Categories: Precious Metals
Topics: General Precious Metals

U.S. GoldMining Inc. (NASDAQ: USGO) CEO Tim Smith on Successful IPO & Next Steps in Advancement of Flagship Whistler Gold-Copper Project, Alaska

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of U.S. GoldMining — Mr. Tim Smith. Tim, it's great to have you on. It's been a while since we chatted. I’ve got to say, sir, your timing is phenomenal with this IPO. How are you doing today?

Tim Smith: Doing very well… and thank you, Gerardo, for having me on the show today. Really excited to have an opportunity to raise awareness for our new company — U.S. GoldMining, Inc. 

And look, you're bang on… superb timing! We're just a fresh IPO as of April 2023… a brand new company ready to go. Very excited to start putting plans together to really showcase and crystallize value for our shareholders.

Gerardo Del Real: The gold price continues to flirt with that US$2,000 level and — despite a dollar index that's firmly above 100 — continues to hold up well. I actually believe that the second half of this year has us due for a breakout that will likely lead to new all-time highs. How are you feeling about the gold space and the precious metals space?

Tim Smith: Yeah, I think it's been just an amazing year so far. Looking at the strength in the gold price over the past two months — wow! 

We've seen well over a US$200 per ounce increase since the start of April. Most recently, it has peaked above US$2,000 a couple of times at a high of around US$2,040 per ounce. It's settled just below US$2,000 for the last couple of weeks. But I think we're really starting to build a good, strong base here.

Gerardo Del Real: You have a market cap of just over US$100 million. US$20 million of that is backed by cash. You're clearly not getting the value for your 9.4 million ounces of gold — gold resource equivalent, I should say — that a lot of your peers are. 

You and I exchanged notes, and last I checked, it looks like you're getting about US$10 an ounce in credit. The global median, of course, is roughly US$40 an ounce. How do you plan on unlocking the value?

Tim Smith: Yes, great question. That US$10 per ounce valuation leaves a lot of upside on the table for the company and our shareholders to crystallize that value. US$10 per ounce, I think, provided great value for the IPO. And we received a very enthusiastic response, which is really a testament to the quality of the asset. 

And from where that enterprise value sits right now, we see significant growth potential as we advance the project towards an average valuation, which we see in the market for a development stage asset to be closer to US$40 to US$50 per ounce. And by development stage, I mean projects that are heading into PEA… so resources are defined and economics are starting to be wrapped around that. 

As that work continues into pre-feasibility and feasibility studies, we then see broadly in the market another multiple increase to around US$100 an ounce. And this is the multiple that I guess we see for advanced stage assets with a clear line of sight through to mine production.

And if I can add an example of that, when I was the VP Exploration for Kaminak Resources back in 2016, Gold Corp. acquired that company's Coffee Gold Project located next door to our asset in Yukon. 

And essentially, the acquisition price was around C$550 million, which equated to well over US$100 per ounce. I think it was around US$130 per ounce for the 3 million ounces in the indicated resources of that project at that time. 

And certainly, we've seen plenty more examples throughout the industry over the past several years where larger companies tend to pay well over a US$100 per ounce for quality ounces in quality jurisdictions. 

So I think that's really why our IPO was so successful at US$10 an ounce. It was a very attractive offering where the shareholders and the company see so much room for growth. 

This is a company in Alaska with all of the infrastructure that the state is willing to support coupled with a really quality asset in the Whistler Gold-Copper asset. So we just think there's tremendous upside here.

Gerardo Del Real: You mentioned the jurisdiction; the very mining-friendly state of Alaska. My old stomping grounds, actually. I spent 17 years in Anchorage, Alaska. The project, I believe, is roughly 105 miles northwest of Anchorage. Anything else that you want to add, Tim? 

I really appreciate you taking the time. There's clearly a lot of runway between a US$10 gold equivalent ounce valuation and a US$100 gold equivalent ounce valuation. I mean, we can all do the math, right? There's tenfold potential there if you're able to advance the project the way that you want to advance the project. 

I should mention that the team is top-notch. It's a group of individuals that have a track record for developing projects and monetizing assets. Anything to add to that?

Tim Smith: Yeah, just a couple of things. You touched on Alaska. There's so much geopolitical tension in the world right now. Not only does this mean that gold as a haven, or a store of value, should increase in price but it also means that our strategy aligns well with investors wanting to own assets like Whistler, which is located in one of the safest jurisdictions in the world. 

It really doesn't get any safer or more mining-friendly than Alaska. It's vast… it’s blessed with natural resources… and it's a great place to do business.

And one example of that is the state's Roads-to-Resources initiative. Essentially, over the last couple of years, the state has put US$8.5 million into a road design that will connect the Whistler Gold-Copper Project with Anchorage. This is a potential game changer for U.S. GoldMining. 

And the key with that is not only will that road allow us to supply the mine but it will directly link the mine with an existing port facility at Port MacKenzie, which lies at the eastern end of the road. So we’re very excited about that. 

The state also recently announced that it expects to commence construction of that road leading directly to Whistler as early as 2025. So we're working closely with the state and looking forward to keeping our shareholders updated as news progresses with that.

Gerardo Del Real: Tim, I want to thank you for your time. I also want to invite you to come back on as you continue with what I suspect is going to be a 2023 full of news flow.

Tim Smith: Fantastic. Delighted to come back anytime. Thanks so much for your time today, Gerardo.

Gerardo Del Real: Appreciate it, Tim. Thank you.

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