In my opinion, the economic conditions are optimal for gold as it currently trades above $2,000/oz., and with the Federal Reserve projected to hike interest rates for the final time in this cycle.
A new IPO recently began trading, having raised $20M from institutional investors at $10/share, but its current price is at a 10% discount, trading at $9.15/share, with $19M in cash on hand.
US GoldMining Inc. (NASDAQ: USGO), a company that spun out from one I am familiar with, has a CEO, Tim Smith, who has over 25 years of experience in mineral exploration and mining. He is focused on developing their Whistler copper-gold project with favorable mining conditions.
USGO has a market cap of $108M, with an enterprise value of $90M after deducting its cash. The company's project has 3M equivalent ounces of indicated resource of gold and 6.4M equivalent ounces of inferred gold, with a total of 9.4M equivalent ounces of gold across all categories. This results in a valuation of less than $10/ounce, compared to recent buyouts in the region that occurred at over $100/ounce.
Did I miss something?
Leave a Reply