Strategic Spinout Sets the Stage for New Gold Ventures
Nevada King Gold Corp. (NKGFF:OTCMKTS; NKG:TSX) has successfully completed its spinout of NV King Goldlands Inc. (Spinco), following approval by Nevada King shareholders on July 22, 2024. Find out what this means for the company's shareholders.
Nevada King Gold Corp. (NKGFF:OTCMKTS; NKG:TSX) has successfully completed its spinout of NV King Goldlands Inc. (Spinco), following approval by Nevada King shareholders on July 22, 2024. The final order for the plan of arrangement was granted by the Supreme Court of British Columbia on July 25, 2024. Under this arrangement, Nevada King shareholders received one share of Spinco for every 30 shares held in Nevada King.
The spinout leaves Spinco with all of Nevada King's concessions and properties, excluding the Atlanta project in Nevada. Additionally, as part of the plan, shareholders exchanged their old shares of Nevada King for new shares on a one-for-one basis. The new shares of Nevada King began trading on August 6, 2024, under the existing trading symbol "NKG."
Digging For Gold
The mining sector, particularly the gold mining industry, remained an area of interest amid shifting economic conditions and geopolitical tensions. Nevada King Gold Corp.'s recent spinout of NV King Goldlands Inc. was positioned against a backdrop of a favorable gold market bolstered by various macroeconomic factors.
Technical Analyst Clive Maund described the company as a "Strong Buy for technical reasons," emphasizing the bullish volume pattern and the steeply climbing Accumulation line.According to a July 29 article on FX Street, "Gold price extended gains for the second consecutive session, trading around US$2,400 per troy ounce during the European session on Monday," reflecting ongoing interest in the precious metal.
The article also noted that "geopolitical risks stemming from conflicts in the Middle East" provided additional support to gold prices, reinforcing its role as a safe-haven asset.
Further supporting this positive outlook, The Daily Gold wrote on July 24 that "a macro development is approaching, which, if it occurs, would be very favorable to precious metals in both nominal and real terms." This potential shift could significantly benefit companies like Nevada King Gold Corp. as they continue to explore and develop their gold assets.
On July 26, Reuters highlighted that "Gold prices rose 1% on Friday as U.S. Treasury yields fell on optimism for an interest rate cut by the Federal Reserve in September." This optimism aligns with the favorable conditions for gold, as lower interest rates reduce the opportunity cost of holding non-yielding bullion, making it more attractive to investors.
Company Catalysts
The spinout of NV King Goldlands Inc. marks a significant strategic move for Nevada King Gold Corp., allowing it to focus on the Atlanta project while enabling Spinco to concentrate on its other concessions and properties.
Recently, the company reported it had intercepted 6.28 grams per tonne gold (g/t Au) over 54.9 meters at its Atlanta project.
With this, Cal Herron, exploration manager of the company, said, "These new target areas significantly exceed the footprint of the Atlanta resource zone, and, with this new drill confirmation, the CSAMT survey data opens up large areas to drill test for similar high-grade mineralization."
The company also noted that the listing of the new shares on the exchange on August 6, 2024, is expected to provide a clear path for the company's future development, further supported by a strong shareholder base.
What Experts Are Saying...
Nevada King Gold's recent developments have drawn significant attention from market analysts, highlighting the potential impact of their ongoing exploration at the Atlanta Gold Mine.
Technical Analyst Clive Maund expressed strong confidence in Nevada King Gold's prospects on August 8, particularly noting that the stock had reached a favorable entry point following a reactionary pullback.
He described the company as a "Strong Buy for technical reasons," emphasizing the bullish volume pattern and the steeply climbing Accumulation line. Maund pointed out that the stock was approaching a critical resistance level, which could lead to quick gains before encountering further resistance. He also noted that after overcoming the resistance at CA$0.50, the stock could advance towards the next objective in the CA$0.83 area, reflecting the 2020 and 2021 highs.
*Bob Moriarty of 321 Gold also highlighted the significance of Nevada King's recent drilling results at the South Quartzite Ridge Anticline. He referenced the July 23 news release, which disclosed a notable intercept of 68.6 meters grading 5.14 g/t Au and 16 g/t Ag. Moriarty described this discovery as potentially transformative, comparing it to the Round Mountain gold system owned by Kinross, which has produced 16 million ounces of gold through 2022. He emphasized that this discovery could represent the "motherlode" with a potential strike length of 1,500 meters. Moriarty urged investors to thoroughly examine the detailed press release, noting its importance if the geological theory proves correct.
Streetwise Ownership Overview*
Nevada King Gold Corp. (NKGFF:OTCMKTS;NKG:TSX)
*Share Structureas of 8/14/2024Source: RefinitivBoth analysts have underscored the significant upside potential of Nevada King Gold, with Moriarty particularly highlighting the strategic importance of the South Quartzite Ridge discovery. This exploration success, coupled with the upcoming spinout of non-Atlanta projects into a new company, positions Nevada King to explore new opportunities.
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 248.81 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.