New Drill Results from Alaska Project Positive

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US GoldMining Inc.'s (USGO:NASDAQ) initial two holes of its 2024 drill season completed at its Whistler gold-copper project in Alaska returned positive results, noted a news release.  

At Whistler this year, the company began drilling on June 27 at the Raintree West deposit then moved in early July to the Whistler deposit. The program covered 4,005 meters (4,005m) in all and was finished on budget and ahead of schedule.

One of the two newly reported holes, WH23-03, extended known high-grade mineralization in the Whistler deposit. This effort was a re-entry as the first drilling attempt last year had to be abandoned at 600.2m downhole due to a winter freeze. Last year's drilling, however, did include a previously reported intercept of 547m of 1.06 grams per ton gold equivalent (1.06 g/t Au eq). Then, it was the longest intercept of high-grade consistent mineralization reported to date at the project.

During this year's program, drilling extended this very intercept by more than 100m, taking it to 652.5m of 1 g/t Au eq. Broken down by metal, it consists of 0.73 g/t gold (Au), 1.5 g/t silver (Ag), and 0.16% copper (Cu).

WH23-03 also encountered several higher-grade zones, including:

• 176m of 1.55 g/t Au eq from 131m downhole
• 57m of 1.36 g/t Au eq from 575m downhole

Also, recent drilling of WH23-03 extended the high-grade mineralized core to a depth of 874.5m.

The total envelope of porphyry-style mineralization at the Whistler deposit, now extending from surface down to a depth of 716.6m, consists of 0.93 g/t Au eq, or 0.68 g/t Au, 0.15% Cu and 1.4 g/t Ag. Beyond this point is "barren country rock peripheral to the porphyry mineral system," the release explained. Mineralization extends to surface and remains open at depth.

The second newly reported hole of 2024, WH24-01, U.S. GoldMining drilled into the area of the open pit shell for the Raintree West deposit, constrained by the mineral resource estimate. This hole confirmed the presence of two types of mineralization.

One was broad gold-copper-silver porphyry-style mineralization. It was shown in this highlight intercept: 61.4m of 0.53 g/t Au eq from 311m downhole, including 41m of 0.61 g/t Au eq from 321m downhole.

Narrow, vein-style gold-silver-base metal mineralization was the second type. Specifically, the hole returned 4m of 0.78 g/t Au, 171.6 g/t Ag, 1.19% lead and 2.53% zinc, from 249m downhole.

Raintree remains open along strike and to depth. The company plans to do more drilling there to delineate the full extent of mineralization.

Unlocking Value in an Emerging District

Headquartered in British Columbia, US GoldMining is a mining explorer-developer that went public on the NASDAQ in April 2023 and raised US$20 million (US$20M) to be used on advancing and unlocking value at its 100%-owned Whistler project, the company's sole focus currently.

About 170 kilometers northwest of Anchorage, Ala., Whistler is in the emerging West Susitna mining district that offers multiple avenues for growth, according to the company's September 2024 Corporate Presentation. Spanning 217.5 square kilometers, the large undeveloped project features a number of gold-copper porphyry deposits and exploration targets.

"Porphyry clusters in the [Whistler-Raintree] area contain the potential to yield additional mineralized intrusive centers," H.C. Wainwright & Co. Analyst Heiko Ihle wrote in a September 5 research report.

"Porphyry clusters in the [Whistler-Raintree] area contain the potential to yield additional mineralized intrusive centers," H.C. Wainwright & Co. Analyst Heiko Ihle wrote.

Whistler's existing mineral resource encompasses three gold-copper porphyry deposits: Whistler, Raintree West and Island Mountain. It stands at  3,000,000 ounces (3 Moz) of Au eq in the Indicated category and 6.5 Moz of Au eq in the Inferred category, according to the company's website.

"The firm may encounter additional high-grade mineralization below the current estimate, which should ultimately improve the project's economic viability," added Ihle.

Along with an exploration permit, US GoldMining has the necessary infrastructure, including a build-out camp and a nearby airstrip, for year-round exploration, the company said. The state of Alaska plans to build an access road to the project via its Roads to Resources program, construction of which could begin next year.

The Canadian junior is led by an experienced team with a proven track record in exploration and development (E&D) of significant gold projects. Chief Executive Officer Tim Smith, for instance, formerly as vice president of exploration at Kaminak Gold Corp., led discovery of the Coffee gold deposit in the Yukon. He has also been involved in E&D in Australia and Canada for junior, midtier, and major mining companies, including Newmont Corp. (NEM:NYSE).

