OUR NEW PROFILE IS: (NASDAQ: USAU)
Alliance Global Partners analyst, Jake Sekelsky, put a $25.00 target on USAU
Electric vehicles use more than double the copper of an internal combustion engine automobile, and the metal is also used heavily in EV infrastructure. (76)Copper is key to electric vehicles, wind, and solar power, as well as the infrastructure that transports and stores renewable energy
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With centuries of history as a store of value in uncertain times, gold is experiencing high levels of demand. (53)
Right now, gold is hovering in record-high territory. Demand for the asset jumped 12% year over year for the first half of 2022, according to a World Gold Council report. (53)
In fact, over the past year, gold is already quietly outperforming the S&P 500…(78)
Some of the world’s smartest investors are jumping in, too.(78) David Einhorn, founder of Greenlight Capital, owns a gold position worth $40 million. Billionaire bond king Jeffrey Gundlach told Yahoo Finance: “Gold is going to go a lot higher.”(78)
Egyptian billionaire Naguib Sawiris says a QUARTER of your portfolio should be in gold as inflation creeps higher… While legendary hedge-fund manager John Paulson has invested more than $200 million into this space. But perhaps the most surprising was when real estate Billionaire Sam Zell, who spent his career arguing AGAINST gold… is now buying gold as a hedge against inflation.
But it doesn’t stop there…
Billionaire hedge-fund founder Ray Dalio told readers not long ago he sees a paradigm shift happening in the gold market. He compared today’s price movements with historical turning points like: Gold’s historic 2,300% leap in the 1970s from $35 to $850 per ounce after President Nixon took the U.S. off the gold standard…
And in the early 2000s, when gold tripled in value – soaring from under $300 per ounce in 2000 to $1,000 by 2008.(78)
But some are saying Gold could go much higher…
Gold surges to 6-month high, and analysts expect records in 2023.(75)
According to commentary published on CNBC.com, Gold prices could surge to $4,000 an ounce in 2023 as recession fears persist, said Juerg Kiener, managing director and chief investment officer of Swiss Asia Capital.
Gold prices could surge to $4,000 per ounce in 2023 as interest rate hikes and recession fears keep markets volatile, said Juerg Kiener, managing director, and chief investment officer of Swiss Asia Capital. (74)
The price of the precious metal could reach between $2,500 and $4,000 sometime next year, Kiener told CNBC’s “Street Signs Asia.”(74)
There is a good chance the gold market sees a major move, he said, adding “it’s not going to be just 10% or 20%,” but a move that will “really make new highs.”(74)
Kiener explained that many economies could face “a little bit of a recession” in the first quarter, which would lead to many central banks slowing their pace of interest rate hikes and make gold instantly more attractive. He said gold is also the only asset that every central bank owns. (74)
According to the World Gold Council, central banks bought 400 tonnes of gold in the third quarter, almost doubling the previous record of 241 tonnes during the same period in 2018. (74)
Driving Demand For Gold(53)
There are several factors that have created an almost perfect storm for gold.
Gold’s Role in Electric Vehicles: Gold is a metal that has been used in batteries for electric vehicles (EVs) for many years. While gold is not the most abundant metal on Earth, it is one of the most conductive. It makes gold an ideal material for use in EV batteries, as it helps to ensure that electricity can flow freely and efficiently throughout the battery.(59)
Gold is also non-reactive, meaning it won’t rust or degrade over time, making it a perfect material for long-term use in EVs. While gold is not the most abundant metal on Earth, it is still a very valuable resource essential for producing electric vehicles. (59)
Record High Inflation: Inflation is at a 40-year high. Conflict in eastern Europe snarled supply chains and China’s strict CV-19 response continue to create incredible inflationary pressures. Gold has been a traditional hedge against inflation. When inflation rises, the value of the dollar goes down. Since gold holds its value, it costs more dollars per ounce to purchase. Therefore, the investor can preserve their total wealth. (53)
Aggressive Interest Rate Hikes: With rising prices hurting every American, the Federal Reserve has made taming inflation its priority. To do so, they began a series of increasingly higher interest rate hikes in March. The hikes quickly grew steeper as inflation remained at historic heights.
