more_reports

Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe

TICKERS: NEXG.V; NXGCF

Canadian Gold Co. Gains Research Coverage
Research Report

View Important Disclosures for this Article
Share on Stocktwits

Source:

A portfolio of assets, a clear growth strategy and seasoned management are some of the attributes of this undervalued explorer-developer, noted a Red Cloud Securities report.

NexGold Mining Corp. (NEXG.V:TSXV; NXGCF:OTCQX) gained additional research coverage with Red Cloud Securities' recent initiation on it with a Speculative Buy rating and a CA$1.80 target price, reported Ron Stewart, managing director and mining analyst, in a Sept. 6 research note. NexGold resulted from the July 2024 combination of Treasury Metals Inc. and Blackwolf Copper and Gold Ltd.

"The merger strengthened the leadership, balance sheet, and capital markets capabilities, allowing it to execute a strategy to drill, develop and deal its way to becoming a mid-tier gold producer," Stewart wrote.

Undervalued Stock, 169% Upside

Red Cloud's target price on NexGold implies a return for investors of 169% given the gold explorer-developer's share price at the time of the report was about CA$0.67, noted Stewart. NexGold is trading 13% below the average value of peers.

"It is one of only three companies that has posted a year-to-date gain in its share price, suggesting the market recognizes the potential value in advancing its assets," Stewart wrote.

Assets at a Glance

Stewart presented the factors that make NexGold an attractive investment opportunity.

NexGold has a handful of assets, at various stages, in the U.S. and Canada. Goliath, the company's current focus, is a 3,000,000-ounce (3 Moz), development-stage, open-pit and underground gold project in Ontario encompassing the Goliath and Goldlund-Miller properties that together span 34,719 hectares (34,719 ha).

Niblack is an advanced copper-gold-zinc-silver volcanogenic massive sulfide project covering 2,524 ha in southeast Alaska.

NexGold's other assets, all prospective exploration properties with gold discovery upside, offer optionality, wrote Stewart. They include Hyder, also in in southeast Alaska, consisting of five properties: Texas Creek, Mineral Hill, Rooster, Cantoo and Casey. Others are Weebigee-Sandy Lake and Gold Rock in Ontario.

In Pursuit of Growth

NexGold has a clear, three-pronged growth strategy, which Stewart explained.  

1) One way is to advance Goliath to production quickly. In that vein, the company intends to complete a feasibility study on the project by Q1/25, start construction as early as Q1/26, and commence gold production as soon as Q1/28.

Goliath already has a resource, but it likely could be expanded. The combined resource consists of 67,000,000 tons (67.7 Mt) of 0.98 grams per ton (0.98 g/t) gold in the Measured & Indicated category and 32.5 Mt of 0.75 g/t gold in the Inferred category. The combined reserve is 30.3 Mt of 1.3 g/t told.

For an operation at Goliath, Red Cloud models it producing 1.176 Moz over a 13-year life of mine at an all-in sustaining cost of US$1,269 per ounce. This would result in an after-tax net present value discounted at 5% of US$331 million (US$331M), an internal rate of return of 21.2%, and a payback period of 3.4 years.

"We anticipate this to be a starting point for NexGold," Stewart wrote. "We expect ongoing exploration at the GGP to have the potential to enhance the production profile and overall project economics."

The federal government has already approved the environmental assessment for the Goliath project. Also, NexGold and the Wabigoon Lake Ojibway First Nation have a relationship agreement in place in which each party commits to collaborating with and supporting the other.

2) The second way is to expand the current Goliath resource and identify new resource centers. As such, NexGold plans a 25,000 meter (25,000m) multistage drill program at the project. The first 4,000m, targeting the 25 kilometer area between the Goliath and Goldlund deposits, are underway.

3) The third way is to prospect for and acquire gold projects to expand its production base.

Catalysts for the Stock

Coming up, investors can expect a flow of drill results over the near term from the current exploration program at the Goliath project, noted Stewart.

In 2025, key catalysts include a feasibility study in Q1, receipt of provincial permits and an Impact Benefit Agreement, a construction decision in Q3 and project financing around year-end. Start of construction is targeted to follow in about Q1/26.

Leadership is a Key Differentiator

Stewart pointed out that the experienced management and technical team of NexGold gives it a competitive edge. These "seasoned mine builders and operators," with extensive careers in the industry, include Chairman James Gowans, Chief Executive Officer Jeremy Wyeth, President/Director Morgan Lekstrom, Project Director Floyd Varley and Vice President of Human Resources and Sustainability Rachel Pineault.

Further, the company has two strategic advisers with proven track records of creating shareholder value: Frank Giustra, a principal investor, and Shawn Khunkhun.


Want to be the first to know about interesting Gold investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. Subscribe

Important Disclosures:

  1. NexGold Mining Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
  2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of NexGold Mining Corp.
  3. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
  4.  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.

Disclosures for Red Cloud Securities, NexGold Mining Corp., September 6, 2024

Disclosure Requirement Red Cloud Securities Inc. is registered as an Investment Dealer and is a member of the Canadian Investment Regulatory Organization (CIRO). Red Cloud Securities registration as an Investment Dealer is specific to the provinces of Alberta, British Columbia, Manitoba, Ontario, Quebec, and Saskatchewan. We are registered and authorized to conduct business solely within these jurisdictions. We do not operate in or hold registration in any other regions, territories, or countries outside of these provinces. Red Cloud Securities bears no liability for any consequences arising from the use or misuse of our services, products, or information outside the registered jurisdictions. Part of Red Cloud Securities Inc.'s business is to connect mining companies with suitable investors. Red Cloud Securities Inc., its affiliates and their respective officers, directors, representatives, researchers and members of their families may hold positions in the companies mentioned in this document and may buy and/or sell their securities. Additionally, Red Cloud Securities Inc. may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services. Red Cloud Securities Inc. has prepared this document for general information purposes only. This document should not be considered a solicitation to purchase or sell securities or a recommendation to buy or sell securities. The information provided has been derived from sources believed to be accurate but cannot be guaranteed. This document does not take into account the particular investment objectives, financial situations, or needs of individual recipients and other issues (e.g. prohibitions to investments due to law, jurisdiction issues, etc.) which may exist for certain persons. Recipients should rely on their own investigations and take their own professional advice before investment. Red Cloud Securities Inc. will not treat recipients of this document as clients by virtue of having viewed this document. Red Cloud Securities Inc. takes no responsibility for any errors or omissions contained herein, and accepts no legal responsibility for any errors or omissions contained herein, and accepts no legal responsibility from any losses resulting from investment decisions based on the content of this report.

Analysts are compensated through a combined base salary and bonus payout system. The bonus payout is determined by revenues generated from various departments including Investment Banking, based on a system that includes the following criteria: reports generated, timeliness, performance of recommendations, knowledge of industry, quality of research and client feedback. Analysts are not directly compensated for specific Investment Banking transactions.

Dissemination Red Cloud Securities Inc. distributes its research products simultaneously, via email, to its authorized client base. All research is then available on www.redcloudsecurities.com via login and password.

Analyst Certification Any Red Cloud Securities Inc. research analyst named on this report hereby certifies that the recommendations and/or opinions expressed herein accurately reflect such research analyst’s personal views about the companies and securities that are the subject of this report. In addition, no part of any research analyst’s compensation is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report





Want to read more about Gold investment ideas?
Get Our Streetwise Reports' Research Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe