| Let’s Look at the Team Driving Success at U.S. Gold (USAU) and How Their Experience Fits the Development of the CK Gold Project
USAU News Out: “Updated assay results further support the company’s projections of one million ounces of gold”
Good day everyone,
U.S. Gold Corp. (NASDAQ: USAU) is a gold exploration and development company with properties in Wyoming, Nevada, and Idaho.
Current price $9.10/share
In news that broke Today / Tuesday, the company updated the assay results for a portion of the drilling conducted during the 2021 field season and the news is good. The updated assay results further support the company’s projections of one million ounces of gold and 248K tons of copper as indicated in their Pre-Feasibility Study from last year.
Kevin Francis, V.P. Exploration and Technical Services, of USAU said: “While we know that we have a high-grade zone starting at surface with minimal waste rock stripping required, we are encouraged by further evidence of higher grades than currently modeled.” In the press release Mr. Francis details the assay results and you can look at them at the link above. I read it and the gist of it is “the results are better than we anticipated.”
I have followed and reported on USAU for years and it’s my favorite Junior Mining company. Not only do they have some great properties with enormous potential, but they also operate in an investor friendly transparent environment. The commencement of a Feasibility Study at the CK Gold Project is a major milestone for the company and potentially a significant catalyst.
As the company begins the Feasibility Study at CK Gold, followed by permitting approval, financing and construction, the foundation of their management becomes crucial. I have always believed in the future success of USAU because of the team the company has put together.
I wanted to talk about the management at USAU and how they may contribute to the future of the company. The list below is neither complete nor are the full bios reiterated. Visit the company website for full biographical information.
George Bee – President, CEO and Chairman. Mr. Bee became President of the company in 2020 and is responsible for recent developments at the company and their current focus on the CK Gold Project.
In 2018 Mr. Bee concluded a third term with Barrick Gold as Senior VP Frontera District in Chile and Argentina to advance Pascua Lama feasibility as an underground mine. This capped a 16-year history with Barrick Gold with positions that included Mine Manager at Goldstrike during early development and operations, Operations Manager at Pierina Mine taking Pierina from construction to operations, and General Manager of Veladero developing the project from advanced exploration through permitting, feasibility and into production. Beyond his history at Barrick Gold Mr. Bee has been involved in senior management positions at several major mining operations all over the world. Mr. Bee is a respected member of the international gold mining community.
Before Mr. Bee came on board, USAU focused on its Keystone Project in Nevada and CK Gold (then called Copper Creek) was an investment property the company held. Mr. Bee saw the size of the CK Gold property, and the Preliminary Economic Assessment done a few years earlier. He immediately turned his focus to the Wyoming property and has transformed the company into a mining exploration force. Mr. Bee’s leadership has been, and will continue to be, an integral component of the development of USAU.
Eric Alexander – CFO. Mr. Alexander has over 30 years of corporate operational and business experience, with over 15 years of mining industry experience. Previously he served as the Vice President Finance and Controller of Pershing Gold Corporation, a mining company (formerly NASDAQ: PGLC), from September 2012 until April 2019. Mr. Alexander’s mining specific financial experience will help as financing becomes critical to development of CK Gold.
Kevin Francis – VP of Exploration and Technical Services. Mr. Francis has held many senior roles within the mining industry and most recently, he consulted to USAU as Principal of Mineral Resource Management LLC, a consultancy providing technical leadership on the CK Gold Project through his association with Gustavson Associates. Mr. Francis is a “Qualified Person” as defined by SEC S-K 1300 and Canadian NI 43-101 reporting standards and holds both an M.S. degree and a B.A. in geology from the University of Colorado. His history with the CK Gold Project and specifically the Pre-Feasibility Study will be invaluable in working with Samuel Engineering during the Feasibility Study process.
The Honorable Ryan K. Zinke – Director. His military career includes being a Navy Seal Commander with two tours of duty at SEAL Team SIX. He has been a State Senator (Montana), U.S. Congressperson and the 52nd Secretary of the Interior. He holds an MBA in Finance, an MS in Global Leadership, and a BS in Geology. Mr. Zinke would be a positive force at any company. The associations and contacts he made in his military and political careers may be vital to USAU particularly during the permitting process.
Robert W. Schafer – Director. Robert Schafer is a registered professional geologist with over 35 years international experience exploring for and discovering mineral deposits, four were producing mines including the Briggs (over one million ounces) and Griffon gold mines and Birkachan (over one million ounces) gold mine. Mr. Schafer has worked in more than eighty countries. His world class geological experience and expertise speaks for itself, and his presence lends credibility to the company.