Ihle pointed out that U.S. GoldMining remains proactively engaged with its stakeholders and the relationships built through these efforts should prove beneficial when applying for permits in the future. The company, for instance, established a sustainability committee, responsible for "sustainability and environmental, social and governmental, including environmental and climate risks and opportunities, human rights and human capital management, community and social impact, and diversity and inclusion," according to the charter.

Gold: Outperforming, Setting Records

The gold sector continues to heat up, experts say.

"Gold is setting records," according to a Sept. 24 Seeking Alpha article. " It is outperforming stocks. And pretty much everything else."

Year to date, gold up is 27.1%. In comparison, the return with the Standard & Poor's 500 is 20.8% during the same period. Also, the NASDAQ is up 21.7% and the Dow, 11.6%. Gold has even exceeded its 25% gain during the COVID-19 pandemic. As it stands now, it is on track this year for its best return since 2010, and "this gold bull still has plenty of legs."

Driving the demand are U.S. Federal Reserve policy, high interest for gold in Asian and Middle Eastern markets, de-dollarization and central bank buying of the metal.

Based on its charts, gold is about to "go into vertical meltup mode" once it breaks above roughly US$2,800 per ounce (US$2,800/oz), Technical Analyst Clive Maund wrote in a Sept. 26 report on clivemaund.com. He indicated the ascent will likely start "as a steep but fairly orderly uptrend that accelerates in stages over time until it ends up in a wild speculative melee with the price going 'limit up' successively or equivalent, as much as market conditions and rules at the time permit."

Therefore, he added, "the gains in all gold-related investments at this time should be spectacular."

Gold equities specifically offer an "incredible opportunity" currently, wrote Frank Holmes in a Sept. 26 Investing.com article, because they are not trading at levels reflecting the continuing rise of the yellow metal's price.

"And since gold mining stocks have typically moved out of lockstep with the broader market," added Holmes, "they offer a level of diversification that I believe can help hedge portfolios against market downturns."

Major, midtier and junior mining companies "all look ripe for a rebound in what is increasingly a risk-tolerant environment now that 'the punch bowl' of monetary easing/lower interest rates is back on central banks' agendas," Ahead of the Herd's Richard Mills pointed out in the Sept. 28 issue. Yet, of the three types of companies, juniors offer the greatest leverage to increasing commodity prices and the highest potential return, he noted.

"Investing early in the development cycle of the right gold junior, one that has an excellent project in a safe jurisdiction, led by experienced management with the ability to raise money, can reap huge rewards—five, 10, even 20 times your money isn't uncommon," wrote Mills.

Looking ahead at the gold price, Goldman Sachs now forecasts it to be US$2,900/oz in early 2025, having just raised it from US$2,700/oz, reported Mint in a Sept. 30 article. Reasons the bank analysts gave were slowly rising exchange-traded funds flows with interest rate cuts in the West and in China, along with increased central bank buying.

Throughout 2025, other experts estimate the gold price will range from US$2,800–3,200/oz, according to a Sept. 25 Skilling article. Longer term, analysts predict it could reach US$6,800/oz by 2040, representing a 7.2% annual rate of return. Central bank policies, global economic trends and inflation will continue to affect the price.

The Catalysts: More Drill Results

Near-term catalyst for U.S. GoldMining, Ihle pointed out, include further assay results from the 2024 drill program, which the H.C. Wainwright analyst expects will be valuable.

Once the company completes drilling, investors should anticipate an updated mineral resource estimate. 

Ihle has a Buy rating and a target price on U.S. GoldMining, the latter implying a potential return of 187%.

Ownership and Share Structure

According to Refinitiv, 11 strategic entities own 88.09%, or 10.92 million (10.92M) shares, of U.S. GoldMining. The Top 3 are parent company GoldMining Inc. with 79.67% or 9.88M shares, 1741 Holding AG with 3.7% or 0.46M shares, and Amir Adnani with 3.23% or 0.4M shares.

As for institutional ownership, 15 companies hold 4.27% or 0.53M shares. The Top 3 are Commodity Capital AG with 3.7% or 0.46M shares, Geode Capital Management LLC with 0.16% or 0.02M shares, and The Vanguard Group Inc. with 0.15% or 0.02M shares.

Retail investors own the remaining 7.65% or 88.55M shares.

Regarding capital structure, U.S. GoldMining has 12.4M shares outstanding and 1.48M free float traded shares.

Its market cap is US$101.67M. Its 52-week range is US$4.91–$9.34 per share.