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A just released feasibility study indicates huge potential gold reserves.
Good day everyone,
U.S. Gold Corp. (NASDAQ: USAU) is a gold exploration and development company.
Current price $10.76/share (at market close 11-30-21)
It’s been a while since we talked about a junior gold miner. We’ve talked about USAU before, but it was in January of this year. I wanted to talk about them now to update you about events at the company and because turmoil in the economy can impact gold prices, driving them higher. Higher gold prices usually improve the value of gold miners at all levels.
Some considerations for USAU:
38% off 52-week high
Copper & gold prices are strong
Tiny share structure
Analysts indicate 68% to 150% potential upside
Fresh PFS with great results
I want to note that USAU shares have just broken through their 20 SMA, 50 SMA and 200 SMA of $10.24, $10.19, and $10.54 respectively. With a 52-week high of $17.40/share, a near term breakout may be indicated.
Gold is a traditional haven for investors that are uncertain of the near-term fortunes of the economy. I talked to you earlier about moves that the Fed is contemplating to tamp down inflation. Potentially discontinuing the purchase of treasuries and mortgage-backed securities along with the other weapon in the Fed arsenal, raising interest rates. These kinds of Fed actions are designed to slow the economy and may drive investors to increase their gold positions. That is good news for USAU.
The current price of gold is $1,787/ounce and the 2021 range has been $1,684 - $1,951/ounce.
USAU presents with a tiny share structure with only 7.09M shares outstanding and 6.76M shares in the float. Insiders hold 13.32% of the outstanding shares and institutions hold 11.79% which seems significant for a development stage company.
The company has a FYE of April 30th, so they are operating in their Q3 right now. At the end of Q1 (July 31) the company reported cash of $10.7M
8/20/2021 HC Wainwright Reiterated Rating Buy $15.50
4/8/2021 Alliance Global Lower Price Target Buy $20.00
The consensus price target level from the analysts above is $17.75 indicating a possible upside of 65%.
Today I want to outline the company’s flagship property, the CK Gold Project located in Wyoming, just west of Cheyenne. The property comprises about 1,120 acres and is 100% owned by U.S. Gold Corp. Here’s a link to a short video about the project.
12-1-21: USAU just released news that it has completed the prefeasibility study (PFS) for the Company's CK Gold Project and has published its SK-1300 Technical Report Summary. A pre-feasibility study determines whether a probable mineral reserve is economically viable and determines whether the reserve can be economically mined. Here are the highlights:
Mineral Resources – 1.58 million gold equivalent ("AuEq") ounces of Measured and Indicated (M+I) Resources
Mineral Reserves – 1.44 million AuEq ounces of Proven and Probable (P1 and P2) Reserves
10-year Mine Life at 20,000 short tons per day process rate
Initial Capital: $221 million
Robust Economics – 39.4% IRR before tax and 33.7% IRR after tax
Permitting and Development
Development Plan Progress Highlights:
2021 Field Season – a successful field season concluded November 2021
Ongoing Test-Work – geochemical, metallurgical for completion in Q1 2022
Interviewing FS and EPCM engineering firm candidates, with RFPs to be submitted
Continued Social and Wyoming Government Outreach
I will do the math. At today’s gold price, the projected gold equivalent reserves at the CK project could be worth as much as $2.6 Billion. Not bad for a company whose market value is only $78M.
Ed Karr, the company CEO said, "Considering the findings of the PFS study in the context of today's metal prices, we seem to be on the precipice of realizing exceptional value from a project whose time has come. We also are intrigued by the upside potential the CK Gold Project holds as we look at the potential value of the aggregate the project can produce at a time when development in the vicinity of the project is increasing."
Make no mistake, this is a huge development that may result in a major catalyst for the company’s value. Stay tuned for our full report on USAU as we expand on the significance of this new development.