Advanced Gold Exploration, under-followed, under-valued, buying opportunity?

In a commodities bull market, early-stage companies leveraged to critical metals like; gold (“Au”), silver (“Ag”, copper (“Cu”) & zinc (“Zn“) are well positioned. A company I love for its metals, cheap valuation and team is Advanced Gold Exploration Inc. (CSE: AUEX) / (OTCQB: AUHIF), with assets in Ontario & Nevada, USA.

Wait, what commodities bull market? Au/Ag are down -26%/-49% from January’s all-time highs. Importantly, meaningful pullbacks are not uncommon in multi-year bull market runs. In fact, pullbacks are widely thought to be healthy for a bull’s longevity. Au is +146% from its 4-yr low in September, 2022.

Not bad, but nothing compared to the EPIC bull markets ended in 1980 and 2011, (31 years apart)… Those two delivered gains of +2,329% & +653%, (avg. +1,491%), over an avg. of 9.4 years. If today’s bull market started in 2022, and lasted 9.4 years, in 2031 Au could be north of $25,000/oz (+1,491% from Sept-2022 low).

I’m not saying that outcome is likely, it’s merely a frame of reference. A gain of +653% (2nd best gain in past 50 years) would result in Au at ~$12,000/oz. To be clear, high quality gold projects/companies don’t require $12,000, anything above $4,000 is icing on the cake.

If Au were to gain +10%/yr. for the next five years, it would reach ~$6,700/oz. Still far from a sure thing, but that hardly seems like a stretch. At $6,700, I estimate the median operating margin for producers would be ~65%, at/above the world’s largest tech giants.

Advanced Gold has just 24M shares outstanding. Its market cap is tiny at C$3.1M (C$0.13/shr. on June 25rd). In June, it farmed out its Buck Lake project on Ontario’s emerging Batchawana Greenstone Belt by signing a definitive agreement with Stage Capital Corp., granting it an option to acquire a 60% interest.

To earn 60%, SCC must invest ~C$1M into the Project (over three years), and pay $190,000 in cash + issue 1.9M shares in SCC (after it becomes publicly-listed) to Advanced Gold.

Buck Lake is within ~50 km of Sterling Metals’ Soo Copper project, ~130 km from Alamos Gold’s Island Gold Mine, and ~140 km from Wesdome Gold’s Eagle River Mine. It’s a promising project, and Advanced Gold will retain at least 40%, at no further cost, as long as SCC moves forward.

On June 23rd, management announced it has entered into an option agreement to acquire the district-scale, road-accessible, 8,287-hectare, Muriel-Marr Project (“MMP“) in NW Ontario. MMP is an exciting exploration project 85 km north of Equinox Gold’s Greenstone Gold Mine (250,000+ ounces in 2026).

Kenorland Minerals’ Kowkash Project (one of multiple Kenorland projects/properties in Ontario & Quebec) directly adjoins the MMP claims. Kenorland is a market darling with a market cap over C$170M, backed by Sumitomo Metal Mining Canada Ltd and Centerra Gold.

I mention Kowkash because drilling by EITHER Kenorland OR Advanced Gold could be quite impactful for MMP. IAMGOLD’s Louanna Gold Mine project is also nearby. It operated intermittently in the 1980’s with a ~200 tpd mill. Historical grades were reportedly ~10-11 g/t Au. Louanna is within ~20 km (as the crow flies) of MMP.

In Nevada, the Company’s recently acquired, past-producing, Silver Belle project is quite attractive. It has ~500 ft of underground workings (shaft + adits & cross-cuts).

This is a 2,000-acre land package with open ground to the north, south, and west. There are multiple vertically extensive ore shoots, but no drilling, geophysics, or modern exploration has been done… Until now.

Silver Belle is a high-grade Ag/poly-metallic CRD project on the world-class Eureka-Battle Mountain mineral belt. Records from 1937 show grades of — 1,611 g/t Ag, 37% lead (“Pb”), 10% Zn, 1% Cu — from smelter-run, underground workings.

Note, that was hand-sorted, selectively-mined material, but it points to the potential to delineate high-grade mineralization. The classic CRD metal suite also includes showings of antimony & tungsten — critical minerals with significant strategic value.

At a reported grade of 3,000 g/t antimony, that alone would be an incremental 0.6% added to the Project’s prospective Cu Eq. grade (assuming 100% recovery).

Notably, one need not rely on antimony & tungsten as anchors of value for AUEX. However, they’re potentially important as they could attract government and/or commercial interest above and beyond the underlying Au, Ag, Zn, Cu & lead.

I’m not suggesting Advanced Gold will necessarily get free-money grants, but it could potentially benefit from elevated interest from strategic investors. Regarding tungsten, 80% is controlled by China, and the price is +900% in the past year.

