U.S. Gold Corp. (USAU) Earnings Call Transcript & Summary

Good afternoon, and thank you for joining us today. I'm Taylor Combaluzier, I'm mining analyst here at Red Cloud Securities. Today's webinar features U.S. Gold Corp, which is a U.S.-focused gold exploration and development company, advancing its portfolio of projects in Wyoming, Nevada and Idaho. The company is focused on its flagship CK gold project in Wyoming, where positive PFS was released last December that outlined a 10-year mine life with average annual loan production of just under 109,000 ounces of gold per year for a post-tax NPV of USD 266 million and an IRR of about 34%. Today, I have with me on the webinar Luke Norman, who's the Chairman and Co-Founder; as well as George Bee, who's the President and CEO at U.S. Gold Corp. The format of today's webinar will be comprised of 2 parts. In the first part, Luke and George will provide an introduction to U.S. gold. In the second part, we'll take your questions live. So please send in any questions you have using the chat function, and we'll get to as many as we can. [Operator Instructions] The start, we'll handle the disclosures and then get into it. So for U.S. Gold, there may be some forward-looking statements made on this call. I would direct listeners to the cautionary note on Page 2 of the U.S. Gold Corporate presentation located on the company's website. Red Cloud Securities, Inc., I would highlight that this webinar is for information purposes only and should not be considered a solicitation to purchase or sell securities or recommendation to buy or sell securities. And we note that this call does not take into account the particular situation or needs of individual investors. Participants should rely on their own investigations and seek their own professional advice before investment. Please see our most recent research located on our website for U.S. Gold specific disclosures. So with that out of the way, I'll turn it over to Luke and George to update you on U.S. Gold and what you have to look forward to with the company.

