PGOL (Patriot Gold Corp) Value Review for H1 2021
Despite Patriot Gold’s market cap being chopped in half over the last several months, the company has had some positive outcomes over the year. The stock market has yet to understand and rationalize this into value. Let’s break it all down:
Royalty Income – Over the first half of 2021, PGOL has received just under $1 million in royalty income. Net earnings (before drilling Windy Peake) were around half a million dollars, after G&A expenses. But the company did some extensive drilling and around two thirds of the net income was used for that. But that still leaves an additional $150k USD in the bank after the first half. Q3 results will be out next month and it should be another profitable quarter.
Moss Mine – Patriot Gold owns a 3% NSR on this mine and it has several years of production left, which can still be increased by drilling. Last quarter Elevation Gold mined 9,000 ounces of gold, meaning they should be able to extract anywhere from 36,000 to 40,000 ounces of gold per year. A new 43-101 report for the Moss Mine was released last week by ELVT stating that the resource is now 490,000 ounces of Gold and 5.75 million ounces of silver. At $1800 gold and $24.50 silver, the resource is worth $1.022 billion. With a 3% NSR, Patriot gold would get around $31 million USD if pricing remained constant over the next several years. But many forecasts are suggesting that commodity prices will increase.
Bruner Project – This was in essence a dead asset for several years until recently. Why? Canamex Gold was unable to work on this project and generate more value for PGOL. The historic resource is under 400,000 ounces of gold, but only 10% of the property was ever explored. This year Endeavour Silver (EDR.T) purchased Burner for $10 million USD and the deal was completed during the summer. EDR has a billion-dollar market cap and is more than capable of exploring Bruner and putting it into production within the next 4-5 years. This is longer hold asset, but any positive results they release will reflect positively on Patriot Gold. There is a 2% NSR where 1% can be bought back for $5 million USD.
Windy Peak – PGOL has been working on this project for quite some time and there have been many positive assay results from it. Windy will still require more work and it’s not the highest-grade material, but it can be mined once a 43-101 indicated resource has been established.
Vernal – Although it has not been worked on yet, the Vernal property isn’t too far from Bruner. The potential of finding some economic gold here seems promising, but we won’t know until the company starts sampling, then drilling.
One last important note. Insiders/Institutions own a majority of the 74.4 million shares, with 10.4 million options exercisable at $0.10 USD (average on MD&A). That means management needs to grow this company in order to extract any value from the common shares or options. Having consistent positive cash flow and value being created over every quarter is key to increasing shareholder value.
Despite Patriot Gold’s market cap being chopped in half over the last several months, the company has had some positive outcomes over the year. The stock market has yet to understand and rationalize this into value. Let’s break it all down:
Royalty Income – Over the first half of 2021, PGOL has received just under $1 million in royalty income. Net earnings (before drilling Windy Peake) were around half a million dollars, after G&A expenses. But the company did some extensive drilling and around two thirds of the net income was used for that. But that still leaves an additional $150k USD in the bank after the first half. Q3 results will be out next month and it should be another profitable quarter.
Moss Mine – Patriot Gold owns a 3% NSR on this mine and it has several years of production left, which can still be increased by drilling. Last quarter Elevation Gold mined 9,000 ounces of gold, meaning they should be able to extract anywhere from 36,000 to 40,000 ounces of gold per year. A new 43-101 report for the Moss Mine was released last week by ELVT stating that the resource is now 490,000 ounces of Gold and 5.75 million ounces of silver. At $1800 gold and $24.50 silver, the resource is worth $1.022 billion. With a 3% NSR, Patriot gold would get around $31 million USD if pricing remained constant over the next several years. But many forecasts are suggesting that commodity prices will increase.
Bruner Project – This was in essence a dead asset for several years until recently. Why? Canamex Gold was unable to work on this project and generate more value for PGOL. The historic resource is under 400,000 ounces of gold, but only 10% of the property was ever explored. This year Endeavour Silver (EDR.T) purchased Burner for $10 million USD and the deal was completed during the summer. EDR has a billion-dollar market cap and is more than capable of exploring Bruner and putting it into production within the next 4-5 years. This is longer hold asset, but any positive results they release will reflect positively on Patriot Gold. There is a 2% NSR where 1% can be bought back for $5 million USD.
Windy Peak – PGOL has been working on this project for quite some time and there have been many positive assay results from it. Windy will still require more work and it’s not the highest-grade material, but it can be mined once a 43-101 indicated resource has been established.
Vernal – Although it has not been worked on yet, the Vernal property isn’t too far from Bruner. The potential of finding some economic gold here seems promising, but we won’t know until the company starts sampling, then drilling.
One last important note. Insiders/Institutions own a majority of the 74.4 million shares, with 10.4 million options exercisable at $0.10 USD (average on MD&A). That means management needs to grow this company in order to extract any value from the common shares or options. Having consistent positive cash flow and value being created over every quarter is key to increasing shareholder value.
