U.S. Gold Corp. (NASDAQ:USAU), a mining company focused on the development and exploration of precious metal projects in the United States, is making major strides toward realizing near-term production at its flagship CK Gold-Copper Project in Wyoming, matched only by an enviable portfolio of district-scale exploration projects in the mining-friendly states of Nevada and Idaho.  Each asset is a company maker, highly relevant In today’s M&A climate.  

The CK Gold Project, in the State of Wyoming, reached a critical threshold in late April 2024 with the granting of a Surface Mine Permit, bringing the project a major step closer to development and production. Concurrently, its exploration assets in Nevada and Idaho, present exceptional future value potential. The Keystone Project, a 20 square mile land package situated just 11 miles south of Nevada Gold’s (ABX-NEM JV) second largest gold mine, the Cortez Hill Complex, represents a compelling analogue to the discoveries that made the Carlin Trend legendary.  

Let’s take a closer look at these projects and how the company expects to maximize potential at each of them.

CK Gold Project: Near-Term Production Potential

The CK Gold Project, located in the Silver Crown Mining District of southeast Wyoming, approximately 20 miles west of Cheyenne, has been the primary focus of U.S. Gold Corp.’s recent efforts. The project was initially discovered in 1881 and has seen various phases of exploration and limited mining over the years. The company acquired the project from Energy Fuels in 2014 and has since conducted several drilling campaigns to define and expand the resource.

CK Gold is a large-tonnage, development-stage gold-copper deposit with high-grade mineralization exposed at surface, surrounded by a broader, lower-grade zone. According to the company’s SK-1300 Technical Report Preliminary Feasibility Study (PFS) released in December 2021, the project supports a solid reserve and resource base. The PFS highlights proven and probable reserves of 1.44 million gold equivalent (AuEq) ounces, including 1.01 million ounces of gold and 248 million pounds of copper, and 1.58 million AuEq ounces of measured and indicated resources, plus 0.357 million AuEq ounces of inferred resources. 

The project’s economics are compelling, even more so given the gold and copper price assumptions back in December 2021 of $1,625 per ounce and a copper price of $3.25 per pound, a far cry from the surging gold price today of over US $2,600 and copper steadily above $4.00. CK’s economics favour gold at around 70% of the project’s value versus copper at an estimated 30%.  And while the 2021 PFS contemplates all-in sustaining costs (AISC) that will likewise reflect the ongoing rise in costs driven by inflation, management still targets a 10-year mine life producing on average 108,500 AuEq ounces [135,300 AuEq in years 1-3], a two-year payback, and very robust net present value and internal rate of return.  The company is in the process of updating the 2021 PFS which is expected to be completed later this year, followed by the Feasibility Study (FS) in the first part of 2025 incorporating project upside opportunities.  

According to George Bee, USAU’s President and CEO acclaimed for developing and operating some of the largest successful mining operations the world over, “the time to make changes to the project is during the initial engineering stage so that the FS will be well thought out and durable, optimized for the best possible outcome”.

CK’s permitting status has been a significant focus for U.S. Gold Corp. which was rewarded in May of this year with the receipt of the Surface Mine Permit from the Wyoming Department of Environmental Quality (WDEQ), a critical milestone that essentially clears the way towards project development.  Of the three ancillary conditions associated with the Permit, only one remains and is expected in the coming weeks. With these permits in place, U.S. Gold Corp. will have cleared all major regulatory hurdles to move forward with the CK Gold Project’s development, potentially attracting interest from major mining companies and financing partners. 

While not currently a feature of the company’s operating plan and pending consideration under a separate or supplemental permit, it has become clear that the rock moved and set aside to get at the copper and gold is not waste rock as is the case with most mines but a valuable resource. The rock has been proven out as a top-quality aggregate and rail ballast resource, made economical by the proximity to a large market in the surrounding area and the northern part of the Colorado front range.

The rock, one of several value-added features, has the potential to virtually double the project’s NPV and set U.S. Gold Corp. apart from other metal mining companies. 

Further Exploration Upside in Nevada

While the CK Gold Project offers near-term production potential, U.S. Gold Corp. is also advancing exploration projects in Nevada, a state known for its rich mineral endowment and favourable mining policies. The company’s key exploration assets include the Keystone Gold Project on the Cortez Gold Trend, a royalty on the Maggie Creek Project adjacent to Newmont’s Carlin operations which have produced over 90 million ounces of gold, and the Challis Gold Project in Idaho. The Nevada trends are home to some of the most productive gold mines in the United States and George Bee should know; he was a mine manager at the Goldstrike Mine for Barrick Gold during the early days of operations that propelled Barrick to where it is today.

The Keystone Project, a massive land position between ABX/NEM’s Cortez Hill operation and McEwen’s Gold Bar Mine, has seen extensive exploration, including geochemical sampling, geophysical surveys and drilling. While U.S. Gold Corp. has yet to undertake a major drilling program at Keystone, the exploration work completed to date suggests significant potential for a major discovery. The company’s strategy involves systematically testing the most promising targets identified through its comprehensive exploration efforts.

Market Outlook

Given the upward trajectory in gold, silver, and copper prices, the company has good reason for its enthusiastic outlook.  

Considering the number of pre-development gold and copper mines battling federal and foreign regulatory hurdles for mining permits, it is no wonder that U.S Gold Corp. is making the radar of analysts in Canada and the U.S.  Alliance Global Partners maintains a price target of $15.25 per share, while H.C. Wainwright & Co. has set a target of $11 per share. These valuations reflect CK’s robust value proposition in a safe jurisdiction, and a highly accomplished technical and management team, but surprisingly very little value is attributed to the exploration upside.