, Canada.
The company is well funded and is backed by an all-star list of investors that includes two world-renowned mining industry titans in Agnico Eagle, which will own 19.9% of the company post-financing and Kinross Gold Corp. (K:TSX; KGC:NYSE), which owns 17.1% currently. Notable shareholders also include PowerOne and White Gold's management who together make up the largest ownership position in the company at 22.9%. The remaining 42.9% of the company's shares are owned by famed mining industry investor, Eric Sprott, other strategic institutional investors, and public float shares that represent about 30-35% of the outstanding shares in the company.
The strategic relationship with Agnico Eagle and Kinross offers the company access to a tremendous level of expertise through their experience operating in various other mining jurisdictions in Northern Canada and Alaska. Few juniors can showcase such an impressive shareholder base.
Regarding White Gold's long-term prospects for the White Gold District, CEO D'Onofrio said, "As a gold exploration Company, the ideal vision and dream for the company would be to continue to own the district, make discoveries, and monetize those on an individual basis to optimize prospective value for shareholders and to fund exploration for additional discoveries."
D'Onofrio noted exploration companies similar to White Gold see the greatest value by making new discoveries and that it is best to leave the building of mines to the developers, who have an entirely different business model and level of expertise. Simply put, D'Onofrio stated, "That's not what our company is built to do. We want to be a project generator. We have this asset which we own, and the expertise to continue to make discoveries and vend them to developers to put into production for literally decades to come."
Regarding what makes the company and the White Gold district stand out among other mining companies and locales, D'Onofrio said: "From an investor's perspective, White Gold appears to check all the boxes."
Stephen Soock, P. Eng., CFA, a mining engineer and analyst with Stifel GMP Canada advised that his firm currently has a "Buy" rating and CA$2.70 per share price target for White Gold Corp.
One very important box is that the company is operating in a Tier 1 mining jurisdiction that is supportive of mining. The previously mentioned Resource Gateway Project will see significant infrastructure improvements to Dawson City and throughout the Yukon, including the building of airports, roads, and logistics to promote mining production and mineral exploration activity in the region — all of which, when finished, should benefit White Gold substantially. Said D'Onofrio, "This is a prime example of the support offered that is very unique on a global level."
The area has also historically been gold-rich, with millions of ounces of placer gold panned from the rivers during the original Klondike gold rush. Despite this though, much of the district has not been touched and has seen limited modern-day hard rock exploration. "Today, companies like White Gold, are just scratching the surface, and the district has the potential to become a major gold camp in the years to come," asserted D'Onofrio.
The area itself and underlying structural formations have already been demonstrated to contain several million ounces of gold mineralization that has already attracted several large miners to the district including Newmont, Agnico Eagle, Kinross, Western Copper, and Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK).
"As additional gold ounces continue to be discovered and defined, the White Gold district has the potential to be a marquee gold camp," D'Onofrio told Streetwise. "The district today can be compared to other prolific mining jurisdictions such as Nevada or Timmins Ontario 70 years ago. With White Gold as the single largest landholder of the district, the company is in the perfect position to capitalize on the potential growth of this area."
According to him, "The Company’s defined gold resources carry an underlying value which has been significantly undervalued by the market and has not given any value to the significant prospective upside of the remainder of the Company’s 1,000,000+ acres, on which the Company continues to demonstrate value with successes like the Betty discovery this year."
D'Onofrio pointed out that the upside potential cannot be understated as there are not many other opportunities in the gold sector that offer a better risk-reward profile. D'Onofrio added that though it is purely focused on exploration, White Gold perhaps could be thought of as a "super junior" given the scope and scale of its projects.
Four large producers are actively pursuing development projects in the region. With Kinross and Agnico Eagle involved in White Gold’s projects, Newmont’s Coffee deposit, and Rio Tinto’s recent investment in Western Copper, "it is quite clear that these major mining companies and others see tremendous opportunities in the White Gold District," said D'Onofrio. "The company believes that its current share price does not accurately reflect the true value of its defined gold resources and upside discovery potential."
Lastly, D'Onofrio mentioned that he expects M&A activity to likely pick up in the near future as companies have under-invested in exploration over the past decade and will need to replenish their gold reserves in order to meet production targets.
Analyst Agrees, Gives WGO a ‘Buy’ Rating
Stephen Soock, P. Eng., CFA, a mining engineer and analyst with Stifel GMP Canada advised that his firm currently has a "Buy" rating and CA$2.70 per share price target for White Gold Corp. Soock commented that the results obtained from Ryan's Surprise and Ulli's Ridge targets demonstrate strong potential to increase the global resource to over 2 Moz Au at the company's Golden Saddle/Arc property and added that a re-rating for the firm's shares is likely if the company is able to increase the resource to beyond the 2 Moz mark.
The analyst claimed that White Gold Corp.'s shares trade very cheaply versus its peers. Stifel noted that it anticipates that as the total resource approaches the 2 Moz mark, the property will likely be spun out to an industry "major" for development.
White Gold Corp. shares trade on the TSX Venture Exchange under the symbol "WGO" and last closed for trading at CA$0.51/share on December 8, 2021. The firm's shares also trade in the U.S. OTCQX market under the ticker symbol "WHGOF" and on the Frankfort Stock Exchange in Germany under the "29W" designation.
As of the close of trading on December 8, 2021, White Gold Corp. had 133,148,308 shares outstanding and a market capitalization of CA$87.88 million (~US$68.78 million).
Read part two of this Streetwise interview with White Gold here.
Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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