Well, thank you, Taylor, and thank you for everyone who's joining us today. That was a good introduction Taylor. As Taylor has mentioned, U.S. Gold Corp., we are listed on NASDAQ, very unique kind of a listing place for this style of company clearly. I will get into our capital structure, et cetera, shortly, but we are -- but in essence, a $40 million market cap company with this advanced stage bucket ready gold copper asset in Wyoming, just about 20 miles out of Cheyenne Wyoming. And we are looking to advance that as well as a very high profile portfolio of exploration assets in Nevada. Now originally, U.S. Gold Corp., as Taylor mentioned, I am a co-founder gold company. Originally, U.S. Gold Corp. Was put together as an exploration-focused Nevada-focused gold company. We were fortunate enough to pick up along the way the CK Gold project, which previously was called Copper King. And this current market environment, maybe we should go back to calling it Copper King, copper being a bit of a market darling right now. But Copper King was in the portfolio, and our real focus was in Nevada. So we have 2 projects, both Keystone and Maggie Creek. In Nevada, Keystone, sits near the Barrick Gold Mines Cortez complex, which is obviously a very big producer for them. It has very similar stratigraphy and quality of rock. So we were exploring that. And up until around -- we went public in 2017 -- June of 2017, which we ran into a bit of a headwind. The exploration space was not really well regarded at the time. People were not too excited about Nevada anymore. Newmont Barrick joint forces, competitive tension and been diminished in Nevada. So we're having trouble raising capital. I looked at copper care and thought that maybe it will be a good idea for us to consider divesting copper kind for cash. So I did not want to throw potentially the baby with the bath water. So I hand it over what technical data we had on Copper King, George and asked them to take a closer look to a deep dive and sort of give me his thoughts and perspectives on who might be the candidate to sell the asset to. And he came back to me several weeks later. He had conducted a full scoping study on the project, as an independent one. So we were crazy. We should not get rid of Copper King. We should advance and develop Copper King and that he would plan and get involved in that process. Now I'm not sure if any of you or many of you are familiar with George, but George has a very committable background in terms of building mines or about gold mines throughout the world, Nevada and South America predominantly. So when George gave me the advice, we took it seriously. We consolidated the stock back. We brought in an acquisition, which also purchased our Idaho projects and George came to the help. So the reason he liked Coping so much And what I had missed is the concern with Cooper King, well, the Seek Gold project had always been a question around the grade being a bit low and it's vicinity to a state park within Wyoming. So those are 2 concerns that we will definitely address upfront today because those both have turned out to be somewhat benefited. I mean low grade is never a benefit, but the fact that the grade sits right at surface. And as I mentioned, bucket ready is a huge advantage to this project. Also, I'll just touch on our cap structure right now because I think it's prudent to do so. I'm going to use the word unique quite a bit through this presentation because it is a very unique company. And you'll see right here in our share structure, 8.4 million shares out. That's -- no one's used to that in the junior mining space. Usually, there's 80-plus million shares. So when people see a $4 or $5 ticket right now, they think, well, it's probably already priced in. This is already an expensive start. Well, you can see by our chart, we've followed the trajectory of all the junior mining companies. And unfortunately, has brought us down to a valuation point where we are below any of the cost base stock that is out there on this company. So it's a really good value proposition right now. We've done all this advancement at Copper King, which we will get into, both George and I. We have raised a fair amount of capital. We have close to USD 9 million in treasury and an enterprise value of somewhere around $50 million right now. So very, very good opportunity, a good time to consider an investment into U.S. Gold Corp. All right, key work that we're being -- or the key thing we've been working on since George joined the company in 2020 was again turning the company around from an explorer and turning ourselves into a predevelopment company. So that included additional drilling to go and shore up our resource and bring it up to what we have now P1P2 standard reserve of just under 1.5 million ounces of gold equivalent. And George and team through a pre-feasibility study that we put out in December of last year, have built up a base case scenario for this project to produce about an average of about just under 110,000 ounces of gold equivalent per annum. The reason we're using gold equivalents is it just -- it simplifies and I think, for everyone, even the analysts out there like to have a little more simplification to this. But