Gold: Is US$3,000 in Sight?

1. Dakota Gold Corp., Emerita Resources Corp., and Goldshore Resources Inc. are billboard sponsor of Streetwise Reports and pay 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 Dakota Gold Corp. and Goldshore Resources Inc.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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Several months ago, it seemed easy to dismiss a prediction like Bloomberg Senior Commodity Strategist Mike McGlone's that it was only "a matter of time" before gold hits US$3,000 per ounce as hyperbole.

But as the yellow metal continues to hit new highs and surge into a bull market, others are starting to jump on the bandwagon.

"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," Anushree Ashish Mukherjee and Anjana Anil wrote for Reuters on Friday.

They attributed Aakash Doshi, head of commodities, North America at Citi Research, as saying gold could reach US$3,000 per ounce by mid-2025 and US$2,600 by the end of 2024, driven by U.S. interest rate cuts, strong demand from exchange-traded funds and over-the-counter physical demand.

Gold prices set another record Monday of US$2,589.70 an ounce before pulling back nearly US$10 by noon ET, Mining.com reported. Gold futures also hit a peak of US$2,617.40 an ounce before the U.S. trading hours.

Gold's price has stayed stable above US$2,550 so far this week and was US$2,573.17 on Wednesday morning.

The market was moving ahead of this week's Federal Reserve meeting, when the Fed cut interest rates for the first time four years. "Low rates tend to be supportive for gold, which bears no interest," Mukherjee and Anil wrote for Reuters.

"If incoming data points to growth risks and weakness in the labor market, it will raise the chance of a 50 bp (basis points) rate cut in either November or December, which 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 the Reuters report.

Rhona O'Connell at the brokerage firm Stone X Group told Atsuko Whitehouse of BullionVault on Monday that "gold's consolidation over 10 days or so laid the foundations for higher prices with a bull run starting last Wednesday . . .  US$2,600 is in sight."

O'Connell wrote, "Among gold-backed ETF investment trusts, the giant GLD fund grew 0.9% last week, reaching its largest size since early January, while No.2 gold ETF, the IAU, also saw its 4th consecutive week of gains, enjoying its largest inflows since mid-August."

Golden Opportunities in Gold Equities?

In a blog post Friday on the website for natural resource investors Goehring & Rozencwajg, which it said was an excerpt from the company's second-quarter commentary this year, the firm noted that the high prices should "herald a golden age for gold stocks."

"Yet paradoxically, these stocks have seldom been cheaper. What underlies this dissonance, and what might it portend for the future?" the firm asked.

"The NYSE Arca Gold Bugs Index (HUI), a benchmark for gold stocks, languishes at 312, more than 50% below its September 2011 high," the company wrote. "Even more striking, the HUI … is only 10% above its August 2016 level — when gold was a mere US$1,300 per ounce. Meanwhile, the HUI’s earnings per share are expected to quadruple this year compared to 2016."

A big part of it, the analysts noted, is the role central banks have been taking as significant buyers of gold, offsetting liquidation by Western investors.

"Unfortunately for gold mining executives, central banks are interested in gold bars, not gold shares," the post on Goehring & Rozencwajg's website noted. "With no natural buyer to counteract Western selling, gold equities have been left in the dust, now trading at historically low valuations. As contrarian value investors, we see extraordinary opportunity in this disparity and have been increasing our positions in gold equities."

Several explorers with projects in North America and Europe could provide exposure to that opportunity, including the following three.

Dakota Gold Corp.

In the United States, Dakota Gold Corp. (DC:NYSE American) is revitalizing the historic Homestake District of South Dakota.

The Homestake Mine, about 3 miles south of Dakota's Maitland Gold Project, produced 41 million ounces gold (Moz Au) and 9 Moz silver (Ag) over 126 years. Dakota has 48,000 acres of holdings surrounding the original mine, which was first discovered in 1876 and consolidated by George Hearst. It currently has four drills at its properties in the district.

Areas surrounding "super-giant deposits" like Homestake are believed to contain significant additional gold resources, wrote John Newell of RSD Discovery Group for a Streetwise Reports piece on the legacy of the famous mine.

