Waiting For Ownership - New Name and Consolidation Marks a New Chapter For Mining Company

NexGold Mining Corp. (NEXG:TSX;  TSRMF:OTCQX), previously known as Treasury Metals Inc., has officially changed its name and consolidated its shares. Effective today, the company completed a share consolidation at a ratio of one postconsolidation share for every four preconsolidation shares. This change reduced the number of issued and outstanding shares from approximately 304,410,407 to around 76,102,374, pending any adjustments for rounding. Starting July 10, 2024, Nexgold shares traded under the symbol NEXG on the TSX Venture Exchange.

Morgan Lekstrom, President of Nexgold, expressed confidence in the name change and consolidation, stating in the company press release, "We believe the name Nexgold Mining Corp. will resonate well with shareholders, current and future, as a growth-oriented gold company focused on near-term production projects. The advancement of the Goliath gold complex is one step in building the vision of a multiasset gold producer, along with assembling a team of expert mine builders, financiers, and long-term supportive shareholders. Momentum and ability to execute place Nexgold in a strong position to create long-term shareholder value."

In addition, Nexgold Mining Corp. has appointed Frank Giustra and Shawn Khunkhun as strategic advisers to the company. Morgan Lekstrom commented, "Adding Frank and Shawn as strategic advisers will help solidify the overall vision for Nexgold. Frank is an icon in the mining industry, with a proven track record of building value-driven mining companies with strong shareholder value. Shawn has been instrumental in raising more than $1 billion in capital for mining projects over the past 20 years and has been instrumental in the turnaround of Dolly Varden Silver. Both Shawn and Frank will be key advisers to the board and to management as we move Nexgold down the buy-and-build path to becoming a mid-tier gold producer."

An aggregate of 1.5 million stock options was granted by the company to Giustra and Khunkhun pursuant to the company's 2024 omnibus equity incentive plan. The options, exercisable into common shares of the company at an exercise price of $1 per common share, vest one-third annually and expire on July 15, 2029. As a result of the grant of options, Giustra and his related entities now own and control 4,746,375 common shares, one million stock options, and 2,646,719 warrants, representing 6.24 percent of the issued and outstanding common shares of the company and 10.52 percent on a partially diluted basis.

In addition, the company announced that 1,335,000 restricted share units (RSUs) representing the right to receive common shares of the company were granted to certain directors and officers. Certain RSUs vest one-third annually, with the rest fully vesting on the first anniversary of the date of grant. All RSUs expire on December 31, 2027.

Examining The Gold Mining Market

In a May report from Statista, it was noted that "Gold has always been one of the world’s most precious and coveted metals, and the primary reason for its value is its rarity." The global mine reserves of gold increased to 59,000 metric tons in 2023, with approximately 3,000 metric tons of gold produced from mines worldwide in the same year. China remained the leading gold mining country, followed by Australia and Russia.

The US also maintained a strong position in the gold mining sector. "Among gold mining companies, Newmont from the U.S. is the global leader, with a production output of 2.5 million ounces in the first half of 2023," according to the Statista report. Newmont's revenue for 2023 amounted to US$11.8 billion. Additionally, the report highlighted that "Nevada is by far the U.S. state with the highest gold production volume, with seven out of the top ten U.S. gold mines located in the state."

On July 16, Mining-Technology reported that "The future for gold is looking bright. The yellow metal achieved a record price of US$2,450 per troy ounce in May, having rallied more than 40% since November 2022." This surge in gold prices was driven by various factors, including increased central bank purchases, Chinese retail demand, geopolitical turbulence, and expectations of cuts to interest rates. Konstantinos Venetis, a macroeconomist at GlobalData TS Lombard, explained that "A confluence of tailwinds has propelled gold prices higher this year in defiance of rising real interest rates and sustained US dollar strength."

