GOLD X MINING CORP (TSX.V:GLDX | OTCQX:SSPXF)
Leveraged to a rising gold price – Gold X is primed for sensational things!
With the price of gold surging to surpass its all time high, as financial markets digest the havoc caused by the coronavirus pandemic, we are witnessing the most favorable precious metals market in a decade. This is a prime time for mining companies which provide exceptional leverage to rising precious metal prices and tend to significantly outperform the underlying commodities during bull markets like we are seeing today.
Gold X (TSX.V:GLDX | OTCQX:SSPXF) is a company that has seen its share price rise over 250% since the March stock market crash, after appointing serially successful executive Paul Matysek as CEO and bringing on mining legend Robert Friedland as the Company’s Chairman. Gold X is leveraging US$150 million of historical expenditures advancing its flagship Toroparu project through feasibility level engineering, its stellar management, committed partners and shareholders to unlock the massive value of Toroparu at today’s gold prices by hurtling towards a production decision.
Gold X’s most recent 2019 PEA demonstrates the Company’s exceptional leverage to a rising gold price. Toroparu demonstrates robust economics at $1,500 gold with an after-tax net present value of US$760 million, after-tax free cash flow of US$1.77 billion, an internal rate of return of 27.7% and a 2.02 year payback. At $1,950 gold where we are today, the project becomes even more compelling.
As the world rallies through an unprecedented bull run on gold, its rising price point does not look as if it is going to come tumbling down anytime soon. Goldman Sachs sees gold surging another 20% to hit $2,300 in the next 12 months. Bank of America shocked the world when they published a 12 month price target of $3,000. Historically, an upward trajectory on the price of gold has been aligned with governments in economic distress. Current widespread fiscal borrowing and quantitative easing programs being introduced around the world point to gold being primed for further gains.
DOWNLOAD OUR SPECIAL REPORT – To discover how Gold X Mining Corp’s (TSX.V:GLDX | OTCQX:SSPXF) world class team is advancing one of the largest undeveloped gold deposits in the Americas.
A Top Team Reunited
GOLD X MINING CORP (TSX.V:GLDX | OTCQX:SSPXF)
With decades of experience both as a geologist and company builder, Gold X CEO, Paul Matysek has developed a strong macro view on the commodity of the moment, and he believes it has a lot of room to run. Matysek has proven his ability to capitalise on macro trends time and again with his endeavours in building various natural resource companies culminating in considerable shareholder wealth generation. Similar to the time he built up a uranium company (Energy Metals) when uranium was trading at a paltry $10 and traded well above $100 before he sold out for $1.8bln. He has achieved similar success in potash, lithium and gold investments.
He has advanced, de-risked and sold five projects in his career which generated $2.8bln in aggregate for shareholders in the process. While others may choose to retire and bask in their achievements, Matysek continues to look for new opportunities. Gold X is the company he has chosen to throw his weight behind next, bringing with him a team that helped his previous successes.
One such previous partner, Robert Friedland, is a world-renowned mining entrepreneur with a solid reputation. He too has generated billions of dollars of value for shareholders and has decades of relevant experience under his belt.
Friedland sold Fairbanks Gold’s Fort Knox Deposit to Kinross in 1992 for C$207 million.
He sold Diamond Fields to Inco (now Vale) for C$4.3 billion after discovering the Voisey’s Bay nickel deposit in 1996.
In 2011 he teamed up with now Gold X CEO Paul Matysek to sell Potash One to K+S
In 2018, he sold Peregrine Diamonds to DeBeers for C$109 million.
His presence as Chairman on the Gold X board of directors is a major stamp of approval for the company that gives further confidence to shareholders. He is a man with a Midas touch who would not be getting involved if he did not see great potential. Robert Friedland’s track record is superb, so it’s no surprise that he is choosy about when to get involved in new ventures. He rarely takes a board seat outside his Ivanhoe Group of Companies and Gold X is honoured to have him take part.
Two major shareholders in Gold X are Wheaton Precious Metals (TSX:WPM) and Gran Colombia Gold (TSX:GCM). Their commitment and confidence in Gold X has helped it retire all debt, significantly strengthening the company’s balance sheet, and own its flagship Toroparu deposit 100%. These two noteworthy shareholders were willing to convert their debentures into equity 28 months early at C$3.20 per share! This gesture has been widely welcomed by existing shareholders who see it as a show of faith and long-term commitment to the company from some of the smartest money in the mining business.
Both Robert and Paul have experience in Guyana which borders on Brazil, Suriname and Venezuela, and together they have established the knowledge required to unlock the deep value hidden there. Previously known as Sandspring Resources, Gold X has already spent considerable time cultivating a long-term relationship with the Guyanese government and local population.
Gold X (TSX.V:GLDX | OTCQX:SSPXF) – At the heart of an untapped nation. Learn more about Its exploration potential in OUR SPECIAL REPORT.
An up and coming nation
GOLD X MINING CORP (TSX.V:GLDX | OTCQX:SSPXF)
While the timing of gold as the metal of the moment could not be better, the same could be said about the deposit’s location. The Toroparu gold project is situated in the Upper Puruni River region of Guyana in South America. This small country is set to become one of the world’s fastest growing economies after a major oil discovery put it on the map. ExxonMobil’s big oil find will help the country advance in infrastructure and economic development, which will make mining there much more straightforward than other South American countries.
The International Monetary Fund (IMF) has projected Guyana to become one of the world’s most rapidly growing economies in the next year. Even with the geopolitical, oil price and pandemic headwinds, the IMF sees a growth projection of 52.8% for Guyana this year alone based on initial production from the massive offshore Guyana oil fields. It is an English-speaking democratic republic governed by British Common Law and a member of the Commonwealth of Nations, World Trade Organization and CARICOM.
Toroparu is 100% owned by Gold X and is at an advanced stage, with an average annual production of 188 koz and 5 million ounces of open pittable gold set for the taking. It has a long mine life of 24 years and Gold X is in the fortunate but unique position of possessing one of the largest in-situ gold projects owned by an independent junior mining company in South America.
Gold X is in the final stages of permitting, but its directors have extensive experience working in Guyana and have cultivated a good relationship with the government there. A final review and licence approval with the Guyana Geology and Mines commission is due soon.
Gold X completed a re-scoped preliminary economic assessment (PEA) for Toroparu in 2019.
It is instigating a two-phased development plan based on selective processing of higher-grade gold resources from near surface mineralization in the Toroparu Main as well as the SE Zone and Sona Hill Satellite Deposits. The first phase will involve setting up a carbon-in-leach processing facility with initial mill capacity of 11.5 ktpd and a view to expand to 23 ktpd in year 11.
The company was already in receipt of a Memorandum of Understanding with the Government of Guyana to develop a hydropower project on the Kurupung River, which can now be utilised to provide clean energy to the Toroparu Project, ensuring significant operating cost savings over the life of the mine.
Gold X’s 53,800-hectare business also holds noteworthy potential for additional satellite or larger scale gold discoveries, further increasing its attraction to investors.
READ OUR SPECIAL REPORT – To discover how Gold X Mining Corp’s (TSX.V:GLDX | OTCQX:SSPXF) team of mining experts is preparing for a major discovery in Guyana.
M&A in the region
GOLD X MINING CORP (TSX.V:GLDX | OTCQX:SSPXF)
With Guyana Goldfields being acquired by China’s Zijin Mining, it has sparked a burst of M&A activity in the region. In the run up to Zijin’s acquisition, the target company enjoyed no less than three takeover offers. In the running was Gran Colombia Gold and Silvercorp. Gran Colombia made a joint bid to acquire Guyana Goldfields and Gold X, as it saw major potential in combining the Aurora mine and Toroparu deposit. It believed that combining the two deposits that are 58km away would result in significant cost savings, de-risk Aurora as it entered the underground portion of the mine and get Toroparu cash flowing on an accelerated timeline. Gran Colombia is a major shareholder in Gold X and it may well see further M&A potential in the future for Gold X.
Despite its size and advanced development stage, when compared with its development stage peers, Gold X trades at a noticeable discount.
The next phase of exploration in 2020 could have a significant impact on its share price.
Unrealised potential
GOLD X MINING CORP (TSX.V:GLDX | OTCQX:SSPXF)
The potential held in the Toroparu gold project is paramount. This is an untapped nation and Guyana’s extensive mineral reserves lie in wait of discovery. Toroparu is purported to be one of the largest undeveloped gold deposits in the Americas.
The presence of Robert Friedland and Paul Matysek in the management team and Board of Directors speaks volumes for the credibility of this project. They do not waste their time on unachievable ventures.
The same could be said for Wheaton Precious Metals and Gran Colombia Gold, two major shareholders that have also added weight to this company. These experts in their field would not have converted $20 million in secured convertible debentures 28 months early if they did not want a piece of the action and see future value in the endeavour.
Despite all these positives, Gold X is trading at a deep discount to its peers. Its next phase of exploration in 2020 could see the value of Gold X rise substantially and increase its feasibility as a potential takeover target. Such is the trend for the consolidation of gold mining assets in Guyana.
Finally, who can overlook the rising price of gold! It seems there is no better time to own gold stocks.
A detailed analysis of where Gold X trades relative to comparables can be found in OUR SPECIAL REPORT.
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