US Gold Corp (NASDAQ:USAU) - Permitted Gold-Copper Project in Wyoming Nears Development Decision

Company Interviews

Interview with Luke Norman, Chairman of US Gold Corp

Our previous interview: https://www.cruxinvestor.com/posts/us-gold-corp-nasdaqusau-advancing-the-ck-gold-project-towards-production-3912

Recording date: 3rd August 2024

US Gold Corp (NASDAQ:USAU) is advancing its flagship CK Gold project in Wyoming, offering investors exposure to a permitted, near-term gold and copper development opportunity in a mining-friendly U.S. jurisdiction. The project's strategic location near Cheyenne, Wyoming, provides significant infrastructure advantages and has contributed to a smooth permitting process. Key project highlights include:

Advanced Permitting: CK Gold has secured crucial permits, including the industrial siting permit and permit to mine. Only one final air quality permit remains, which the company expects to obtain without significant issues.

Strong Economics: The December 2021 pre-feasibility study outlined robust economics, with 1 million ounces of gold and 248 million pounds of copper in reserves. The project boasts an attractive all-in sustaining cost (AISC) of approximately $800 per ounce, based on conservative metal price assumptions.

Unique Value-Add Opportunities: US Gold Corp is exploring ways to monetize approximately 35 million tons of waste rock as aggregate or rail ballast, potentially creating a significant additional revenue stream. The company is also considering the post-mining use of the open pit for water storage, which could enhance community relations.

Creative Financing Approach: Rather than pursuing dilutive equity financing at current market levels, the company is exploring alternative options. These include non-traditional capital sources, municipal bonding, aggregate sales, and potential prepayment agreements.

Experienced Management: Led by Chairman Luke Norman, the team has a track record of creating shareholder value in the mining sector.

US Gold Corp's current market capitalization of around $60 million appears to significantly undervalue the project's potential. Management believes a more appropriate valuation would be closer to 0.8 times net present value, or about $323 million, based on the project's reserve base and permitted status.

Near-term catalysts for the company include:
Finalization of the air quality permit
Economic studies on the aggregate opportunity
Engagement with potential financing partners
Ongoing project optimizations

For investors, US Gold Corp offers exposure to both gold and copper, providing a hedge against inflation and participation in the green energy transition. The project's advanced stage and permitted status reduce many of the risks typically associated with junior mining investments.
However, investors should be aware of the challenges facing the company, including securing project financing on attractive terms and achieving a market valuation that reflects the project's true worth. The junior mining sector is known for its volatility, and careful due diligence and position sizing are crucial.

The CK Gold project aligns with several important macro trends, including growing demand for critical minerals, emphasis on domestic supply chains, and infrastructure development. The company's creative approach to project optimization and financing also reflects broader trends in the junior mining sector.

In conclusion, US Gold Corp represents an intriguing opportunity for investors seeking exposure to a de-risked gold and copper project in a stable jurisdiction. With key catalysts on the horizon and potential for significant value creation, the company merits close attention from investors interested in the precious and base metals sectors. As always, thorough due diligence is essential when considering an investment in the junior mining space.

View US Gold Corp's company profile: https://www.cruxinvestor.com/companies/us-gold-corp

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