Gold Opportunity in Arizona: Surprising Acquisition Unlocks Value

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Mako Mining Corp. (MKO:TSX.V; MAKOF:OTCMKTS) has announced its intention to acquire the Moss gold mine in Arizona, a move that will expand its portfolio of gold assets in the Americas. Through a non-binding letter of intent, Mako plans to purchase all shares of EG Acquisition LLC (EGA), a private corporation established by its controlling shareholder, Wexford Capital LP, to acquire the Moss mine. EGA has already completed the acquisition of Golden Vertex Corp., the direct owner of the Moss mine, via a court-approved sale process under the Companies' Creditors Arrangement Act and Chapter 15 of the U.S. Bankruptcy Code.

The proposed transaction, set to close by February 2025, is valued between US$4.9 million and US$6.4 million, depending on the resolution of disputed net smelter return royalties on the Moss mine. Notably, over US$60 million in liabilities tied to the mine were eliminated during the bankruptcy process. The Moss mine, an open-pit heap leach operation in Arizona's historic Oatman district, is currently producing gold at a limited capacity, with mining operations temporarily paused. Mako plans to restart full-scale mining and optimize operations following the acquisition.

CEO Akiba Leisman remarked on the significance of the deal, stating, "The acquisition of the Moss gold mine, after eliminating US$60 million in liabilities and at a net purchase cost reduced further by US$1.5 million in released collateral, highlights Mako's ability to leverage its financial and operational expertise. This transaction represents a strategic expansion funded entirely by the company's cash flow."

On January 7, Ceasar's Report newsletter wrote about his acquisition, stating, "It's interesting to see Mako Mining entering the United States to further diversify its asset base, and it will be equally interesting to see if it picks up more land in the regional district."

Mako Mining has recently demonstrated strong financial performance. In Q4 2024, the company sold 10,803 ounces of gold, generating record revenue of US$28.8 million, and increased its cash balance by US$9.5 million to US$14.5 million. The company's high-grade San Albino mine in Nicaragua has consistently delivered robust results, with mill availability at 97% and gold recovery at 85%.

Gold Prices Continue to Surge Despite Market Headwinds

According to Mining.com, on January 4, investment demand remained the most significant driver for gold prices in 2025, reflecting concerns about economic, financial, and political uncertainties. The CPM Group projected an average gold price of US$2,730 per ounce for 2025, up 13% from 2024, with global mine production expected to increase by 1.5% to approximately 88.6 million ounces.

Ahead of the Herd on the same day highlighted that gold miners entered 2025 undervalued despite record earnings fueled by high gold prices. It noted that in 2024, gold averaged US$2,391 per ounce, a 23% increase over 2023. Unit profits for major gold miners were expected to reach record levels, with Q4 2024 profits estimated at US$1,261 per ounce, compared to US$980 in the first three quarters. The report emphasized a "major-paradigm-shift revaluation year" for gold miners due to their sustained profitability and high prevailing gold prices.

Ceasar's Report newsletter wrote about his acquisition, stating, "It's interesting to see Mako Mining entering the United States to further diversify its asset base, and it will be equally interesting to see if it picks up more land in the regional district."

Reuters on January 6 reported that U.S. Treasury yields had placed short-term pressure on gold prices, which settled at US$2,647.40 per ounce. Despite this, Nitesh Shah of WisdomTree projected a price target of US$3,050 per ounce by the end of the year, citing potential dollar depreciation and geopolitical tensions as key drivers.

321Gold described the current environment as favorable for gold on January 7. This was supported by geopolitical uncertainties and fiscal spending. Analysts projected gold prices to range between US$2,700 and US$2,900 per ounce. Stewart Thomson noted that "a range trade for gold could see miners and silver stage numerous 20% surges in 2025," presenting opportunities for substantial investor gains.

Finally, Quote the Raven on January 10 explored the relationship between gold prices and broader economic trends, emphasizing that gold remains a hedge against inflation and market stress. It pointed to central bank policies and geopolitical concerns as factors likely to sustain high gold prices and drive further investment.

Mako's Elevated Production Levels and Strategic Adjustments

Mako Mining's acquisition of the Moss gold mine offers several immediate and long-term catalysts that position the company for growth, as per their investor presentation. First, the Moss mine provides a producing asset in a mining-friendly jurisdiction, allowing Mako to diversify its geographic exposure while leveraging its expertise in small-to-medium-scale mining operations. The company plans to restart mining operations swiftly, optimizing the mine plan and debottlenecking the crushing plant, which is expected to boost output within months of the acquisition.

Beyond the operational advantages, Mako's financial strength underpins the transaction. The deal is funded entirely through the company's cash flow, preserving shareholder value without additional financing. Furthermore, the elimination of historical liabilities and streamlining of royalty obligations significantly enhance the Moss Mine's economic potential.

In parallel, Mako continues advancing its Eagle Mountain project in Guyana, with a phased development plan targeting initial production by 2027. The company has committed to engineering studies, tailings management, and environmental permitting to support the project's timeline. Near-term milestones include initiating underground mining at San Albino and integrating high-grade discoveries from its extensive landholdings in Nicaragua.

Ownership and Share Structure

According to Refinitiv, 3.06% of Mako Mining is owned by management and insiders. Of them, Akiba Jacob Issachar Leisman holds the most at 2.25%.

Institutions own 49.50% of the company with Wexford Capital LP holding the largest amount with 47.75%. The rest are retail.

Mako Mining has 79.25 Million outstanding shares, 76.83 free float shares, and a market cap of CA$181.72. Their 52 week range is CA$1.96-CA$3.74.