Gold major Barrick just tripled its profits…
Newmont Goldcorp, also reported a big jump in profits over the last couple of months.
But what most investors don’t know is that most of the money is made in the discovery of new world-class gold deposits.
And geologists now think they could have hit the motherlode in a new mining frontier…
It all started when miners found a nugget of solid gold weighing 1 kilogram…worth $45,400.
Then, they repeated the feat, and dug up a second nugget weighing 2.7 kilograms, worth $122,500.
It’s a little mine with a bright future, sitting on top of the biggest mining belt in West Africa and the new center of the global gold mining industry.
And AGG hopes to use Kobada to strike it rich in the next big gold boom.
The company has a lot going for it:
A drilling project that will reach completion on December 12, with a total resource base of an estimated 2.2 million ounces of gold, worth $4 billion at current prices.
A management team of dedicated professionals, and their led by Stan Bharti, a titan of the industry who has spun gold out of nothing, turning little companies into firms 20x their original size.
Gold prices look ready to rise. Interest rates are dropping. Big gold firms scrambling to acquire smaller firms to shore up their bottom lines.
So this tiny $20 million firm could realize a huge valuation or even potentially get taken over …delivering a massive upside to investors who get in on the ground floor.
##1 African Treasure
The Kobada Gold Project is in southern Mali—which investors should note.
Northern Mali has had its share of problems—but southern Mali is stable, peaceful, and very friendly to foreign investors, particularly in the mining industry.
In fact, Mali is Africa’s third-largest gold producer. The mining belt running through West Africa, known as the Birman Belt, is among the most promising mineral areas in the world.
AGG’s property at Kobada covers a stretch up to 15km wide and 25km long with more than 200km2 to explore. Initial feasibility studies indicate a deposit of 2.2 million ounces—with a more detailed bankable study scheduled for April.
AGG is confident that once initial investment is complete, they can pull 50,000 ounces of gold out per year, with a future target of 100,000 ounces.
The accommodation camp is 95% complete, drilling is well underway with a completion date of December 12. Right now, it’s working at breakneck speed—drilling a new hole every three days.
That 100,000 ounces could be worth nearly $150 million in revenue each year—for a firm worth just over $23 million.
And recent discoveries of two massive solid nuggets mean that this is just the beginning. More nuggets could be unearthed, based on AGG’s findings.
Mineralization is clear at shallow depths with gold very close to surface all the way down to 300m. Costs should be low, with less time to market. And the Malian government has proven a reliable partner.
It used to be South Africa was the focus of mining companies’ attentions. But now, investors are shifting their focus West... where the geology promises big gains for companies that strike it rich early.
According to Mining Intelligence, 61 new assets are in production or construction stages, with 24 assets undergoing economic assessments…and 367 assets in exploration, indicating a major boom is under way.
In Mali alone, there are at least twenty different mining companies buying up real estate. And the regulatory environment is perfect—the Malian government has embraced mining, Mali’s biggest GDP contributor, and has made changes to the permit process in order to quicken the rate of exploration.
In North America, securing the right permits can take years—but in Mali, authorities can clear you for exploration in a manner of months.
In fact, West Africa seems poised to become a new center for global gold mining—thanks to huge deposits, super low costs and a favorable regulatory environment amenable to mining interests.
The local trifecta of Mali, Guinea and Burkina Faso already produce twice as much gold as South Africa, the previous gold capital of the world—and things should only get better from here.
#2 Billion Dollar Birmian
Kobada is part of a massive belt running across a huge swath of West Africa—known as the Birmian Belt.
Other companies, including mining giants Barrick and Resolute, have already hit it big.
And the list of winners doesn’t stop there.
Take the Morila mine, in southern Mali, just east of Kobada. Operated by Barrick, the mine has been in operation since 2000 and has produced millions in gold and ore.
Or take the Tongon mine in Cote d’Ivoire, also operated by Barrick, where the company unearthed 230,000 oz …worth $322 million.
And what about the Syama Mine, in Mali, operated by Resolute, where production estimates are at 300,000 oz of gold per year—at current prices, a haul worth $420 million.
Just this year, Ghana overtook South Africa as Africa’s biggest gold producer. And Mali isn’t too far behind, in a close race for second place.
There could be hundreds of new assets popping up throughout the Birimian in the next few years—the sooner investors buy into AGG, the sooner they can profit from Kobada’s haul, before other investors beat them to the punch.
#3 Millions? How About Billions
The discovery of 1kg gold nuggets is just a hint of what’s to come at Kobada.
AGG is keeping its expectations small—it only wants to pull up 50,000 oz a year.
At the current value, that’s nearly $80 million. Not too shabby.
The full lode at Kobada is reckoned to be 2.2 million oz, a figure a new definitive feasibility study in April might add to. At current prices, that full haul is more than $3 billion—all for a company with a $23 million valuation.
And even that $3 billion figure should only climb higher and higher.
With China`s gold buying spree ramping up, industry experts expect the prices to go up to $2000.
That means the estimated gold at the Kobada property could be worth more than $4 billion.
Plus, AGG is in safe hands—it’s got a management team that knows how to spin gold from silk, and they’re led by a titan in the field.
#4 Gold Standard in Management
Two directors, Sir Sam Jonah and Bruce Humphrey, have a hundred years of combined experience working the finances for mining operations.
Jonah served as CEO of Ashanti Goldfields Company Ltd in the mid-1980s, while Humphrey was CEO and President of Desert Sun Mining and COO of Goldcorp.
Taking on matters on the ground is mining engineer Danny Callow. Callow served as the head of Glencore’s Africa Copper division, and he built a copper operation in Africa from green fields to a 210,000-ton producer while serving at Glencore.
