As more and more people begin to adapt to this higher inflation environment, more people are starting to wake up to gold. In fact, recently, it was announced that a Dutch pension fund that oversees €7.7 billion was buying a 5% allocation to gold. This would suggest that the fund was allocating €386m towards physical gold, given its fund size.
Last Wednesday, it was reported that the consumer price index jumped 0.8% last month, which outpaced the 0.2% forecasts. Exploding commodity prices are driving inflation as many items in the economy are experiencing shortages.
Investors are quick to point out that gold has lagged in recent months, but it’s important to remember that gold made its move first. It is still up 40% the past two years, and still, the investor sentiment within the mining industry is terrible with incredibly cheap valuations.
Many retail investors are purely focused on chasing gains within the cryptocurrency space where items such as dogecoin, where a digital dog is responsible for its 1000% gain this year, have a bigger market cap than the world’s largest gold producer.
At some point, investors are going to wake up and realize the mineral wealth in the ground with the developers and the deep value represented in the majors with its high margin operations.
A developer I have been following for a while is New Placer Dome. This is a company that I feel is significantly discounted within the marketplace given its location, asset quality, and growth prospects. Please check out the previous article I did on the company, here.
In short, the company has a portfolio of assets residing in Nevada, which has a long-dated history of hosting monster gold deposits. The company’s flagship asset, Kinsley, is unique because it is an incredibly high-grade system which is quite rare in Nevada.
Here are some of its historical high-grade drilling results, which is headlined by 42.7 meters at 10.5 grams/ton:
The company has reported some excellent exploration results over these last few months. Recently the company confirmed the secret spot discovery at Kinsley mountain, which intercepted 1.77 g/t gold oxide over 25.3 meters and 3.81 g/t gold sulphide over 11.6 metres; including 11.3 g/t gold over 2.9 metres. (Full Release Here)
I will go through the company in depth in the coming weeks in a pure commentary article but today I am pleased to be joined with New Placer Dome’s founder and CEO, Maximilian Sali for another general update on the company:
Alexander Deluce:
Hi Max, thank you for taking the time to provide the Gold Telegraph readers with another update on New Placer Dome and its exciting portfolio of assets.
These last few months the company has been reporting lots of exploration results at Kinsley. Can you elaborate on the results and your optimism for the project?
Maximilian Sali:
Simply put, we hit some of the best results in all of Nevada for 2021 if not the best to my knowledge.
We made 3 discoveries at 3 different zones including some very low hanging fruit which was the oxide grades near surface and at surface at the Main Pit North past producing zone and a brand-new oxide discovery at Secret Spot.
We also hit 24 grams over 4.5 metres of economic gold on a step out from the resource.
The reason I say economic is because you can go and drill a great hole but it the hole is in the middle of nowhere it doesn’t really matter how good it is. This hole is just outside the current resource which means these results will be added to the resource when we put out our updated technical report.
Alexander Deluce:
What are some milestones the company is looking to achieve for the remainder of 2021?
Maximilian Sali:
We are going to follow up on the shallow oxide gold discoveries at the Main Pit North and Secret Spot in July and are hoping for a much faster turn around at the labs following our Summer 2021 program.
Alexander Deluce:
Now Max, I always love to ask CEO’s about their opinions on the general market sentiment within the gold industry.
What is your current assessment right now in the gold space?
Maximilian Sali:
I think if you asked most people last summer where gold would be this summer they would have said $2500 and I would have said the same thing. That didn’t happen and what we have seen is Bitcoin takes a lot if not all the love out of gold stocks and the gold price.
95% of gold stocks are down from last summer despite putting out some amazing results. Most companies that financed last summer wont be able to finance this summer because last summer everyone was scrambling to finance anything in gold.
How I feel about New Placer and it shows with my insider purchases is that we hit some of the best grades in the space recently and if this was last summer the stock would be at a high and not where it is now.
That being said, this creates a big buying opportunity as we will get financed and continue to show the market what Kinsley can do. All I hope for is that gold can get back to last summer highs and we will see a rerating of this company and many others.
Thank you, Max, for your time. I am looking forward to catching up with you again in the next few months.
New Placer Dome trades on the Toronto Stock Exchange under the ticker NGLD and has a market capitalization of 14 million.
Please visit its website, here.
Please visit its corporate presentation, here.
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