the economics are largely driven by gold right now. At least based off our pre-feasibility with $1,625 gold, $3.25 of copper. We're running at about a 70% goal to 30% copper economics. But we are heavily leveraged to both. So running those numbers in that range, great, but we're running an AISC of about $800, and we'll get to that very shortly. But look, as I said, good listing, good position in cash. The other thing, item, I will bring up and the reason why we just started working with Red Cloud closely is we are looking to dual list our company now over on to the Toronto Stock Exchange later this year. Our trigger point was being able to produce the pre-feasibility which is deemed to be 43-101 compliant. So we are going to do all this in Toronto. I think that will really help us in our orphaned situation that we're in right now. That being listed on a more tech-oriented exchange in the U.S. Clearly, we're not getting seen by the Street in Toronto. So we're excited looking forward to having Toronto to become a part of our outreach. You can see here a list of comps that's been drawn up and the mean how they generally trade market cap to ounces in the ground or what percentage of NAV they're running. So price to NAV, most companies are running around 0.35%. NAV, we're running around 0.1 right now. So there's a lot of leverage there. And as we get through our bankable feasibility and file the permits later this year in the next 6 or 8 weeks, we're going to move further up that scale. So a big disparity between where we sit right now in terms of valuation and where we probably should be compared to our peer group. I won't get into the ESG slide too much right now because there's a heck of a lot more to this project than just it being a copper gold mine. Now obviously, we do have to talk to this and will a later date. But right now, the big thing with Copper King, or the CK Gold project is its potential to be a very carbon mutual, carbon friendly gold and copper mine. So rather breast statement, how do I come up with such a thought. Well, as I mentioned, when we first started looking back at this project and trying to evaluate whether we should do some advancements on it, concerns around this project previously. And I think it's sort of history amongst people who have known it in the past, was its proximity to the state park. So you can see, obviously, cheyenne, on the slide, 20 miles away, a very well-maintained road, rolls in, very short entry point into the project. It's located on state ground. But we do have to cross some private land. We have all the tenures and agreements in place with this private landholder. But you can see outside of the property boundary here, and I'll try to draw. There's our property boundary obviously here, and it's superimposed yet. You'll see this water body that is known as that is crystal like. And to the south of it is Granite Lake -- sorry, other way around. I think actually, that's right. Crystal Lake and then Granite Lake. They are water reservoirs or reservoir network for the township of Cheyenne. They are also located within the state part known as Curt Gowdy State Park. So we sit right on the edge of the pristine legs that feed water into the township. Okay. That, to me, was going to be an endpoint for this project. Fast forward to today, the Bureau of Public Utilities in Cheyenne, Wyoming is desperate for additional water capacity. They do not have enough water capacity to feed the future of the townships surrounding us. So their plan of attack is to increase the dam heights within the 2 man-made lakes within the state park and in doing so, flood out all the local recreation areas and roads and support like bathroom facilities, et cetera, within the park. Our plan to build an open pit mine within 1.5 miles of the State Park will, in fact, leave them with a hole in the ground in the very same granite that host these water containment facilities and by proxy, save the park. So that's one exciting factor around this project that no one was aware of. The other thing that George will get into here in a moment is the grade. Now people were concerned about the low grade nature of this deposit historically with the drilling work that we have done, that George have done that we've done through [block bet], et cetera. We have a very high-grade center to this project that sits right out cropping its surface. So it's a shovel-ready project with very [manable] grade. And again, a project that's going to service the community in the future. Lastly, which we also value into this pre-feasibility is if indeed, this is going to proceed to become a pit lake. As you can see, pit outlined here in this lower right side, course delay our waste rock is also the very same waste rock that is being harvested here in the very bottom center of the slide by Martin Marietta, just off the IID highway to ourself. That rock is selling for about USD 16 to USD 18 a tonne, and it will be sitting on surface next to our copper gold mine for by essence for free to us at U.S. Gold Corp. So what I'll do is I'll let George get into this pre-feasibility study with you all, and then we'll come back and continue sort of more interactive view of this presentation later on.

