The gold mining sector is a popular field for investors as there are over 300 companies listed and publicly traded. Gold and gold mining companies are often seen as complementary investments. Although gold mining company stocks correlate with gold prices, the growth and return largely depend on the expected future earnings of the company.
There are many factors in play for a gold mining company to be successful — effective management, production costs, reserves, mine exploration and project development.
At the recent Global Small Cap Conference, Edward Karr, president and CEO of U.S. Gold Corp., spoke with Benzinga about the company’s advancements in its mining assets.
USGC’s 4 Exploration Properties
U.S. Gold Corp. (NASDAQ: USAU) is a publicly traded exploration and development company advancing high potential projects in Wyoming, Nevada and Idaho. The company’s current properties offer high upside due to its large growth potential for the current resource and valuation upside based on market comparables.
CK Gold Project, Wyoming: The project is an advanced-stage gold and copper exploration and development project located in southeast Wyoming, 20 miles west of Cheyenne. This project is located entirely on state land, allowing an easier permitting process and more affordable annual leases. Challis Gold Project, Idaho: The Challis Gold project is located 45 miles southwest of Salmon, Idaho, within the tertiary Challis volcanic field. Keystone, Nevada: The project is located on the prolific Cortez Gold Trend, one of the world’s most highly prospective mineral trends and has the potential for major upside. Over the past 50 years, the Cortez and Carlin trends in Nevada have produced more than 245 million ounces of gold. Maggie Creek, Nevada: The Maggie Creek project is located on the world-famous Carlin Gold Trend, one of the most highly prospective mineral trends and has the potential for major upside. Relevancy of Mining Companies
With the Biden administration, the role of mining companies in the “new economy” is sometimes called into question.
Karr pointed out that the copper component of the company’s Wyoming Copper King project is integral to the government’s potential $2.2 trillion infrastructure program and its emphasis on electrification.
Karr stated that since the automobile industry is moving toward electric cars, the need for copper is going to increase as the average electric car uses about 180 pounds of copper. Karr believes that both gold and copper are also going to be important for windmills, solar panels and electronic circuitry.
Additionally, with cryptocurrency taking the headlines in the last couple of years, many wonder how gold would compete against cryptocurrency as a hedge against inflation.
Karr believes that gold and cryptocurrency are not mutually exclusive and can both be part of a good investment portfolio as they are not fiat money. Cryptocurrency acts as a hedge against inflation and gold has been used as a store of value for over 2,000 years and its value is predicted to stand the test of time.
USGC has over 7 million shares outstanding and no debt. It has an enterprise value of $60 million and $14 million in cash.
The company’s recent significant financings include:
Closed $9.6 million registered direct offering (February 1, 2021)
Closed Northern Panther acquisition and added $8 million in additional capital (August 13, 2020)
Closed $2 million registered direct offering (March 30, 2020)
Completed a 10:1 share consolidation (March 19, 2020)
Closed $2.5 million registered direct offering (June 2019)
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