Augusta Gold (TSX: G) gained by 10.06% today to close at $1.75 per share and will hit new 52-week highs very quickly!
Three weeks ago, G's President/CEO Donald Taylor who was previously COO of Arizona Mining prior to it being acquired for US$1.6 billion in cash (for a gain of 1,576% from NIA's suggestion price) said that G is close to completing its Engineering Studies for both Bullfrog and Reward.
When Corvus Gold released its Engineering Studies for North Bullfrog and Motherlode, AngloGold Ashanti (AU) announced a deal to acquire Corvus for US$460 million in cash only nine months later. G's Engineering Studies for Bullfrog and Reward could be released at any time now and we believe the odds are high that G gets acquired within the following nine months.
Let's assume AU acquires G for US$500 million approximately nine months from now. In all likelihood, the market will begin to price in this probability well in advance. Even if G doesn't reach a US$500 million market cap on its own, it should easily rise to a US$300-$400 million market cap by itself prior to any deal taking place. We see almost no downside risk at any market cap of less than US$150 million because it is 100% impossible for anybody to make an argument that G's assets aren't MANY times more valuable than the Sterling/Crown Project that AU acquired last month for US$150 million in cash!
G's Bullfrog+Reward Projects have a combined measured & indicated resource of 1,635,990 oz of gold plus an inferred resource of 285,000 oz of gold!
The Sterling/Crown Project that AU acquired last month for US$150 million in cash only has an inferred resource of 914,000 oz of gold! An inferred resource has a much lower level of confidence than that applied to a measured & indicated resource!
Not only does G have 2.1X more gold resources than the Sterling/Crown Project, but 85.2% of G's gold resources are measured & indicated. Only measured & indicated resources can become a proven & probable reserve! G's Bullfrog+Reward Projects on a very conservative basis are 3-4X more valuable than the Sterling/Crown Project, which was acquired by AU last month for US$150 million in cash! G is currently trading at a market cap of only US$100 million!
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. NIA's President has purchased 174,200 shares of G in the open market and intends to buy more shares. This message is meant for informational and educational purposes only and does not provide investment advice.