Gold Explorer Drops Private Placement From New Strategic Investor

Source: Streetwise Reports 09/23/2024

Western Exploration Inc. (WEX:TSX.V; WEXPF:OTC) announced a non-brokered private placement of CA$1.7 million from a new strategic investor from Texas, just as the gold bull market is starting to gather steam.

Western Exploration Inc. (WEX:TSX.V; WEXPF:OTC) announced a non-brokered private placement of CA$1.7 million from a new strategic investor from Texas.

The company is in the midst of a 4,000-meter drilling program at its wholly-owned Aura gold and silver project in Nevada to target high-grade veins east of the Gravel Creek deposit, where 2023 drill results provided a “breakthrough” showing a significantly expanded resource, the company said.

“Western Exploration is chiefly a gold explorer, and gold is set to perform very well over the next several years due to accelerating currency debasement and war,” Technical Analyst Clive Maund wrote for Streetwise Reports on August 21.*

“Another big positive is that the company has already discovered significant reserves at its projects in northern Nevada, which is a mining-friendly jurisdiction,” Maund continued. “And still another positive is that the number of shares available to retail investors is tiny. … This means that any significant increase in demand for the stock could lead to a spectacular spike, and the stock is already powering up to make significant gains.”

Under the newly announced placement, TXAU Ventures LLC of Houston will purchase 1,603,773 units of Western Exploration at CA$1.06 per unit. Each unit consists of one variable voting of Western Exploration and one-half of one variable voting share purchase warrant of the company. Each warrant allows the purchase of one variable voting of the company at CA$1.36 per warrant share on or before 24 months after the offering closes.

All of the available units in the offering have been allocated to TXAU, Western Exploration. The offering is scheduled to close on or about September 24.

The company said in a release that it intends to use the net proceeds from the offering to advance a pre-feasibility study (PFS) of the Doby George Deposit, undertake baseline studies in advance of commencing permitting of the Doby George Deposit, and for general corporate purposes.

Connecting the Dots

The Aura Project consists of three locations in Nevada: Doby George, Gravel Creek, and Wood Gulch. Earlier this year, the company announced that it is expanding the size of the Wood Gulch/Gravel Creek resources area and working toward a resource update for Doby George.

“Past drilling has already outlined very high Au and Ag grades, and this should allow us to connect the dots and expand the current Gravel Creek resource,” Western Exploration Chief Executive Officer Darcy Marud said in an update to shareholders this spring.

Oriented core data from 2023 identified an array of intersecting veins, stockwork, and hydrothermal breccias following steep to shallow northwest-to-northeast trends that mimic the known structural controls of mineralization, the company said.

“The strongest correlation between 2023 holes WG456 and WG457 linked mineralized structures to a north/north-west trending corridor, with moderate dips west/south-west towards the main GC Fault zone,” Western Exploration said in a release. “Multiple legacy intercepts along two sub-parallel veins zones show grades of over 20 g/t Au Eq along a dip length of over 200 meters. Initial drilling in 2024 will bracket Discovery section 500N, with holes drilled along strike and up dip on 80-meter step outs.”

The drilling program at Aura is “very likely to deliver more high-grade assays to the market in H2/24 and confirm a very significant new discovery zone,” writer Brien Lundin of Gold Newsletter has noted. “With a target like this, the company is largely immune to the gold price action if it can deliver results as hoped. Thus, it remains a Buy.”

Maund agreed that bright days could be ahead for the stock.

“Turning now to the charts, we quickly realize that Western Exploration is powering up for a major bull market,” Maund wrote. “The price/volume has been positive for most of this year, and the price is now starting to advance away from the base that started to form as far back as August of last year, and at a time when the entire sector is commencing a major bull market. Holders of Western Exploration should, therefore, stay long, and it is rated a Strong Buy here as the bull market is still in its earliest stages.”

Gold Sees Record Week

Indeed, the outlook for gold has been distinctly bullish this month. Its prices per ounce set another record Monday of US$2,589.70 before pulling back. It has stayed stable above US$2,550 so far this week and was US$2,573.17 on Wednesday morning.

Leading the way to further gains was the Federal Reserve’s first interest rate cut in four years on Wednesday. [OWNERSHIP_CHART-10631]

A major cut like Wednesday’s “would increase the tailwind for gold and pull forward the timing for attainment of US$3,000,” Peter A. Grant, vice president and senior metals strategist at Zaner Metals, said in a Reuters report by Anushree Ashish Mukherjee and Anjana Anil.

“Gold market bulls are locking in bullion prices surging to fresh records, with a milestone of US$3,000 per ounce coming into focus, fired up by monetary easing by major central banks and a tight U.S. presidential election race,” Mukherjee and Anil wrote.

Ownership and Share Structure

About 72% of Western Exploration is owned by strategic entities and high net worth investors, according to its latest investor presentation, including Golkonda LLC with about 46%, Agnico Eagle Mines Ltd. with 14%, and Auramet Capital Partners with 5%.

Other institutions hold about 6%, insiders and management hold about 3%, and the rest is retail.

Western Exploration’s capital structure consists of 43.8M outstanding shares and 16.21M free float traded shares. Its market cap is CA$45.11 million. Its 52-week trading range is CA$0.46−$1.50 per share.

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Important Disclosures:

1. Western Exploration Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Western Exploration Inc.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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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* Disclosures for the quotes from the Clive Maund article published on August 21, 2024

1. For the quoted article (published on August 21, 2024), the Company has paid Street Smart, an affiliate of Streetwise Reports, US$1,500.
2. Author Certification and Compensation: [Clive Maund of clivemaund.com] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing the article quoted. Maund received his UK Technical Analysts’ Diploma in 1989. The recommendations and opinions expressed in the article accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed

Clivemaund.com Disclosures

The quoted article represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks cannot be only be construed as a recommendation or solicitation to buy and sell securities.

( Companies Mentioned: WEX:TSX.V;WEXPF:OTC, )

Source: https://www.streetwisereports.com/article/2024/09/23/gold-explorer-drops-private-placement-from-new-strategic-investor.html