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By Gerelyn Terzo, Benzinga
The gold price has been on a tear of late, reaching a fresh all-time high of $2483.73 on July 17 amid trader expectations that the Federal Reserve will lower interest rates. While inflation has begun to show signs of easing, and gold is renowned as an inflationary hedge, there are still plenty of catalysts that could continue to fuel gold’s bull run, including geopolitical tensions that are likely to continue to erupt around the globe. The Dow Jones U.S. Gold Mining Total Stock Market Index reflects that sentiment, having gained over 23% in the past three months alone.
As a result, gold mining companies have the wind at their backs, giving them an opportunity to generate cash flow and manage costs. Vancouver, British Columbia-based Austin Gold (NYSE: AUST) controls a trio of gold exploration projects, including two strategically positioned in Nevada. Nevada has rich gold deposits in mines that contributed nearly three-quarters of U.S. gold production in 2021.
With a market capitalization of just over $15 million, Austin Gold shares have risen almost 60% year-to-date. Now that the second half of 2024 is underway, the company provided an update on its latest exploration activities, noting the progress made recently and what lies ahead for the rest of the year.
Among the highlights, the company says it could be closer to hitting pay dirt in a promising Nevada gold project, while its Oregon project shows potential for high-grade gold and silver.
Lone Mountain Project Potential
Situated at the southern end of the Independence Mountains, Lone Mountain is one of Austin Gold’s three projects. Austin Gold holds a mineral lease agreement on 454 unpatented lode mining claims and owns 348 claims itself, all of which total 57.6 square kilometers. Lone Mountain is positioned within 20 miles of some of Nevada’s most attractive gold mining centers, including the Carlin Trend, where over 90 million ounces of gold have been mined.
As an exploration project, there have yet to be proven mineral resources uncovered at Lone Mountain, and it is premature to determine if there will be. However, Austin Gold says the project contains all of the geological characteristics necessary for the formation of large Carlin-type gold deposits; the Roberts Mountains thrust and related faults, favorable host rocks including the Roberts Mountains Formation and Coal Canyon Sequence, hydrothermal alteration and mineralization typical of Carlin-type deposits and districts, and the proper age of intrusive rocks that create Carlin-type deposits and districts.
Lone Mountain’s discovery potential was not fully addressed by prior exploration efforts. As a result, Austin Gold states it intends to “verify and significantly expand on the historical sampling programs to target areas of promising hydrothermal alteration and mineralization.” Austin Gold says it will harness the results of these sampling programs with historical results to better target gold deposits in the Lone Mountain project.
Kelly Creek Project: Attractive Joint Venture Terms
Kelly Creek is yet another Nevada-based project in which Austin Gold has the option to enter a joint venture with its wholly owned subsidiary Austin American Corporation. In doing so, Austin Gold would position itself to hold a 70% interest in the Kelly project, located in Nevada’s Humboldt County.
In its latest corporate update, the company revealed it has renegotiated the terms of that JV agreement, extending the target date to earn a majority interest in the project by two years. As a result, Austin Gold must invest CA$2.5 million by June 30, 2027, to qualify.
To earn the additional 19% that would bring it to the full 70% threshold, Austin Gold must allocate an additional CA$2.5 million while also footing the cost of property lease payments and fees to maintain the property in good standing. The company said it will decide the best course of action for the Kelly Creek Project at the appropriate time.
Stockade Mountain Project: Gold and Silver
Last but not least is Austin Gold’s Stockade Mountain Project. Unlike the other two gold projects, both of which are located in Nevada, Stockade is a gold and silver project situated in Malheur County, Oregon. Austin Gold revealed its intentions to “aggressively” pursue positive gold mineralization during the 2023-2024 winter drilling program.
The company’s first three holes revealed what the company described as a “robust” mineralization system at this project, one with “significant gold grades.” Due to the five-acre disturbance limitation under a Bureau of Land Management notice-level exploration permit, Austin is undertaking a Plan of Operations to allow for greater flexibility for drill site locations and access.
Austin Gold’s drilling and exploration program at Stockade Mountain targets high-grade gold and silver vein deposits formed deeper within the hydrothermal system. Austin is planning a drill program, with the timing subject to permitting, to continue the exploration for the hypothesized high-grade vein systems.
Fully Funded
Austin Gold, with a board of directors whose members have built three billion-dollar companies in the resource sector, says it is fully funded for all planned exploration programs. This could give stakeholders confidence in the company's future direction.
As gold prices soar to unprecedented levels and companies like Austin Gold ramp up their drilling projects, the moment is ripe for gold exploration firms seizing this historic opportunity.
Featured photo by Jingming Panon on Unsplash.
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