Great. All right. Well, thank you, Luke. And so we are on a state section here. We will be paying a royalty to the state of Wyoming. The royalty payments are earmarked for K-12 education. And in Wyoming at the moment, there is a deficit with respect to the education budget. And so we anticipate that we're going to get a lot of support as we look to putting several tens of millions of dollars into the state coffers for education. And that's beyond the tax revenue and the jobs. We had an independent study by the University of Wyoming Center of business, essentially outlining that's in one of our press releases. So just before I go into the prefeasibility study, look, all ounces aren't created equal. So this is fairly low grade, but goodness. We are outcropping on surface. We don't have a big pre-strip. We're in an area where mining activity, just 3 miles is an acceptable practice. And the other thing is that being on a state section and being surrounded by private land. We are not under the jurisdiction of any federal authority. We had a declaration from the -- or a determination that we were Non-jurisdictional last year, February from the Army core of Engineers. We are on private and state land. And that means that really we follow the regulations in the state of Wyoming. So the Wyoming apartment to environmental quality and the State Lands office will be dictating our activities. So we're well advanced on the permit. We should -- as Luke said, we should be able to put that permit in play application in the next few weeks. And we started right from the get-go with environmental monitoring. So we've got well over 18 months of data collected. We don't have any cultural artifacts on the site. There is no indigenous claim. And generally, we're not seeing any in aged speeches for or flora. So we anticipate things are going to run relatively smoothly. Look, the PFS that we put out again, 1.44 million gold equivalent ounces. What we decided to do was essentially put a value proposition around what we know that we have. And we've got extensive drilling, which defined [ 110 million ] ounces of gold, 240 million pounds of copper. And we put that into a mine plan 10 years in duration, 20,000 tonnes per day, spitting off, as Luke said, just under 110,000 ounces per year over those 10 years at an AISC of $800. Now the mine plan is actually front-end loaded and the first 3 years are 135,000 ounces of gold equivalent production just because some are better grade is situated at surface. You probably can't see it too well, but I'm holding up a piece of core here. This isn't all low grade. This is a piece of our core, which has got just shy of 12 grams per tonne and just shy of 8% copper in it. So the -- this is an old mining district. The old boys were there mining it in the 20s shut down. Unfortunately, that's not the tenor of the entire deposit, but we do have some very good grade right upfront in the project. And the mining cost is low because the strip ratio is less than 1 to 1. And the process, what we need to do is we need to extract the rock, put it into a concentrator and put a developer concentrate for shipping off site into the market. So this initial capital here reflects the cost of putting a contract -- a concentrator in place. And that's a big bite for a small company. We were -- when we put the PFS out about 75 million. We're currently about 40 million market cap. How do we crack this nut. We think that we're going to crack this nut with equipment manufacturer and perhaps state of Wyoming loans so that we would have probably covered this capital cost estimate on debt on an 8-year note on very favorable terms. So as Luke points out, the -- when we put the PFS out, we were essentially looking at a $1625 gold price, and $3.25 per pound copper price, and that gave us a 2.2-year payback. Obviously, you're all aware of where gold and copper is going. And as Luke mentioned, 70% of the revenue is from the gold, but copper is well above where we're looking at that today. If we do debt financing, this AISC is at based on an equity raise. Well, if we put the 2/3 of the capital cost in favorable terms on debt financing, maybe this number goes up to $950 per ounce, but it's still a very good margin from where we are. I'm not going to -- I've already mentioned 1 million ounces of P1P2 reserves, 248 million pounds of copper. So I'll move on to just mention that the project it's not typical for a gold mining project. We have to essentially mine the rock, put it into a crusher, grind it up and then go into a floatation circuit, regrind scavenger cleaner flotation. We then reclaim all the water that we can and recycle that into the plant, we filter [ prices ]. So we have a dry stack tailings dam. So there's no conventional tailings concerns. And essentially, we're just using flotation reagents, which are fairly benign on site. The concentrate gets shipped off site to a smelter. We're looking at anywhere from 20% to 26% copper, 2 to 3 ounces of gold per tonne. It's a very clean concentrate. So that is a concentrate which we are looking at, and it looks to have a good market. This is just briefly some of the drilling. When we did -- when Luke talks about our PFS because I saw the opportunity of putting this project into operation quickly and making it shovel ready quickly, we've done a heck of a lot of work as part of the pre-feasibility study. And what you're seeing here is just some of the holes that we have put in place for exploration. Just to have a look a little bit at the continuation of the ore body at depth, but really hydrology to make sure that we are covering off the hydrological characteristics and the geochemical characteristics of what the pit will look like when it's done. And that plays into the notion that the pit can be used as a water storage facility. And then geotechnical holes and then condemnation holes for where we want to build the plant site. Just quickly here, you can see the pit and the -- in colors, up on the top left-hand corner, the higher-grade outcropping at surface. We haven't tapped the depths of the deposit yet. So we've got additional resources at depth. But as I say, the idea was to put the value proposition around what we definitely knew we had, and we've got additional resources at depth and to ourself. So really what you can expect in the next little while is we will be talking a little bit about some of the additional resources that we anticipate at depth. The feasibility study will be coming out soon. We've got a minority-owned company out of Denver, Samuel Engineering, concluding the work on the engineering for the feasibility study. We've already established that the rock, which doesn't contain copper and gold is really good rock for aggregate and ballast. So we'll be looking at adding on at least at a preliminary economic assessment level, the opportunity associated with the rock. And as mentioned by Luke, we probably got 30 million tonnes of rock sitting on surface, which has been paid for as part of extracting the gold and copper. And if we can get a fraction of what Martin Marietta is selling, that is extra revenue for the project. So again, attractive financing options, and we are looking at the pit mine potential to be able to tie into the [indiscernible] that feeds the City of Cheyenne their water supply. So we're advanced on the permitting, the application should be going in. We would anticipate around the year. So the mid- to late 2023, we then move from a project which is -- which people originally thought you wouldn't be able to get permitted. We believe that we can and will and in the short term. And really, as you look around at projects in safe jurisdictions, Canada, United States, where you know the rules of the game. Having a shovel-ready project is quite unique. So that's where we anticipate being next year, and we'll move on to construction and production '24, '25. So with that, I'll hand over to Luke.

