Major Financing Arrangement to Boost Exploration of Gold and Copper Assets

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.
3. James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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NevGold Corp. (NAU:TSX.V;  NAUFF:OTC;  5E50:FSE) has secured a financing arrangement of up to C$8 million through a convertible securities agreement with Mercer Street Global Opportunity Fund II LP. This financing, which is structured in two tranches, includes an initial tranche of $3.5 million, with the potential for an additional $4.5 million in a second tranche. The funds will be used to advance Nevgold’s portfolio of gold and copper projects, including the Nutmeg Mountain and Limousine Butte oxide heap-leach gold projects, as well as the Zeus copper project.

Brandon Bonifacio, Nevgold’s CEO, expressed optimism about the agreement, stating in the news release, “We are pleased to announce this financing package and further capital support from Mercer, who have been a strong supportive shareholder of the company over recent years. The financing will allow us to continue to advance our high-quality portfolio of gold and copper assets in the Western USA, with the proceeds focused on drilling our Nutmeg Mountain and Limousine Butte oxide, heap-leach gold projects, along with advancing our Zeus copper project through the first phase of systematic exploration."

The financing agreement provides Nevgold with flexibility in managing its assets, which are crucial to the company’s strategy of expanding its mineral exploration and development activities. The financing deal, despite current market challenges, underscores the company’s commitment to progressing its projects and generating significant news flow in the coming year.

Strategic Positioning Amid Bullish Copper and Gold Market Trends

The mining sector is currently witnessing a confluence of favorable conditions, particularly in the copper and gold markets, which directly impacts companies like NevGold. Copper, a critical industrial metal, is showing strong signs of a major uptrend. As Technical Analyst Clive Maund wrote on August 27, “Copper looks ready for its next big runup, which could be massive.” This surge is attributed to technical patterns that had been forming over recent months, such as the Head-and-Shoulders bottom and the breakout from a corrective downtrend, indicating robust market momentum. These developments suggest a lucrative environment for copper producers, as increasing demand and constrained supply create opportunities for significant price appreciation.

Simultaneously, the gold market is displaying bullish tendencies, driven by both technical and fundamental factors. On August 23, Jordan Roy-Byrne of The Daily Gold emphasized that “Gold is on the cusp of a massive 45-year breakout in inflation-adjusted terms,” pointing to a historic opportunity for gold mining companies. As the economic landscape shifts, with inflationary pressures and central bank policies playing pivotal roles, the price of gold continues to climb toward its projected targets. This upward trajectory is further supported by the alignment of technical indicators, positive sentiment, and strong fundamentals, positioning gold stocks for potential breakouts. Roy-Byrne also noted that “Technicals, fundamentals, and sentiment are in bullish alignment,” which could lead to increased margins and profitability for gold miners.

Moreover, the market dynamics have also been affected by shifts in global trade patterns, particularly in copper.  a report from Bloomberg News on August 24 highlighted the unusual circumstances in the copper market, where “The 15,000-ton Ricarda cargo that reached New Orleans in July highlights a seismic shift in the market this year.” This shift, characterized by a significant increase in US copper imports and China's unexpected role as an exporter due to subdued domestic demand, underscores the complex global supply chain dynamics. Such developments have bolstered inventories in the US, potentially stabilizing the market while also creating opportunities for companies like NevGold to capitalize on these trends.

As  Mark Mead Baillie wrote for Kitco on August 26, despite some short-term volatility, “Gold looks great even should anticipated decline near-term dominate.” This resilience is crucial for mining companies, as it suggests that the long-term outlook remains positive, driven by underlying economic factors and ongoing demand for safe-haven assets. For NevGold, this means that their gold projects, like Nutmeg Mountain and Limousine Butte, are likely to benefit from these favorable conditions, potentially leading to significant returns as market trends continue to evolve.

Overall, the current landscape in both copper and gold markets offers a promising backdrop for NevGold’s strategic initiatives. With key projects positioned to take advantage of rising prices and positive market sentiment, NevGold is well-placed to leverage these sector trends for substantial growth and value creation.

NevGold Catalysts

The convertible securities financing arranged by Nevgold represents a significant catalyst for the company as it enables the advancement of key projects in the Western USA. The Nutmeg Mountain and Limousine Butte gold projects, along with the Zeus copper project, are poised for accelerated exploration and development, backed by the secured funds. The strategic allocation of these resources is expected to lead to meaningful progress in the company’s project pipeline, particularly in drilling and exploration activities.

Moreover, the financing's flexible structure, including the issuance of warrants and prepayment options, provides Nevgold with the ability to manage its financial obligations effectively while continuing its operational growth. The potential for additional financing through the second tranche further enhances the company’s financial position, allowing for sustained investment in its assets.

The continued support from Mercer, a long-standing shareholder, reinforces confidence in Nevgold's projects and their future potential. This financing arrangement is set to drive the company's strategic objectives forward, contributing to a robust development phase that aligns with the company’s long-term growth plans.

Ownership and Share Structure

About 37% of the company is now held by strategic investors, including GoldMining Inc., which now holds 28.4% 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 5.26%, CEO Brandon Bonifacio with 4.83%, Independent Director Gregory French with 1.17%, and Independent Director Timothy Dyhr with 1.02%, Reuters said.

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

As for its share structure, NevGold has 93.91M outstanding shares and 53.63 million free-float traded shares.

The company's market cap is CA$38.59 million. Its 52-week trading range is CA$0.2300 - 0.5000 per share.