U.S. Gold Corp. (USAU, Financial) recently announced the results of its 2017 Keystone Scout drilling program.
Vice President Dave Mathewson revealed the project is massive: "The drilled intercepts bare many similarities to world-class gold deposits located on the north Carlin Trend and neighboring Cortez Trend deposits."
The north Carlin Trend and Cortez Trend are some of the most productive gold-producing areas in the world. The Carlin Trend is especially notable as North America's most prolific gold-producing area. The Cortez Trend is home to many highly productive gold sites, including Barrick Gold Corp.'s (ABX, Financial) Red Hill and Goldrush deposits.
So Mathewson's Keystone project is located on the Cortez Trend, Nevada's biggest gold field. U.S. Gold finished drilling the last four holes of the Keystone project on the Cortez Gold Trend in Nevada and released the final results on Aug. 25.
This unique geographic situation bodes well for Keystone's chances of producing commercially viable amounts of gold. As the recent drilling results show, the project bears many similarities to highly productive gold deposits in the same area.
A busy summerÂ
The Keystone drilling results are the second major announcement by U.S. Gold this summer. The company also recently announced the acquisition of the Gold Bar North property in Eureka County, Nevada. Like Keystone, Gold Bar North is located on the Cortez Gold Trend. The property features strong geochemistry hinting at high potential levels of gold and has 49 unpatented lode mining claims. The only financial cost to maintain these claims are small federal and county fees.
Regarding the Gold Bar North acquisition, President and CEO Edward Karr said:
"The acquisition of Gold Bar North represents a continued, methodical growth strategy for U.S. Gold Corp. The property is very synergistic for our flagship Keystone district-scale project and provides an additional exploration upside for a potential discovery. By consolidating the entire Keystone district on the world-class Cortez Trend and adding this nearby additional Nevada high-potential exploration property, we are hopeful of future potential discoveries."
Three highly prospective properties
The acquisition of Gold Bar North brings the company's total portfolio to three properties in Nevada and Wyoming: Keystone, Gold Bar North and Copper King. These properties have been described as "highly prospective," featuring strong geochemistry similar to proven gold deposits in neighboring areas.
The Keystone project is an underexplored, Tertiary (34.1+/-0.7 Ma) lower-plate window located in Nevada's famous Cortez Gold Trend. Despite being located in one of the world's most prolific gold-producing regions, extensive exploration has not yet been conducted on Keystone project land.
Keystone encompasses approximately 12 square miles, or 7,500 acres worth, of mineable territory. The area has strong geochemical features, including high levels of arsenic and zinc in the soil samples. These signs indicate a large gold system may be present in the area. Mathewson has hailed Keystone as "the best exploration project I have seen in my career."
Gold Bar North is another gold exploration property based in Nevada. U.S. Gold acquired the property from Mathewson on June 30, which led to him being hired at the company as vice president as well as head of exploration.
Gold Bar North consists of 49 unpatented lode mining claims in Eureka County. Its claims are located in Sections 5, 6, 29, 30, 31 and 32, Townships 22 and 23 North, Range 49 East, Mount Diablo Base Line and Meridian.
The company plans to develop the property through permitting, advanced mapping and geophysics, drill target identification and drilling. Gold Bar North is part of the larger Gold Bar area, which also includes properties like Gold Bar Horst and Gold Bar South.
Gold's resurgence in 2017
Gold and gold equities have recently made significant gains in the markets this year. Having risen sharply since January, gold equities recently ended at a three-month high. This marks a departure from a long-term trend which saw gold companies underperform compared to the hard asset itself.
Recently, management changes and lower costs have led to increased margins and a return to strong free cash flow generation. Gold equities have responded strongly to the recent rise in the price of gold, with increased margins leading to strong performance against both the price of gold and major indices, including the S&P 500.
Why investors should take a look at U.S. GoldÂ
U.S. Gold is a mineral exploration company focused on developing high-potential gold and copper projects. As mentioned previously, it owns three main properties. Each of these properties is located near proven gold reserves, including some that have been mined for nearly a century.
The company's exploration programs are fully funded and ready to move ahead. Initial drilling is already complete on the Keystone project, with highly favorable results. The company's future plans include additional property purchases and talent acquisitions.
The company has assembled an elite management and advisory team with more than a century of combined experience developing gold projects. Advisors include Tom Chapin of Barrick Gold, veteran geophysicist Jim Wright and digital mapping specialist Joe Laravie.
Mathewson is one of the world's leading geologists, with over 35 years of exploration experience in the state of Nevada. As the head of Newmont Nevada's exploration team, he made several notable discoveries, including the Tess, Northwest Rain, Saddle and South Emigrant projects in the Rain Mining district. Between 1999 and 2001, his team made important extension discoveries at Newmont's Gold Quarry and Mike deposits.
Mathewson is also notable for his work at Gold Standard Ventures Corp. (GSV, Financial). His work there led to the consolidation of the Railroad-Pinion district and the North Billion and Bald Mountain discoveries. Gold Standard's market cap increased from $15 million to $500 million largely as a result of his discoveries.
Disclosure: The author has no positions in any of the stocks mentioned.