Yes. Thanks, George. And I will go back and just do a sort of a summary on Copper King before we wrap this up, of course, but we should absolutely touch on our exploration portfolio. I think it's key. We're receiving little to no value for this portfolio of assets right now, but they are of the highest pedigree, Nevada especially exploration projects you can find in the junior space right now. Back this slide, you can see in the background here. This is a view taken from Keystone project, which is a full district scale stand-alone domal district sitting across the valley from the Cortez complex. As I mentioned, Barrick's big dog these days in Nevada. They continue to make new discoveries there. Cortez Hills is rounding around 25 million ounces of gold. Then they've got about 4 or 5 additional new discoveries that have added into that. Keystone sits right in the heart of this big elephant country that we know in North Central Nevada. We have -- like I said, this domal uplift that has given us access to the same lower plate rock formations that are in existence up in the Cortez Trend. So we have a multi intrusional, multi pulse system that fit into those rocks. We ran a couple of scout programs back around 3 years ago, and that's when we discovered exactly that, that we had the same -- very same sort of backdrop in surrounding that our neighbors to the north Barrick have at Cortez Hills. There's a sort of a layout of our stratigraphy. But with our mapping crew that we work with, who had -- was led by Tom Chapin, who had previously worked at Cortez Hills. We have the -- like I said, very, very similar to almost identical rock package. And we were hitting operation in the extent of 2,000 feet plus of heavily altered, multi-stacked limestone packages right close to surface, the right appreciation. We were seeing all the exciting ingredients you'd hope to see in Nevada for these big mineral systems, the [indiscernible] and others. Unfortunately, it is really -- it hit figures at the time, the marketplace just was not paying for early stage exploration, but Keystone looks like it could be a monster. My previous company that I co-found Gold Standard Ventures. We have a very similar story to this. Again, a stand-alone domal district in that case, on the Carlin Trend. We managed to build that market capitalization up to close to $1 billion with getting into this discovery mode and discovery phase. And I think that Keystone represents a very, very similar situation to that, that you've got this multi-deposit, multi -- very structurally complex stacks, stratigraphy-type opportunity where we could find a number of deposits. And I think as we move ahead with Copper King and we start to create that value and especially if we start to see a turnaround in this sector, we would definitely like to deploy some capital into Keystone. Our other, I'd say, equally as exciting project in Nevada is Maggie Creek. Maggie Creek sits right in the heart of the North Carlin Trend and amongst some of the biggest gold mines on Carlin Trend. The very mines that created Newmont and Barrick as we know them today. You can see Gold Quarry just to our south here, and Gold Quarry is a very gold-rich project, obviously, and Newmont have a symptomatic outcropping oxide deposit, just flanking our land package there. When we went in last year, we drilled 1.5 [indiscernible], if you can fathom that, but long story, low treasury at the time. We went in and discovered -- we knew actually from previous geophysics, excuse me, just trying to find the right slide here, from previous geophysics that there was sort of a West, Northwest trending structural corridor through here. So we placed 2 holes just to go and test for structure, just to see if the operation was there, if the right rock packages were there, longer hole and the very first hole we drilled right into the package that you want to see on the North Carlin Trend, and that's called Popovich. And that was very heavily altered with all the right ingredients we wanted to see. And some of the ingredients that are seen in some of the most unique deposits on the North Carlin Trend, that have been nickel with crystalline barite within that hole. So with the -- really intrigued to get in there and take a deeper dive at Maggie Creek at some juncture. I think that's a huge value proposition for all shareholders. Barrick were quite surprised that we got into that heavily altered Popovich at such a relatively shallow depth. Everything is relative of course. It was around 1,300 feet when we hit Popovich, I believe, maybe a bit deeper. But seeing the heavily altered Popovich completely changed Barrick's perspective on what our Maggie Creek claims represent. They thought that, that package was dipping off strictly to the south, and that we also would not enter the right alterations. So once they saw that we were, they've shown a little bit of interest in it. So I think collectively, we would all love to get into there. Challis, I won't get into at all really today other than to mention that it came with 300,000 ounces of stock resource. There's a lot of other companies exploring in and around us now. So we do hope to maybe team up with 1 or 2 of those at some juncture and give it some light of day. So we have a very impressive portfolio, but Copper King is our prime driver right now. Unique here's that word again. For the 48 contiguous states, Wyoming is the only state that handles its own permitting. So we are dealing with filing permits in the next 6 to 8 weeks and dealing directly with the township of Cheyenne. There is no federal involvement whatsoever. The Army Corps of Engineers, we've received clearance, as George mentioned, no Bureau of Land Management or forestry. And Cheyenne is -- the township nearby is also the home to the state government. So we have Governor of Cheyenne there. The previous governor, Governor Freudenthal is actually a consultant of ours. He and the past attorney general for the State of Wyoming are helping us navigate the permit process that they help build and bring together. So they're helping us with the different forms of government that we need to, to go through this permit process. So we're in very, very good hands for that -- in that regard. And it is a bucket ready project, as George mentioned. So with grade at surface, as we see as very low strip, sub-1-1 strip ratio. There's no nefarious agents that we need to use to extract the mineralization. There's no containment ponds, no smoke stacks, it's just dry stack tailings. So environmentally, it's a very clean project. And then ultimately, where we think we're going to get a lot of credit, and we're going to start building that credit. And hopefully, obviously, that will reflect back to us an additional value is that carbon footprint is brought down dramatically if we are selling off our waste rock as aggregate and handing over the open pit to -- by proxy save the local state park from flooding. We are going to be taking ourselves -- or dual listing ourselves, on the Toronto Stock Exchange. We think that, that's going to give us a lot more visibility. I think we will attract a lot more attention from the analysts on Bay Street with our listing there. And yes, look, ultimately, we have got everything lined up for this project from a proven mine builder with George and his team all the way through to a lot of local support, a project that employs a lot of local people, and we're 1.5 hours' drive from Denver International Airport, so very well located. So I will wrap this portion of the presentation up in terms of going through the PowerPoint, and maybe Taylor can come back in and we can navigate through a few questions.

