New High-Grade Gold Intercept Spurs District Wide Potential
Nevada King Gold Corp. (NKGFF:OTCMKTS; NKG:YSX) recently announced it had intercepted 6.28 g/t Au (grams per tonne gold) over 54.9 meters. Read on to see why one analyst believes the company may become an acquisition target.
Nevada King Gold Corp. (NKGFF:OTCMKTS; NKG:YSX) announced on July 23 its intercept of 6.28 g/t Au (grams per tonne gold) over 54.9 meters (from Hole AT24HG-41) occurred in strongly altered intrusive rock starting 147.9 meters downhole, immediately below a non-mineralized, massive quartzite unit that caps the top of the South Quartzite Ridge Anticline.
The hole was steeply angled at -85? southward along the anticlinal axis of the SQRT to test a large, low-resistivity CSAMT anomaly occurring underneath the highly resistive quartzite cap. This axial zone aligns with major, high-angle faults controlling felsic intrusions and associated gold mineralization further north within the resource zone and is most likely a southern extension of the WAGZ.
In light of this news, Roth MKM analyst Mike Niehuser gave the company a Buy rating and a CA$0.65 target price.
Niehuser highlighted the significance of the geophysical surveys, stating, "We believe that NKG's application of geophysical surveys has effectively turned the pieces of the Atlanta Gold Project puzzle right-side-up, revealing its district-wide potential." The analyst noted that the surveys "validated drilling immediately to the west and to the east and exposed additional large targets farther east and west."
Niehuser concluded, "In our opinion, hole AT24HG-41, as interpreted, has the potential to clearly show NKG to be a likely acquisition target by a major mining company."
In related news, on July 26, Nevada King announced it had obtained a final order from the Supreme Court of British Columbia approving the proposed plan of arrangement to spin out all of its concessions and properties, except for the Atlanta Gold Mine Project, to its shareholders. This spin-out will be conducted through a subsidiary named SpinCo. Nevada King will grant SpinCo a 3.0% net smelter return royalty on all gold and silver production from Atlanta, including the resource area and non-core claims.
Striking Gold: The Promising Future of the Gold Mining Sector
According to Kitco on July 17, gold prices have surged to a record high, reaching US$2,487.40 per ounce, driven by a combination of bullish technical factors and expectations of a potential interest rate cut by the Federal Reserve later this year. This milestone reflects the strong performance of the yellow metal, with investors optimistic about further price appreciation in the near term. The Federal Reserve's potential rate cut is a significant driver, as lower interest rates generally enhance the appeal of gold, which does not yield interest.
Mike Niehuser of Roth MKM concluded, "In our opinion, hole AT24HG-41, as interpreted, has the potential to clearly show NKG to be a likely acquisition target by a major mining company."A May report from Statista highlighted the enduring value and rarity of gold, noting that global mine reserves of gold increased to 59,000 metric tons in 2023.
Despite fluctuations, gold production from mines worldwide amounted to approximately 3,000 metric tons in the same year, with China leading global gold mining, followed by Australia and Russia. This consistent production underpins the stability and reliability of gold as an investment.
Positive sentiment toward gold is further reinforced by its performance as a safe haven asset. According to Frank Holmes from U.S. Global Investors on July 8, gold has shown a year-to-date rise of 12.8% in 2024, outperforming many major asset classes. The World Gold Council estimates that central bank demand contributed significantly to gold's performance, with Goldman Sachs setting a bullish target of US$2,700 per troy ounce by year-end. This target is supported by strong demand from emerging market central banks and Asian households, highlighting gold's role as a reliable store of value amid global economic uncertainties.
On July 10, Matthew Piepenburg from Von Greyerz AG emphasized the strategic importance of gold as a global reserve asset, noting its increasing recognition amid ongoing de-dollarization trends. Piepenburg asserts that gold is replacing U.S. Treasury securities as a global reserve asset, reflecting a broader shift in economic strategies among sophisticated investors.
Key Catalysts Driving Nevada King Gold's Growth
The recent findings at the South Quartzite Ridge Target (SQRT) are a significant catalyst for Nevada King Gold Corp., showcasing the potential for larger mineralized targets within the Atlanta Gold Mine Project. The discovery of 6.28 g/t Au over 54.9 meters in hole AT24HG-41 demonstrates the potential for high-grade mineralization in the SQRT, suggesting a strong gold system similar to those found in other major Nevada gold mines. This intercept supports the hypothesis that the SQRT could host significant blind mineralization beneath the quartzite unit, opening up new exploration targets.
Moriarty concluded, "I think NKG made the deal of a lifetime."The company touted its use of Controlled Source Audio-Magnetotellurics (CSAMT) data as instrumental in identifying low resistivity zones correlated with mineralized high-angle intrusions. This geophysical method has been critical in pinpointing new zones of mineralization, with the potential for numerous additional targets throughout the Atlanta district. The systematic exploration approach, guided by advanced geophysical techniques, positions Nevada King to potentially uncover more mineralized zones within the district.
Cal Herron, Exploration Manager of Nevada King, emphasized the broader implications of these findings in a press release, saying, "As our 2024 reconnaissance exploration program progresses, we now have numerous targets to chase in all directions from the current resource zone. Considering the strong intrusive tie to Au/Ag mineralization, the company is well positioned to make more new discoveries."
'A Deal of a Lifetime'
*In his July 25th article for 321Gold, Bob Moriarty shared his insights on Nevada King Gold Corp.'s recent developments. He highlighted Nevada King's July 23 press release, which revealed critical information about the company's drill intercepts with gram/meter results exceeding 100.
The most noteworthy discovery, according to Moriarty, was the 68.6 meters of 5.14 g/t Au and 16 g/t Ag from the South Quartzite Ridge Anticline. He described this as "the motherlode with a 1500-meter potential strike length," comparing it to a similar gold system owned by Kinross at Round Mountain, which produced 16 million ounces through 2022.
Moriarty stressed the importance of focusing exploration efforts on the South Quartzite Ridge despite the challenges posed by the need for permits.
He also noted the previously mentioned spinout of all Nevada King projects, except for the Atlanta Gold Mine Project, into a new company called NV King Goldlands.
Streetwise Ownership Overview*
Nevada King Gold Corp. (NKGFF:OTCMKTS;NKG:YSX)
*Share Structureas of 7/26/2024Source: RefinitivReflecting on the project's history, Moriarty cited his visit in 2011 when it was owned by Meadow Bay. He noted that Meadow Bay acquired the project for US$5 million and some shares but later sold it to Nevada King for just US$1 million in 2019.
Moriarty concluded, "I think NKG made the deal of a lifetime."
Ownership and Share Structure
According to Refinitiv, 36.32% of Nevada King Gold is held by management and insiders. Of this category, Collin Kettell holds 19.68% or 61.99 million shares, Michael A. Parker holds 14.28%, at 45 million shares, and Craig A. Roberts holds 1.46% or 4.6 million shares.
Institutions hold 3.62%. Rothschild & Co Asset Management Europe SCS has the largest out of this category at 2.19%, with 6.91 million shares.
The rest is retail.
Market Watch notes that Nevada King Gold has 343.48 million shares outstanding and 230.3 million free float shares. The stock has a 52-week range of CA$0.20 and CA$0.48.
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Important Disclosures:
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.
* Disclosure for the quote from the Bob Moriarty article published on July 25, 2024
Bob Moriarty: I, or members of my immediate household or family, own securities of: Nevada King Gold Corp. My company has a financial relationship with Nevada King Gold Corp. I determined which companies would be included in this article based on my research and understanding of the sector.