Gold stocks, including mining companies, ETFs, and royalty firms, offer investors varied exposure to the yellow metal's further potential after hitting a record high in 2023.
Nevada Canyon Gold Corp. (OTC: NGLD) is a uniquely structured natural resource company focused on the state of Nevada, a jurisdiction continuously rated as one of the best places to explore and mine gold in this world!
By partnering with capable operators and people, the company focuses on building and managing a diversified, future cash-flowing portfolio of precious metal assets and properties. With a growing portfolio and an experienced management, NGLD may be one of the most strategic entrances into the Bullion Boom.
Investors shouldn’t ignore 2023’s Gold Bull Rally as 2024 could bring even more gains…
Precious metal gold finished 2023 at $2,062.40 per troy ounce, gaining 13% for the year after hitting an all-time high of $2,135.39. This was the highest annual close on record.
Gold prices surged in the last few months of 2023 after a powerful rally was sparked by central bank purchasing and mounting investor interest. Central bank demand, primarily from EM institutions, was a significant contributor: which added an estimated 15% to gold’s annual performance.
Fed interest rate cuts and falling U.S. real yields will once again become the key drivers behind gold prices in 2024.
The gold market has outperformed many key asset classes over several periods. The metal is well positioned in a period of low interest rates and political, economic, and social uncertainty. It also offers a unique correlation with the broader equity market in different return scenarios and experiences less volatility than many markets.
A continued bull rally for Gold could put Nevada Canyon Gold (OTC: NGLD) into the spotlight, a company designed to be a unique and lower-risk investment opportunity while retaining upside value!
Here’s why:
The opportunity in Nevada…
Historical mining production began in Nevada over 150 years ago. The discovery of the famous Comstock Lode in the 1850s is some of the richest silver/gold mines ever found to date. The Comstock Lode and Virginia City became household names throughout the world. The wealth of Comstock’s fabulously rich mines affected presidential politics and gave Nevada its international fame.
Major mining companies such as Newmont Goldcorp and Barrick Gold Corporation operate many of the state's gold mines. Active mines include those at Jerritt Canyon and the Carlin Trend.
Today Nevada has developed into one of the largest gold producers in the world over the last 50 years and Nevada Canyon Gold Corp. (OTC: NGLD) is aiming to capitalize!
A unique approach…
The current mineral royalty marketplace is highly active and competitive, with several “well-financed” small to upper-tier royalty and streaming companies trying to gain market share within the sector.
NGLD’s management does not intend to compete with these successful, well financed royalty companies but instead will focus on becoming a source of royalty deals for them!
How will the Company do this?
Nevada Canyon is focused on acquiring and creating royalties on smaller producing, pre-production or pre-resource properties, creating a royalty package by aggregating them under one roof, then selling the packages.
What does this do?
This creates a much higher valuation as a package rather than individual smaller royalties, creating a much higher potential profit margin in the process. The potential upside profit margins are much higher in the pre-production royalties than that in the producing property royalties.
NGLD management believes it can create substantial upside value to the initial capital and equity invested by the company with this low overhead approach and unique business model.
The company offers and attractive financing alternative to that of the current dilutive typical financings in the CDN markets.
NGLD isn’t interested in dilutive equity directly into the Companies, but rather in earning and developing an interest in the ground gold resources of a particular project. Typically, in this model, the company would acquire an initial stage royalty in a project, then exploration stream finance the project, this way the value of its royalty increases as the project or in-the-ground gold resources grow. For the property owner, there is no dilution on their share capital, as the property is being developed.
What is a royalty? A Royalty is the right to receive a percentage or other denomination of mineral production from a mining operation. New royalties are created by providing capital to an operator or explorer in exchange for a royalty. The capital provided is typically used for the development and construction of a mine, mine expansion, or funding exploration work.
Royalties are acquired from either a company or an individual. NGLD creates royalty packages by acquiring multiple smaller royalties. This creates a much higher valuation as a package rather than individual smaller royalties. NGLD will sell some of its higher valuation royalty packages to the larger royalty companies creating a nice profit margin in the process.
How Do Royalty Interests Work?
The potential upside valuations of royalties increase substantially from pre-resource properties to producing mines.
Exploration potential of a pre-resource property increases the gold resource and the royalty’s value.
The royalty value on pre-production & fully permitted properties typically increases 2-3 times once mine production financing is secured.
