Gold prices are still pushing higher thanks to two key catalysts. One, China’s central bank is still aggressively buying gold. In April, for example, China bought another 60,000 troy ounces, extending its buying spree to 18 straight months. In fact, as noted by Mining.com, “Safe-haven demand, driven by geopolitical and economic uncertainty, as well as persistent central bank buying contributed to a rally in gold in March-April. China held 72.80 million ounces of gold at the end of April, up from 72.74 million ounces a month before.” All of which is positive news for gold companies, such as U.S. Gold Corp. (NASDAQ: USAU), Barrick Gold Corporation (NYSE: GOLD) (TSX: ABX), Royal Gold Inc. (NASDAQ: RGLD), Franco Nevada Corp. (NYSE: FNV) (TSX: FNV), and Newmont Corp. (NYSE: NEM) (TSX: NGT).
Two, there’s growing speculation the U.S. Federal Reserve could cut interest rates this year. Fueling that potential, U.S. jobs growth slowed more than expected in April, taking some pressure off the Federal Reserve to keep rates higher for longer.
Look at U.S. Gold Corp. (NASDAQ: USAU), For Example
U.S. Gold Corp. just announced that its wholly owned subsidiary, Gold King Corp., has been issued its Surface Gold Mine Permit, dated April 29, 2024, from the Director of the Wyoming Department of Environmental Quality, subject to certain conditions.
In commenting on the approval, George Bee, President, CEO and Director of U.S. Gold Corp. said, “Having previously been granted the Industrial Siting Permit in June last year and now the Mine Operating Permit we have cleared the major regulatory hurdles towards project development. Work to meet final authorization for development is well underway. The remaining conditions are the approval of the reclamation bond which has already been submitted, the Wyoming Pollutant Discharge Elimination System permitting process, which is in the final stages of approval, and the WDEQ Air Quality Division permits, where technical work is under review. We remain on track to receive the necessary permits around mid-year, as per prior guidance.”
Luke Norman, Executive Chairman of U.S. Gold Corp. added, “This is an outstanding accomplishment. Since shifting the Company’s focus in August 2020 from exploration to the development of the CK Gold Project, through the receipt of the Mine Operating Permit, is a remarkable achievement. We would like to recognize our management team, consultants, and the State of Wyoming regulatory authorities for everyone’s hard work and dedication advancing the CK Gold Project. The CK Gold Project sits on State and private ground in Wyoming, which is an extraordinary jurisdiction for resource development, with a clear regulatory framework, and authorities that are knowledgeable, experienced, and motivated to safely and responsibly manage the State’s mineral wealth.”
The remaining mine operating permit conditions as per the WDEQ Director’s letter of approval are as follows: 1. No construction or mining activities shall be allowed to commence until the reclamation performance bond, in the amount of $5,010,000 as set forth in the Director’s Bond Letter dated February 20, 2024, is approved, 2. The application states multiple discharge points that require WYPDES permits. The operator has applied for these permits and is awaiting final approval. As a non-significant revision to the approved permit, the operator shall provide an updated map of approved discharge locations and a list of WYPDES permit numbers when they are made available to them. The operator is not authorized to conduct discharge activities until the permits are approved and placed into the permit, and 3. No construction or mining activities shall be allowed to commence until the applicant obtains required WDEQ-Air Quality Division (“AQD”) permits. As an NSR to the approved permit, a copy of the approved AQD permit(s) shall be inserted into the approved mining plan when they are made available.
Background
U.S. Gold Corp. pivoted from a purely exploration focus on its highly prospective assets in Nevada and Idaho to development of the CK Gold Project in 2020, representing a significant and achievable value creation opportunity for the Company.
In August 2020, the current management team started along the development path for the CK Gold Project, previously known as Copper King, which had lain dormant for several years. While Copper King has been known about and explored on multiple occasions, following limited underground mining around 100 years ago, the last study on the project was a Preliminary Economic Assessment authored by Mine Development Associates Inc. in 2012.
In September 2020, the Company commenced work on establishing an environmental baseline for the project area and its surroundings. Following two years of data capture covering surface and subsurface water monitoring, fauna, flora and cultural assessment and modelling, a Mine Operating Plan and Closure Plan Permit application was submitted to WDEQ. By November 2022, the application was deemed technically complete, and the detailed WDEQ review commenced, including a review of certain aspects by experts contracted by WDEQ. In April 2023, WDEQ responded to the Company with comments and the Company spent several months addressing WDEQ’s comments and making design changes to provide further comfort to WDEQ that the proposed action contemplated as many eventualities as could reasonably be expected to provide for the health, safety and stewardship of the environment and cultural resources. At the end of February 2024, the 30-day public notice period commenced, which concluded on March 28, 2024. In accordance with the statutory timeline, WDEQ issued the approval of the Mine Operating Permit on April 29, 2024.
