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TICKERS: AUAU; AUXXF

Gold Co. Initiates 5000 Meter Drill Program
Research Report

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Allegiant Gold Ltd. (AUAU:TSX.V; AUXXF:OTCQX) has an extensive portfolio, exceptional management, and successful farm-out strategy, according to a Atrium Research report.

Atrium Research analysts Ben Pirie and Nicholas Cortellucci, in a research report published on September 11, 2024, initiated coverage on Allegiant Gold Ltd. (AUAU:TSX.V; AUXXF:OTCQX) with a Buy rating and a target price of CA$0.50 following the company's announcement of a 5,000 meter drill program at its Eastside District. 

Allegiant Gold is a precious metals exploration company based in Tonopah, Nevada, focusing on its flagship Eastside District project, which hosts an inferred resource of 1.4 million ounces gold (Moz Au) at 0.54 grams per tonne (g/t) and 8.7Moz silver (Ag) at 4.4 g/t.

The analysts noted, "AUAU has commenced a 5,000m drill program at Eastside, part of which will focus on resource expansion and the rest on exploration targets."

Pirie and Cortellucci highlighted Allegiant's farm-out strategy, stating, "Utilizing its project farm-out strategy, the company has brought in ~CA$7.5M over the last five years, limiting dilution to shareholders and supporting its clean capital structure which has no warrants."

The analysts emphasized the company's potential, noting, "The Eastside District shows strong potential of growing to a multi-million-ounce deposit and ultimately becoming an attractive takeout target for the several major miners in the region."

Allegiant Gold's strategic focus includes expanding its resource base at Eastside while leveraging its farm-out strategy to generate non-dilutive capital for exploration. The company's management team, including CEO Peter Gianulis, collectively owns 14% of shares, with Kinross Gold holding a 10% stake.

Atrium Research's valuation methodology for Allegiant Gold is based on an EV/oz approach. "We value AUAU using an EV/oz methodology, assuming US$25/oz on its 1.4Moz resource. This still comes at a discount to the group average as we lean on the side of conservatism," the analysts explained.

With a Buy rating and a target price of CA$0.50, representing a potential return of 186% from the price at the time of the report, Atrium Research sees significant upside potential for Allegiant Gold.

Pirie and Cortellucci concluded, "Allegiant Gold's extensive portfolio, exceptional management, and successful farm-out strategy present a compelling investment opportunity poised for significant growth while maintaining shareholder value."


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Important Disclosures:

  1. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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Disclosures for Atrium Research, Allegiant Gold Ltd., September 11, 2024

Analyst Certification Each authoring analyst of Atrium Research on this report certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated securities discussed (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the research, (iii) to the best of the authoring analyst’s knowledge, she/he is not in receipt of material non-public information about the issuer, (iv) the analyst does not own common shares, options, or warrants in the company under coverage, and (v) the analysts adhere to the CFA Institute guidelines for analyst independence.

About Atrium Research Atrium Research provides institutional quality issuer paid research on public equities in North America. Our investment philosophy takes a 3-5 year view on equities currently being overlooked by the market. Our research process emphasizes understanding the key performance metrics for each specific company, trustworthy management teams, unit economics, and an in-depth valuation analysis. For further information on our team, please visit https://www.atriumresearch.ca/team.

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