Gold Mining Co. Forms British Columbia Subsidiary, Gains Five New Properties
Source: Streetwise Reports
June 2, 2023 (Investorideas.com Newswire) NevGold has created a British Columbia subsidiary to focus on its Ptarmigan project, and has also entered into an option for several new gold, copper, and lithium properties.
NevGold Corp (NAU:TSX.V; NAUFF:OTC; 5E50:FSE) has created a British Columbia subsidiary and contributed its Ptarmigan property in British Columbia, along with several new properties in British Columbia through an option agreement with Eagle Plains Resources Ltd. (EPL:TSX.V).
Two of these properties show potential for precious metals and three show potential for lithium. This deal will allow for NevGold, the parent company, to focus on its oxide, heap-leach gold projects in the western United States.
The Creation of SubCo
NevGold has established a subsidiary based in British Columbia that will focus on the company's high-grade Ptarmigan silver (Ag), copper (Cu), lead (Pb), and zinc (Zn) project in southeastern BC. The BC subsidiary has also entered into an option agreement to acquire a portfolio of projects from Eagle Plains Resources. This portfolio will include three lithium projects and two Cu, gold (Au), and Ag projects in British Columbia.
The highlights of the agreement are as follows:
- The deal unlocks immediate value from Ptarmigan, with 25 million shares of the BC subsidiary being issued to NevGold.
- The deal offers further exposure for shareholders to additional prospective projects.
- Large, district-scale projects totaling over 310km2 in British Columbia.
- Ptarmigan, Lost Horse, and Acacia have several drill-ready targets.
- An operating partnership exists between NevGold and ELP teams on BC projects.
- This deal allows NevGold to maintain 100% focus on Western U.S.A. projects, such as Nutmeg Mountain in Idaho, Limousine Butte in Nevada, and Cedar Wash in Nevada.
According to Brandon Bonifacio, "The creation of the focused British Columbia SubCo extracts immediate value for our shareholders with 25 million shares being issued to NevGold ... Ptarmigan has significant value but gets zero value ascribed due to our focus on our gold assets in the Western USA. Partnering with Eagle Plains allows us to strengthen our presence in BC while also building an efficient, well-established operating platform. The transaction allows NevGold to remain laser-focused on being one of the go-to companies for oxide, heap-leach gold in the Western U.S.A."
There are several new properties included in the new deal: Lost Horse, Acacia, Findlith, Surprise Lake, and Toodoggone. Surprise Lake and Toodoggone are early-stage projects, and geochemical results indicate the potential for lithium mineralization. Findlith has also been identified as the site of possible lithium mineralization.
Gold has seen a rise in value as uncertainty in the dollar persists. Some analysts, such as Richard Mills, believe that conditions are right for another record-breaking precious metals rally. Mills cites five factors in the rise of gold and silver: recession fears, the banking crisis, the actions of the US Federal Reserve, and rising demand pushing against a stagnant supply.
According to Stockhead, gold has seen a drop in recent days, which may be a chance for new investors to get into the market.
A downside of the previous rally in precious metals was that a price of US$2000/oz was prohibitive to those looking to break into the market. The recent price of US$1977/oz may represent an opportunity.
Technical analyst Clive Maund has rated NevGold as a "strong Buy" for all timeframes.
According to Maund, the company's stock is in the late stages of a Cup and Handle base, and "this interpretation of what is going on being very strongly supported by the powerfully bullish volume pattern of recent weeks with the strong upside volume starting to drive the Accumulation line steeply higher and the best news is that it is still at an excellent entry price."
In January of 2022, NevGold mobilized a drill rig to Nutmeg Mountain and received a Notice of Intent permit to drill on federal Bureau of Land Management claims at Nutmeg Mountain.
The company is expecting to receive further drill results from Nutmeg over the coming weeks and months and will also start drilling its Limousine Butte project in Nevada.
Ownership and Share Chart
Management and insiders own 30% of the company. Brandon Gennaro Bonifacio owns 6.06% with 4.11 million shares, Gregory French owns 1.62% with 1.10 million shares, Victor H. Bradley owns 1.33% with 0.90 million shares, Timothy Dyhr owns 1.30% with 0.88 million shares, Morgan Hay owns 1.25% with 0.85 million shares, and Robert T. McKnight owns 0.33% with 0.22.
As for institutions, GoldMining Inc. owns 18.54% with 12.56 million shares, and Palos Management Inc. owns 0.89% with 0.60 million shares. Gold Mining Inc. represents institutional investments.
The company reports that there may be some potential retail sellers or sellers that participated in the December 2022 financing. Warrants are priced at CA$0.60, with a large batch of 10,303,127 expiring on June 24, 2023.
NevGold has a market cap of CA$35,568,000. There are 71,418219 shares, 16,947,558 warrants, and 5,266,000 options. It trades in the 52-week range between CA$0.30 and CA$0.81.
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