Will Newrange Gold Corp. (TSXV:NRG) Rise with Inflation, Gold Rising to $3,000/oz?

黄金股估值
Published on: November 3, 2021
Author: NAI500

Bloomberg recently published an article titled, “Gold’s Inflation-Haven Appeal Means ‘Violent’ Run-Up May Be Ahead”,  that stated that gold, like aluminum, natural gas and other commodities, may surge from inflation pressures.  Will Newgrange Gold Corp. (TSXV:NRG), a gold exploration company with assets in Nevada, benefit from the rising gold prices?

Gold is used by investors as a hedge against market risks such as inflation and geopolitical turmoil. Investors looking for exposure to this safe-haven asset have several options, including investing in gold bullion directly or buying gold futures contracts. Another way to gain indirect exposure to gold is by investing in gold mining and exploration companies. Many investors see gold stocks as a liquid and low-cost option for gaining exposure to this part of the gold industry.

“Gold’s inflation-protection appeal probably will send prices to $3,000 an ounce.”

Bloomberg quoted David Garofalo, Chairman & CEO at Gold Royalty Corp.(GROY).,  and Rob McEwen, chairman and chief owner of McEwen Mining Inc.(MUX), who both predict  that when investors catch on soon that global inflationary pressures are less transitory and more intense than central bankers and consumers price indexes suggest, “gold’s inflation-protection appeal probably will send prices to $3,000 an ounce, from about $1,800 now,” according to Garofalo.

In terms of timing, Garafalo stated, “I’m talking about months… The reaction tends to be immediate and violent when it does happen. That’s why I’m quite confident that gold will achieve $3,000 an ounce in months not years.”

Inflation and Gold Price vs Bitcoin and Crypto

While many market commentators have stated in recent months that Bitcoin is the new gold for inflationary hedging, the asset, and cryptocurrency in general, sees a number of risks that are not present in gold.

Investopedia recently published an article that clearly highlights the risks of Bitcoin and cryptocurrency that hut its ability to act as a hedge on inflation.  In it, the article highlights that recent high profile losses in value, security breaches, and uncertainty as a long lasting asset make the sector dangerous as a long term value hedge.  Also, political risk, taxation uncertainty and the difficulty of transactions make cause greater volatility in the sector.

While gold prices have lagged behind Bitcoin, if Goldcorp’s former executives are correct, the precious metal is currently undervalued and now may be an unprecedented opportunity for an entry point.

Rising Gold Prices Combined with Newrange’s Active Project Development Strategy

Newrange has had a busy 2021, issuing meaningful press releases almost on a monthly basis, including the acquisition of the past-producing, high-grade Argosy Gold Mine in Ontario, senior leadership changes, and a sizable update on its exploration program on its flagship Pamlico Project.

Newrange is focused on district-scale exploration for precious metals in North America.  The company’s flagship project, the Pamlico Project in Nevada contains a large-scale multi-phase polymetallic mineralizing system with multiple gold and copper targets spread over more than 5,700 hectares.   In the prolific Red Lake District of northwestern Ontario, the past-producing high-grade Argosy Gold Mine is open to depth, while the adjacent North Birch Project offers additional blue-sky potential.  Focused on developing shareholder value through exploration and development of key projects, the Company is committed to building sustainable value for all stakeholders.

Newrange provided us with detailed summaries of both the Pamlico Project and the company’s Ontario projects recently.

Summary of the Recent Exploration Update for the Pamlico Project

  • Earlier this year, a large-scale IP geophysical survey was completed at Pamlico and the property was more than doubled in size due to the positive results.
  • The company has only drilled 2 holes in this new area, while ongoing mapping, rock and soil sampling, in conjunction with the expanded IP survey, are demonstrating strong intrusive activity in the southern part of the newly enlarged property, with widespread copper, zinc, silver and gold mineralization that was previously unrecognized.
  • The recognition of metal zonation at Pamlico is a significant step forward in the exploration of the project & the ability to use multi-element geochemical patterns as pathfinders will be important in future drill targeting.
  • Rock sampling in the Skarn Zone, is showing widespread Au-Ag-Cu-Pb-Zn mineralization
  • South of the Skarn Zone several intrusive bodies have been recognized and shears and contact zones within this area contain copper and zinc mineralization, while skarn alteration is widespread within the host sedimentary rocks.
  • In the eastern part of the property, south of the historic La Panta Mine, a north-south copper-bearing shear has been identified that shows a strong spatial association with a similarly-trending IP anomaly. Grab samples along the structure have returned 5.59%, 1.36%, 2.43% and 1.63% Cu over a strike length of approximately 250 meters.
  • It now appears that we are dealing with more than one phase of mineralizing activity spread over more than 25 square kilometers and the Pamlico Gold Mine area may be just one portion of this.

Summary of Activities on Newrange’s  Ontario Properties

  • Newrange has 2 projects in the Birch-Uchi Greenstone Belt in the Red Lake District of NW Ontario – the North Birch and Argosy Gold Mine Projects.
  • The acquisition of Argosy closed on November 1, 2021, while the final exercise of the option for 100% of North Birch will take place in December.
  • North Birch is an early-stage project in that the 8km long target horizon has never been drilled. However, there is gold in the adjacent rocks and the Argosy Mine is only 2km away.  Furthermore, the 4.9 million ounce (Au) Springpole deposit is only 12km from North Birch and 10km from Argosy.  In this sense, North Birch represents the ‘blue sky’ discovery potential.
  • The Argosy Mine is the largest past-producing gold mine in this greenstone Belt, having closed in 1952 after producing 101,000 ounces Au at a grade of 12.89 g/t. It was only mined to a depth of 300 metres, while mines in this region typically extend to a depth of more than 1,000 metres.
  • Newrange will be drilling both of these projects starting in January.

Disclaimer: The company described in this article is a customer of NAI Interactive Ltd. This material is for informational purposes only and is not intended as a recommendation or offer or solicitation for the purchase or sale of any securities or financial instruments, or for transactions involving any financial instrument or trading strategy.

Gold In-Depth Analysis Investment Mining Precious Metals