Perfect. Thanks a lot, Luke and George. So yes, we'll turn over to the Q&A portion of the webinar now. [Operator Instructions] Having said that, we do already have a ton that have come in. So I'll just kick it off here with the first one. So do you think part of the issue with the undervaluation versus peers is the fact that it's difficult for funds to take a meaningful position with just 8 million shares outstanding and the realistic float of probably just 1 million shares or so?

Look, we're actually quite a liquid stock relative to that float. We trade quite well. I think the biggest impediment we've had in terms of bringing in funds is the fact that when we went through our realignment, we consolidated back the stock in 2020, right when there was that blip of excitement into the gold sector, and that was driven, unfortunately due to COVID. Everyone sense that there was going to be some inflationary forces with that, with the printing of money that was going to go on. Gold had its moment in the sun from, I'd say, sort of March through to the end of July, which is exactly when we were forming the company or reforming the company and bringing in George. So by the time we were ready to go and speak to the institutions, they were already -- that was September and they were going into redemption phase and flows -- the flowing out of the gold space, not into it. So we have one well-established gold fund in the company, who's a big supporter of ours, the Phoenix Gold Fund. David Crichton-Watt, who is the principal there. But I don't think that our current float or market capitalization is the impediment for investment into our company. I think it's just been a lack of knowledge about the positives around this project and capital flows going the wrong way.

Okay. Great. So turning over to the project side here. Just 1 question. I think the viewer missed what the current mine life is for CK once it's in production?

10 years based on the P1P2 reserves that we have at the moment. One of the things that we're looking at is maybe accelerating the mining using a stockpile strategy and then processing for the last 2 years. But at the moment, based on our current resource, it's 10 years. There is upside, and we can look to extending to depth and to the south.

Great. Okay. And I know you did mention this in the presentation, but just viewer wondering about the bankable feasibility study and whether that will give value to the aggregate or not?

Look, I think as you climb past the various milestones in a project's life and you start taking risk off, we will see those valuation metrics get recognized. So I will say that there's inflation at the moment, but that, I think, is going to be more of an offset by the higher metal prices. And we're also doing a lot of work to make the footprints of the plant more conservative, eliminate some of the equipment. So yes, I think as you look at achieving milestones, permit, feasibility study, permit approval, valuation increases.

Great. Okay. And in terms of financing here, we have a few questions. Just wondering if you've begun discussing with the state about financing and kind of where the current cash on hand gets you with the project?

Yes. Look, I think one of -- again, I think 1 of the more concerned viewpoints of our company right now is clearly our market cap versus the CapEx that's required to build this. The pre-feasibility makes the assumption that the $220 million of bill is financed through equity, right? In reality, the State of Wyoming for one has precedence for putting up state bonding to fund up to 50% of CapEx. We're very much pursuing that right now. We're in discussions with the state -- or we're about to commence discussions with the state, excuse me. We've done our homework, but there is a possibility that the state would through a municipal bond put up the equivalent of half of the funding. Then vendor funding through the build-out of the mine would be about up to 60% or 70% of the balance of that. So you'd be looking at a sort of a need for $30 million or $40 million worth of equity dilution in a scenario like that to build this project out. As George mentioned, that would bring your AISC up. You would see in your IRR through the roof. And again, the project is highly leveraged to the price of gold and the price of copper. So if we do see increase in the price of gold and copper or even if they just stay stationary where they are right now, you see with all the big mining companies, their cash flows are way up with these higher metals prices. So funding this project would not be a pure equity proposition at all. I also believe that with the simplicity and I say simplicity, permitting is not a simple process, but relative to just dealing with the State of Wyoming and that set, the simplicity of this permit process means that from filing to an answer and commence -- well, sorry, a final answer back on the permits is a 12-month process. So hypothetically, in 12 months or less, we could have a fully permanent bucket-ready project that spits out over 100,000 ounces a year equivalent. And as George mentioned, the front 3 years, 130,000 ounces per year, that's going to be really attractive to other mining companies. And if they can bring in -- if we can bring in the reduced carbon footprint and green credits that would be associated with this, that would be a very valuable proposition in the company. So I think it's going to excite a lot of M&A activity as we go through this process and the next 12 months will be exciting from that perspective, plus obviously, institutionally. I think the funds will really much like the fact that we will have such a really good ESG component to this project. So all the value is about to be untapped right now, I believe.

