Tech Revolutionizing Digital Gold Mining Hits Milestone

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* Disclosure for the quote from the Clive Maund article published on January 27, 2025

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The quoted article represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be  only be construed as a recommendation or solicitation to buy and sell securities.

A building revolution in the way investors buy and sell gold, a precious metal that is currently setting new records in a bull market, just got a boost from a deal announced recently to acquire mining claims in Ontario.

NatGold Digital Ltd. plans to transform underground gold resources into tradable, compliant NatGold Tokens in a blockchain-based digital gold mining ecosystem instead of physically digging it up from the ground.

Partner company Great Eagle Gold Corp. (GEGC:CSE; GEGCF:OTC; GI8:FRA) just announced it has signed a letter of intent (LOI) with New Path Resources Inc. to acquire three patented mining claims containing 240,100 ounces of NI 43-101 inferred gold resources. The deposit would yield 48,020 NatGold Tokens, with Great Eagle receiving 40,817 tokens (85% of the total) after accounting for NatGold's tokenization fees and contingency fund allocations.

Great Eagle has agreed to acquire the rights for US$750,000 (converted from CA$1,000,000), with an initial option payment of CA$10,000 already made.

Great Eagle Chief Executive Officer Andrew Fletcher said the agreement was a "significant milestone" in the process of supplying NatGold with resources for tokenization.

"It positions us as a key player in preparing for the imminent launch of NatGold's revolutionary, patent-pending digital gold mining ecosystem," Fletcher said.

Gold Is Bullish, But What's the Best Way to Own It?

With its traditional role as a safe place to invest in times of turmoil, fears of an escalating global trade war have sent prices to new highs in recent days. It hit a mark of US$,2942.70 during Tuesday's Asian trade, according to Reuters.

Gold has been in an uptrend for 16 months, having rallied by 63% since October 2023, according to the Reuters report by Clyde Russell. It has accelerated since Trump was re-elected with an increase of 16% since mid-November.

"Investors are turning to gold as a safe haven amid rising uncertainty as Trump unleashes a variety of trade tariffs and threatens more to come," Russell wrote.

But according to Technical Analyst Clive Maund, writing on January 27*, many investors are "painfully aware that gold stocks have been dramatically underperforming gold itself over the past several years."

The reasons? The astronomical costs of mining the gold and the public's negative perception of the mining industry's ESG record (ESG stands for Environmental, Social, and Governance).

"Enter Great Eagle Gold, which is leading the ESG shift from traditional gold mining to digital gold mining," Maund wrote. "Traditional gold mining involves digging gold out of the ground, an expensive, laborious, and time-consuming business, and then a large percentage of it goes back into the ground in the form of gold bars in bullion vaults."

It's revolutionary because Great Eagle will acquire and prepare certified underground gold deposits for tokenization into NatGold coins — the result of this being that "the gold in the ground is ascribed value and ownership without ever having to be mined," Maund wrote.

The analyst recognizes this may be a hard concept for some traditional investors to wrap their heads around.

"However, this tokenization of the gold in the ground is probably more real than Bitcoin, and as we know, Bitcoin has entered the mainstream in a big way, so why not gold?" Maund wrote.

The ABCs of Tokenization

But what is a blockchain, and how does this all work? According to Wealth Daily, a blockchain is "a distributed public ledger. Just picture it like a giant jumbled spiderweb — there's no start or center and no central controlling entity."

"In the world of digital currency, this is a huge benefit to many investors and users who don't like the idea of their money being tied to a central government or bank," the website noted.

Tokenization is simply "converting the rights of an asset to a token on a blockchain."

The world's largest asset manager, BlackRock, is aiming to tokenize US$10 trillion of its assets.

"We believe that next step going forward will be the tokenization of financial assets," Chief Executive Officer Larry Fink has said. "Every stock, every bond will have its own (number), it will be on one general ledger, (and) every investor, you and I, will have our own number."

In a fireside chat with Bretton Woods Committee, Securitize chief executive officer and cofounder Carlos Domingo said that tokenization is not that different than ownership of certain assets now, like deeds for homes and other real estate or securities recorded by an issuer.

"Tokenization is nothing else but a very efficient ledger that is that is public" but also digitally secure, he said.

Much of what asset managers do is to raise and invest money, he said. "But they also have to record the ownership of everything," he said. "They have to move it around, and that turns out to be a very complicated process with a lot of intermediaries involved, with a lot of reconciliation errors, manual processes, etc."

"Gold needs to keep up with the times. How?" asked entrepreneur, business author, and seasoned capital markets professional Alex Tapscott, who co-wrote the bestselling book Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World, and the more recent Wall Street Journal Bestseller Web3. "The answer lies in blockchain, the technology behind Bitcoin. Blockchains allow us to program a digital coin or 'token' to represent anything of value — stocks, bonds, art, gold — and make it accessible to anyone without the need for intermediaries."

The global Bitcoin market size was valued at US$17.05 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 26.2% from 2022 to 2030, Grand View Research said.

Agreement Makes It Possible

The strategic partnership between NatGold and Great Eagle makes this happen with gold. While NatGold Digital is the creator and operator of the digital mining ecosystem and also responsible for the demand-side market creation for the NatGold Token, Great Eagle represents the supply side of the NatGold ecosystem — the side that supplies the ecosystem with qualifying mining titles containing certified gold resources that are tokenized into NatGold Tokens.

Under this agreement, Great Eagle holds preferential tokenization rights for up to 2.5 million NatGold Tokens.

Fletcher stated that the company has developed a proprietary acquisition strategy to meet NatGold's stringent requirements for tokenization and trustworthiness. "Over the past year, Great Eagle's in-house team of data analysts has compiled a comprehensive database of acquisition targets. This 'universe of targets' represents projects that meet specific criteria essential for NatGold Digital's tokenization process."

Based on a proprietary scoring system to evaluate targets, Great Eagle has analyzed and qualified more than 300 certified gold deposits mostly in North America.

Technical Analyst Maund noted that gold's true value "lies in its existence, not where it is vaulted, these problems are solved by 'digital mining.'"

There will be some argument that physical gold is needed for jewelry and even industrial applications, but "it is clear that if the tokenization of gold is successful, the need to mine new reserves will be vastly reduced so that what demand there is can be met to a considerable degree by existing mines and processing tailings, etc."

Maund said Great Eagle already seems to be building up to "breaking out into a significant bull market."

"Nearly all of the volume since late September has been upside volume, which, of course, explains the strong rise in volume indicators during this period," Maund wrote about its four-month chart at the end of January. "What we have seen on the charts strongly suggests that Great Eagle Gold is building up to breaking out of its recent base pattern into a new bull market and that such a breakout could happen soon, it is rated an Immediate Strong Buy here."

Ownership and Share Structure

NatGold is a private company.

According to Refintiv, about 35% of Great Eagle Gold Corp. is owned by management and insiders. Of them, Azim Dhalla owns the most with 25.4%. Yari Nieken holds 6.77% and Andrew Fletcher holds 1.69%. The rest is retail.

The company has 32.71 million Free Float Shares and a market cap of CA$10.05 million. The 52-week range for GEGC is CA$.07-0.58.