GTCH:CC - Nevada Gold Experiences Rising Prices and Declining Production
2023-08-08 09:18:10 ET
The Case for Investing in Junior Gold Companies
With global economic uncertainty on the rise, many investors are looking to hedge their portfolios with hard assets like %Gold . And while gold prices have seesawed in recent years, projected declines in production from major producing regions like Nevada mean prices could be poised for a sharp upswing. That's why advanced-stage junior gold exploration companies – with their low entry point, underlying asset value mitigating risk, and high discovery potential – are looking increasingly attractive.
Nevada has long been a gold mining powerhouse, producing on average US $12 billion annually over the last 25 years, and accounting for 76% of US gold production and 7% globally. While an impressive achievement, this time period has also witnessed a 50% drop in Nevada’s gold production, representing a decline of 4.7 million ounces of gold annually. In turn, the US has slipped in ranking on the world’s gold production leaderboard from 2 nd to 5 th place. The decrease in production is primarily driven by the natural slowdown expected of maturing mines combined with a deficit in production replacement, and with costs climbing as grades decline, further drops seem inevitable.
The discovery and production of gold has translated into a major windfall for the state of Nevada. In addition to direct investment, job creation, and a wide web of ancillary benefits, the state receives considerable tax contributions. Total taxes collected in 2022 from gold and silver production is estimated to be ~US$ 250 million, with a significant portion allocated to funding the state’s education system. Considering tax revenues will fluctuate alongside gold production rate, a continued decline will measurably impact contributions that the state relies on.
Nevada is considering incentives like tax breaks to spur new development, but discoveries are down, with exploration spending declining year after year. According to a report by S&P Global Market Intelligence , Nevada’s gold exploration spending peaked in 2012 at $580 million and dropped to $280 million in 2017, reflecting a global trend of declining exploration budgets and fewer major discoveries in recent years. While the state’s production is expected to drop further without new sources of gold supply, their commitment to finding solutions that will boost development make it no wonder they are ranked as the top favoured jurisdiction in the world in which to operate. The recently released Fraser Institutes 2022 Annual Survey of Mining Companies has ranked Nevada the #1 spot for Investment Attractiveness, an assessment of both the state’s policy regime and mineral potential.
Advanced exploration stage junior mining companies offer exposure to these solutions and upside from existing deposits that have significant growth potential. Their low entry point, proven exploration success, and underlying real-world assets significantly mitigate downside risk. A clear growth path with additional opportunities for discovery in a commodity that bears strong market fundamentals makes such companies highly attractive to investors, especially for those looking for a less expensive hedge than gold with more potential upside.
However, projects that truly boast the ability to counter the cascade effect of dwindling production are few and far between – and with a gold super cycle seemingly looming, savvy investors are scouting for prospects with a proper risk-to-reward ratio. One company operating in the region that looks to be checking all the right boxes is Getchell Gold Corp.
Getchell Gold Corp: An Overlooked Opportunity in Nevada's Gold Country
%GetchellGold (CSE: ) (OTCQB: ) is a mining company focused on advancing its flagship Fondaway Canyon gold project in Nevada. With gold prices on the rise amidst economic uncertainty, Getchell offers investors a promising yet overlooked opportunity.
Fondaway Canyon is located in Churchill County, Nevada – a top-ranked mining jurisdiction globally. The advanced exploration project covers 4,200 acres and has a long history of drilling and production. Under Getchell's management, drilling over the past three years has successfully expanded mineralization and outlined a large resource.
In 2023, Getchell announced an updated mineral resource estimate containing 550,000 oz of gold as Indicated resources and an additional 1.5 million oz Inferred. Importantly, the mineralization remains open and untested in most directions. According to GTCH President Mike Sieb, " We basically doubled the historic resource with 18 drill holes ."
Riding the Lightning – Doubling of Resource Estimate was Only the First Step
GTCH is advancing its flagship project with plans for an expanded 2023 drill program. The company recently announced applications for a dozen additional drill pads to further explore the large resource outlined to date. As stated by Sieb, “ After three years of drilling and delineating a sizeable Mineral Resource 600 metres down dip from surface and 600 metres along strike, the gold mineralization remains fully open for further expansion .”
The recent doubling of the historical resource estimate came as a result of just 18 of 26 recent drill holes. With mineralization open in multiple areas, Getchell sees significant potential for further expanding the deposit. The upcoming drill program will follow up on positive results from 2022 drilling and is designed to step out from the known volume of gold mineralization and increase the resource.
The GTCH Advantage
With continued exploration success, Fondaway Canyon has clear potential to evolve into a multi-million-ounce gold deposit. Yet GTCH retains a modest $20 million market capitalization, presenting a discounted entry point relative to comparable companies like I-80 Gold Corp. ( NYSE:IAUX ) and %NevadaGoldKing (NYSE: ).
For investors seeking undervalued gold exposure, Getchell warrants consideration. Led by seasoned management and advancing a major asset in Nevada's prolific gold trends, Getchell offers upside potential as it systematically unlocks value at Fondaway Canyon. As results continue validating the project's world-class nature, Getchell's overlooked status may not last for long.
About Getchell Gold Corporation
Getchell Gold (CSE: GTCH | OTCQB: GGLDF) is a publicly listed gold exploration and development company delineating a potentially Tier-1 gold resource at its flagship Fondaway Canyon project in Nevada, USA. Following consecutive successful drilling programs from 2020 to 2023, the company has effectively doubled the size of the historic resource, placing the Fondaway Canyon project firmly into the multi-million-ounce resource category. Getchell Gold is perfectly positioned to continue expanding its resource with plans to rapidly advance towards a Preliminary Economic Assessment.
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