Egypt has also made ambitious plans to enhance its mining sector's economic contribution by 2030. On July 18, a report on MenaFN stated that "Karim Badawi, Egypt's Minister of Petroleum and Mineral Resources, outlined the government's ambitious goals to significantly increase the mining sector's contribution to the national economy by 2030." Badawi emphasized plans to raise the sector's share of the national GDP to 5 percent within the next decade. Martin Horgan, CEO of Centamin, highlighted Egypt's competitiveness in the global mining landscape, praising the Sukari gold mine as a global benchmark.

In a July 16 report by Quantis Now, it was mentioned that "Gold reached new all-time highs Tuesday, with the commodity soaring above US$2,460 per ounce and showcasing a robust 1.7% gain for the session, driven by heightened investor convictions that the Fed will cut interest rates at its September meeting." This optimistic outlook was further supported by Bank of America analyst Lawson Winder, who wrote, "With the sharp and sustained move higher in gold prices, we think that there will be an increased focus on capital allocation in the sector."

Nexgold's Next Steps

As per the company, Nexgold Mining Corp. has made significant strides towards enhancing its market presence and operational capabilities. The recent name change and share consolidation are pivotal steps aimed at streamlining the company’s capital structure and enhancing shareholder value. Additionally, the company has successfully completed its transaction with Blackwolf Copper and Gold Ltd., during which it paid a success fee to Haywood Securities Inc. through the issuance of 1,236,400 preconsolidation shares at a deemed price of $0.2022 per share. This issuance remains subject to TSX-V approval and adheres to Canadian securities laws regarding a four-month-and-one-day hold period.

The Goliath gold complex, comprising the Goliath, Goldlund, and Miller deposits in Northwestern Ontario, remains a cornerstone of Nexgold's asset portfolio. This project, alongside the company's other ventures such as the Weebigee-Sandy Lake gold project joint venture and the high-grade Niblack copper-gold-zinc-silver project in Alaska, positions Nexgold as a formidable player in the gold mining sector. The company's commitment to meaningful engagement with regional communities and indigenous nations underscores its dedication to sustainable development and community well-being.

Expert Opinions on Nexgold

Jay Taylor, in his June 28, 2024, Hotline, provided positive feedback on the merger between Blackwolf Copper & Gold Ltd. and Treasury Metals Inc. He stated, "Blackwolf Copper & Gold Ltd. announced overwhelming shareholder approval of the merger of the company into Treasury Metals. At least on the surface, the combination of near-term production from Treasury Metals combined with highly prospective exploration British Columbian and Alaskan properties in Blackwolf's portfolio appears very appealing." Taylor emphasized the strategic advantage of merging near-term production capabilities with promising exploration properties.

Technical Analyst Clive Maund shared his insights on June 26, 2024, regarding the merger. He remarked, "The benefits of this merger can be summarized as the synergies produced by the companies combining their assets, expertise, and experience, as well as the resulting economies of scale as they combine forces." Maund pointed out that the merger would enhance the leadership, balance sheet, and capital markets team of the combined entity. He highlighted that these improvements position the merged company for success, particularly with the combined company's Niblack copper-gold development project in Alaska and other exploration properties representing promising upside projects for future growth.

Ownership and Share Structure

Streetwise Ownership Overview*

Blackwolf Copper & Gold Ltd. (TSXV.BWCG;OTC:BWCGF)

^*Share Structure as of 6/20/2024

Source: Thomson Reuters & Blackwolf Copper and Gold Ltd.

According to Reuters, insiders own 5.74% or 9.23 million shares of Granite Creek Copper.

One of the five insiders is the Chairman of the Board, President and CEO Timothy Johnson, with 2.54% or 4.08 million shares.

The other four, all directors, are Robert Sennott with 1.87% or 3.01 million shares, Michael Rowley with 1.06% or 1.71 million shares, John Cumming with 0.26% or 0.42 million shares, and Loy Chunpongtong with 0% or 0.01 million shares.

The company does not have any institutional investors.

Retail investors own the remaining 94.26%.

Granite Creek has 161 million shares outstanding and 151.77 million free-float traded shares.

The company's market cap is CA$7.23 million, and it trades in a 52-week range of CA$0.03 to CA$0.08 per share.

Important Disclosures:

1. Nexgold is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Nexgold
3. James Guttman 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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