With approval of the Mine Operating Permit, work on a prefeasibility study update and completion of the feasibility study has been restarted. The feasibility study work awarded to Samuel Engineering Inc., in April 2022, was suspended in March 2023. The decision to suspend Samuel’s work on a feasibility study was made for three reasons: first, the Company did not want a “stale dated” study in relation to the permit approval timeframe; second, there was still price and supply disruption following the COVID-19 pandemic, and third, there was a need to recognize some of the changes and additions that came about as a consequence of WDEQ’s review of the project. Engineering work is well advanced with the process plant design largely complete and updated bids for major equipment are now being solicitated. We are on track to update the prefeasibility study by the third quarter of 2024 and finalize the feasibility study sometime thereafter. We are also working to understand and include project upside opportunities in the feasibility study.
Other related developments from around the markets include:
Barrick Gold reported preliminary Q1 production of 940 thousand ounces of gold and 40 thousand tonnes of copper, as well as preliminary Q1 sales of 910 thousand ounces of gold and 39 thousand tonnes of copper. As previously guided, Barrick’s gold and copper production in 2024 is expected to progressively increase each quarter through the year, with the Pueblo Viejo plant expansion ramping up from Q2 and the Porgera mine restart continuing in line with plans. We remain on track to achieve our full year gold and copper guidance.The average market price for gold in Q1 was $2,070 per ounce while the average market price for copper in Q1 was $3.83 per pound. As planned, preliminary Q1 gold production was lower than Q4 2023 mainly as a result of planned maintenance at Nevada Gold Mines and mine sequencing at various sites.
Royal Gold announced its guidance for calendar year 2024 total stream and royalty sales volume, depletion, depreciation and amortization expense, and effective tax rate, as well as an update on the recent repayment of outstanding borrowings. Sales guidance for 2024 is provided on a sales volume basis to improve transparency and avoid the effect of volatile commodity prices in the conversion of revenue to gold equivalent ounces. Sales volume for stream agreements represents physical metal sold, and sales volume for royalty agreements represents royalty revenue received divided by the average metal price for the relevant period. Gold, silver and copper are expected to provide the majority of 2024 revenue. Sales from Other Metals are expected to be relatively minor and the range provided assumes 2024 prices of $7.50/lb for nickel, $0.90/lb for lead, and $1.10/lb for zinc, which are the metals that are expected to provide most of this component of sales.
Franco Nevada recently noted, “In late 2023, we were challenged by the unprecedented production halt at Cobre Panama. We are hopeful that the issues can be resolved, although we have taken a prudent approach for the carrying value of the asset”, stated Paul Brink, CEO. “Despite the issue at Cobre Panama, our business remains robust and we continue to benefit from a long- duration, diversified portfolio. We finished the year with no debt and $1.4 billion in cash and cash equivalents. The balance of our business performed well in 2023 and is expected to grow in 2024 with contributions from the completion of the Tocantinzinho, Greenstone and Salares Norte gold mines. Our growth outlook through 2028 is driven by numerous new mines and mine expansions. $2.4 billion of available capital positions us well for attractive acquisitions in an environment where many project developers are capital constrained.”
Newmont Corp. announced first quarter 2024 results and declared a first quarter dividend of $0.25 per share. “Newmont delivered a strong first quarter operational performance, producing 2.2 million gold equivalent ounces and generating over $1.4 billion in cash from operations before working capital changes,” said Tom Palmer, Newmont’s President and Chief Executive Officer. “Underpinned by the gold industry’s leading portfolio of Tier 1 gold and copper operations, we remain well-positioned to achieve our full-year guidance and deliver meaningful synergies and productivity improvements from the combined portfolio. We remain focused on delivering on the commitments we laid out at the beginning of this year, creating an attractive value proposition for new and existing investors during this unique time in the gold industry.”
Legal Disclaimer / Except for the historical information presented herein, matters discussed in this article contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Winning Media is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. For making specific investment decisions, readers should seek their own advice. Winning Media is only compensated for its services in the form of cash-based compensation. Pursuant to an agreement Winning Media has been paid three thousand five hundred dollars for advertising and marketing services for U.S. Gold Corp. by U.S. Gold Corp. We own ZERO shares of U.S. Gold Corp. Please click here for disclaimer.
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