CHEYENNE, Wyo., April 26,
2023 /PRNewswire/ -- As U.S. Gold Corp. ("U.S.
Gold," the "Company," "we," "our" or "us") (NASDAQ: USAU)
begins the second quarter of calendar year 2023, we would like to
inform our shareholders and investors that we remain on track with
our objectives. Despite the uncertainty of the financial markets
and our banking system, precious metals continue to be primed for a
bright future, with gold, silver and copper leading the charge.
Precious metal equities continue to outperform on Wall Street and
trend towards historic highs. In fact, a Kitco News' online
survey, recently projected that gold's value could top out the
year at a record $2,100 per ounce.
This makes us extremely excited about the future of U.S. Gold.
Earlier this month we closed a $5
million registered direct offering, to be used for general
working capital which puts us in a solid position fiscally.
Those that have been following us closely are aware that in 2020
we pivoted toward the development of our CK Gold Project in
Wyoming, lowering priority, for
now, on our outstanding exploration assets in Nevada and Idaho. Let there be no mistake, permitting and
developing a new mine are not easy tasks. We appreciate the support
of our shareholders as we advance through the rigorous steps that
are necessary to take our CK Gold Project from a resource with
potential, to a wealth and opportunity-generating mine. We believe
we are on track.
Update on activities and major milestones for the CK Gold
Project
Following the Prefeasibility Study (PFS) published in
December 2021, work continued toward
a Feasibility Study (FS) which was largely completed in 2022.
The PFS contemplated a gold price of $1625 per ounce and $3.25 per pound of copper. While inflation will
likely push up some of the costs identified in the PFS, the revenue
side of the equation will be positively impacted by, among other
things, the projection of higher gold and copper prices. It is
anticipated that the CK Gold Project revenues will count on
approximately 70% of its revenue from gold, but of increasing
importance is the 30% from copper sales in the concentrate that we
plan to ship.
As things now stand, the Company plans to have the FS available
in Q3 2023. Finalization rests on certain aspects that needed
further clarity.
- Energy Prices. In the runup to the winter months, oil
and fuel prices were surging for a number of reasons, principally,
geopolitics and the Ukraine
conflict. We now see prices stabilizing and have a better view of
energy prices in general, which will affect both capital and
operating costs associated with the project.
- Supply Chain. Supply chain uncertainty resulted in
equipment manufacturers providing quotations and lead times on
equipment that were overly conservative. As COVID-19 has been
largely dealt with, manufacturing has ramped up and there is once
again competitive tension in the market, resulting in more options
and better prices for the project.
- Inflation and Economic uncertainty. Inflation pressure
and higher interest rates still give rise to caution. While
interest rates are high, it does appear that inflation is beginning
to come under control, allowing more confidence in estimates.
- Project Royalty Rate. The project royalty rate is
payable to the Office of State Lands and Investment (OSLI), from
whom project mineral leases are granted. A recommendation was made
by OSLI staff to the OSLI Board of Directors on April 6, 2023 and adopted that same day. The
rate, set at 2.1% of the net receipts from the CK Gold Project,
gives the Company certainty on this important parameter, which can
now be reliably incorporated into our assessment of project
economics. This royalty is earmarked for K-12 education in
Wyoming, an important benefit
supporting project development.
- Water Supply. Water in the western United States is a contentious issue after
many years of drought and the paucity of water in the Colorado
river system. U.S. Gold has been aware of this from the outset and
sought to reduce the water necessary for the project with plans to
install filter presses to capture water and reuse it, rather than
implement a conventional tailings storage system. Having defined
the water needed for the project, options for a water supply were
investigated. A win-win scenario was chosen for the supply, wherein
the City of Cheyenne through its
Board of Public Utilities (BOPU) would supply the water needed.
After mining and reclamation, the water that BOPU will sell to the
Company will be needed to cater to the growing water use in the
city and its surroundings. In the interim and for the life of the
mine, there is surplus water, and the sale of that water will
provide funding for the development of the BOPU system for future
regional water needs. To firm up the water supply the following
events/steps have been taken.
-
- At a City of Cheyenne council
meeting in November 2022, the City
Council approved an "Outside Water Users Agreement" that could be
entered into between U.S. Gold and BOPU.
- In February, a Water Development and Purchase Agreement was
ratified and signed between U.S. Gold and BOPU, contemplating the
firm supply of up to 600 gallons per minute for the life of the
project.
- Mine Operating Permit (MOP) and Closure Plan. On
September 13, 2022, the permit
application was submitted to the Wyoming Department of
Environmental Quality's Land Division. The submission was subject
to a completeness review, which it passed, and went on to the
technical review stage. The first round of comments from the
technical review have now been received. The process is proceeding
as anticipated and we do not see any issues in responding to the
first round of technical commentary from the authority. As a
reminder, the project falls under the jurisdiction of the state
since the project lies within state and private ground. The Company
anticipates that the permitting will continue through the balance
of 2023 and most likely into early 2024.
