Strategic Drilling Push Bolsters U.S. Gold Exploration Prospects

Source: Streetwise Reports 12/10/2024

Nevada King Gold Corp. (NKGFF:OTCMKTS; NKG:TSX) has released results from its latest drilling efforts at the Atlanta Gold Mine Project, situated within Nevada’s Battle Mountain Trend. Read more to find out how these results highlight the project’s potential for near-surface gold mineralization and future exploration hopes.

Nevada King Gold Corp. (NKGFF:OTCMKTS; NKG:TSX) has released results from its latest drilling efforts at the Atlanta Gold Mine Project, situated within Nevada’s Battle Mountain Trend. The project, wholly owned by the company, continues to demonstrate promising gold mineralization across multiple zones. The latest data includes results from 20 reverse circulation (RC) holes and one diamond core drill hole in the North Extension Target (NET), along with 14 RC holes in the East Ridge Target (ERT).

Highlight intercepts include 1.95 grams per tonne (g/t) gold (Au) over 29.0 meters (m), with a higher-grade inclusion of 6.6 grams per tonne of gold (g/t Au) over 6.1 m in hole AT23NS-177. Other significant results, such as 1.21 g/t Au over 51.8 m in hole AT24NS-189, underscore the continuity of mineralization within the NET. These intercepts align with historical data, showcasing the structural control of mineralization along the Atlanta Mine Fault Zone (AMFZ).

As noted in the news release, the company’s Phase II drilling program, which has added 77 new holes in the NET, has further confirmed the potential for higher-grade, near-surface gold mineralization. This work builds upon a 2020 resource estimate that outlined 460,000 ounces of gold in the measured and indicated categories and 142,000 ounces inferred, at average grades of 1.30 g/t and 0.83 g/t Au, respectively.

Digging Into Gold Mining and Exploration

In a commentary published December 5 by Kitco Media, Gary Wagner highlighted the impact of U.S. monetary policy and macroeconomic indicators on gold prices. While a modest decline was observed due to a strengthening dollar, the upcoming Federal Reserve meeting and potential rate cuts were seen as key factors likely to influence gold’s direction. Wagner noted that a softer dollar provided cushioning against potential losses, underscoring the complex interplay between monetary policy and gold market performance.

The following day, an article on Ahead of the Herd on December 6 emphasized the resilience of gold’s “monster upleg,” which saw a 53.1% increase over a 12.9-month span. This growth has been driven by diverse demand sources, including Chinese investors, central banks, and Indian jewelry buyers, rather than traditional ETF inflows. The report highlighted that global demand remained robust despite recent pullbacks, with seasonal trends and geopolitical dynamics expected to continue shaping the market.

According to a December 6 report on The Daily Gold, gold recently experienced a breakout from a 13-year cup-and-handle pattern, propelling prices from US$2,100 to US$2,800. This move marked a substantial rally, yet gold has not outperformed traditional stock market benchmarks, emphasizing the need for fresh capital inflows to sustain its bull market momentum. Despite this, gold remains in an uptrend, with expectations that stronger performance against equities and the 60/40 portfolio could ignite further gains.

In a December 7 analysis on Excelsior Prosperity, it was noted that gold had climbed dramatically from a November 2022 low of US$1,618.30 to a peak of US$2,801.80. This rally, fueled by central bank and geopolitical buying, has seen prices consolidate recently, with technical support levels identified around US$2,659.60. The analysis described the current correction as “a healthy consolidation,” suggesting that the sector remains in a broadly bullish posture. Seasonal trends and the performance of related equities, such as gold miners, have further contributed to the sector’s dynamics.

Nevada King’s Driving Forces

As per the company’s investor presentation, Nevada King’s upcoming initiatives aim to build upon these successes and expand the project’s resource potential. The company plans to launch a Phase III exploration program in 2025, targeting additional zones, such as the Jumbo Target and South Quartzite Ridge Target, identified through advanced geophysical surveys. These areas exhibit promising signatures indicative of mineralized intrusive systems, potentially hosting significant new deposits.

Additionally, metallurgical testwork underway is expected to further refine extraction processes, with initial tests demonstrating strong recovery rates using conventional Nevada oxide processing methods. Scheduled drilling in Q4 2024 at the Jumbo Target, coupled with ongoing road construction at South Quartzite Ridge, will enhance accessibility to untapped zones.

Exploration manager Cal Herron emphasized the importance of these developments, stating, “The geological setting and consistent mineralization trends suggest robust opportunities for district-scale discoveries at Atlanta.”

What Analysts Are Saying About Nevada King Gold

On October 17, Mike Niehuser from Roth MKM reiterated a “Buy” rating on Nevada King Gold, maintaining a price target of CA$0.65 per share. Niehuser highlighted the company’s progress at the Atlanta Gold Project, particularly the identification of 15 regional targets, which he noted could lead to additional discoveries. He emphasized the potential of the South Quartzite Ridge Target (SQRT), describing it as “a gold-enriched area with high potential” and stating that it “may have the greatest potential for significant discovery.”

Roth MKM projected that Nevada King’s current gold resource estimate could increase significantly, potentially reaching 1.5 million ounces. Niehuser underscored the firm’s confidence in Nevada King’s ability to advance exploration efforts and deliver further success, stating, “We maintain a Buy rating and a price target of CA$0.65 per share.” [OWNERSHIP_CHART-11124]

Niehuser also pointed out the company’s reinterpretation of the geologic model, which could drive success in its planned Phase III drill program in 2025. He noted that Nevada King’s plans to explore “the balance of the Atlanta Caldera” could lead to significant rerating opportunities as additional discoveries are made. Roth MKM highlighted the company’s debt-free balance sheet as a key strength, reinforcing the bullish sentiment surrounding its exploration strategy and long-term potential.

Ownership and Share Structure

According to Refinitiv, 36.32% of Nevada King Gold is held by management and insiders. Of this category, Collin Kettell holds 19.68% or 61.99 million shares, Michael A. Parker holds 14.28%, at 45 million shares, and Craig A. Roberts holds 1.46% or 4.6 million shares.

Institutions hold 3.62%. Rothschild & Co Asset Management Europe SCS has the largest out of this category at 2.19%, with 6.91 million shares.

The rest is retail.

Market Watch notes that Nevada King Gold has 378.09 million shares outstanding and 228.88 million free float shares. The stock has a 52-week range of CA$0.20 and CA$0.46.

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( Companies Mentioned: NKGFF:OTCMKTS;NKG:TSX, )

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