100% of Gold Co.'s Warrants Exercised Early

Source: Streetwise Reports 07/31/2024

The nearly CA$4.9 million in proceeds are sufficient to advance this explorer’s project through the preliminary economic assessment stage. Learn one analyst’s take on this stock.

Goldshore Resources Inc. (TSXV: GSHR; OTCQB: GSHRF ; FWB: 8X00) generated CA$4.875 million (CA$4.875M) from all of its 37.5 million (37.5M) share purchase warrants being exercised early, the company announced in its latest news release.

The warrants were issued at CA$0.13 per common share, with a 36-month term, as part of Goldshore’s nonbrokered private placement that closed on November 17, 2023.

“The exercise of these warrants provides a significant boost to our treasury, securing funding through the completion of the preliminary economic assessment (PEA) expected in Q1/25 and supporting the acceleration of our strategic plan to unlock the full value and potential of the Moss gold deposit,” Chief Executive Officer Michael Henrichsen said in the release. Moss is Goldshore’s current focus, its project in Ontario, Canada, with a resource and blue sky potential.

In other news, the Canadian mining company issued 150,000 restricted share units (RSUs) to Shawn Khunkhun, a director of Goldshore and the CEO of Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX).

Each RSU entitles the holder to receive one common share or an equivalent amount of cash or a combination of both at the company’s discretion. The RSUs will fully vest in a year, on July 29, 2025.

Creating Shareholder Value

Goldshore Resources Inc. is a British Columbia-based gold explorer-developer, currently advancing Moss, a project with a resource and “lots of exploration upside” and “decent infrastructure nearby, and the jurisdiction is obviously excellent,” wrote Dominic Frisby of The Flying Frisby newsletter in May.

Moss’ existing mineral resource estimate stands at 1,540,000 ounces (1.54 Moz) of 1.23 grams per ton gold (1.23 g/t Au) in the Indicated category and 5.2 Moz of 1.11 g/t Au in the Inferred category. Mineralization remains open at depth, along strike, and through 23 kilometers (23 km) of mineralized structural corridors.

Goldshore recently completed a 12-hole, 2,780-meter (2,780m) drill program at the project, targeting the Boundary zone and Southwest Drilling zone prospects.

Technical Analyst Clive Maund wrote in an April report that Goldshore’s stock had just started to climb and was headed much higher. At the time, it was trading about CA$0.08 lower than it is now.

“Results to date are encouraging with visual confirmation of the Boundary zone as well as the definition of a new parallel shear zone that has similar characteristics to the known Boundary zone mineralization,” said Henrichsen in a July 24 news release.

As Goldshore proceeds at Moss, it is concentrating on a 6-by-8 km area, the “Moss block,” containing 91% of the deposit’s ounces, Michelsen said in a video in June. The current strategic work plan has three components. One is growth. To achieve this, the company aims to find ounces in the top 200m, “high-margin ounces that we can then roll into an economic study moving forward,” and make a Moss-like discovery in the structural corridors.

The second component of the plan is economic studies, first a PEA outlining production in a phased approach.

With respect to the third part, community, environment and permitting, Goldshore is taking several weeks to strategize the best way to proceed with permitting, Henrichsen noted, “to minimize regulatory risk and efficiently navigate through the environmental assessment process.”

Gold’s Positive Momentum To Continue

Despite the gold price continuing to hit record highs, “the strong structural bull case for gold remains intact” and likely will persist throughout the year regardless of who wins the U.S. presidential election, wrote J.P. Morgan in a July 15 article. Factors continuing to impact the price include geopolitical conflicts, central bank buying, inflationary hedging, and U.S. budget deficit concerns.

“Across all metals, we have the highest conviction on a bullish medium-term forecast for both gold and silver over the course of 2024 and into H1/25,” said Gregory Shearer, head of base and precious metals strategy at J.P. Morgan.

The finance firm’s recently upgraded gold price estimates have it climbing to a new high, US$2,500 per ounce (US$2,500/oz), by 2024E, assuming the Federal Reserve cuts interest rates one time this year in November.

A more conservative gold price estimate by analysts for year-end is US$2,350/oz, as reported by Capex.com on July 25.

“Two active military theatres, key elections ahead, and uncertain global monetary policy suggest that safe haven demand will continue to support gold prices in the short to medium term,” the article said.

Five years out, analysts’ most optimistic gold price prediction is close to US$3,000/oz.

When it comes to investing in gold, junior resource stocks, like Goldshore, “offer the best leverage to a rising commodity price because of the huge opportunity for gains,” Richard Mills wrote in Ahead of the Herd on June 11.

With respect to gold mining, the global market is expected to grow to US$274.2 billion (US$274.2B) in value by 2032 from US$201.2B in 2023, according to Market Research Future. The forecasted compound annual growth rate between this period is 3.5%.

Significant drivers of this projected growth overall, the market analysis company noted, are the increasing population of high net worth individuals and a growing demand for gold jewelry, including among men.

The Catalysts: Progress Working the Plan

As it continues working its strategic plan for advancing Moss, Goldshore will have some notable events happening soon that could boost its stock, the company said.

The next catalyst for Goldshore, expected this August, is the initial results of its recent drill program at Moss.

Some time in Q1/25, management expects to have the PEA on Moss finished.

In the meantime, the company will continue conducting environmental baseline studies and engaging with the community.

“Much More Upside Potential”

Technical Analyst Clive Maund wrote in an April report that Goldshore’s stock had just started to climb and was headed much higher. At the time, it was trading about CA$0.08 lower than it is now.

The four-year chart for GSHR showed “much more upside potential,” he pointed out and indicated he planned to stay long in the company. Maund recommended investors add to their positions on minor reactions in the near term. [OWNERSHIP_CHART-10291]

Ownership and Share Structure

Regarding ownership of Goldshore, according to its July 2024 Corporate Presentation, insiders (management and the board) own 11%.

Strategic investors hold 35%.

Institutional investors have 15%. According to Reuters, they include Sprott Asset Management LP with 5.25%, U.S. Global Investors Inc. with 0.54%, and Ninepoint Partners LP with 0.21%.

Retail investors own the remaining 39%.

As for its share structure, Goldshore has 296.5M shares outstanding, 35.4M warrants, and 18M granted options, per the company.

Its market cap is CA$76.48M, Reuters reports. Its 52-week trading range is CA$0.85–0.31 per share.

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Important Disclosures:

1. Goldshore Resources Inc. and Dolly Varden Silver Corp. are billboard sponsors of Streetwise Reports.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Goldshore Resources Inc. and Dolly Varden Silver Corp.
3. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
4. 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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( Companies Mentioned: TSXV: GSHR;OTCQB: GSHRF ;FWB: 8X00, )