With market valuations spread, investors inching towards “anti-bubble” opportunities.
Gold stands at the top of that list.
Opportunity won’t come knocking in the form of your usual large gold market giant presenting colossal potential. Stealing the spotlight are smaller junior mining companies that could land your average investor a deal worth its weight in gold- a lot of gold.
How do you recognize the next catalyst?
The clearest way is pinpointing what companies are seeing substantial exploration success.
For starters, with plenty of near-term catalysts for gold, there’s a good pack of potential.
• One, Warren Buffett’s Berkshire Hathaway has just started to jump into gold miners, like Barrick Gold. “In the past, Buffett, the billionaire chairman of Berkshire, cautioned against investing in the metal because it’s not productive like a farm or a company. Now, gold miners are benefiting from surging bullion prices that are boosting profit margins as costs of production have steadied, making them increasingly attractive investments,” says Bloomberg.(1)
• Two, Goldman Sachs says “we’ll see higher gold prices on low real interest rates and currency debasement concerns.”(2)
• Three, Elliott Management’s Paul Singer still says gold is “one of the most undervalued” assets available and that its fair value is “multiples of its current price.”(3)
• Four, “As economic output contracts sharply, fiscal outlays surge, and central bank balance sheets double, fiat currencies could come under pressure investors will aim for gold,” argue analysts at Bank of America.
Emgold Mining Corporation, a mining company which owns a portfolio of mining assets in mining-friendly jurisdictions of Nevada and Quebec.
Emgold’s business structure models that of the real estate industry, through acquisitions and divestitures. Instead of focusing on one core asset, Emgold looks to acquire multiple undervalued and overlooked assets. They add value through exploration, and quickly monetize assets through divestiture- the analogy is you can’t win by hitting one nice shot, you need multiple opportunities, and Emgold is set up nicely to score big, with multiple assets and the goal of taking them to production.
One being Nevada, which in the past has shown stable permitting, exploration, and mining jurisdictions, with an abundance of gold. In 2018 Nevada produced approximately 5.8 million ounces of gold or about 83% of U.S. production.
The second, Quebec, which in 2018, produced approximately 34% of Canada’s gold, equaling around two million ounces. Both mining districts have quality geology, and exciting potential for acquisitions, enhancement, discovery, and divestiture of products.
Emgold has plenty of room for growth.
Just over the last several months:
• Emgold Mining optioned, acquired, and sold Troilus North Property, Quebec to Troilus Gold Corporation (TLG.T $0.97 as of June 29th, 2020) for C$250,000 in cash and an additional 3.75 million shares of Troilus.
• In 2019/20, it optioned, acquired and signed Earn-in with Option to Joint Venture Agreement with Kennecott Exploration, a subsidiary of Rio Tinto Plc (NYSE: RIO) on the New York Canyon Property, NV. Kennecott can earn up to a 75% interest in the Property by spending US$22.5 million. Rio Tinto, one of the largest mining companies in the world with a market capitalization of over 93 billion dollars (USD) is not generally interested in acquiring mining assets with small production potential. This could suggest that they believe New York Canyon to be a multi-billion-dollar opportunity.
• Earlier this year, the company sold Rozan & Stewart Properties to Ximen Mining (XIM.V $0.60 as of June 29th, 2020) for C$100,000 cash, 1.275 million shares, and 1.275 million share purchase warrants exercisable at C$0.45 for three years & C$0.55 for two additional years.
If Emgold were to sell their shares in the above companies, a simple calculation would show the cash profits would equal their current market cap.
With that being said, the market is heavily undervaluing Emgold, and giving no value to the list of remaining mining assets within the company’s notable portfolio.
One property that outlines the valuation mismatch is the Golden Arrow asset. This property already has measured and indicated resources estimated to 296,500 ounces of gold and 4.0 million ounces of silver; do the math and you will quickly realize this amazing market opportunity.
This is gold for free!
The gold rush is here for Emgold as recent acquisitions bring resource excitement.
Earlier this year Emgold signed a $22.5 million joint venture deal with Kenecott Exploration on its New York Canyon project in Nevada.
Kennecott, by the way, is a subsidiary of Rio Tinto, one of the world’s biggest mining companies (NYSE:RIO). The deal will allow Kennecott to earn approximately 75% interest in the Property by completing US$22.5 million in exploration expenditures.
Kennecott staked 265 unpatented mineral claims, expanding the Property to 21 patented and 417 unpatented mineral claims, totaling approximately 8,700 acres.
Plus, over the last year, Emgold Mining Corporation successfully expanded its portfolio of assets in the Nevada and Quebec hot zones. As of 2019, Emgold Mining Corporation had the:
In addition, the Company completed a drill program at its Casa South Property, QC. Significant work was done collecting and organizing exploration data from acquisitions.
In addition, some of its top assets include:
• Buckskin Rawhide East Property, NV (100% owned) — Buckskin Rawhide East is an inlying set of mining claims surrounded by Rawhide Mining LLC’s operating Rawhide Mine claims. Rawhide Mine has produced 1.7 million ounces of gold and 14.5 million ounces of silver between 1988 and 2014. The property is leased to RMC who have the option of acquiring it by bringing it into commercial production.
