Wokes aren’t Leftist
Gold79 Mines (AUU; $0.035) has released some exciting results from their Gold Chain project, with one hole (GC23-28) grading 51 g/t over 9 m. This hole is at the junction of the Tyro mine vein and White Spar fault, opening up a possibility of a so-far unexplored higher grade zone. Here are briefly their projects:
- The drilling at the Gold Chain project is giving them approximately 30 m of 1.5 g/t Au over a structure that is 100m deep. They have, in my view, shown a 500 m strike length at the Tyro mine vein. This would equate to about 200,000 oz. This rock should be oxidized. This, even without the higher-grade hit, should justify the market capitalization. Moreover, in its news release, the company believes that the strike could exceed 2,000 m, giving it the potential to contain 800,000 oz. If further drilling proves this potential, the upside from this project is substantial.
- The Jeffrey Canyon project has been optioned to Kinross. To earn 70% of the project, Kinross must pay US$5 million in cash and spend US$0.6 million. Assuming this agreement continues, AUU will have earned US$5 million in cash and retained 30% of the project, whose attributed value based on money spent by Kinross would be US$2.4 million. This would be a total value of US$7.4 million or $10 million for AUU.
- AUU bought the Tip Top project for a consideration of over $1.5 million in 2020.
- The Greyhound project is being operated by Agnico Eagle, which has spent $3 million to earn about two-thirds of the project. The attributed value for AUU is $1.5 million.
Based on the above, I see the market capitalization of AUU well-underpinned by the Gold Chain project. The recent higher grade hit, the potential at Gold Chain to prove a much longer strike length, and the other three projects give me a free upside.
AUU is short of cash. They also have 27 million warrants with an exercise price of $0.05 (expiry, November 2025). Twenty-seven million shares from the last financing will be free-trading on the 19th of March, 2023. They have 174 million shares, most of which are with retail investors. While I see a terrific upside, these technical reasons could limit the move up for the next few weeks, particularly when AUU has increased by 60%. I am happy to bid at C$0.035.
Disclaimer: All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment, or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies. The sole purpose of these musings is to show my thinking process when analyzing a stock, not to provide any recommendations. I will not and cannot be held liable for any actions you take resulting from anything you read here. Conduct your due diligence, or consult a licensed financial advisor or broker before making any investment decisions. Any investments, trades, speculations, or decisions made based on any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise.