IAUX - i-80 Gold: Trading At A Deep Discount To Fair Value

2024-03-26 09:46:24 ET

Summary

• i-80 Gold Corp. share prices suffered over the last year, with it back to testing all-time lows despite significant positive developments across the portfolio.
• Meanwhile, the company continues to progress its joint-venture discussions at its flagship Ruby Hill Project, with the potential for a more permanent financing solution in Q2.
• In this update, we'll dig into the Q4 results, recent developments, and why this disconnect in the share price looks like a buying opportunity.

It's been a tough two-year stretch for gold developers, and while i-80 Gold Corp. (IAUX) management team took advantage of the favorable market environment in 2020 to sell its last company (Premier Gold), and outperformed the sector significantly in its first two years as a spin-out under i-80 Gold (2021, 2022), 2023 was a tough year for the share price - and 2024 hasn't started out any better. However, while several other developers have seen their share prices sink because of a lack of access to capital, a lack of news flow, and not being any closer to production given the difficult environment, i-80 Gold has made multiple new discoveries, has been one of the few companies with access to capital to continue advancing its projects, and it has put one of its mines into production already, with a significant increase in gold production expected by Q4 of this year.

Unfortunately, the extremely negative sentiment sector-wide and share dilution related to the Paycore Minerals deal have weighed on the stock, with IAUX testing its all-time lows, even with the gold price at all-time highs. And while it is understandably discouraging for investors, this is not a case of deteriorating fundamentals that have led to a downgrade in the story. In fact, the story has only gotten better, and is 18 months closer to realizing its goal of becoming a 400,000 ounce gold producer than it was at its all-time highs in Q4 2022 above US$3.00 per share. It's also worth noting that while i-80 has lagged producers, its share-price performance hasn't been that different than many developers, and it's actually outperformed most developers since inception (Q2 2021). So, given that the story continues to improve (growing resource, potential for a deal with a JV partner at its flagship asset, higher gold price), I see this as a case of the baby being thrown out with the bathwater.

In this update we'll dig into the Q4 results , recent developments, and why this disconnect in the share price looks like a buying opportunity....

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