But the big news is AGG’s new CEO, President and Chairman: Stan Bharti.
With thirty years of experience, Bharti is bringing a particular expertise to AGG, promising to take the company into a new golden age.
His accomplishments include:
- Started and founded Desert Sun in 2002 at $0.40 a share sold 2006 $750 million or $7.50 a share (TSX: DSM)
- Started and founded Consolidated Thompson 2004 at $0.25 a share sold in 2011 for $4.9 billion or $17.50 a share (TSX: CLM)
- Started Avion Gold 2008 at $0.40 a share and sold in 2012 for $400 million or $0.88 a share (TSX: AVR)
- Started Sulliden 2009 at $0.40 a share and sold in 2014 for merged value of $464 million or $ 1.47 (TSX: SUE)
Companies under Stan’s leadership have uncovered 20 million ounces of gold, more than 3 billion ounces of iron ore and 1.5 billion ounces of potash.
Bhart’s gathered more than $3 billion in investment capital for his companies and released billions to his shareholders.
And he knows his way around a gold mine: Bharti predicted gold prices would bounce back in the mid-1990s and he knew gold would rebound again between 2003 and 2015.
In Mali, he led the company Avion, a $20 million firm in 2008, which he turned around and sold for $500 million—all during the Great Recession.
That’s a 20x growth rate. And Bharti’s ready to repeat the miracle.
“I have always bought or acquired undervalued assets in emerging markets. This gives our shareholders the best potential for HUGE returns. AGG (TSXV:AGG, OTCMKTS:AGGFF) fits in that category very well.”
“It feels like we are in 2003 again,” Bharti said, “at the cusp of a great run in gold and gold stocks.”
“The team is now complete,” he declared, “and we are ready to take this asset to the next level in one of the most bullish environments I have seen in my 30 year career in mining “
#5 The Next Gold Rush
Remember those nuggets they found at Kobada? That’s only the beginning.
West Africa could be about to become one of the world’s biggest gold mining hubs…and AGG hopes to break out of the Birmian and realize gains worth billions.
And investors are starting to take note.
Gold prices are climbing. Big gold miners are snapping up smaller companies, and AGG could be next.
The VanEck Vectors Junior Gold Miners ETF, one of the most popular small-cap mining ETF’s, has gone up 50% in the last 2 months.
FIRST, the price of gold won’t likely stay put for long. It’s been trending upward for months, and could go even higher.
Stan Bharti, the new chief of AGG, thinks it’ll hit $2000/oz.
SECOND, the company knows the real potential of the Kobada mine…2.2 million ounces, worth as much as $3 billion, or more than $4 billion if the price goes up.
But that could just be the beginning. With accommodations for crew 95% complete and workers drilling around the clock to reach the December 12 completion date, AGG is sprinting towards the finish line.
As Pope & Company noted, "The gold at the Kobada deposit is coarse and nuggety, which means the contained gold content is often under estimated."
This little $23 million market cap company with its billion dollar mine in Mali could see a colossal surge of investor interest…and it could all happen in the next few weeks, before completion on December 12.
Investors who want a piece of this action will have to act fast…
Other companies to watch as gold continues to barrel towards $2,000:
Kinross Gold Corporation (NYSE:KGC, TSX:K)
Kinross Gold Corporation is relatively new on the scene, founded in the early 90s, but it certainly isn’t lacking drive or experience. In 2015, the company received the highest ranking for of any Canadian miner in Maclean's magazine's annual assessment of socially responsible companies.
While Kinross posted a significant loss in the fourth quarter of 2018, the company has turned itself around this year, posting significant year-to-date growth in its share price.
Agnico Eagle Mines Ltd (NYSE:AEM, TSX:AEM)
Canadian based gold producer, Agnico Eagle Mines is an especially noteworthy company for investors. Why? Between 1991-2010, the company paid out dividends every year. With operations in Quebec, Mexico, and Finland, the company also is taking place in exploration activities in Europe, Latin America, and the United States.
Agnico is a company with a lot of exposure to gold, letting investors take advantage of long-term price movements.
Though the company joins a long list of gold majors that reported losses in 2018, this year has been a spectacular year for the company.
Yamana Gold (NYSE:AUY, TSX:YRI)
Yamana, has recently completed its Cerro Moro project in Argentina, giving its investors something major to look out for. The company plans to ramp up its gold production by 20% through 2019 and its silver production by a whopping 200%. Investors can expect a serious increase in free cash flow if precious metal prices remain stable.
Recently, Yamana signed an agreement with Glencore and Goldcorp to develop and operate another Argentinian project, the Agua Rica. Initial analysis suggests the potential for a mine life in excess of 25 years at average annual production of approximately 236,000 tonnes (520 million pounds) of copper-equivalent metal, including the contributions of gold, molybdenum, and silver, for the first 10 years of operation.
Eldorado Gold Corp. (NYSE:EGO, TSX:ELD)
This Canadian mid-cap miner has assets in Europe and Brazil and has managed to cut cost per ounce significantly in recent years. Though its share price isn’t as high as it once was, Eldorado is well positioned to make significant advancements in the near-term.
In 2018, Eldorado produced over 349,000 ounces of gold, well above its previous expectations, and is set to close out this year even stronger. As a result, Eldorado has doubled its share price since the beginning of the year.
First Majestic Silver (NYSE:AG, TSX:FR)
While it’s primary focus remains on silver mining, First Majestic does hold a number of gold assets, as well. Additionally, silver tends to follow gold’s lead when wider markets begin to look shaky. And with analysts sounding the alarms of a global economic slowdown, both metals are likely to regain popularity among investors.
Already this year, First Majestic has seen a 74 percent increase in its share price.
By. Ian Jenkins
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