The price of gold is thought to go down as interest rates go up because higher-yielding investments become more appealing. Yet, there is little evidence that gold is consistently weakened by federal funds rate hikes. (53)
Looming Recession: The Federal Reserve hopes to achieve a “soft landing,” contracting the economy just enough to tame inflation but not cause a recession. Major banks don’t share the Fed’s optimism. Their analysts currently predict that there is a 1 in 3 chance of a recession hitting. Historically, gold increases in value during a recession. (53)
An all-electric future depends heavily on copper, gold, and other precious metals. (54)
An all-electric future depends heavily on copper, gold, and other metals. (54) Looming supply shortfalls could hamper the nations’ goals of reaching net-zero emissions by 2050. (54) Electric vehicles, solar and wind power, and batteries for energy storage all run on copper. An EV requires 2.5 times as much copper as an internal combustion engine vehicle. (54) Copper is used throughout electric vehicles, charging stations, and supporting infrastructure because of the metal’s durability, high conductivity, and efficiency. (72)
Meanwhile, solar and offshore wind need two times and five times, respectively, more copper per megawatt of installed capacity than power generated using natural gas or coal. (54)
Copper is also key to the infrastructure that transports renewable energy, thanks in part to its electrical conductivity and low reactivity. Its uses include cables, transistors, and inverters. (54)
Demand for metals and minerals that fuel our future will ultimately create new world orders, as countries rush to secure supplies of copper, lithium, nickel, and other vital raw materials. (54)
Unless a significant new supply of copper and gold becomes available, climate goals will be short-circuited and remain out of reach.(54)
Recent Reports indicate the potential of over 1,00,000 ounces of Gold and over 240,000,000 million pounds of Copper at U.S. Gold Corp. (NASDAQ: USAU)’s CK Gold Project. (50)
How the Inflation Reduction Act Will Spur a Revolution in Electric Vehicle Battery Supply Chains (63)
Batteries are an essential part of the clean energy transition. The International Energy Agency estimates that demand for battery minerals, including aluminum, copper, cobalt, and lithium, will grow sevenfold by 2030. Domestic mineral supply chains will need to catch up. The United States alone will need 500,000 metric tons per year of unrefined lithium by 2034 just to power EVs, but it currently accounts for only 1 percent of global lithium production. (63)
In the same period, a rapidly industrializing China has created a near-monopoly on many of these minerals. Although it mines around 1 percent of the world’s cobalt, China is responsible for refining and exporting roughly 80 percent of the world’s supply. (63)
To catch up, the United States will need to invest $175 billion in battery production in the next three years.(63)
Recent Reports indicate the potential of over 1,000,000 ounces of Gold and over 240,000,000 million pounds of Copper at U.S. Gold Corp.’s CK Gold Project. (50)
The CK Gold Project was reportedly discovered in 1881, was high-graded and saw limited mining. The first exploration work reported was drilling by ASARCO in 1938. Several additional rounds of drilling have been conducted since that time. In 1972 Henrietta Mines Ltd. acquired the property and completed a comprehensive program of exploration and development. (50)
The CK Gold Project property is located 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. (50)
The property comprises about 1,120 acres (2 square miles) and is 100% owned by U.S. Gold Corp. (50)
The project offers the company near-term, open-pit production potential as well as compelling value. (50)
Prefeasibility Study Highlights: (50)
Mineral Resources – 1.58 million gold equivalent (“AuEq”) ounces of Measured and Indicated (M+I) Resources (50)
– An additional 0.357 million AuEq ounces of inferred resource
– M+I includes: Gold – 1.110 million ounces and Copper – 280 million lbs
Mineral Reserves – 1.44 million AuEq ounces of Proven and Probable (P1 and P2) Reserves (50)
– P1 and P2 include: Gold – 1.010 million ounces and Copper – 248 million lbs
10-year Mine Life at 20,000 short tons per day process rate(50)
– Average AuEq production: 108,500 ounces per year
– First 3 years: 135,300 AuEq ounces per year
Initial Capital: $221 million (50)
– Potential attractive financing terms from equipment suppliers and development capital sources
– 2-year Payback
Robust Economics – 39.4% IRR before tax and 33.7% IRR after tax (50)
– NPV (5%): $323 million and $266 million, before and after tax, respectively
– All in Sustaining Cost (“AISC”) at $800 per AuEq ounce
– Assumes $1,625/ounce gold price and $3.25/lb copper price
– Highly leveraged to increase metals prices
– Aggregate sales from mine waste rock, proven to be excellent quality
– FS-level value engineering and plant optimization
– Ongoing metallurgical testing to enhance recovery of gold and copper<
– Resource expansion potential at depth and to the south-east
Permitting and Development (50)
– Project footprint under the jurisdiction of Wyoming agencies