"Super-giant deposits are characterized by clusters of geologically similar deposits within several hundred square kilometers, defining profoundly mineralized regions," Newell wrote. "It is believed that at least twice that amount of gold exists in the neighborhood of these super giants. If that is true, then there (is) at least 100 Moz of gold left to be found in this vastly underexplored precious metal district of South Dakota."

This proximity to a super-giant "suggests a high potential for similar deposits," Newell wrote. "Being in the shadow of many old mines increases the probability of finding significant mineral resources."

The Maitland mine produced more than 200,000 ounces of Tertiary gold before 1945, when it was closed because of World War II. According to the company, numerous structures, including the historical Maitland Mine structure, remain untested along strike and illustrate the larger potential of the project.

Dakota recently reported that new drilling results have expanded the areas of continuous Tertiary epithermal gold mineralization in the district.

Exploration drilling at Maitland's Unionville Zone confirmed the zone's target extension strike extends for at least 2,000 meters and could reach as far as 3,000 meters with the inclusion of rock chip samples.

"These results continue to confirm our belief that the Tertiary epithermal system at Maitland is comprised of multiple structures across a broad area extending over several kilometers," said Vice President Exploration James Berry. "As we continue to explore this area for deeper Homestake Mine-Style gold mineralization targets, we expect to encounter additional higher-grade Tertiary epithermal mineralization at the same time."

The company has a high probability of encountering both types of gold mineralization with every test hole at Maitland, which "provides excellent optionality and value in our exploration programs," Berry noted.

Canaccord Genuity Capital Markets Analyst Peter Bell wrote in an August 22 updated research note that drilling for shallow gold mineralization at Maitland is "one of three ongoing programs being advanced by the company — the other two being deeper high-grade gold mineralization at the JB Gold Zone and the infill and step-out drilling at the Richmond Hill Gold Project to update the S-K 1300 resource estimate."

The primary target, Bell noted, is "deeper Homestake-style mineralization at depth."

According to the company, approximately 25% of its shares are with management and insiders. Out of management, Co-Chairman Robert Quartermain holds the most shares at 8.1%; President, CEO, and Director Jonathan Awde is next at 6.1%; while COO Jerry Aberle holds 4.7%, the company said.

About 26% of the shares are with institutional investors, according to Yahoo Finance and Edgar filings. Top institutional holders include Fourth Sail Capital with 5.3%, Van Eck Associates with 4.1%, Blackrock Institutional Trust Co. with 3.7%, The Vanguard Group Inc. with about 3.2%, Fidelity Management, and Research Co. LLC with 2.7%, and CI Global Asset Management with 2.6%.

About 16.5% is with strategic investors, including Orion Mine Finance, which owns about 9.9%, and Barrick Gold Corp., which owns about 2.5%. The rest is retail.

Dakota Gold has a market cap of US$221 million, with 90.9 million shares outstanding. It trades in a 52-week range of US$3.25 and US$1.84.

Emerita Resources Corp.

Emerita Resources Corp. (EMO:TSX.V; EMOTF:OTCQB; LLJA:FSE) is exploring the Iberian Pyrite Belt in Spain. In August, the company announced it had discovered new high-grade gold and silver mineralized gossans at its wholly-owned Nueva Tintillo project there.

These newly discovered zones, located approximately 1.5 km northwest of the historic Santa Flora copper mine, have demonstrated promising assay results, the company said. Emerita's exploration program continues to advance, with further mapping and sampling efforts aimed at refining the understanding of these mineralized areas.

"We see a very similar relationship at (the company's) Iberian Belt West Project, specifically the gold-rich gossan that overlies La Romanera deposit and two parallel mineralized horizons," company President Joaquin Merino said. "Work continues to further develop this exciting new prospect and prepare it for future drill testing."

The Nuevo Tintillo project is Emerita's largest landholding in the Iberian Pyrite Belt and spans 6,875 hectares, with an additional 7,625 hectares of claims pending final approval. The property is strategically located between several world-class Volcanogenic Massive Sulfide (VMS) deposits, including Rio Tinto and Cobre Las Cruces.

