Overlooked – But Ready To Outperform

So far, the market’s overlooked Allegiant Gold (AUAU.V; AUXFF.OTCQX).

But with an aggressive drill program set to significantly build on the current million ounces of gold on its Eastside project and another drill program at its highly touted Bolo project...that’s about to change in a big way.

Dear Fellow Investor,

Gold has responded sharply to the avalanche of Covid-related stimulus cascading through the economy.

And even when the “green shoots” of economic renewal briefly slow gold’s advance, gold bugs can rest assured that the long term trend is very much on their side.

The bottom line: With negative interest rates and ballooning government deficits as far as the eye can see, the table is set for a gold bull market of historic proportions.

If you have faith in this investment thesis, you’ll want to position yourself to take maximum advantage...and the best way to do that is through well-positioned gold explorers, developers and producers.

In that regard, you’d be hard pressed to find a better option than Allegiant Gold (AUAU.V; AUXFF.OTCQX) — a company with over a million ounces of gold in Nevada, and with a drill program that could significantly increase those ounces.

And the best part? It’s still valued as if it has hardly anything at all.

A Nevada Legend’s Next Big Adventure

The Allegiant Gold story begins with its affiliation with Nevada gold exploration legend Andy Wallace.

Wallace’s experience running the privately-held company Cordex spanned more than five decades working with John Livermore, the man whose Carlin gold discovery in the early 1960s put Nevada on the map for gold mining.

The “Carlin style” of gold mineralization would prove to be highly repeatable throughout key trends in the state. So much so that Nevada has produced more than 84 million ounces of gold since 1965. (It generated 5.58 million ounces in 2018 alone.)

For proof of just how fertile the Carlin model has been for the state, consider that Wallace himself led Cordex during five of the eight gold mine discoveries it has made over preceding decades.

The table below highlights those discoveries.

Given this success, Wallace could have easily walked away from mining.

Instead, he teamed up with Allegiant (and became the company’s chief geologist and CEO from 2018-2019) over a decade ago in the belief that more million-ounce-plus discoveries remain to be made.

It’s the next adventure of a mining industry legend excited to outline one more huge Nevada gold resource.

The Nevada Premium

A large endowment of gold is just part of the Nevada story. The state is also arguably the world’s most favored mining jurisdiction. Indeed, according to the Fraser Institute Annual Survey of Mining Companies, Nevada ranked as the first choice for the most appealing mining destination.

It’s not just the state’s top-notch mining infrastructure or its skilled labor force — it’s the political and legal support the industry receives. Given the economic malaise and turmoil developing in the rest of the world, investors will need to pay close attention to mining jurisdiction more than ever.

Simply put, mining is a major contributor to the state’s economy, and state and local officials generally roll out the welcome mat for exploration, development and production.

Equally, if not more important given the current pandemic-related economic crisis, America’s established rule of law eliminates developing-world expropriation risk.

That risk is already rearing its head in Papua New Guinea, where the government recently refused to renew Barrick Gold’s lease on its massive Porgera mine.

There will likely be more stories like this in the months ahead, creating a “safe jurisdiction” trading premium on companies like Allegiant Gold — where six of its nine projects are located in Nevada.

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Eastside:
A Million Ounces To Build On

Allegiant’s Eastside project — the flagship project within the company’s Nevada portfolio — is arguably worth many times the company’s market cap all by itself.

Consider this: According to the most recent resource update on Eastside, the Eastside project’s Original zone hosts 1.1 million gold-equivalent, inferred ounces. That’s over a million ounces of gold, in Nevada, for a company whose market cap is less than C$17 million!

That implies a value of less than $12 per resource ounce.

And yet it gets even better, because the growth potential at Eastside is substantial.

For starters, there’s an historical resource on the Castle zone to the south that, with a modest amount of drilling, could add over 270,000 ounces of gold in the near future.

Better still, as the map below indicates, the open pit resource defined at the Original zone remains open in all directions. It also remains open at depth.

That quite-significant exploration potential will be tested by the drill bit in the weeks just ahead.

Overall, Allegiant will drill 13,000-15,000 meters at Eastside and will also include a program to better define the resources at the Castle Zone...lower the strip ratio by seeking to convert waste rock at the Original zone into resources...probe the limits of Original’s mineralization...and test other targets on the district-scale property, as less than 8% of the 72 km² property has been tested.

Add in the ounces at the Castle zone that the drills will be targeted to confirm, plus some exploration success, and it’s easy to see that Allegiant could potentially add hundreds of thousands of ounces to its resource in the days ahead.

In doing so, it will reach the rarified status of a company in the uber-safe jurisdiction of Nevada with a resource approaching two million ounces of gold.

It doesn’t take much research to see that companies fitting that description typically trade for many times Allegiant’s current market cap.

Another Big Advantage:
Management That’s On Side With Investors

There’s no doubt that an investment in a junior mining company is, in part, an investment in management. You want a team that knows how to execute on its plans and how to put shareholder money to its best use.

Allegiant scores high marks on those measures. Its leadership team has a reputation for exploration success and a conservative approach to shareholder dilution. In fact, they haven’t issued one share in over two years.

That commitment is reflected in the company’s relatively tight share structure (61.1 million shares outstanding) and management’s personal investment in the company (insiders own almost 15%) with all shares purchased in the open market.

Having a management team whose financial interests are aligned with shareholders helps ensure its dedication to maximizing value.

It’s a commitment that’s reflected, also, in Allegiant’s effort to minimize dilution. That effort includes a stated intention to farm out as many of its projects as possible to joint venture partners, the better for the company itself to focus on the proven value and exciting potential at Eastside.

Indeed, the company has already successfully farmed out its Bolo and Four Metals projects and, in the coming months, will seek to farm out additional projects in the highly sought-after Nevada market.

A Bevy Of Share-Price Catalysts

The financial flexibility those deals are providing (and will provide) will allow Allegiant to stay laser-focused on growing the resource at Eastside.

With a massive C$2.7 million exploration program at Eastside set to kick off this month, the company can look forward to several potential catalysts in the weeks and months ahead:

• Significant results from its aggressive drill program at Eastside

• A resource update that should grow the project’s 1.1 million ounces (the company’s stated goal is a two-million-ounce resource)

• A preliminary economic assessment that could deliver market-moving numbers

• A 3,000-meter drill program recently announced by New Placer Dome Mining at Allegiant’s 100% owned Bolo project — one of the hottest projects in all of Nevada

And then there’s this: The vast gold resource Allegiant has already established at Eastside — well over a million ounces, and in Nevada — is likely to attract a significant market rerating as the company continues to draw attention to its deep undervaluation.

Add in Allegiant’s tight share structure, considerable portfolio of projects and ambitious exploration plans and you get a terrific lever on the gold bull market that’s unfolding before our eyes.

If you like the yellow metal’s medium- and long-term prospects, you’ll want to own Allegiant Gold now — before the drills start turning at Eastside.

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To Learn More about Allegiant Gold