Canadian Gold Explorer Acquires 100% of Idaho Project

NevGold Corp. (NAU:TSX.V; NAUFF:OTC; 5E50:FSE) announced it has exercised the option to acquire 100% of the Nutmeg Mountain gold project in Washington County, Idaho.

As part of NevGold's option agreement from June 2022, the company issued 10 million shares at CA$0.30 per share for a total of CA$3 million common shares to GoldMining Inc. (GOLD:TSX; GLDG:NYSE.American)

NevGold's stock went up 1 cent to CA$0.33 on the news Friday.

“Completing the acquisition of 100% of Nutmeg Mountain from GoldMining is a monumental milestone for the company," NevGold Chief Executive Officer Brandon Bonifacio said. "We have diligently advanced our efforts since closing the transaction on Nutmeg Mountain in August 2022. After less than 12 months of working on the project, we released our initial MRE."

NevGold announced a Mineral Resource Estimate (MRE) at Nutmeg Mountain last August with more than 1 million indicated ounces of gold (Au) from 51.7 million tonnes (Mt) at 0.61 g/t Au, and 275,000 inferred ounces of gold from 17.9 Mt at 0.48 g/t Au.

The company plans to explore with further drilling and metallurgical test work and work towards on updated MRE to advance the project to a Preliminary Economic Assessment (PEA).

"We are fortunate to now own 100% of one of the very few open-pit, oxide, heap-leach gold projects of scale and grade with mineralization starting at surface in the Western USA," Bonifacio said. "Nutmeg Mountain's location in Western Idaho (Washington County) also offers many benefits as it is a premier mining jurisdiction with excellent infrastructure in place, which will allow for rapid project advancement."

The Catalyst: A Growing Resource

NevGold said compared to a 2020 historical resource estimate at Nutmeg Mountain, the new MRE increased the pit-constrained tonnage by more than 32%. More high-priority drill targets were also identified.

The company noted that mineralization at the project starts at the surface.

"The strip ratio of the project based on conceptual pit-shells is expected to be less than 1:1, which is extremely low for an open-pit, oxide, heap-leach gold project," the company said in a release when it announced the MRE. "The low strip ratio will minimize upfront capital and development timelines of the Project, providing the opportunity for a future low-cost mining operation with rapid cash flow."

The average drill hole depth at the project is less than 75 meters, NevGold noted, and to date, the potential high-grade feeder veins typically associated with low-sulfidation epithermal gold systems have yet to be identified.

Besides in-ground reserves and an expanding drill program, NevGold offers other advantages. As Rowan Dunne points out in Mugglehead Magazine, "Positive shareholder relationships make NevGold a worthy investment." 

"Discovering additional near-surface disseminated gold mineralization and the potential high-grade feeder structures will continue to be the focus of NevGold's ongoing exploration," the company said.

Other current projects for the company include the Limousine Butte and Cedar Wash properties in Nevada. Located in western Idaho, Nutmeg Mountain comprises 1,724 hectares of federal unpatented mining claims, 12 patented claims, and two private land leases.

In early 2023, NevGold completed five core drill holes totaling 1,371 meters at Nutmeg Mountain, data used to complete the MRE.

Besides in-ground reserves and an expanding drill program, NevGold offers other advantages. As Rowan Dunne points out in Mugglehead Magazine, "Positive shareholder relationships make NevGold a worthy investment." 

More Details of Transaction

GoldMining owned 20% of NevGold's outstanding common shares prior to NevGold completing the acquisition of the property.

On completion of the Share Issuance Payment, GoldMining holds, and has control and direction over, 26,670,250 common shares and 1,488,100 warrants, representing approximately 29.4% of NevGold's outstanding common shares on an undiluted basis and approximately 30.5% on a partially-diluted basis assuming the exercise of the warrants held by GoldMining.

The securities are subject to a four-month hold period ending on May 19, 2024, in accordance with applicable securities laws and the policies of the Exchange.

Why Gold? Why Now?

Potential interest rate cuts could lead gold prices to close as much as 10% above current levels (US$2,2025.10 per ounce early Monday afternoon), despite declines so far in 2024.

In a research note reported by CNBC, UBS described recent price changes as "minor" and that the "power of the [Federal Reserve's] policy pivot should not be underestimated."

UBS forecasted a rise to US$2,250 per ounce by the end of the year.

Scotiabank was more cautious; however, CNBC reported, but they revised their price guidance to a year-end forecast of US$2,000 per ounce, up from US$1,900 per ounce.

Geopolitical instability and market uncertainty can boost gold as a "safe haven" asset, but markets are becoming uncertain that the Fed will begin rate cuts in March, CNBC said.

According to the World Gold Council's Gold Outlook 2024, the market is expecting a "soft landing" for the economy in the U.S. this year – traditionally not attractive for gold.

"That said, every cycle is different," the Council wrote. "This time around, heightened geopolitical tensions in a key election year for many major economies, combined with continued central bank buying, could provide additional support for gold . . . Further, the likelihood of the Fed steering the U.S. economy to a safe landing with interest rates above 5% is by no means certain."

Ownership and Share Structure

About 37% of the company is now held by strategic investors, including GoldMining Inc., which now holds 29.4% of the company on an undiluted basis, and McEwen Mining Inc. 

The company said about 30% is held by management and insiders. According to Reuters, these include Non-Executive Chairman Giulio T. Bonifacio with 7.3%, CEO Brandon Bonifacio with 6.7%, Independent Director Gregory French with 1.62%, and Independent Director Timothy Dyhr with 1.37%, Reuters said.

About 10% is held by institutions, and the rest is in retail.

NevGold has a market cap of roughly CA$26.67 million with 67.76 million shares outstanding. The stock trades in a 52-week range of CA$0.48 and CA$0.24.

Important Disclosures:

1. NevGold Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of NevGold Corp. and Goldmining Inc.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
4.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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