High-Grade Gold Discovery Signals Bright Future in Ontario

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NexGold Mining Corp. (NEXG.V:TSXV; NXGCF:OTCQX; TRC1.F:FRA) has reported high-grade drill results from the C Zone East at its Goliath Gold Complex in northwestern Ontario. The recent findings include the highly anticipated visible gold intersection below the current mineral resource boundary. Among the highlights is a core sample from drill hole TL24-678, which returned 117.95 grams per tonne (g/t) gold (Au) over 2.70 meters, including an interval of 635 g/t Au over 0.50 meters. This sample was obtained at a depth of 607 meters. The result is part of a broader intersection of 6.30 meters grading 50.81 g/t Au.

The company also provided updates from its initial Interlakes drill program, which showcased orogenic-style gold mineralization. Notable results include 2.03 g/t Au over 1.50 meters in drill hole IL-24-09 and 2.23 g/t Au over 1.50 meters in drill hole IL-24-10. These findings have been integrated into the company's geological model for future exploration.

NexGold's ongoing 25,000-meter drilling program aims to expand resources and uncover new deposits across its 65-kilometer strike length. The six drill holes completed at Goliath targeted the down-dip extension of the C Zone. All six intersected mineralized zones, confirming the zone's continuation and potential for additional resource expansion.

Morgan Lekstrom, President of NexGold, emphasized the importance of these results, stating in the press release, "Today, we have announced another example that the high-grade, down-dip potential of the Goliath deposit is just being scratched. Having the open pit capability at Goliath, along with additional high-grade hits in the underground, continues our belief that we are seeing a much larger system at play. Combine that with our recent work at Interlakes showing the mineralized trend extending beyond just Goldlund and Goliath, this helps us vector in on the next mineral resource on trend."

Gold's Market Dynamics and Global Impacts

Gold continues to demonstrate its role as a critical financial asset amidst ongoing global economic uncertainties. According to a November 13 report by Joe Vidueira of the Mises Institute, gold reached historic price levels in 2024, surpassing US$2,500 per ounce. This followed a 13% rise in 2023, underscoring its performance as one of the best-performing assets of the year. Vidueira highlighted that central banks played a significant role in this upward trajectory, with their aggressive gold purchases totaling 1,037 tons in 2023. This is the second-highest annual amount on record. A survey from the World Gold Council indicated that nearly 30% of central bank respondents planned to increase their reserves, the highest percentage since 2018.

Both newsletter writers maintained a Buy recommendation for NexGold, citing the company's ongoing 25,000-meter drill program as a key catalyst for future resource expansion and value creation.

The upward pressure on gold prices has been supported by increasing geopolitical and economic instability.

Egon von Greyerz, writing for Matterhorn Asset Management on November 26, emphasized that the substantial gold buying by Eastern and Southern central banks, combined with limited supply, has created "unprecedented demand for gold for many years." Von Greyerz argued that the market fundamentals suggest a "significant revaluation" of gold, driven by central banks replacing dollar reserves with gold, limited mine production, and hypothecation of existing reserves.

According to David Brady of Sprott Money on November 30, the Bullion Banks, often regarded as "smart money," have been aggressively cutting their net short positions in gold since peaking at record levels in late September. This trend has historically aligned with price declines, as demonstrated by gold's drop from US$2802 on October 30 to US$2542 — a 9% decrease over two weeks. Similarly, large speculators, known as "Funds," have reduced their net long positions by 29% in the same period, mirroring the Banks' actions.

As outlined in Brady's piece, the interplay between these market participants reveals a broader expectation for continued price adjustments. Bullion Banks' actions, characterized by reducing short positions during peaks and increasing them near troughs, serve as a predictive signal for directional price movements. The Funds, conversely, often act as a counterbalance, amplifying volatility by being heavily long at peaks and short near lows. This dynamic remains crucial for forecasting the next significant shift in gold and silver prices.

Stewart Thomson of 321 Gold echoed calls from others regarding the bullish cycles in the gold market, which are driven by technical patterns and global economic shifts. He emphasized that while gold experienced a recent pullback from its highs near US$2800, the metal remains well-positioned for a continued upward trajectory. Thomson noted the potential for a "D wave" correction to the US$2450-US$2300 support range, which could establish a base for a powerful "E wave" rally.

Strategic Developments Driving NexGold Forward

The Goliath Gold Complex continues to serve as the cornerstone of NexGold's growth strategy. The project is advancing toward near-term production, supported by robust pre-feasibility study results. According to the company's website, the study indicates a net present value (NPV) of $652 million at a 5% discount rate and an internal rate of return (IRR) of 41.1% based on a gold price of US$2,150 per ounce. The complex has also cleared federal environmental assessments, with final permitting underway.

Exploration efforts at the Goliath Complex have been bolstered by a well-capitalized balance sheet, which allows NexGold to focus on resource expansion and potential acquisitions. Anchored by significant backing from cornerstone investor Frank Giustra, NexGold is positioning itself firmly in the sector through a combination of advanced development, aggressive exploration, and strategic acquisitions.

Future plans include targeting high-grade zones at the Far East area of the Goliath property, where historical drilling has identified mineralization over a 400-meter strike length and to a depth of 200 meters. These activities are part of a dual-track strategy aimed at delivering long-term value through development and exploration initiatives.

Third-Party Analyst Commentary

Jay Taylor, in the November 1, edition of Jay Taylor's Gold, Energy & Tech Stocks, provided a favorable analysis of NexGold Mining Corp. Taylor highlighted the company's resource expansion potential at the Goliath Gold Complex, stating: "The continuity of the deposit and the visible gold from deeper drilling demonstrates the tremendous potential for resource expansion."

Taylor also emphasized the robust economics of the project, particularly under higher gold price scenarios. At a US$1,750 gold price, the Goliath Gold Complex features a discounted post-tax NPV of CA$336 million and an IRR of 25.4%. Under a US$2,500 gold price scenario, these figures increase to CA$943 million and 54.3%, respectively.

Chen Lin, in his What is Chen Buying? What is Chen Selling? report, reiterated his optimism about NexGold. As Chen explained, "The recent drilling results highlight NexGold's resource expansion potential and the visibility into high-grade zones reinforces its valuation growth."

Both newsletter writers maintained a Buy recommendation for NexGold, citing the company's ongoing 25,000-meter drill program as a key catalyst for future resource expansion and value creation.

Ownership and Share Structure

The company notes management and insiders own 3.4% of NexGold.

Institutions own 17%.

Strategic investors own 37.4%. Frank Guistra owns 10.1%. On a partially diluted basis, Sprott owns 14.95%. Extract owns 14%. First Mining owns 4.3%. Matrix owns 1.9%, and Teck own 1.9%.

NexGold has 86 million shares and a market cap of CA$57.16 million.