Emgold believes it can do precisely that.
TheCanadian mining company is betting that its cutting-edge technologies can find new gold in overlooked or overworked properties – especially those adjacent to existing productive mines.
By re-interpreting historical data with a generous application of moderngeophysics and with new geological and resource models, Emgold engineers believe they can determine properties likelyto be productive.
Back From The Dead
Emgold’s activity in western Nevadais one example of thisstrategy at work. The company is close to acquiring 100% of the Marietta property where mining began in the 1870s and continued into the 1950s. Considered overworked by most mining companies, Marietta seemed a perfect place to put Emgold’s playbook into action. The companyconducted exhaustive exploration utilizing technology unavailable to earlier generations of gold seekers and found what are believed to be enormous reserves of gold, silver, andcopper.
If early-stage exploration confirms Emgold’s estimates, the company could be sitting on more than 10 million ounces of gold and possibly an equal amount of copper. And that sits well withEmgold’s investors.
A $15 Million Site
Emgold’s 2018 acquisition of Nevada’s Golden Arrow property is another example of the strategy. Located in a historic mining district where underground mines operated from 1905 to the 1930s, the 7,050-acre property was acquired by Emgold after a major reinterpretation of historic geophysics studies indicated the possibility of significant potential for development.
Now in an advanced state of exploration, the site has measured and indicated resources of some 12.2 million tons totaling 296,000 ounces of gold and, as a bonus, 4.0 million ounces of silver.
Using M&A guidelines for measured and indicated ounces of $50 an ounce, that puts the approximate value of Golden Arrow at a cool $15 million.
The Mine Next Door
Emgold has found that one of the best places to look for gold is in close proximity to an existing gold mine.Consequently, the company has acquired a number of properties adjacent to workingmines or advanced-stage projects. These properties were especially attractive because of deeply discountedprices resulting from the length and severity of the current down cycle.
An example of the company’s mine-next-door strategy is its 91% ownership of the Casa South
site in Quebec. Emgold’s analysis of historic drilling data dating back twenty years foundthat the studieshad been poorly designed and yieldedmisleading information.
More important is the site’s location: adjacent to Hecla Mining Company’s profitable Casa Beradi mine which has produced 1.9 million recovered gold ounces since production began in 1988 and generates 35% of Hecla’s revenue. Emgold plans to drill three major exploration targets at Casa South in 2019.
Drilling is set to start soon and will determine if Emgold’s predicted asset value of 2 million ounces is on the money. If it is, the site will be worth at least $25 million. And that’s Emgold’slow-end estimate.
Creating value above ground
While exploration and mining are Emgold’s bread and butter, the company also seeks to create value for its stockholders without drilling a single hole in the ground through a series of smart strategic investments.Case in point: Troilus North. Emgold optioned, explored, and acquired the property which is contiguous to the past producing Troilus Mine in November 2018. A month later Emgold sold the property to Troilus Gold for $C250,000 in cash and 3.75 million shares valued at $C3.3
million. The combined 40,000-acre property is considered one of Quebec’s golden opportunities with a target of 5 million ounces – and Emgold stockholders are thebeneficiaries.
Mining meets M&A
Emgold is a mining company run by people who not only know mining from below ground up, they’re also savvy in the art of strategic acquisitions.
David Watkinson, the President, CEO, and Director of the company is a mining engineer with more than thirty yearsexperience in underground and open pit mine development. He’s also managed mammoth capital projects in Canada, the United States, and the Philippines.Even the CFO, Robert Rosner, has mining industry experience in addition to an extensive background in IPOs,Mergers and Acquisitions, and reverse takeovers.
A Seriously Undervalued Company
All of which raises the question: with all that Emgold has going for it, why isn’t the company’s stock doing better?
CEO David Watkinson blames a thriving stock market … and lessened fears of Armageddon.
“Historically, gold prices have soared when people expected the worst … economic collapse … blood in the street,” says Watkinson. “And people aren’t expecting that right now. So they’re putting their money into moreliquid investments … stocks, primarily. And, of course, less demand for gold has driven down the price of mining company stocks.”
But Watkinson sees the bright side of the situation. “Lower gold prices have led to deeply discounted prices for properties. We’ve been able to take advantage of that to acquire a number of highlydesirable ones.”
A Tempting Takeover Target
Not surprisingly, its valuable assets and low stock price make Emgold especiallyattractive to major mining companies and deep-pocketed multinationals.
But when asked about selling the company,Watkinson would only say, “We’ll continue to try to do what we think is best for our shareholders.”
To some, that sounds like a CEO willing to consider a sale – at the right price.
And the future?
Even without an immediate sale, Watkinson sees exciting times ahead for his growing company. In addition to theproperties mentioned here, Emgold has three exploration properties adjacent to or nearthe operating Rawhide Mine in Nevada andtwo exploration properties in the Kootenay Arc area of southern British Columbia. The company is also looking a number of advanced-stage acquisitions, mainly in the US.
Emgold is rated a “buy” by some of the industry’s top analysts and would seem to represent an exceptional opportunity for investors. Especially with the stock in the single digits as of this writing.
Which makes Emgold one mining stock that could turn out to be pure gold.