US Gold (USAU) Breaking News on Acquisition
How High Can Gold Prices Go?
Up nearly 300% since our March report – https://mailchi.mp/tradersnewssource/do-not-miss-this-low-float-report-647932
Good day everyone,
We are continuing our coverage of U.S. Gold Corp. (NASDAQ: USAU) a gold, copper, silver, and zinc exploration and development company.
Current price $11.01 per share
Shares outstanding (est.) 2.92M
Float (est.) 2.63M
Insider ownership 22.38%
The value of USAU shares, like the shares of many companies in the gold sector, are tied in part to the price of gold. So where do you think gold prices are going?
Potential catalysts for USAU shares:
Increasing price of gold
Positive news on their mining efforts
Possible acquisition of new mining interests
Any potential collaboration with a larger company
Yesterday, USAU announced they have acquired Northern Panther Resource Corporation, in an all-stock transaction. In addition to acquiring this new high potential exploration project, located in Idaho, and known as the Challis Gold Project, USAU is getting seasoned mining professionals and up to $8 million in additional capital. Northern Panther is being merged into a newly formed USAU subsidiary.
The new shareholders in USAU, created by the transaction, include George Bee and Robert Schafer. Mr. Schafer has been given many sector awards as a leader in the mining industry. Mr. Bee has a long employment record in gold mining, including 16 years at Barrick Gold.
The Challis Gold Project is located approximately 75 kilometers southwest of Salmon, Idaho, within the tertiary challis volcanic field. The Project has a historic 43-101 (not current) resource of approximately 313,825 ounces of gold at a grade of 1.22 grams / ton gold, with a potential low strip ratio and exploration upside potential.
We linked the press release below. It contains the full resumes of Mr. Schafer and Mr. Bee along with more details of the transaction and the Challis project: https://finance.yahoo.com/news/u-gold-corp-acquires-northern-120000419.html
What we find interesting about the Northern Panther Project acquisition is that the sellers, these seasoned gold mining industry veterans, took USAU stock instead of money. In fact, USAU is getting $2.5M in cash that was held by Northern Panther, from the acquisition.
When we last talked about USAU in May, the price was $6.02 per share and the price of gold was $1,726 per ounce. At that time, as part of our due diligence, we cited an article that said, “There are more than one gold analysts indicating they expect gold may go as high as $2000/oz in the next 18 months.”
Here we are, just two months later, and the current gold price has been hovering around $2000 per ounce, retreating slightly from last week’s high of $2070. That was quick. What we did not tell you about that article we researched, what we did not tell you in that May newsletter because it seemed too far-fetched, was that some of the analysts also forecasted:
A mid-decade gold price of $5,000 per ounce
Now that the 18-month forecast has happened in two months, we cannot help but wonder about the timeline for the $5,000 dollar gold forecast.
“Gold is at all-time highs but strong fundamentals and demand for diversifying assets imply further gains,” said Luca Paolini, chief strategist at Pictet Asset Management.
For our new members we included a brief description of the USAU properties at the end of this newsletter.
As the price of gold continues to rise, the big players in the sector are likely to scramble to buy up low priced junior miners with solid prospects like USAU.
Let us consider:
The price of gold continues to rise
Tiny float of 2.63M shares means the share price can advance quickly
Insiders hold 22.8% of the shares
Likely future consolidation within gold mining sector
Studies indicating potential mineral reserves could be several times the current market cap
8/10/2020 HC Wainwright Boost Price Target Buy $16.50 ➝ $19.50
As the chart linked below indicates, USAU shares have crossed their 50 DMA and 200 DMA of $7.41 and $7.05 respectively, in a bullish manner.
The USAU projects:
The newly acquired Challis Gold Project described above and located in Idaho.
The Keystone Project was the company’s first and founding project. It is located on the prolific Cortez Gold Trend. Over the past 50 years, the Cortez and Carlin trends in Nevada have produced more than 245 million ounces of gold. The Cortez Trend is also home to major mining operations of Barrick Gold (GOLD) and Newmont Mining (NEM), both just miles from the Keystone Project.
The Copper King Project is a gold and copper exploration and development project located in southeast Wyoming and has a Preliminary Economic Assessment (PEA) report, authored by Mine Development Associates, dated December 5, 2017, Net Present Value near $200+ million (with today’s gold price). The company is currently in the process of upgrading to a Pre-Feasibility Study meant to attract investor development funding.
Gold Bar North is a gold exploration property, consisting of 49 unpatented lode mining claims situated in Eureka County, Nevada. Gold Bar North is also on the Cortez Trend and is located near to the Keystone Project.
The recent acquisition of an interest in the Maggie Creek exploration project on the Carlin Gold Belt in Nevada could earn USAU up to a 70% interest. The company announced this month, the completion of a detailed gravity survey on the project.
The Traders News Group
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