High grades combined with low political risk have increased interest in gold mining in Nevada. The highly respected Fraser Institute Annual Survey of Mining Companies, an annual survey of mining executives, ranked Nevada the third most attractive mining jurisdiction in the world based on geology and policies. Of the 91 jurisdictions around the world, only Finland and Saskatchewan ranked higher.
With the announcements last month that Hecla Mining Co. (HL:NYSE) is buying Klondex Mines Ltd. (KDX:TSX; KLDX:NYSE.MKT) and Alio Gold Inc. (ALO:TSX; ALO:NYSE.American) is purchasing Rye Patch Gold Corp. (RPM:TSX.V; RPMGD:OTCQX), gold mining companies are beginning to take a serious look at Nevada.
The Hecla-Klondex deal, valued at $462 million, gives Hecla control of Klondex's three Nevada mines: Fire Creek, Midas and Hollister. Phillips S. Baker, Jr., Hecla's president and CEO, noted that "opportunities to acquire significant land packages along Nevada's prolific gold trends are very rare. Rarer still are for these land packages to have the highest-grade mines in the U.S. and this transaction is consistent with Hecla's strategy of owning large prospective land packages with mines where we can improve costs, grow reserves and expand production."
The Alio Gold-Rye Patch business combination, worth around $128 million, gives Alio access to Rye Patch's operating Florida Canyon mine in Nevada. Alio touted that the merger "establishes an operating presence in Nevada, providing further geopolitical diversification."
As gold mining companies seek to replace gold reserves and replenish their exploration pipeline, attention is beginning to shift toward other gold explorers that have highly prospective exploration properties in Nevada. One such company is Allegiant Gold Ltd. (AUAU:TSX.V; AUXXF:OTCQX), which was spun out of Columbus Gold Corp. (CGT:TSX; CGTFF:OTCQX) and began trading in late-January this year.
Allegiant, while a new company, boasts distinguished and experienced leadership. James Kwantes wrote about the pedigree of Allegiant's management in Resource Opportunities on Feb. 21, "Allegiant CEO Andy Wallace is the principal of Cordex Exploration—founded by John Livermore—and has been involved in the discoveries of several multi-million-ounce gold deposits in Nevada. . .Wallace is a gentlemanly Nevada legend whose knowledge of deposits and prospects in the state is impressive."
Brien Lundin, in the April issue of Gold Newsletter, noted that Cordex "is responsible for eight discoveries in Nevada, and its founder, John Livermore, discovered the Carlin Mine that started Nevada's run of elephant-sized gold discoveries back in the 1960s."
"Allegiant is exploration investing with the drill risks mitigated by the calibre of the team and the number of shots, across multiple projects." - James Kwantes, Resource Opportunities
Eleven of Allegiant's 14 projects are located in Nevada, with the Eastside Gold Project being the most advanced. In February, Allegiant's chairman, Robert Giustra, said that the company's 2018 drill program had two goals, "to double the in-pit ounces at Eastside while reducing the strip ratio, and to make a new, significant discovery at any one of the other nine high-priority gold projects that we plan to drill."
The 20,000-meter drill program at Eastside is already seeing results. On March 5, Allegiant announced that its first nine drill holes had extended "the Original Zone another 300 meters to the west, where it still remains open." Highlighted results include hole 147, which returned 42.7 meters of 2.49 g/t gold, including 9.1 meters of 9.03 g/t gold.
Robert Giustra stated that "these results confirm our geological model and validate our objectives to double the in-pit ounces and significantly reduce the strip ratio at the Original Zone. The Original Zone has the hallmarks of a very large gold system and is just one of many exploration targets that exist at Eastside." The company has added a second drill rig "to test the southern extension of the Original Zone, which also remains open."
In addition to Eastside, Allegiant plans to drill an additional 20,000 meters at nine other gold projects this year. All of these projects are drill ready, with the targets identified by Andy Wallace, and only one of them, Bolo, has been previously drilled by Allegiant. In 2013, drilling at Bolo returned 133 meters of 1.28 g/t gold, including 30.5 meters of 3.24 g/t gold.
Allegiant's management and aggressive exploration plans have put it on the radar screen of many market commentators.
Thibaut Lepouttre noted in Caesars Report on February 15 that "Allegiant Gold is one of our favorite exploration companies in North America as Eastside provides the 'current' fundamentals (and investment thesis), whilst the other exploration projects provide additional blue sky potential. . .We expect this year's drill program to be incredibly important for Allegiant Gold as it will aim to increase the resource whilst reducing the strip ratio."
"Allegiant is a buy for those looking to add to their spinout holdings and those who want to add an aggressive junior explorer to their portfolios." - Brien Lundin, Gold Newsletter
Brian Lundin noted in Gold Newsletter, "At current trading levels, the company is definitely undervalued compared to peers with similar precious metal exploration assets. It's a buy for those looking to add to their spinout holdings and those who want to add an aggressive junior explorer to their portfolios," Lundin concluded.
Mickey Fulp wrote in Mercenary Geologist in February that Allegiant "is one of my top picks."
James Kwantes concluded in Resource Opportunities that Allegiant "is exploration investing with the drill risks mitigated by the calibre of the team and the number of shots, across multiple projects."