Tara Gilfillan – Director. Tara Gilfillan is a CPA with over 25 years of experience as a financial executive and serial entrepreneur. She is currently the Founder and President of Optimize Group Inc. a mine-to-mill project development engineering company with offices in three continents. Ms. Gilfillan has held executive positions including CFO and Controller of several mining companies. Her project development and finance experience come at a crucial time for the company as the development of CK Gold and the associated financing loom ahead.
Once again,
Why I believe USAU shares may swing quickly:
New developments at their CK Gold Project (see below)
The prices of gold and copper are rising (see below)
Tiny share structure with only 6.31M shares in the float
Insiders own 14.26% of the outstanding shares and institutions own 12.25%
Cash (mrq) $7.14M. FYE is April 30th.
Current value is considerably below analyst’ target of $20.75/share – over 100% upside (see below)
USAU shares are still trading 30% off their 52-week high of $13.20/share
Now you should be seeing the full picture as to why I love this Gold Miner!
The Traders News Group
This week’s original coverage below
Is USAU Next to be Part of the Consolidation (Buyout’s) in the Red Hot Gold Sector?
AMC Entertainment Holdings, Inc. (NYSE: AMC) Just Bought a Stake in Hycroft Mining (NASDAQ: HYMC), Could U.S. Gold (USAU) Be Someone’s Else’s Diversification Investment?
Good Day Everyone,
U.S. Gold Corp. (NASDAQ: USAU) is a gold exploration and development company with properties in Wyoming, Nevada, and Idaho.
After closing the Monday session at $8.13/share, USAU climbed to $9.59 early on heavy volume of 138K shares.
Current price $9.05/share (+ 11.32% as of 10:04 am EST 3-15-22)
In news that broke this morning, AMC Entertainment (AMC) said it would invest $56 million in gold and silver producer Hycroft Mining Holding Corp (HYMC) along with Canadian fund manager Eric Sprott, a move the theater operator’s CEO said would help the company diversify.
That move by AMC makes me wonder if USAU could become an acquisition target. Diversification into gold, silver, copper, and other minerals may be a savvy move for companies with cash that want a commodities-based cushion against economic woes. USAU could be a potential target due to its low market value and gold rich properties.
The price of gold, at this writing, is $1,919/oz, only 8% off its all-time high of $2,074/oz.
The Traders News Group
This morning’s original report below
The Valuation at U.S. Gold (USAU) is Still Lagging the Trend in Gold Prices but That Could Change Quickly
Very exciting development with USAU, working on feasibility study.
Good day everyone and welcome to all of our new members,
U.S. Gold Corp. (NASDAQ: USAU) is a gold exploration and development company with properties in Wyoming, Nevada, and Idaho.
Current price $8.13/share
Why I believe USAU shares may swing quickly:
- New developments at their CK Gold Project (see below)
- The prices of gold and copper are rising (see below)
- Tiny share structure with only 6.31M shares in the float
- Insiders own 14.26% of the outstanding shares and institutions own 12.25%
- Cash (mrq) $7.14M. FYE is April 30th.
- Current value is considerably below analyst’ target of $20.75/share – over 100% upside (see below)
- USAU shares are still trading 30% off their 52-week high of $13.20/share
With gold prices trending to new highs and the company at a new advanced exploration level, I believe that the USAU valuation could rise to a new high. I think it may get there soon, creating an opportunity for investors right now.
I last reported on USAU in January and now I want to update you on recent developments. For our many new members since January, USAU has four gold and mineral exploration projects; the CK Gold Project in Wyoming, the Keystone Project located on the gold rich Cortez Trend in Nevada, Maggie Creek, located on the prolific gold producing Carlin Trend in Nevada, and Challis Gold in Idaho. The company’s current focus is on developing the CK Gold Project.
The CK Gold property comprises about 1,120 acres (2 square miles), is 100% owned by U.S. Gold Corp. and is located about 20 miles west of the city of Cheyenne, Wyoming. There is a fuller description of CK Gold at the bottom of this report.
The price of gold has been staying above $1,900/oz this month and crossed the $2,000/oz level last week. The current price of copper is $9,220/ton. Copper demand is on the rise and gold prices are trending. Aggregate, a byproduct of mining sells for $9.00 -$18.00/ton. These are three products USAU expects to produce at their CK Gold project. Gold companies at all levels do well when the prices of gold gains.