Additional Identified Royalty Acquisitions
NGLD and their industry contacts have identified up to ten potential additional royalty acquisitions within Nevada. The potential gold mineralized property royalties range from producing mines, pre-production, initial resource, and pre-resources gold mineralized properties. The company estimates an initial funding in the range of $20M, along with Nevada Canyon share equity, would be sufficient in securing these mineral property royalties.
Precious metal streams are obtained by providing capital to project operators and explorers, by selling NGLD a portion of their current or future precious metal production. The capital the company provides is then used for funding exploration work, mine development, construction, or expansion. All without incurring dilution to their share structure or debt to their balance sheets.
What is a Precious Metal Stream?
A precious metal stream a purchase agreement that provides an upfront capital payment for mine development in exchange for a percentage of gold output at a below-market cost, in most instances up to an 80% discount to the current commodity market price.
Metal stream acquisitions are often larger in size than royalty acquisitions, have more flexibility in the negotiation of terms and conditions, and generally provide both parties with tax advantages.
For example, the average cash cost per gold equivalent ounce (GEO) is $400 for Nevada based operating streaming Companies. This means streaming companies in Nevada are now netting a cash operating margin of more than $1,600 an ounce. NGLD would then sell what it receives from its partners at market prices and pockets the difference as profit.
This offers investors cost predictability, direct leverage to increasing precious metals prices and in a high-quality asset base within Nevada. This portion of the company’s business model offers investors commodity price leverage and exploration upside but with a much lower risk profile than a traditional mining company.
Nevada Canyon has identified numerous gold and silver streaming opportunities, meaning it isn't tied to the performance of any one producer. Most importantly, streaming companies are instant beneficiaries of rising physical metal prices. NGLD estimates an initial funding in the range of $20M, would be sufficient in securing these initial identified precious metal streams.
The 5-step Streaming Model:
1. Phase of project development
2. Commodity price assumptions
3. Appropriate discount rate
4. Future cash flow
5. Analyze the impact on portfolio
NGLD finds undervalued or distressed mineral exploration properties and provide investment capital, along with the company’s geological and engineering expertise. This then increases the geological potential and adds value to the properties. The company then sells the property to other mining companies for a premium return without all the large Cap-Ex expenditures. NGLD recovers its costs, shares in the purchaser’s Company, and most importantly retains a royalty in the property. Avoiding the high costs and time of putting a mine into production. This creates short term upside value in these properties, with very low risk, while retaining a long-term royalty, at a very low-cost basis.
Why Nevada?
The world’s biggest gold mining companies are spending 100s of millions to explore and acquire additional prospects here in the heart of America’s gold production capital – Nevada.
In 2020, it was reported that approximately 30 gold mines produced a staggering $7.1 billion from gold and silver mining in Nevada. Gold production from Nevada was higher than any other U.S. state (4,868,086 Au troy ounces in 2019), accounting for 76% of gold produced in the United States. (Nevada Bureau of Mines and Geology, January 2020)
✓ In Nevada, 90% of mining is from gold, and 90% of the gold mined is from two transnational mining conglomerates, Barrick Gold Corporation and Newmont Goldcorp.
✓ Most of Nevada's gold is mined from deposits, known as Carlin-type deposits. These unique deposits have an endowment of 255 M oz of gold (past production and current reserves/resources).
✓ These Carlin-type deposits, located in a 190- mile by 190-mile area in Nevada, make up the second largest concentration of gold in the world, after only the Witwatersrand in South Africa. (World Gold Council Report June 2020)
✓ Nevada mining companies spent $460.1 million probing for minerals and energy sources in 20203. 63% of expenditures went towards actual exploration (mainly drilling).
✓ In 2019, Nevada accounted for 54% of all mining exploration budgets within the U.S. Multiple world-class gold discoveries have occurred in Nevada during the past two decades.
✓ Nevada's major geologic trends have been producing precious metals continuously for more than 50 years with mine lives slated to produce for several more decades.
Nevada Canyon Gold Corp. (OTC: NGLD) intends to be at the forefront of providing these realistic prospects, royalties and streaming assets the company is currently aggregating!
Loman Project: A Historic Past Producing High-Grade Gold Project – 100% Owned
The Loman Project is within the Walker Lane shear zone, a 100-kilometre-wide structural corridor extending in a southeast direction from Reno, Nevada, located 18 miles southeast of Hawthorne, NV, along U.S. Highway 95. The project has excellent year-round access and infrastructure within Mineral County, one of Nevada's most pro-mining counties.