Allegiant is also beginning to attract attention from Canadian investment dealers.
Beacon Securities initiated coverage on Allegiant on April 10 with a Buy rating and a 12-month target price of CA$0.90 per share. The stock is currently trading at around CA$0.45.
Beacon analyst Michael Curran noted that "Allegiant controls the entire portfolio of Nevada properties accumulated by Columbus Gold (via Cordex) over the past decade or so. We feel several of these properties have above average potential for new gold deposit discoveries."
He stated, "Allegiant Gold starts life as an attractive explorer with a proven exploration team, a portfolio of promising targets in mining-friendly jurisdictions, and ~$4 million in cash. We see re-rating potential in the short-term, as AUAU completes initial drill programmes at Eastside in Nevada."
Additionally, "medium-term, we believe several additional properties in the portfolio have potential for new deposit discovery, which could drive further market interest and/or AUAU share re-rating," Curran noted.
All eyes will be on Allegiant as it explores Nevada's elephant country in the hopes of making a significant, new gold discovery.
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1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Allegiant Gold, Columbus Gold, Klondex Mines and Rye Patch Gold. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Allegiant Gold, a company mentioned in this article.
Disclosures from Resource Opportunities, Feb. 11, 2018
Editorial Policy: Companies are selected for presentation in this publication strictly on their merits, and Resource Opportunities sponsors are selected on their merits as well. No fee is charged to non-sponsor companies for inclusion, and sponsor companies help financially support the subscriber-funded newsletter by keeping subscription prices low. Dollar and $ refer to Canadian dollars, unless stated otherwise or obvious from the context (for example, a share price on a Canadian exchange).
Disclaimer: Readers are advised that the material contained herein is solely for information purposes. Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice. Nothing contained herein constitutes a representation by the publisher, nor a solicitation for the purchase or sale of securities. The information contained herein is based on sources which the publisher believes to be reliable, but is not guaranteed to be accurate, and does not purport to be a complete statement or summary of the available data. Any opinions expressed are subject to change without notice. The author and their associates are not responsible for errors or omissions. They may from time to time have a position in the securities of the companies mentioned herein, and may change their positions without notice. (Any positions will be disclosed explicitly.)
Disclosures from Gold Newsletter, April 2018
The publisher and its affiliates, officers, directors and owner actively trade in investments discussed in this newsletter. They may have positions in the securities recommended and may increase or decrease such positions without notice. The publisher is not a registered investment advisor. Authors of articles or special reports are sometimes compensated for their services.
Disclosures from Caesars Report, February 15, 2018
We have a long position in Allegiant Gold, but no relationship with the company. Please read the disclaimer.
Disclosures from Mercenary Geologist, February 8, 2018
Disclaimer and Notice: I am a shareholder of Allegiant Gold Ltd and it pays a fee of $4000 per month as a sponsor of this website. I am not a certified financial analyst, broker, or professional qualified to offer investment advice. Nothing in any report, commentary, this website, interview, and other content constitutes or can be construed as investment advice or an offer or solicitation or advice to buy or sell stock or any asset or investment. All of my presentations should be considered an opinion and my opinions may be based upon information obtained from research of public documents and content available on the company’s website, regulatory filings, various stock exchange websites, and stock information services, through discussions with company representatives, agents, other professionals and investors, and field visits. My opinions are based upon information believed to be accurate and reliable, but my opinions are not guaranteed or implied to be so. The opinions presented may not be complete or correct; all information is provided without any legal responsibility or obligation to provide future updates. I accept no responsibility and no liability, whatsoever, for any direct, indirect, special, punitive, or consequential damages or loss arising from the use of my opinions or information. The information contained in a report, commentary, this website, interview, and other content is subject to change without notice, may become outdated, and may not be updated. A report, commentary, this website, interview, and other content reflect my personal opinions and views and nothing more.
Disclosures from Beacon Securities, Allegiant Gold Ltd., Initiating Coverage, April 10, 2018
Does Beacon, or its affiliates or analysts collectively, beneficially own 1% or more of any class of the issuer's equity securities? No
Does the analyst who prepared this research report have a position, either long or short, in any of the issuer’s securities? No
Has any director, partner, or officer of Beacon Securities, or the analyst involved in the preparation of the research report, received remuneration for any services provided to the securities issuer during the preceding 12 months? No
Has Beacon Securities performed investment banking services in the past 12 months and received compensation for investment banking services for this issuer in the past 12 months? Yes
Was the analyst who prepared this research report compensated from revenues generated solely by the Beacon Securities Investment Banking Department? No
Does any director, officer, or employee of Beacon Securities serve as a director, officer, or in any advisory capacity to the issuer? No
Are there any material conflicts of interest with Beacon Securities or the analyst who prepared the report and the issuer? No
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Analyst Certification: The Beacon Securities Analyst named on the report hereby certifies that the recommendations and/or opinions expressed herein accurately reflect such research analyst’s personal views about the company and securities that are the subject of the report; or any other companies mentioned in the report that are also covered by the named analyst. In addition, no part of the research analyst’s compensation is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.