Okay. And then kind of with that theme, I guess, do you think buyers will start getting on CK once the permits are in place? Or do you fully intend to take the project over the finish line and into production?

Well, I think that they're going to see a number of variables being met along -- a number of benchmarks to be met through this 12-month period. So it's not now sit on your hands and wait 12 months for permits. They're going to see a lot of news generated by us as we [ tick boxes off ] through that permit process. Each one of them is a huge value-add to the project. So no, I think that's going to be reflected back into the company very soon. And I think that what I call an arbitrage, but that gap between our valuation relative to our peer group, 0.1 versus 0.4 of NAV. You take $320 million NAV. If we're trading at 0.4 of that, we should have a $120-plus-million market cap right now. With permits that can go anywhere from 0.6 to 1 on NAV. So -- and again, that's using those diminished metals prices, $1,600 gold or [ 16 25, sorry 3 25 ] copper. So a lot of variables in play that are going to add value to us. And we are, again, on the very cheap side of the curve relative to our peer group. And look, one other thing I want to touch on is, just to our South, the exact same mining operation is in place, and that being Marietta, but it's just purely an aggregates pit. But it's the same operation, just digging out this exact type of rock, crushing it and selling it. That's what we're doing with the copper gold component with crushing it, washing it and making a concentrate, dry com, but these things are permitted, they're in place and they're spitting distance to our project.

And so those are the -- that's a good example of an aggregate operation. I guess some of yours aren't overly familiar with Wyoming as a jurisdiction even up here. It's not one that we hear about too much. Are there other examples of mining operations you can point to? I know the state does have some and the oil and gas industry is quite prevalent there as well.

And coal, George, please. Yes.

Yes. The State of Wyoming has got a very large portion of its income and revenue from the resource sector. Of late, you've started to see a little bit of a decline in the tonnage of coal that has been mined, concerns about carbon. Power stations closing. It doesn't appear that people are willing to put money into new coal-fired power stations. So as a consequence, there's been a fairly dramatic decrease in the coal produced. And that when you start looking at the loss of revenue from coal recovered, the opportunity to diversify the tape from natural resources within the state becomes quite attractive.

Perfect. Okay. We have a question here, just wondering, given kind of the -- as you touched on the presentation, the grade of the deposit, the low-grade nature of that and the attractive all-in sustaining costs that you're able to achieve. Could you just kind of maybe discuss that a little bit? And how that's -- how that worked out?

How that works. Okay. Look, on Slide 5, where we show the metrics of the deposit, you can actually see 1 of the shafts that was on. This was part of the Silver Crown mining district. And the little piece of coal that I've shown you with the chunk of pyrite sitting in here. The old boys in the 1920s didn't go underground for the kind of average grade that we see. So obviously, when you're mining the larger disseminated body which has been shut through primarily granodiorite rock, we see very consistent but lower grade material across the resource. There is a concentration of a very good grade right at the top of the deposit, which actually outcrops on surface. So the -- why do the numbers work? Well, the numbers work because we're in a low strip ratio scenario. We don't have to move too much waste to get at the rock. We've got lots of mining capacity around us. With the industry coming off coal mining, there's lots of contractors available, competitive market for mining. And our -- this material once it's crushed and ground up to the appropriate sizes, it is -- it floats really well. We're down to starvation levels of reagents. So we're looking at a couple of bucks a tonne for mining, $7 a tonne for the processing. And we really don't have to move a lot of waste to get at that. Additionally, unlike a lot of the projects have been evolved in throughout South America and the world, we don't have to build a whole bunch of infrastructure. People can go home to Cheyenne or Laramie at night. All our service functions can be conducted out of town from -- in Cheyenne, where we'll be creating a bunch of jobs, good paying jobs, which is at a time when that economic activity is needed. So things like the fact that we're 1.5 hours from Denver, 4 hours from Gillette, 6 hours from Salt Lake City. We don't have to carry a lot of inventory of parts and equipment. By the time we're ready for -- to replace a motor, the old motors out. The new ones has arrived on site for replacement. So it is a very, very nice project. And if folks want to come and visit, you hop on a plane to Denver and 1.5 hours later, you're on site. So logistically, it is an excellent place to be.

Perfect. That was a great answer. And just kind of a follow-on on one of those things, we have a question. Just wondering what the ramp-up to full capacity is once the mine starts.

Well, look, like any mine, this isn't rocket science. The simple mining truck shovel operation. We're just doing all the testing around the blasting and blast vibrations at the moment, but it's dead simple mining, 100-tonne, 130-tonne trucks, nothing untoward there. The concentrator, this material floats really well. And we would anticipate a normal start-up condition wherein over the course of probably the first 4 months of operation, you would -- proving up, getting the bugs out of the plant and getting up to full production of 20,000 tonnes per day.

Great. Okay. And we have one question here, just going back to the corporate side of things. We have a question, wondering if insiders have been buying at these low price levels?

Luke, you're the biggest investor. But I mean, the last time I bought was at $7 a share, and I'll be -- I'm certainly looking and can't believe the valuation at the moment that managers and insiders, we've got about 20% of the company.

And I've just become an insider. So I actually held off buying any until I filed my Form 3, which was just late last week. So now I'm going to buy some. I just want to be on print to buy it for -- doing so anonymously for so long. So yes, I'm a buyer of the stock. I will absolutely continue to be a buyer of the stock. Just to point out, again, this current -- at even $5, we're trading at a $1 below any cost base and stock that I know of. Our cheapest financing ever done was down around $6 mark. So we had Armistice come in, who's a very big fund. They were brought in recently by AGP in the U.S. that was publicly announced. So I can speak to that now through Armistice's own filing. They came in at over $8 a share. So we were trading at almost 50% discount to that a week or 2 ago. So look, there is no reason for us to be trading down here. I think we just haven't had the love and support in the sector and the algorithms are in there picking up people's heels and making people think that there's something wrong. I get so many calls from people wondering, there must be something wrong on a project level that they don't know of. There may be something wrong. One of the questions that hasn't been asked in this group, by the way, which is where do we see the biggest inherent risk. What do we see as the biggest failure point to this project hypothetically. And I'll let George answer that because he's far more conservative than I. Because to me, I don't see one. There is no kind of breaking point. Sure, we could not get permitted.

The biggest risk, Luke, is that we attract too much attention before we've got the value of the stock up and there...

I agree. Somebody jumps in there.

Yes.

Yes.

Perfect. Okay. So with that, I think we have gone through pretty much all questions. So maybe I'll give you guys the last word, maybe just the final pitch and final thought you want to leave with the potential investors, and then we'll sign off.

Well, look, just -- I'll go first. And just from my side, look, we're keeping our eyes on the ball. We want to get the feasibility and the permitting done around our copper gold project. It's a great project. It's got great numbers. But there's upside. There's upside beyond. We're not spending money at the moment doing additional exploration to increase the size of the resource. And we're not focusing on the aggregate at the moment because that's a little bit of a different story. It's something that we're going to look at. But if you've got 30 million tonnes of rock sitting out there, gosh, if we could get $10 a tonne, that's $300 million of additional revenue for the project. So we're not getting distracted. We're keeping our eyes on the ball. We'll permit that copper gold project. And it just -- I used to drive past the Carlin projects every day. I worked for Barrick for 16 years, over 3 different occasions and started out when Goldstrike was a hill. And just to Luke's point, we're in some of the best real estate in Nevada, and we're just getting 0 value from that at the moment. So I shake my head sometimes, but we're not getting distracted. We're going to get this CK Gold Project focus resolved and move through to putting this into operation. Luke?

Yes, I think you summed it up perfectly, George. But exactly that the value proposition, which is already way out of kilter right now, which is just our simple, very simple copper gold mining story is not taking into consideration all that value in aggregate that the value that we bring to the community in terms of saving their park that almost, I think, green friendly mining scenario that I speak to, that we're going to kind of work towards with consultants and such to come with a really positive report around that. These are all things that are just going to add value to the CK project. And as George mentioned, down here, it's more of a concern if we get some M&A interest right now than it is a positive. We just need to get through this and make sure that the investment community realizes that the CK Gold Project is the next North American mine to be built because we're not going to spend 5 to 10 years in permitting purgatory or permitting help, frankly, when it comes to federal agencies. And it's a very meaningful size mine, and it would tie in very nicely to any mid-tier producer. And who knows what kind of green credits they could get out of this, too. So that's my side.

Perfect. So with that, I would like to thank Luke and George from U.S. Gold for taking the time to host the webinar today with Red Cloud Securities, and thank you to everybody on the line for tuning in with us.

Thank you, Taylor.

Thank you, everyone.