The project consists of 30 unpatented mining claims (600 acres) covering several past producing small-scale high-grade gold and copper mines, altered and mineralized zones discovered by previous geological compilations and mapping of the historical workings.
The property is located adjacent to the privately owned Pamlico project and near several past-producing mines, including the Bodie, Aurora, Borealis, Evening Star, Mabel, Mindoro and Camp Douglas Mines. Held by private interests for most of its history, Garfield Flats remains significantly underexplored with exceptional potential for discoveries on several exploration targets with multiple zones.
Historical sampling on the project has revealed the presence of copper, bismuth, antimony, and pervasive lower grade gold mineralization, cut by vein structures (some previously mined) of higher-grade gold. Previous induced polarization surveys also denoted the presence of significant coincident I.P. anomalies. These factors clearly demonstrate the potential of this relatively unexplored project for the discovery of significant gold mineralization.
The Swales Property: 100% Controlled
The Swales Property consists of 40 unpatented mining claims covering approximately one square mile in the Swales Mountain Mining District in Elko County, Nevada.
The claims are located within the Carlin Trend, one of the richest mining districts in the world, and home to some of the largest gold mines in the US.
The property is approximately 13 miles northeast of Nevada Gold Mine’s Gold Quarry Mine and 16 miles east southeast of Nevada Gold Mine’s Goldstrike Mine, all of which are located along the gold rich Carlin Trend.
Geologically, the property is underlain by Upper plate Ordovician Vinini Formation (upper plate of the Roberts Mountains thrust) with windows of Lower plate Mississippian to Silurian Roberts Mountains Formation limestone (Lower plate of Roberts Mountains thrust), the ideal host rocks for a Carlin type gold deposit. These rocks have been intruded by Tertiary rocks identified as Monzonite porphyry to the west of the property with many prospects and historic mining. Much of the property is covered by alluvium, but silicified, iron stained jasperoids are found throughout the property where outcrops are exposed.
Small gold annomalies occur in the upper plate rocks at Swales Mountain which suggests the possibility of more extensive deposits in the Roberts Mountains Formation where it lies concealed by gravels or in the broken rock within the Roberts Mountains thrust.
The Belshazzar Project – 100% Controlled
The Agai-Pah Property consists of 20 unpatented mining claims with a combined area of 162 hectares (400 acres). The Property is located in the northwestern portion of the Gillis Range, within the Buckley Mining District, in Mineral County, Nevada, 13 miles north-east of the town of Hawthorne, and 22 miles SW of the Rawhide Mine.
The property contains numerous historical workings consisting of underground workings with multi-level vertical shafts, several adits at different sub-levels, declines and a number of prospects pits that dig along structures. An existing road network provide access to the numerous historical workings. Historical sampling on the project has revealed the presence of silver, copper, gold, lead, zinc, barium and barite. There have been at least two periods of mining on the property, with the first in the early 1900’s, and then later in the late 1980’s. The early 1900’s, work consisted of excavation of at least 15 adits, 5 vertical shafts, declines and numerous prospects pits that dig along structures.
The second episode of mining took place in the late 1980s when a small pit was excavated, and ore material was mined and transported approximately 2 miles to the west to a small heap leach. During this time about two kilometers of roads were built, several large trenches were completed, and a number of shallow drill holes (12+) were drilled. All the drill holes noted during this historical work were vertical and most were drilled in the hanging wall of the ore-bearing structures. An extensive sampling program was undertaken in early 1988, evidenced by aluminum sample tags widely spaced in the areas of alteration. No historical data has been found from any of this historical exploration work.
The Agai-Pah property contains numerous historical workings both underground and on surface. The Property is in close Proximity to several past producing mines including the Bodie, Aurora, Borealis, Pamlico, Evening Star, Mabel, Mindoro and Camp Douglas Mines. Held by private interests for most of its history, the Agai-Pah Property remains very underexplored with minimal modern-day exploration. These factors clearly demonstrate the exceptional potential of this relatively unexplored project for new discoveries of significant mineralization on several exploration targets in multiple zones.