- Industrial Siting Commission (ISC) Permit. Depending on
the magnitude of capital expenditure, the State of Wyoming has a mechanism to cushion
the impact of large investment projects on the local community,
freeing up state funds for infrastructure and city and county
service enhancements. The ISC permit cycle is shorter than the MOP
cycle, and the Company should have concluded the proceedings ahead
of U.S. Gold having a determination on the MOP. The steps on the
ISC permit application are as follows:
-
- November 28, 2022 – mailed
project description to 126 agencies and organizations, including
projected impacts. Set date for and invited public to project open
houses in Cheyenne and
Laramie.
- December 14 and 15, 2022 – held
open houses to discuss project with interested parties.
- February 21, 2023 – submitted ISC
permit application.
- March 2023 – passed ISC
completeness review and received initial comments.
- May 10, 2023 – scheduled hearing,
followed by 90-day review (August
2023), leading up to a decision by the ISC.
- Updating the CK Gold Project Resource and Mine Plan. The PFS was based on the 2020
drilling and exploration program. The PFS plan was scheduled at
20,000 short tons per day (stpd) and 20-ft bench height cuts in the
mine plan. The following enhancements are anticipated in the
FS:
-
- Resource to incorporate 2021 drilling, capturing some of the
additional mineralization we know to extend beyond the PFS-defined
open pit.
- Switch to +/-30-ft bench heights to ease mine planning and help
productivity and mine costs, maintaining the 20,000 stpd mill feed
rate.
- Incorporate an ore stockpile strategy that allows the mine to
present higher grade material to the mill sooner, resulting in
better economic performance.
- Conclude mining sooner and reclaim stockpiled ore in the latter
years of the project, allowing tailings to be deposited into the
base of the mined-out pit, thereby reducing the size of the
tailings facility and improving project economics in the final
years.
- Repricing Capital Equipment. With the majority of the FS
complete and all major equipment identified, the equipment needed
for the project will be repriced. Factors that will affect the
price include inflation, a new view on availability and supply, and
interest and foreign exchange rates.
- Other Opportunities. While the project economics revolve
around revenues from copper and gold, with copper and gold
extraction into a concentrate for sale to smelters, there is a
whole new revenue opportunity from the CK Gold Project that is
being evaluated. In order to extract the gold and copper from the
open pit, not only the ore containing the copper and gold must be
moved but also other rock, normally referred to as waste rock. Some
of this rock will be used to stabilize the dry stacked tailings
pile and for reclamation; however, there will be over 30 million
tons stacked and eventually reclaimed in a separate pile. This
material has been tested and constitutes an excellent source of
aggregate and ballast. While our plans and permit applications do
not contemplate the commercialization of this material, the FS will
identify the opportunity for later consideration.
- Other Activities. While the majority of the Company's
resources are aimed at the CK Gold Project, we continue to look for
opportunities to advance our exploration assets. Having sold
Maggie Creek to Nevada Gold Mines, our attention turns to
Keystone, a phenomenal land package on the Eureka/Battle
Mountain and Cortez gold trend, and our Challis property in
Idaho.
On behalf of the entire team at U.S. Gold, we thank you for your
interest in our Company and look forward to an exciting year ahead.
Please do not hesitate to contact us through our website.
George Bee
President
and CEO, Director
U.S. Gold Corp.
About U.S. Gold Corp.
U.S. Gold Corp. is a publicly traded, U.S. focused gold
exploration and development company. U.S. Gold Corp. has a
portfolio of exploration properties. The CK Gold Project is located
in Southeast Wyoming and has a
Preliminary Feasibility Study technical report, which was completed
by Gustavson Associates, LLC. The Keystone exploration property is
on the Cortez Trend in Nevada. The
Challis Gold Project is located in Idaho. For more information about U.S. Gold
Corp., please https://www.usgoldcorp.gold/.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release are forward-looking
within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements may be identified by the use of
forward-looking words such as "anticipate," "believe," "forecast,"
"estimated," and "intend," among others. These forward-looking
statements include statements related to the CK Gold Project, which
include, development and permitting of a mine on the project;
anticipated gold and copper revenues; availability of a Feasibility
Study in Q3 2023; and repricing of all major equipment needed for
the project. There are a number of factors that could cause actual
events to differ materially from those indicated by such
forward-looking statements. These factors include, but are not
limited to, risks arising from: market and other conditions, the
prevailing market conditions for metal prices and mining industry
cost inputs, environmental and regulatory risks, COVID-19 risks,
changes in interpretations of geological, geostatistical,
metallurgical, mining or processing information, risks faced by
junior companies generally engaged in exploration activities,
whether U.S. Gold Corp. will be able to raise sufficient capital to
develop the CK Gold Project and implement future drilling programs,
the success or failure of future drilling programs, and other
factors described in the Company's most recent Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on
Form 8-K filed with the Securities and Exchange Commission, which
can be reviewed at www.sec.gov. The Company has based these
forward-looking statements on its current expectations and
assumptions about future events. While management considers these
expectations and assumptions to be reasonable, they are inherently
subject to significant business, economic, competitive, regulatory,
and other risks, contingencies, and uncertainties, most of which
are difficult to predict and many of which are beyond the Company's
control. The Company undertakes no duty to correct or update any
information contained herein.
For additional information, please contact:
U.S. Gold Corp. Investor Relations
+1 800 557 4550
ir@usgoldcorp.gold
www.usgoldcorp.gold
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SOURCE U.S. Gold Corp.