Newlox Gold Ventures Corp. (NWLXF:OTCMKTS;LUX:CSE;) is an environmental remediation and gold recovery company nearing profitability with the ramp-up of its first processing plant in Costa Rica. Unlike traditional gold mining, which generates tons of chemical waste, Newlox aims to profitably remediate historical tailings and artisanal mine waste, which is a major source of water pollution in the region.
Newlox uses a proprietary and environmentally sustainable gravity and flotation beneficiation process to recover residual gold from historical tailings left by local artisanal miners. Even in a world where we think of mining companies as large multinationals, 20% of annual global gold production comes from local small miners who produce an oversized portion of the pollution associated with mining because they do not have access to modern, cleaner, and more efficient processing methods. Newlox partners with local miners to clean up historical pollution and provides access to cutting-edge clean processing technology to eliminate the use of mercury in mining while boosting recoveries by over 90%.
The company's first processing plant, Plant 1, is now increasing processing capacity towards 80 tons per day capacity, up from 20 tons in January 2021. At the throughput rate that is possible in the near term, Plant 1 is projected to produce over 6,500 ounces of gold per year at an industry-leading cash cost of approximately US$650 per ounce. The company's June financial statements showed the operations are now cash-flow positive and that the first processing plant is continuing to increase output. Given the recent performance at Plant 1 and the company's second processing plant being built and coming online shortly, Newlox is poised to generate significant earnings over the coming quarters.
Unlike larger gold mining companies, Newlox focuses on working with local miners on smaller-scale but ultra-high-grade projects starting at 9 grams per tonne gold. This is because its operations team is uniquely able to work with local artisanal mining groups while its technologies and methodologies significantly reduce processing costs while appealing to local governments due to their environmental remediation objectives. For example, in Q1 2022, the company reported an all-in-sustaining cost of just US$535 per ounce of gold produced. It should be noted that this is a lower cost than their competitors.
As Newlox ramps up Plant 1 toward full capacity, it has also constructed processing Plant 2, which is waiting on the power supply. Plant 2 will boost companywide capacity to over 14,000 ounces of gold production per year. At current gold prices near US$1,940 per ounce, this production profile could generate annual revenues of over US$27 million. Newlox's current market cap stands at just around US$11 million.
The Boston Project employs an innovative "partnership mining model" where Newlox collaboratively works with local artisanal miners. This provides the miners with a much safer and more profitable outlet than using toxic chemicals like mercury to extract gold themselves. Newlox's approach eliminates mercury use while improving the environment, miner health, and overall community relations.
Newlox is following a proven expansion strategy into the significant Latin American market, with the goal of reaching over 140,000 ounces of annual gold production from 8 processing plants within five years.
This plan is modeled after the success of Dynacor Gold Mines Inc. (DNG:TSX), which has reached a market capitalization of around US$90 million after years of steady growth fueled by its environmentally and socially responsible gold ore processing model.
Demand for ethically produced "green gold" is accelerating globally as consumers and investors become increasingly aware of the heavy environmental footprint of traditional gold mining. Newlox seems well positioned to capitalize on this trend while generating strong profitability from its low-cost remediation-driven operations.
With Plant 1 demonstrating Newlox's potential for cash flow generation, investors have an exciting opportunity to get in early on this unique eco-friendly gold producer before it hits full stride. As the company benefits from rising production at Plant 1, moves closer to flipping the switch on Plant 2, and works to replicate its operations in new regions like Colombia and Brazil, its upside potential is outstanding.
Newlox Gold represents a compelling investment in sustainably produced gold ore processing.
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- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Newlox Gold Ventures Corp.
- Jeffery Hunter: I determined which companies would be included in this article based on my research and understanding of the sector.
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