Saturday, 11 January 2020

Gold In The USA, The Alaskan Elephant Country: M&A Deals Are Driving Up The Valuation Of Gold In The Ground.



Finally, the industry is recovering and M&A deals are driving gold valuation in the ground. Years of deep cuts in the exploration budgets have left gold majors with dramatically decreasing mining reserves. McKinsey calls it "Gold Mining Reserves Crisis".




Now the most forward-looking companies are exploring for gold on the exchanges where reserves can be bought still cheaper and, what is more important, with more certainty than exploring for new gold discoveries in the ground. But the time of tax-loss selling and Christmas sales are over. The coming liquidity tide is lifting the boats and today I would like to look at the latest available charts and the valuation trends for gold oz in the ground.




"We have been talking about these megatrends, tectonic shifts in our society and signs for years, now it is finally happening. Talk is cheap, the money will tell all the story when they will take the position and only after that you will start hearing about "the next unbelievable opportunity". You know, what I am talking about here - I will provide the road maps and a lot of charts, as usual, but you will have to Do Your Own Research and pick up the winners. I know mine."




News about Electrum Group partnering in the new venture with gold mining legends Rob McEwen and Eric Sprott for exploration in Alaska will ignite the new wave of interest to the juniors operating in Alaska. Alaska jumped to the 5th place among safe mining jurisdictions and giant 39 Moz Donlin Gold project is getting more and more attention. Electrum Group is the major shareholder of Nova Gold which is developing Donlin Gold in JV with Barrick Gold.




With gold prices reaching new highs this year mining analysts are applying higher metrics to value "gold in the ground" when comparing juniors and their projects. Nova Gold was trading as high as $2.4B reflecting its 50% stake in Donlin Gold. It gives more than $120 valuation per oz in the ground. All projects are different, but previous Gold Bull market valuations started at $20 per oz of the inferred resources - the very initial level of resources. Now, these charts from AuCu Consulting are showing different Averages starting from $42/oz for different stages of resource definition for Exploration Companies. 




New mining deals will give us a better sense of the valuations. Eric Sprott and Rob McEwen will make sure that Alaska is shining bright on the radars of investors now. Increased gold prices are making the great state of Alaska as one of the most attractive in the industry: "leverage in the place where you can keep the rewards". And their own gold price projections can bring real fireworks to the exploration opportunities. As always do your own research and you will have to pick up the winners.




As we discussed before, the industry is facing "Gold Mining Reserves Crisis". The 1970s and 1980s were the golden years for gold exploration. "There was at least one 50 MOZ Au discovery each decade and at least ten 30 MOZ Au discoveries. From 2000 industry failed to find any 50 MOZ Au deposits or any 30 MOZ Au deposits." M&A deals are only redistributing the already well-known resources, the industry needs new major discoveries, but giants like Donlin Gold are only a few and far between. 




M&A deals are driving up gold in the ground valuations already and experts are forecasting the further consolidation in the industry. TNR Gold is developing Shotgun Gold project in the Alaskan Elephant country near the giant Donlin Gold project and is looking for a strategic partner to grow together. You can find more information about our Company on the links below.





Gold In The Alaskan Elephant Country: Kirill Klip GEM Royalty TNR Gold Presentation November 2019.




"The Company's strategy with the Shotgun Gold Project is to attract a partnership with one of the major gold mining companies. TNR Gold ("TNR") is actively introducing the project to interested parties," commented Kirill Klip, Executive Chairman of TNR. "We may be at the beginning of a great discovery. There is a clear path on how to move this project forward using the geological and geophysical research currently available to target drilling to expand the resource and form the basis of a preliminary economic analysis. The next step is to acquire a partner that shares our vision and recognizes the growth potential and value to be added to the Shotgun project over time."






Please always read legal disclaimer. There is NO investment advice on any Kirill Klip feeds and blog. Always consult a qualified financial adviser before any investment decisions. Do Your Own Research.




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