Also in August, Emerita announced it had secured a loan-financing agreement with Nebari Natural Resources Credit Fund II LP for up to US$15 million in non-dilutive capital. This financial support is aimed at advancing the Iberian Belt West project, allowing the company to maintain momentum despite challenging equity market conditions.

"This transaction with Nebari gives Emerita access to up to US$15 million of non-dilutive capital in a challenging equity environment for resource companies and allows the company to maintain the momentum in developing its ongoing Spanish projects," Emerita Chief Executive Officer David Gower said.

Reuters provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 5.13% of the company.

According to Reuters, Michael Lawrence Guy owns 1.54% of the company, David Patrick Gower owns 1.12%, Joaquin Merino-Marquez owns 0.84%, Catherine Stretch owns 0.65%, and Marilia Bento owns 0.4%.

Institutions own 1.19% of the company, Reuters reported, including Merk Investments LLC with 1.11%.

According to Refinitiv, there are 247.39 million shares outstanding with 234.7 million free float traded shares, while the company has a market cap of CA$165.8 million and trades in a 52-week range of CA$0.26 and CA$0.78.

Goldshore Resources Inc.

Goldshore Resources Inc. (TSXV: GSHR; OTCQB: GSHRF ; FWB: 8X00) announced an update on resource expansion targets at the Moss Deposit on Tuesday.

The company said the identified targets are located within the top 200 meters from surface and are within, or directly adjacent to, the conceptual open pit shell defined in the company’s current mineral resource estimate. Collectively, there are five targets that have been defined that represent three avenues for potential mineral resource expansion:

• Strategic infill to increase drill density in locations where mineralized drill intercepts are currently too widely spaced to be included in the inferred mineral resource category;
• Extending known mineralized shear zones laterally along strike; and
• Extending mineralized shear zones intersected at depth at the Moss Deposit towards surface where no shallow drilling has occurred

"We are very pleased with the mineral resource Expansion Targets that have been delineated, which represent an opportunity to not only increase the ounce profile of the Moss Deposit but also to reduce the overall strip ratio in a potential mining scenario," Chief Executive Officer Michael Henrichsen said. "We view the drilling of these targets as a critical step to potentially improving the economic performance of the deposit on the back of the PEA (preliminary economic assessment), currently in progress with G Mining Services, being released as we continue to look to add ounces in the top 200 meters from surface."

Goldshore also reported progress on the PEA. After a completed a site visit to assess potential infrastructure locations by G Mining Services Inc., the mineral resource model has been confirmed for use in the PEA study. Currently, the company is reviewing several mining and milling scenarios to determine the best steps forward.

According to the company's news release dated March 21, 2024, the updated NI 43-101-compliant 2024 MRE has expanded to 1.54 million ounces (Moz) of Indicated gold resources at 1.23 grams per tonne gold (g/t Au) and 5.2 Moz of Inferred gold resources at 1.11 g/t Au. This resource expansion only covers 3.6 kilometers of the more-than-35-kilometer mineralized trend, indicating substantial growth potential.

The project's location in Ontario, Canada, offers strategic advantages, including accessibility from the Trans-Canada Highway, hydroelectric power on-site, and support from local communities.

"Our summer drilling efforts were focused on assessing the potential of two high-priority targets, the Boundary Zone and the SW Extension, with the goal of demonstrating the growth potential for high margin ounces from surface to 200 meters depth," Henrichsen said.

The company provided a breakdown of its ownership, where 6.4% of Goldshore is held by management and directors. 

Institutions own approximately 15% of the company. The largest shareholder in this category is Sprott Asset Management LP, with 4.59% or 13.72 million shares.

Strategic shareholders own 35%. Brian Paes-Braga is the largest shareholder in this category, with 11.48% or 34.31 million shares. 

The rest is with retail investors. 

The company reports that there are around 298.9 million shares outstanding, while the company has a market cap of CA$100.13 million.