US Gold surges after obtaining Wyoming mining permit

Site of the CK gold project. Credit: U.S. Gold Corp.

U.S. Gold (Nasdaq: USAU) surged on Wednesday after the company announced the issuance of its surface mining permit by the Wyoming Department of Environmental Quality — a key milestone in the CK gold project’s development.

“Having previously been granted the industrial siting permit in June last year and now the mine operating permit, we have cleared the major regulatory hurdles towards project development,” said U.S. Gold chief executive George Bee, adding that work to meet final authorization for development is underway.

The remaining conditions are the approval of the reclamation bond, which has already been submitted, the Wyoming Pollutant Discharge Elimination System permitting process, which is in the final stages of approval, and the WDEQ Air Quality Division permits, where technical work is under review.

“We remain on track to receive the necessary permits around mid-year, as per prior guidance,” Bee said.

“The CK gold project sits on state and private ground in Wyoming, which is an extraordinary jurisdiction for resource development with a clear regulatory framework and authorities that are knowledgeable, experienced, and motivated to safely and responsibly manage the state’s mineral wealth,” said Luke Norman, executive chairman.

Shares in U.S. Gold rose 10.3% to $4.80 by 11:20 a.m. ET, for a market capitalization of $51.3 million. Earlier, it had hit a 52-week high of $5.05 after opening the session at $4.57.

Pivot to Wyoming

In August 2020, U.S. Gold pivoted to developing the CK project after spending years exploring prospective assets within the states of Nevada and Idaho, namely the Keystone and Challis gold projects.

Acquired from Energy Fuels in 2014, the CK project is home to a large-tonnage, gold-copper deposit that has 1.58 million oz. of gold equivalent (1.11 million oz. gold and 280 million lb. copper) in measured and indicated resources.

The high-grade mineralization at CK is exposed at surface and is surrounded by a large, low-grade zone with potential for additional resources, which is being explored by the U.S. Gold team in parallel with advancing the project towards production.

A 2021 pre-feasibility study gave the project a 10-year mine life, averaging 108,500 oz. of gold equivalent output per year, including 135,300 oz. over the first three years. Total metal production over life of mine will be 248.8 million lb. of copper and 1.02 million oz. of gold.

The PFS also showed robust project economics, including an after-tax net present value (discounted at 5%) of $266 million and internal rate of return of 33.7%. Initial capital is estimated at $221 million, giving it a payback period of two years.