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Nevada Mining Co. Deploys Unique Financing Model

Source: Streetwise Reports 01/12/2024

It has been roughly a year since we reported that Canadian exploration firm NevGold Corp. had secured a further exploration permit for its Nutmeg Mountain project. Now, the company is embarking on a unique common-shares-only financing model to advance development at numerous nascent mine sites.

NevGold Corp. (NAU:TSX.V; NAUFF:OTC; 5E50:FSE) is a Canada-based exploration and development company targeting large-scale mineral systems in proven districts found in Nevada, Idaho, and British Columbia. Current projects include the Limousine Butte Property, the Nutmeg Mountain Property, and the Cedar Wash Property.

The Limousine Butte Property is located 105 kilometers north of Ely in east-central Nevada, encompassing approximately 6,650 hectares.

Cedar Wash is an exploration-stage gold property 300 km Southeast of Limousine Butte in Lincoln County, Nevada.

The Nutmeg Mountain property is the company’s other U.S.A. holding, located in Western Idaho, comprising 1,724 hectares of Federal unpatented mining claims, 12 patented claims, and two private land leases.

The Catalyst: Unique No-Warrant Financing Model

On January 5, NevGold Corp. announced a first tranche closing of the upsized non-brokered private placement financing first announced on December 20, 2023, of 4,687,500 common shares at a price of CA$0.32 per Common Share for gross proceeds of CA$1.5 million.

As a result of solid demand, NevGold also announced that it is further upsizing the offering to a maximum of 6,250,000 Common Shares to raise gross proceeds of up to CA$2.0 million.

NevGold CEO Brandon Bonifacio says, “It is encouraging to see the broad demand for our no warrant financing, and the initial CA$1.5M tranche had strong participation from current shareholders, including McEwen Mining Inc., and new strategic investors.”

NevGold CEO Brandon Bonifacio says, “It is encouraging to see the broad demand for our no warrant financing, and the initial CA$1.5M tranche had strong participation from current shareholders, including McEwen Mining Inc. (MUX:TSX; MUX:NYSE ) (an existing strategic corporate shareholder), and new strategic investors.”

“The financing proceeds will focus on some high-potential opportunities at Nutmeg Mountain and in the surrounding Hercules Copper District, both in Washington County, Idaho,” he explains.

“We are looking forward to commencing field work, which will lead to an active 1H-2024. The NevGold platform has advanced significantly since publicly listing the company in June 2021, and we will continue to build on our oxide, heap-leach gold resource base in the Western U.S.A., as well as other accretive opportunities to generate value for our shareholders.”

The company’s release explains that management expects to close the second tranche of the offering on or about January 12, 2024. NevGold intends to use the aggregate net proceeds raised from the Offering for general working capital purposes and advancing strategic efforts at the Nutmeg Mountain Project and in the surrounding Washington County, Idaho district.

Why This Sector? Gold Retains Its Luster

Mining stocks — especially those with considerable inground reserves — are a popular shelter in times of economic uncertainty, so stocks like NevGold’s generally perform well when the market is confused.

According to the World Gold Council’s outlook for the year, “Gold had a strong 2023, defying expectations amid a high-interest rate environment and outperforming commodities, bonds, and most stock markets. As we look forward to 2024, investors will likely see one of three scenarios. Market consensus anticipates a ‘soft landing’ in the U.S., which should also positively affect the global economy. Historically, soft landing environments have not been particularly attractive for gold, resulting in flat to slightly negative returns.”

“That said, every cycle is different. This time around heightened geopolitical tensions in a key election year for many major economies, combined with continued central bank buying, could provide additional support for gold.”

“Further, the likelihood of the Fed steering the U.S. economy to a safe landing with interest rates above five% is by no means certain. And a global recession is still on the cards. This should encourage many investors to hold effective hedges, such as gold, in their portfolios.”

Why Now? Consistently Undervalued

As we explained last year, NevGold’s large claims appear to be widely undervalued by the market. Comparable mining and exploration groups (specifically, Freeman Gold, Getchell Gold, West Vault Mining, Integra Heap Leach, Nevada King Gold, Augusta Gold, and Liberty Gold) trade at an average EV/Resource multiple of CA$70/oz AuEq. [OWNERSHIP_CHART-10234]

As of this writing, NevGold trades at less than CA$15/oz AuEq, offering investors a significant (460%) immediate re-rate potential. In fact, despite securing considerable financing over the past year, its stock price is lower than it was a year ago.

Besides in-ground reserves and an expanding drill program, NevGold offers other advantages. As Rowan Dunne points out in Mugglehead Magazine, “Positive shareholder relationships make NevGold a worthy investment.”

GoldMining Inc. (GOLD:TSX; GLDG:NYSE) is a major shareholder that owns approximately 20% of NevGold’s shares. GoldMining also recently supported NevGold’s financing, which it completed in December 2022 with a CA$1.25 million lead order. McEwen Mining Inc. (MUX:TSX; MUX:NYSE ) is another shareholder that owns just under 8% of NevGold’s issued and outstanding shares.”

Ownership and Share Structure

NevGold has a market cap of roughly CA$25 million with 71,418,219 shares outstanding. It also has CA$2 million in cash holdings against a monthly burn rate of CA$50,000.

Insiders and directors own 30% of the company, with GoldMining Inc. holding another 19.9%. McEwen Mining holds a further 7%, leaving 43.1% floating between retail (~33.1%) and institutional investors (~10%).

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Important Disclosures:

  1. [NevGold Corp.] has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
  2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of [NevGold Corp.].
  3. [Owen Ferguson] wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
  4. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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( Companies Mentioned: NAU:TSX.V; NAUFF:OTC; 5E50:FSE,
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