In terms of grants, the Dept. of War, Dept. of Energy & State Dept. are throwing around billions of dollars. There are numerous departments/sub-departments, and agencies/sub-agencies tasked with fighting back against decades-long China’s dominance is critical metals.

Examples of U.S. gov’t grants, loans, equity investments of at least US$100M…
How many dozens more of $10-$100M???

The Trump Admin. is extremely serious about re-shoring/on-shoring mining, processing, refining, and recycling. With $39 Trillion in debt, the U.S. is NOT worried about deploying several $10s of billions…

Regarding Silver Belle, CEO/Pres. Arndt Roehlig stated,

“Data interpreted to date has confirmed the site’s status as a rediscovery target, highlighted by documented historical Ag production. Located in the historic Diamond district of Eureka county, the Project consists of a 2,000-acre claim block on the Eureka-Battle Mountain mineral belt. Despite its location in one of the world’s most productive mining jurisdictions, the Project has seen no modern exploration, all historical work restricted to a much larger, untested potential CRD system.“

There’s considerable excitement around Silver Belle as it’s wide open at depth and surrounded by mines/projects owned by Newmont, Barrick, Nevada Gold Mines, Kinross, Hecla, Equinox Gold, KGHM Intl., McEwen Mining, and I-80 Gold.

The closest two projects/mines are I-80’s past-producing, high-grade Ruby Hill Complex and Kinross’ currently producing Bald Mountain heap-leach operation. Both are within ~40 km. I-80 & Kinross are known to be acquisitive.

Therefore, if/when a resource estimate is established, these two, and others, could/should be interested. The Company is prudently de-risking Silver Belle. A Phase 1 program launched in April included three weeks of detailed geological mapping.

Eighty-seven (87) rock/soil samples are in the lab awaiting assays. All data will be compiled into a GIS database. Upon completion, ProDeMin will prepare a NI 43-101 Technical Report with a thorough review of historical data and recommendations for drilling and resource definition.

Drilling aims to determine if the Company is on the cusp of a larger structure. The geological setting is thought to be analogous to well known poly-metallic VMS systems like Glencore’s Kidd Creek (currently being acquired by Discovery Silver).

The Project is 55 km from the town of Sault Ste. Marie, (population ~80,000) via Highway & logging roads, and near regional rail. It’s close to Ontario’s hydro-powered grid, with ample access to mining equipment/services.

Recent drilling returned massive sulphide mineralization, incl. 4.6% Cu + 98 g/t Ag + 1.2 g/t Au over 3.1 m (within a larger 11.8 m interval). Historically, up to 15% Cu plus 12–15% Zn was reported from 37 holes (8,054 m).

At the Doyle project, also in the Batchawana Greenstone, Advanced Gold is targeting an Au system sharing notable geological similarities with the Hemlo camp, one of Canada’s most prolific Au districts.

Historical drilling returned high-grade intercepts including 46 g/t Au over a meter in an interval hosting visible Au, and another meter of 14.6 g/t Au in a different hole. Doyle has seen ~8,000 meters of historical drilling, but has not been drilled in over 30 years.

Recent LiDAR & airborne geophysics identified structural corridors associated with known mineralized centers. Management is securing permits for a 3,000-meter diamond drill program to test the depth and strike extent of high-grade mineralization along newly identified NE-trending structures.

Make no mistake, Advanced Gold Exploration Inc. (CSE: AUEX) / (OTCQB: AUHIF) is a high risk proposition, but one could hardly do better than Ontario (#2 in the latest Fraser Institute Survey) and Nevada #1.

Moreover, one could hardly do better than gaining early-stage leverage to Au, Ag, Cu, Zn, and possibly antimony/tungsten. To reiterate, investors are not betting the farm on an antimony/tungsten narrative, they could do quite well with the other critical metals.

There’s tremendous option value at Advanced Gold, (Silver Belle, Doyle, MMP & free-carried on 40% of Buck Lake) yet the Company is valued at just C$3.1M. When, not if, junior miners recover from recent weakness, Advanced Gold could bounce back nicely.

Disclosures/disclaimers: The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about Advanced Gold Exploration, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market-making activities. [ER] is not directly employed by any company, group, organization, party, or person. The shares of Advanced Gold Exploration are highly speculative, not suitable for all investors. Readers understand and agree that investments in small-cap stocks can result in a 100% loss of funds. Readers agree to consult with financial advisors before making investment decisions.

At the time this article was posted, Advanced Gold Exploration was an advertiser on [ER], and Peter Epstein owned no shares in the Company, but might acquire shares in the open market in the near future.

Readers understand and agree that they must conduct due diligence above and beyond reading this article. While the author believes he’s diligent in screening out companies that, for any reason whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors, including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article or future content.