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• A2Gold has entered a binding LOI to acquire a 100% interest in the Taylor Gold-Silver Project in Nevada from White Pine Precious Metals for C$10M in shares plus US$1M in deferred cash.
• The project hosts a historic 11Moz M&I silver resource at 2.89 oz/t Ag based on a US$17/oz Ag price, which increases to ~17.9Moz M&I and 2.7Moz Inferred at US$30/oz.
• The Taylor Project is district-scale, offering exposure to both gold and silver with significant exploration upside, and is located within the top-ranked mining jurisdiction.
• We see the acquisition terms as favourable, which is accretive to our valuation, and are increasing our target price to $2.10/share.
This morning, A2Gold Corp. (AUAU:TSXV, AUXXF:OTC, RR7:FRA) announced a binding LOI to acquire a 100% interest in the Taylor Gold-Silver Project in White Pine County, Nevada, from White Pine Precious Metals Inc. The Taylor Project comprises a 117km2 land package that is fully permitted and ready for immediate drilling. The acquisition adds a second district-scale system to A2Gold’s portfolio, complementing the flagship Eastside Gold-Silver Project, and bringing the Company’s total Nevada mineral tenure to ~230km2. We are maintaining our BUY rating and increasing our target price to $2.10/share (previously $1.70/share) on A2Gold.
Total consideration for the Taylor Project is structured as 8,662,881 common shares at a deemed value of C$10.0M (based on a 20-day VWAP of $1.1544/share) plus US$1.0M in non-interest-bearing-deferred cash (US$250K at close; US$250K quarterly thereafter). White Pine retains a 2.0% NSR, of which A2Gold can repurchase 1.0% for US$2M within four years or US$3.0M within six years. The share-heavy structure preserves A2Gold’s balance sheet for exploration, in which the Company is well-capitalized to advance at both projects.
Taylor Project – Overview
The Taylor District is in eastern Nevada and has a well-documented silver mining history, having produced ~1.94Moz Ag between 1875 and 1892, and a more recent open-pit operation from 1981-1984 that processed 1.47Mt at 3.50 oz/t Ag to recover 3.77Moz Ag at 69.5% recovery. A 2018 historic resource defined an 11.0Moz M&I silver resource at 2.89 oz/t Ag (using a $17/oz Ag base case), with a further 0.6Moz Inferred, which increases significantly at higher silver prices (outlined below). Historical drilling indicates the resource remains open in multiple directions, with most holes drilled to depths of less than 152m and offers upside from gold and antimony mineralization within a much larger mineralized system. The project is permitted for drilling and has strong infrastructure in place. For more information, see below.
AUAU: Acquiring District-Scale Nevada Project; Raising Our Target Price
What you need to know:• A2Gold has entered a binding LOI to acquire a 100% interest in the Taylor Gold-Silver Project in Nevada from White Pine Precious Metals for C$10M in shares plus US$1M in deferred cash.
• The project hosts a historic 11Moz M&I silver resource at 2.89 oz/t Ag based on a US$17/oz Ag price, which increases to ~17.9Moz M&I and 2.7Moz Inferred at US$30/oz.
• The Taylor Project is district-scale, offering exposure to both gold and silver with significant exploration upside, and is located within the top-ranked mining jurisdiction.
• We see the acquisition terms as favourable, which is accretive to our valuation, and are increasing our target price to $2.10/share.
This morning, A2Gold Corp. (AUAU:TSXV, AUXXF:OTC, RR7:FRA) announced a binding LOI to acquire a 100% interest in the Taylor Gold-Silver Project in White Pine County, Nevada, from White Pine Precious Metals Inc. The Taylor Project comprises a 117km2 land package that is fully permitted and ready for immediate drilling. The acquisition adds a second district-scale system to A2Gold’s portfolio, complementing the flagship Eastside Gold-Silver Project, and bringing the Company’s total Nevada mineral tenure to ~230km2. We are maintaining our BUY rating and increasing our target price to $2.10/share (previously $1.70/share) on A2Gold.
Total consideration for the Taylor Project is structured as 8,662,881 common shares at a deemed value of C$10.0M (based on a 20-day VWAP of $1.1544/share) plus US$1.0M in non-interest-bearing-deferred cash (US$250K at close; US$250K quarterly thereafter). White Pine retains a 2.0% NSR, of which A2Gold can repurchase 1.0% for US$2M within four years or US$3.0M within six years. The share-heavy structure preserves A2Gold’s balance sheet for exploration, in which the Company is well-capitalized to advance at both projects.
Taylor Project – Overview
The Taylor District is in eastern Nevada and has a well-documented silver mining history, having produced ~1.94Moz Ag between 1875 and 1892, and a more recent open-pit operation from 1981-1984 that processed 1.47Mt at 3.50 oz/t Ag to recover 3.77Moz Ag at 69.5% recovery. A 2018 historic resource defined an 11.0Moz M&I silver resource at 2.89 oz/t Ag (using a $17/oz Ag base case), with a further 0.6Moz Inferred, which increases significantly at higher silver prices (outlined below). Historical drilling indicates the resource remains open in multiple directions, with most holes drilled to depths of less than 152m and offers upside from gold and antimony mineralization within a much larger mineralized system. The project is permitted for drilling and has strong infrastructure in place. For more information, see below.
Underlying
ALLEGIANT GOLD
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Atrium Research Corporation
Atrium Research provides institutional quality issuer paid research on North American public equities using deep fundamental analysis. Our research reports are disseminated through Bloomberg, FactSet, Capital IQ, Reuters and many more, as well as through our social media and email distribution lists.
Ben Pirie
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