The Agai-Pah Property – 100% Controlled
The Belshazzar Project consists of 10 unpatented mineral claims and 7 placer mineral claims (156 acres) situated along the upper reaches of Fall Creek within the Quartzburg mining district, Boise County, Idaho, about 25 miles north-northeast of Boise. The project is accessed via 16 miles of mostly gravel and four-wheel-drive road from Idaho City. The Quartzburg district is in the western part of a larger mining region known as the Boise Basin, which produced over 2.8 million troy ounces of gold from placer and lode mines (Anderson, 1947).
The last known production from the Belshazzar mine was reported in 1941 (Mitchell, 2008). Exact production figures for the mine are not available.
As early as 1914, “high grade specimen rock” was being reported from the Belshazzar mine. According to Quinn (1914), this material was found in the drift on the No. 3 level. Campbell (1927) reported a “nugget” which yielded $245 in gold, equivalent at the time to almost 12 ounces. During 1928, it was noted that “some remark ably rich segregations of native gold” had been found in a section of the vein between the 401 and No. 3 levels. Several hand-sorted lots of this material contained between 48 and 435 ounces of gold, and one single specimen of pure metal reportedly weighed 105 ounces (Mitchell, 2008). Some of the ore was so rich that it was shipped directly to the assay office in Boise without treatment. Most of the specimen gold found at the Belshazzar was probably melted down, as few specimens are known to have survived from the active mining period ending in 1931. In recent years, a ” waste” rock dump located near the portal of the mine’s 401-foot level has, with the aid of modern metal detectors, produced hundreds of wire gold specimens, ranging from microscopic in size to over 20 troy ounces. Total recent gold specimen production to-date is unknown but is probably well in excess of 800 ounces of gold.
Palmetto Royalty: Nevada Canyon acquired an 2% net smelter returns royalty (NSR) on the Palmetto Project.
The Palmetto Gold Project has a current initial NI 43-101 compliant mineral resources completed by the property’s current owner. The Palmetto property has been actively explored by several different Companies (Newmont Gold, Phelps Dodge, Cambior Inc, Romarco Minerals) since the 1980s, over US$25m has been spent on the Project to date.
The Project’s current owner Smooth Rock Ventures Corp, ongoing exploration program includes the remodeling and re-interpreting of the geological model. There are several additional mineralized zones hosting significant grades within close proximity to the inferred resource zones. These zones have yet to be included in the resource estimate due to drilling density. Smooth Rock sees these areas having immediate potential to significantly add to the overall resource by increasing the drilling density between the mineralized shells. Smooth Rock’s geological team intends to increase and upgrade the category of the resource from inferred to measured and indicated. Smooth Rock estimates the potential exists for increasing to 1m ounces into the measured and indicated category. The Palmetto Project, consists of 116 unpatented mining claims totaling 2,217 acres located in Esmeralda County, Nevada, within the southern portion of the Walker Lane gold trend.
The Olinghouse Project is located approx. 30 miles east of Reno, Nevada. The property was operated by Alta Gold in the late 1990’s and completed a Feasibility Study in 1997. The historic geologic resource outlined in the above table was based on over 600 drill holes collared at 100 ft centers.
The Project’s current owner, Lake Mountain Mining, LLC is currently reviewing its financing plans for additional exploration, required permitting, economic studies and various capital expenditures towards a production restart decision in the near future. A large portion of the Olinghouse Property remains relatively unexplored. The historical mineralized resource is open at depth and along strike. The Project has excellent potential to increase the current gold resources in excess of 1m ounces. Nevada Canyon has signed an Option to Purchase agreement to acquire 1% net smelter returns royalty (NSR) Full consideration of the Agreement consists of the following: (i) an initial cash option payment of $200,000 upon execution of the definitive agreement. (paid) (ii) $2,000,000 which can be paid by Nevada Canyon to the Vendor in either cash, or (iii) 2,000,000 common shares. Closing of the transaction is subject to certain terms and conditions as disclosed in the Definitive Option to Purchase Agreement.
Nevada Canyon’s business model is inherently scalable and efficient, resulting in margin expansion as the price of gold increases. The company is NOT exposed to the inflationary pressures which have impacted the rate of return and profit margins of operating mining and exploration companies over the past several years.
NGLD can enjoy the carried benefit of reserve growth, as operators explore for additional reserves at their existing mine sites. NGLD is also not required to participate in the exploration expense or pay any additional compensation when operators discover or add additional reserves to their existing mines or deposits.
To further reiterate:
Nevada Canyon management believes it can create substantial upside value to the initial capital and equity invested by the Company with its approach and business model.
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