Financing Arrangement to Boost Exploration of Gold and Copper Assets
NevGold Corp. (NAU:TSX.V; NAUFF:OTC; 5E50:FSE) has secured a financing arrangement of up to CA$8 million through a convertible securities agreement with Mercer Street Global Opportunity Fund II LP. Learn how this affects the company's portfolio and future projects like Nutmeg Mountain, Limousine Butte, and the Zeus copper project.
NevGold Corp. (NAU:TSX.V; NAUFF:OTC; 5E50:FSE) has secured a financing arrangement of up to CA$8 million through a convertible securities agreement with Mercer Street Global Opportunity Fund II LP. This financing, which is structured in two tranches, includes an initial tranche of CA$3.5 million, with the potential for an additional CA$4.5 million in a second tranche. The funds will be used to advance Nevgold's portfolio of gold and copper projects, including the Nutmeg Mountain and Limousine Butte oxide heap-leach gold projects, as well as the Zeus copper project.
Brandon Bonifacio, Nevgold's CEO, expressed optimism about the agreement, stating in the news release, "We are pleased to announce this financing package and further capital support from Mercer, who have been a strong supportive shareholder of the company over recent years. The financing will allow us to continue to advance our high-quality portfolio of gold and copper assets in the Western U.S.A., with the proceeds focused on drilling our Nutmeg Mountain and Limousine Butte oxide, heap-leach gold projects, along with advancing our Zeus copper project through the first phase of systematic exploration."
The financing agreement provides Nevgold with flexibility in managing its assets, which are crucial to the company's strategy of expanding its mineral exploration and development activities. The financing deal, despite current market challenges, underscores the company's commitment to progressing its projects and generating significant news flow in the coming year.
Strategic Positioning Amid Bullish Copper and Gold Market Trends
The mining sector is currently witnessing a confluence of favorable conditions, particularly in the copper and gold markets, which directly impacts companies like NevGold. Copper, a critical industrial metal, is showing strong signs of a major uptrend.
As Technical Analyst Clive Maund wrote on August 27, "Copper looks ready for its next big runup, which could be massive." This surge is attributed to technical patterns that have been forming over recent months, such as the Head and Shoulders bottom and the breakout from a corrective downtrend, indicating robust market momentum. These developments suggest a lucrative environment for copper producers, as increasing demand and constrained supply create opportunities for significant price appreciation.
Simultaneously, the gold market is displaying bullish tendencies, driven by both technical and fundamental factors. On August 23, Jordan Roy-Byrne of The Daily Gold emphasized that "Gold is on the cusp of a massive 45-year breakout in inflation-adjusted terms," pointing to a historic opportunity for gold mining companies.
As the economic landscape shifts, with inflationary pressures and central bank policies playing pivotal roles, the price of gold continues to climb toward its projected targets. This upward trajectory is further supported by the alignment of technical indicators, positive sentiment, and strong fundamentals, positioning gold stocks for potential breakouts. Roy-Byrne also noted that "Technicals, fundamentals, and sentiment are in bullish alignment," which could lead to increased margins and profitability for gold miners.
Moreover, the market dynamics have also been affected by shifts in global trade patterns, particularly in copper. A report from Bloomberg News on August 24 highlighted the unusual circumstances in the copper market, where "The 15,000-ton Ricarda cargo that reached New Orleans in July highlights a seismic shift in the market this year." This shift, characterized by a significant increase in U.S. copper imports and China's unexpected role as an exporter due to subdued domestic demand, underscores the complex global supply chain dynamics. Such developments have bolstered inventories in the U.S., potentially stabilizing the market while also creating opportunities for companies like NevGold to capitalize on these trends.
As Mark Mead Baillie wrote for Kitco on August 26, despite some short-term volatility, "Gold looks great even should anticipated decline near-term dominate." This resilience is crucial for mining companies, as it suggests that the long-term outlook remains positive, driven by underlying economic factors and ongoing demand for safe-haven assets.
