Gold Explorer Drops Private Placement From New Strategic Investor

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Western Exploration Inc. (WEX:TSX.V; WEXPF:OTC) announced a non-brokered private placement of CA$1.7 million from a new strategic investor from Texas.

The company is in the midst of a 4,000-meter drilling program at its wholly-owned Aura gold and silver project in Nevada to target high-grade veins east of the Gravel Creek deposit, where 2023 drill results provided a "breakthrough" showing a significantly expanded resource, the company said.

"Western Exploration is chiefly a gold explorer, and gold is set to perform very well over the next several years due to accelerating currency debasement and war," Technical Analyst Clive Maund wrote for Streetwise Reports on August 21.*

"Another big positive is that the company has already discovered significant reserves at its projects in northern Nevada, which is a mining-friendly jurisdiction," Maund continued. "And still another positive is that the number of shares available to retail investors is tiny. … This means that any significant increase in demand for the stock could lead to a spectacular spike, and the stock is already powering up to make significant gains."

Under the newly announced placement, TXAU Ventures LLC of Houston will purchase 1,603,773 units of Western Exploration at CA$1.06 per unit. Each unit consists of one variable voting of Western Exploration and one-half of one variable voting share purchase warrant of the company. Each warrant allows the purchase of one variable voting of the company at CA$1.36 per warrant share on or before 24 months after the offering closes.

All of the available units in the offering have been allocated to TXAU, Western Exploration. The offering is scheduled to close on or about September 24.

The company said in a release that it intends to use the net proceeds from the offering to advance a pre-feasibility study (PFS) of the Doby George Deposit, undertake baseline studies in advance of commencing permitting of the Doby George Deposit, and for general corporate purposes.

Connecting the Dots

The Aura Project consists of three locations in Nevada: Doby George, Gravel Creek, and Wood Gulch. Earlier this year, the company announced that it is expanding the size of the Wood Gulch/Gravel Creek resources area and working toward a resource update for Doby George.

"Past drilling has already outlined very high Au and Ag grades, and this should allow us to connect the dots and expand the current Gravel Creek resource," Western Exploration Chief Executive Officer Darcy Marud said in an update to shareholders this spring.

Oriented core data from 2023 identified an array of intersecting veins, stockwork, and hydrothermal breccias following steep to shallow northwest-to-northeast trends that mimic the known structural controls of mineralization, the company said.

"The strongest correlation between 2023 holes WG456 and WG457 linked mineralized structures to a north/north-west trending corridor, with moderate dips west/south-west towards the main GC Fault zone," Western Exploration said in a release. "Multiple legacy intercepts along two sub-parallel veins zones show grades of over 20 g/t Au Eq along a dip length of over 200 meters. Initial drilling in 2024 will bracket Discovery section 500N, with holes drilled along strike and up dip on 80-meter step outs."

The drilling program at Aura is "very likely to deliver more high-grade assays to the market in H2/24 and confirm a very significant new discovery zone," writer Brien Lundin of Gold Newsletter has noted. "With a target like this, the company is largely immune to the gold price action if it can deliver results as hoped. Thus, it remains a Buy."

Maund agreed that bright days could be ahead for the stock.

"Turning now to the charts, we quickly realize that Western Exploration is powering up for a major bull market," Maund wrote. "The price/volume has been positive for most of this year, and the price is now starting to advance away from the base that started to form as far back as August of last year, and at a time when the entire sector is commencing a major bull market. Holders of Western Exploration should, therefore, stay long, and it is rated a Strong Buy here as the bull market is still in its earliest stages."

Gold Sees Record Week

Indeed, the outlook for gold has been distinctly bullish this month. Its prices per ounce set another record Monday of US$2,589.70 before pulling back. It has stayed stable above US$2,550 so far this week and was US$2,573.17 on Wednesday morning.

Leading the way to further gains was the Federal Reserve's first interest rate cut in four years on Wednesday.

A major cut like Wednesday's "would increase the tailwind for gold and pull forward the timing for attainment of US$3,000," Peter A. Grant, vice president and senior metals strategist at Zaner Metals, said in a Reuters report by Anushree Ashish Mukherjee and Anjana Anil.

"Gold market bulls are locking in bullion prices surging to fresh records, with a milestone of US$3,000 per ounce coming into focus, fired up by monetary easing by major central banks and a tight U.S. presidential election race," Mukherjee and Anil wrote.

Ownership and Share Structure

About 72% of Western Exploration is owned by strategic entities and high net worth investors, according to its latest investor presentation, including Golkonda LLC with about 46%, Agnico Eagle Mines Ltd. with 14%, and Auramet Capital Partners with 5%.

Other institutions hold about 6%, insiders and management hold about 3%, and the rest is retail.

Western Exploration's capital structure consists of 43.8M outstanding shares and 16.21M free float traded shares. Its market cap is CA$45.11 million. Its 52-week trading range is CA$0.46−$1.50 per share.