– Potential to submit mine permit in 2022 and receive approval in 2023
The CK Gold Project resource is based upon 160 drill holes totaling 28,500m and contains an oxide, mixed oxide-sulfide, and sulfide rock types. The CK Gold Project mineralization is characterized by an extraordinarily even distribution of metal grades occurring as a large body of disseminated and vein / stockwork gold, silver, and copper mineralization. (50)
The SK-1300 PFS study using base case prices of $1625/oz gold and $3.25/lb copper indicates a 10-year project with a manageable capital requirement of $221 million. (50)
Over the project life, a total of 248.8 million pounds of copper and 1,017,000 ounces of gold are projected to be produced based on the PFS throughput assumptions. The project shows a pre-tax NPV (5%) of $323.3 million and an IRR of 39.4%. The project enjoys an ideal geopolitical location in Wyoming; the State has been very supportive of efforts to advance the project. (50)
U.S. Gold Corp. has assembled a team to both continue expanding CK Gold Project’s current gold and copper resource and to advance the project towards production. In addition, the company is developing effective community and government relations programs in order to minimize any future social challenges. (50)
U.S. Gold Corp. Announces the sale of its interest in the Maggie Creek Property for $2.75 million to two of the world’s largest mining companies.(65)
Nevada Gold Mines is a joint venture between Barrick (61.5%) and Newmont (38.5%) that combined our significant assets across Nevada in 2019 to create the single largest gold-producing complex in the world.
Nevada Gold Mines is operated by Barrick.
On November 10, 2022, U.S. Gold Corp. (NASDAQ: USAU) announced the execution on November 9, 2022, of a transaction related to the Maggie Creek Property among Nevada Gold Mines LLC. (65)
Renaissance Exploration, Inc., which is an indirect wholly-owned subsidiary of Orogen, and the Company’s wholly-owned subsidiary, Orevada Metals, Inc., are parties to an Exploration Earn-In Agreement dated February 19, 2019, pursuant to which Orevada, by making certain payments and incurring certain exploration expenditures, has the right to earn at least a 50% interest and up to a 70% interest in the Maggie Creek Property, owned by RenEx, in Eureka County, Nevada. (65)
Pursuant to an Assignment and Assumption Agreement dated November 9, 2022, among NGM, Orogen, RenEx, U.S. Gold, and Orevada, U.S. Gold caused Orevada to assign its interest in the Original Earn-In Agreement to NGM. (65)
Simultaneous with that assignment, NGM and RenEx entered into an Amended and Restated Exploration Earn-In Agreement, pursuant to which NGM can earn a 100% interest in the Maggie Creek Property. (65)
As consideration for the assignment of the Original Earn-In Agreement to NGM, U.S. Gold received an upfront cash payment of $2.75 million dollars from NGM, and NGM agreed that if it exercises the NGM Option and acquires the Maggie Creek Property, it will grant to U.S. Gold a 0.5% Net Smelter Returns royalty on all gold and other recovered and saleable minerals from the Maggie Creek Property, pursuant to a separate royalty agreement between NGM and U.S. Gold, the terms of which have been fully agreed as part of the Transaction. (65)
Under the U.S. Gold Royalty Agreement, NGM will have the right to buy back one-half of the U.S. Gold Royalty (reducing the royalty to 0.25% of Net Smelter Returns) for a fixed price of $500,000.(65)
In addition, the U.S. Gold Royalty Agreement will provide that U.S. Gold waives the first $800,000 of production royalty payments owed to it, regardless of whether NGM exercises its buy-back rights.(65)
Under the U.S. Gold Royalty Agreement, NGM will also have a right of first refusal to purchase the U.S. Gold Royalty if U.S. Gold decides to sell that royalty.(65)
Commenting on the transaction, George Bee, President and CEO of U.S. Gold, said,(65)
Mr. Bee went on to say, “Such exploration is very costly and, for U.S. Gold, drilling Maggie Creek comes at a time when there is not a great deal of appetite in the capital markets to fund the resource sector and exploration in particular. We believe that pursuing deeper high-grade mineralization is best conducted by NGM, who have decades of experience on the Carlin Trend and understand the gold occurrences in the target horizons. We are content to have played a part in what we believe will be another extension to the prolific Carlin Trend, to have recovered more than our investment in the Maggie Creek property, and retained an interest, via a production royalty, for our shareholders in what we hope will be future exploration success. Furthermore, we can now focus exploration efforts on our Keystone property, a 100% owned 20-square mile land package on the Battle Mountain Eureka/Cortez Trend, a highly prospective area just 10 miles on trend from the NGM Cortez Complex.”(65)
PRESIDENT AND CEO
Mr. Bee is a senior mining industry executive, with deep mine development and operational experience. He has an extensive career advancing world-class gold mining projects in eight countries on three continents for both major and junior mining companies. Most recently 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.