NevGold Catalysts
As explained in the company press release, the convertible securities financing arranged by Nevgold represents a significant catalyst for the company as it enables the advancement of key projects in the Western U.S.A. The Nutmeg Mountain and Limousine Butte gold projects, along with the Zeus copper project, are poised for accelerated exploration and development, backed by the secured funds. The strategic allocation of these resources is expected to lead to meaningful progress in the company's project pipeline, particularly in drilling and exploration activities.
Moreover, the financing's flexible structure, including the issuance of warrants and prepayment options, provides Nevgold with the ability to manage its financial obligations effectively while continuing its operational growth. The potential for additional financing through the second tranche, as noted by the company, further enhances the company's financial position, allowing for sustained investment in its assets.
The recent financing secured by NevGold provides a significant boost to the company's strategic initiatives, particularly in advancing its portfolio of high-potential gold and copper projects located in the Western U.S.A. This financing enables NevGold to intensify exploration and development efforts across four key district-scale assets, each situated in top-tier jurisdictions known for their mining-friendly environments. The company's investor presentation goes in-depth on these upcoming locations and projects, explaining how each plays a key role as a catalyst for NevGold moving forward.
Limousine Butte (Nevada) stands out as a critical project within NevGold's portfolio. This Carlin-style deposit, which has a historical 2009 resource estimate of 241,000 ounces of gold in the Measured & Indicated categories at 0.78 g/t Au, and 51,000 ounces in the Inferred category at 0.70 g/t Au, represents a substantial opportunity for the company. The project has already yielded positive, thick oxide drill results from the inaugural drill program in 2022, highlighting its potential for further resource expansion and development.
Cedar Wash (Nevada) offers a promising gold-silver exploration opportunity with significant upside potential. The project features an extensive gold-in-soil anomaly extending over 2 kilometers, indicating the presence of mineralization that could lead to future resource discoveries.
Zeus Copper Project (Idaho) is another key asset in NevGold's portfolio, recently staked on the Hercules Copper Trend. The project covers approximately 20 square kilometers (around 2,000 hectares or 4,900 acres) and shares the same geological signatures as the Hercules Copper Project, positioning NevGold as a first mover in this highly prospective region. The strategic importance of the Zeus Copper Project is underscored by its location within a recognized copper-producing trend, offering potential for significant resource development.
Nutmeg Mountain (Idaho) further solidifies NevGold's position in the region, with a 2023 Mineral Resource Estimate indicating 1.01 million ounces of gold in the Indicated category and 275,000 ounces in the Inferred category, starting at surface with a grade of 0.61 g/t Au. The project benefits from good infrastructure and strong exploration potential, both laterally and for deeper feeder systems, making it a key target for ongoing and future exploration activities.
Streetwise Ownership Overview*
NevGold Corp. (NAU:TSX.V; NAUFF:OTC; 5E50:FSE)
*Share Structureas of 4/1/2024Source: Thomson Reuters and NevGold Corp.The successful financing arrangement enables NevGold to advance these projects, which are well-positioned to capitalize on the current bullish trends in both the gold and copper markets. The funds will be strategically allocated to drill programs and exploration activities, potentially leading to meaningful resource growth and significant news flow as these projects progress. With assets in such attractive locations, NevGold is poised to make substantial strides in the development of its portfolio, further enhancing its value proposition in the mining sector.
Ownership and Share Structure
About 37% of the company is now held by strategic investors, including GoldMining Inc., which now holds 28.4% of the company on an undiluted basis, and McEwen Mining Inc.
The company said about 30% is held by management and insiders. According to Reuters, these include Non-Executive Chairman Giulio T. Bonifacio with 5.26%, CEO Brandon Bonifacio with 4.83%, Independent Director Gregory French with 1.17%, and Independent Director Timothy Dyhr with 1.02%, Reuters said.
About 10% is held by institutions, and the rest is in retail.
As for its share structure, NevGold has 93.91M outstanding shares and 53.63 million free-float traded shares.
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The company's market cap is CA$38.59 million. Its 52-week trading range is CA$0.2300 - 0.5000 per share.
Important Disclosures:
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.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.James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.This article does not constitute investment advice and is not a solicitation for any 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. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.For additional disclosures, please click here.