Recent milestones at USAU:
The next phase of engineering for the CK Gold project was just announced last week. The company has awarded a contract for the next phase of engineering work to Samuel Engineering Inc. as USAU works towards a full Feasibility Study (FS). Samuel Engineering has a 25-year history, having serviced more than 300 customers worldwide (more on the FS below).
Earlier this month, in an update on the CK Gold project, company President and CEO, George Bee said, “With proven and probable reserves that currently stand at over 1 million ounces of gold and 248 million pounds of copper in a rising price environment, we believe that bringing this US domestic production will have widespread benefits.”
At today’s prices, those proven and probable reserves mentioned above translate into $3.0 billion.
On January 26, U.S. Gold Corp. announced a variety of updates related to the advancement of its CK Gold project. The company continues to move the project through the permitting stage and towards a production decision in FY22 based on the recent publication of CK Gold’s Pre-feasibility Study. In turn, the company expects to file its mine plan permit in mid-FY22, while management anticipates about a 12-month approval process from state regulators. Given this timeline, U.S. Gold currently anticipates having its permit approved by mid-FY23 (the company FYE is April 30th).
In my opinion, the developments above transform USAU into an Advanced Stage Exploration Company.
The consensus analyst’ rating on USAU is “Buy” and the average twelve-month price target is $20.75/share representing an upside over 100%.
3/11/2022 HC Wainwright – Boost Target – Buy $16.00 ➝ $16.50
12/2/2021 Alliance Global- Boost Target – Buy $20.00 ➝ $25.00
HC Wainwright, in their recent analysis, states their USAU Discounted Cash Flow Valuation and boosted target price is based upon: “Our DCF analysis results in a valuation for the CK Gold project of $83.1M, or $9.71 per share. We add an unchanged total of $50.0M for the Challis ($28.0M), Keystone ($20.0M), and Orevada (Maggie Creek) ($2.0M) projects, in addition to U.S. Gold’s cash balance of about $7.1M, to achieve our overall firm NAV of $140.2M, or $16.39 per share. Finally, we round this figure to our final price target of $16.50 per share.”
A Feasibility Study (of a mine proposal) is an evaluation of a proposed mining project to determine whether the mineral resource can be mined economically. Samuel Engineering will be looking at all the data collected by USAU thus far and much more as the company generates it. A Feasibility Study has several key objectives, and these are a few:
Demonstrate with reasonable confidence that the project can be constructed and operated in a technically sound and economically viable manner.
Provide a basis for detailed design and construction.
Enable the raising of finance for the project from banks or other sources.
The scope of a Feasibility Study is massive and a big step toward the future for USAU. This is the step where an outside company states, “yes they can do this” and that’s when permit approval and operations start to happen.
Stay tuned for a full report on USAU where I discuss the management team that is moving this project along so quickly.
About the CK Gold Project:
The CK Gold Project was reportedly discovered in 1881, high-graded and saw limited mining. The first exploration work reported is drilling by ASARCO in 1938. Several additional rounds of drilling have been conducted since that time. In the 1972 Henrietta Mines Ltd. acquired the property and completed a comprehensive program of exploration and development. In addition to drilling, an I.P. survey, geologic mapping, geochemical sampling, and metallurgical testing were conducted (Nevin, 1973).
Drilling campaigns were conducted by Saratoga since 2006 and Strathmore since 2012, with a hiatus in drill exploration until the acquisition of the project by U.S. Gold Corp. from Energy Fuels in 2014. U.S. Gold Corp. conducted drilling in 2017, 2018, 2020 and is currently concluding its 2021 drilling program, focused on data collection to support post PFS and feasibility studies in 2022.
The CK Gold Project property is in the Silver Crown mining district of southeast Wyoming, approximately 20 miles west of the city of Cheyenne, on the southeastern margin of the Laramie Range. The Martin Marietta Materials (MLM) Granite Canyon Quarry sits just three miles south of CK Gold.
The property comprises about 1,120 acres (2 square miles) and is 100% owned by U.S. Gold Corp. In December 2021, the company released the project’s SK-1300 Technical Report Preliminary Feasibility Study, PFS (by Gustavson Associates LLC). The project offers the company near-term, open-pit production potential as well as compelling value.
We will be back with more on USAU. This introduction should get everyone acquainted with US Gold and a good starting point for your analysis.
The Traders News Source |