With his Barrick experience and having had eight years in South Africa working underground gold with Anglo American and open pit copper with Rio Tinto at Palabora Mine, Mr. Bee was well placed to advance projects internationally and domestically as a senior executive. This led to his appointment to various board and leadership positions at various companies. As COO of Aurelian Resources in 2007, he was in charge of project development for Fruta del Norte in Ecuador until Aurelian was acquired by Kinross Gold in 2008. Post-acquisition, moving on from Kinross, where he had also previously worked from 1996 to 1998 advancing projects in El Salvador and Nevada, he joined Andina Minerals as CEO in 2009. Andina and its 6 million-ounce Volcan Gold Project in Chile was acquired by Hochschild in 2013. By this time Mr. Bee had been appointed to the boards of Peregrine Metals and later Stillwater Mining and Jaguar Mining. In 2014, he also assumed the role of Chief Executive Officer of Jaguar Mining, operating mines in Brazil, as the company emerged from a financial restructuring process.
Mr. Bee is a graduate of the Camborne School of Mines in Cornwall, United Kingdom and is a member of the Institute of Corporate Directors with an ICD.D designation.
CHIEF FINANCIAL OFFICER AND CORPORATE SECRETARY
Mr. Eric Alexander has over 30 years of corporate, operational and business experience, and over 15 years of mining industry experience. Previously he served as Corporate Controller of Helix Technologies, Inc., a publicly traded software and technology company from April 2019 to September 2020. Prior to that, 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. Prior to that, Mr. Alexander was the Corporate Controller for Sunshine Silver Mines Corporation, a privately held mining company with exploration and pre-development properties in Idaho and Mexico, from March 2011 to August 2012. He was a consultant to Hein & Associates LLP from August 2012 to September 2012 and a Manager with Hein & Associates LLP from July 2010 to March 2011. He served from July 2007 to May 2010 as the Corporate Controller for Golden Minerals Company (and its predecessor, Apex Silver Mines Limited), a publicly traded mining company with operations and exploration activities in South America and Mexico. In addition to his direct experience in the mining industry, he has also held the position of Senior Manager with the public accounting firm KPMG LLP, focusing on mining and energy clients. Mr. Alexander has a B.S. in Business Administration (concentrations in Accounting and Finance) from the State University of New York at Buffalo and is also a licensed CPA.
VICE PRESIDENT – EXPLORATION & TECHNICAL SERVICES
Mr. Francis has held many senior roles within the mining industry, including VP of Project Development for Aurcana Corporation, VP of Technical Services for Oracle Mining Corporation, VP of Resources for NovaGold Resources and Principal Geologist for AMEC Mining and Metals. Most recently, he consulted to U.S. Gold Corp. as Principal of Mineral Resource Management LLC, a consultancy providing technical leadership to the mining industry, as well as the CK Gold Project through his association with Gustavson Associates (a member of WSP) since September 2020. Mr. Francis is a member of the Board of Directors of Texas Mineral Resources Corporation. 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.
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