Again, Jonathan, I always appreciate your participation in our conferences and our summits here today as you really provide insights into what's taking place in the antimony market. Okay, we're gonna transition now back to gold as I sit down with the Chairman of U.S. Gold Corp., Luke Norman. Please stick around for more. All right. Hello, everyone, and welcome to the U.S. Gold Corp. Fireside Chat. My name is Robert Blum, Managing Partner here at Lytham Partners. Today I'll be moderating a Q&A discussion with Luke Norman, Executive Chairman at U.S. Gold. Company trades under the ticker symbol USAU on the Nasdaq. Luke, welcome.
Thanks for having me, Robert. Good to see you again.
Fantastic. Nice to see you as well, and thanks again for your participation here. For those that may be new to U.S. Gold Corp, could you give us sort of the, you know, what the company is overview, your talk about your core assets, what stage you're in today, and what sort of the value creation milestones are from here, and maybe if you have a moment, just a little bit on your own background and what attracted you to the company.
Yeah, certainly. I'll do that in reverse then. Again, Luke Norman, I've been 26+ years in this industry. I started off in the banking community over at Canaccord Capital in the late 1990s, early 2000s. Did a five-year stint there and recognized very early we were financing a large amount of junior mining companies, just as the people listening today. It was really hard even for us to pick the wheat from the chaff. It was a challenging process, and towards the end of my tenure on the banking side of things, I just recognized a huge shortage of quality management. Some great projects out there and management, and at the end of the day, you've gotta back the jockeys.
I stepped out of Canaccord and followed, pursued a couple of the assets that we had financed and didn't feel comfortable with the management groups, and those went on to be very successful companies. One in particular, Gold Standard Ventures, that myself and Jonathan Ord took the reins of and completely rebuilt and had a very successful company out of Nevada with. In 2020, I kind of refocused myself into U.S. Gold Corp., and U.S. Gold Corp. ourselves now we have a development-ready gold, copper, and silver project sitting right in the heart of the U.S.., and it's fully permitted. We are a very rarefied company from that perspective. Truthfully, only one of the juniors that I can really point a finger to that has all of the permits in hand and is ready to go.
We've got somewhere in the realm of about 100,000 ounces of annual production within our current full reserve, bankable reserve, with a very recent definitive, I mean, in the last few days, definitive feasibility study is out, hot off the press. We're just having a lot of interest from the analysts and from peer group companies in that right now. Our real value proposition is CK or Copper King, and it sits right in Cheyenne, Wyoming, right on the I-80 corridor. About a 1.7 million ounce reserve, a heck of a lot of upside beyond that, and it's fully permitted shovel-ready.
You know, congrats on getting that announcement out here this week. I wanna sort of get your thoughts maybe more from a macro before we dive more specifically into your project here. