Gold Co. Shares Multiple Catalysts

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On October 30, 2024, O3 Mining Inc. (TSXV:OIII; OTCQX:OIIIF) shared its plans to complete a preliminary economic assessment on its flagship Marban Alliance project in Val-d'Or , Québec.

In the release, O3 reported it would be working with G Mining Services Inc. as the lead consultant for the PEA, which will be prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

O3 Mining wrote that the results of this PEA can be expected at the end of this year. The company wrote that "These results are expected to highlight the advancements made on Marban Alliance since the effective date of the current Prefeasibility study (being August 24, 2022) and provide updated guidance for use in a Feasibility Study on the Marban Alliance Project that is expected to commence in early 2025. In addition, O3 Mining is expecting the environmental baseline studies to be completed in the first quarter of 2025 following comprehensive fieldwork gathered over a period of three years. Assuming positive results, the Corporation intends to commence Impact Studies in the second quarter of 2025."

The next day, on  October 31, 2024, O3 Mining also reported that it had acquired the Lac Esther property from Midland Exploration Inc.

This property is close to O3's Kinebik Project, which O3 views as an important property as "it forms an integral part of the core exploration strategy, and the acquisition of the Lac Esther Property will enable the corporation to further consolidate its presence in the Casa Berardi trend."

Canaccord Genuity analyst Jeremy Hoy gave the company a Speculative Buy rating and a target price of CA$4.

In light of this news, O3 Mining's CEO José Vizquerra said, "We are pleased to further consolidate our presence on the Casa Berardi trend through the acquisition of Midland's Lac Esther Property. The Lac Esther Property fits well within our current property holdings at the Kinebik Project and will enable our team to conduct additional exploration drilling at Casa Berardi. This aligns well with our core exploration strategy and is an extension of our mission to explore and develop the major geologic faults in Québec. Our exploration success on the Cadillac Break continues a baseline of expertise to continue our strategy along the prolific Casa Berardi trend."

O3 Mining is a gold explorer and mine developer, with a focus on achieving production from its highly prospective gold camps in Québec. According to the company, O3 has the " support and expertise of industry leaders as it grows towards being a gold producer with several multi-million-ounce deposits in Québec."

It currently owns 100% interest in all of its properties, which comprise 127,100 hectares.

Why Gold?

The gold price broke through the US$2,700 per ounce (US$2,700/oz) barrier last week. Safe haven demand is buoying the gold and silver prices ahead of the U.S. jobs report due out this Friday and the U.S. elections next week, Kitco News reported on Oct. 29. The trepidation about the outcomes of these two events is "supporting buying interest in the safe-haven gold and silver markets."

Recently polled London Bullion Market Association members indicated they believe the gold price could reach US$2,940/oz during 2025, reported Stockhead on Oct. 28.

"Combined with expectations of lower global interest rates, this further enhances gold's attractiveness as an investment," the article noted.

As for gold equities, the S&P/TSX Venture Composite Index (SPCDNX) confirmed a multidecade bull run for junior, intermediate, and senior mining stocks when it closed above 1,000 recently, Stewart Thomson with 321Gold wrote. The index is a key indicator of the health of the general gold, silver, and mining stocks market.

CIBC analyst Bryce Adams gave O3 an Outperform rating and price target of CA$3.

Experts predict the gold price will keep climbing. In its revised forecast, Citi Research expects the gold price to hit US$2,800/oz in three months versus its previous estimate of US$2,700, according to Reuters. The analysts based their new projection on potential further U.S. labor market deterioration, interest rate cuts by the U.S. Federal Reserve, and physical gold and exchange-traded funds buying. Looking six to 12 months out, Citi forecasts US$3,000/oz gold.

InvestingHaven's price prediction is even more bullish, US$3,100/oz gold in 2025, it wrote on Oct. 22. The investing research service derived this estimate from leading gold price indicators, including heightened inflation and increasing central bank demand, and from patterns on long-term gold charts, it noted.

A Buy-Rated Stock

So far, analysts have seemed optimistic about O3 Mining's stock. On October 30, Canaccord Genuity analyst Jeremy Hoy gave the company a Speculative Buy rating and a target price of CA$4. They came out with this report in light of O3's announcement of the PEA at the end of this year and wrote, "Given the time passed since the 2022 PFS, moderate inflation, and the run-up in gold price, we expect to see incremental increases to costs and capex, and likely higher commodity price assumptions for resources in the PEA. We understand that the upcoming PEA and FS will showcase a stand-alone operation but that the company is evaluating toll-milling options in the background."

They continued, "Management also highlighted that it expects environmental baseline studies to be completed in Q1/25 and to commence impact studies in Q2/25."

CIBC analyst Bryce Adams also shared his opinion of the stock on the same date, pointing out not only the upcoming PEA but also that earlier this month, the company had completed two offerings in 2024 for aggregate gross proceeds of CA$22.9M. Adams noted that Gold Fields had become a major shareholder in the company. 

Adams stated, "Recall, Gold Fields acquired 50% of Osisko’s Windfall project in May 2023, following its unsuccessful bids for Yamana Gold’s interests in the Canadian Malartic mine in Quebec in early 2023, and has indicated further growth interest in Quebec. With M&I resources of 2.4Moz and inferred resources of 0.6Moz at its flagship Marban project and near-term final permitting submission, O3 has above-average take-out potential, in our view. "

With this, Adams gave O3 an Outperform rating and price target of CA$3.

Catalysts

In their report, Hoy and Guo reported multiple catalysts for O3 Mining, including:

• The Marban Alliance PEA results, expected in Q4/24
• The Completion of environmental baseline studies, Q1/25.
• The Marban Alliance Feasibility Study results, H2/25
• The Filing of Marban Alliance Impact Studies, Q1/26
• The ongoing Exploration at Horizon and Kinebik

The analysts also mentioned that the company had M&A potential as it advanced Marban Alliance. 

Ownership and Share Structure

According to the company's investor presentation, 6.3% of O3 Mining is held by management and insiders.

17% is with strategic investor Gold Fields.

Institutions own 30.6%.

The rest is retail.

The company has a market cap of CA$113.1 million, 108.7 million shares outstanding, and according to MarketWatch it trades in the 52-week range between CA$0.91 and CA$1.72.