• Mindora, NV (options to acquire 100% interest) — Emgold has options to acquire two sets of mineral claims which will re-consolidate the property. Total historic drilling completed at Mindora in the 1980’s and 1990’s was 13,100 meters (42,836 feet) in 171 holes. Historic drilling identified near surface high grade gold and silver mineralization, low grade bulk disseminated gold and silver mineralization, and molybdenum porphyry mineralization at depth.
• Casa South, QC (100% owned) — Emgold’s Casa South property is located immediately to the south and abutting Hecla Mining Corporation’s operating Casa Berardi Mine. Since 1988, Casa Berardi Mine has produced over 2 million ounces of gold.
• East West Property, QC (options to acquire approximately 55% interest) — East-West is located in the Val d’Or Mining Camp west of and adjacent to Wesdome Gold Mines Ltd. Kiena Complex, which hosts the past producing Kiena Mine. It is east of and adjacent to Osisko Mining Inc.’s Marban Block which contains three past producing mines (Marban, Norlartic, and Kierrans).
When evaluating the potential for any energy exploration investment, it’s important to examine the quality of the company’s management.
David G. Watkinson, B.Sc., P.Eng. – President, Chief Executive Officer, Director
David Watkinson brings over 30 years of professional engineering experience in underground and open pit mine development, including mine permitting, engineering, feasibility, construction, and operations to Emgold.
In addition, he has extensive experience in project management, having taken projects from grass roots start-up to successful operating status. Mr. Watkinson has been responsible for management of large capital projects and operations in Canada, the United States and the Philippines. He has held progressively senior positions with Placer Dome Inc., Kinross Gold Corporation, Thyssen Mining Construction and Vulcan Materials Company. Mr. Watkinson holds a B.Sc. in Applied Science, Mining Engineering, from Queen’s University in Kingston, Ontario (1985) and is a Registered Professional Engineer in the Province of Ontario.
Robert Rosner—Chief Financial Officer
Rosner has significant experience as a mining industry entrepreneur and executive. He currently serves as Director, President and CEO of Lucky Minerals, Director and CFO of Chimata Gold Corp, as well as holds Director and Executive positions on several Canadian and USA based public companies. Mr. Rosner has over 30 years of experience in the mining industry and acted as an officer and director of both Canadian and U.S. listed companies, providing senior management of reporting compliance, oversight and fiduciary capacities, and directing corporate activities. He also has significant experience in Initial Public Offerings, Mergers & Acquisitions, and reverse takeovers.
Alain Moreau, BS, MS., P.Geo. – Director of Exploration
Alain Moreau is a Professional Geologist and member of the Order of Quebec Geologists. He has 30 years of experience in exploration for minerals and metals and has worked exploring a variety of deposit types across North America and the world. Mr. Moreaus is Emgold’s Qualified Person as defined by National Instrument NI 43-101 for Emgold’s properties in Quebec.
Robert C. Pease, B.Sc., M.Sc., CPG.- Consulting Geologist
Robert C. Pease is a Professional Geologist with a B.Sc. (1976) and M.Sc. (1979) in geology from University of Nevada, Reno. He has 40 years of diversified experience in mineral development and engineering geology in the mining and construction industries. He has managed exploration projects and his field geology work led to discoveries of lode and placer gold and bedded barite deposits in Nevada and California.
He has an extensive background in Mother Lode and Basin-Range geology applied to gold deposits and industrial minerals; surface and underground geologic mapping; core and RC drilling and sampling in difficult ground conditions; engineering geology, and project reclamation. He is also experienced with geologic modeling using MineSight three-dimensional software. He was employed as Emgold’s Chief Geologist from 2004 to 2014 and is Emgold’s Qualified Person as defined by National Instrument NI 43-101 for Emgold’s properties in the U.S. He is a member of the American Institute of Professional Geologists.
Perry Grunenberg, B.Sc., P.Geo. — Consulting Geologist
Perry Grunenberg is a Professional Geologist and member of the Professional Engineers and Geoscientists of B.C. He has 30 years of experience in exploration for metals and diamonds and has worked exploring a variety of deposit types across North America. Mr. Grunenberg is a graduate of the University of British Columbia and is Emgold’s Qualified Person as defined by National Instrument NI 43-101 for Emgold’s properties in B.C.
One, with gold on the rise, it might be on the way to $3,000, perhaps even $5,000 in the next 18 months, as central banks flood economies with liquidity.
Two, we’re seeing millions of dollars flood in through deals for a company with a small market cap of only $4.09 million.
Three, the company has assets situated in two of the world’s hottest mining districts – Nevada and Quebec.
Four, its projects operate next to existing mines with Hecla Mining and Osisko Mining.
Five, with big money coming in from the likes of Berkshire Hathaway and flowing into gold miners’ hands, there’s big potential for Emgold to strike more deals, as the company explores, moves to monetize assets through divestiture.
Six, at current gold prices, Emgold Mining Corporation USA (EGMCF) Canada (EMR.VN) could deliver a substantial investment opportunity, especially with the Gold Rush well under way.
Source 5: https://www.investmentoffice.com/Observations/Macro_Observations/Gold_Is_Money_Everything_Else_Is_credit.html#:~:text=Because%2C%20as%20J.P.%20Morgan%20stated,buy%20currencies%20rather%20than%20gold.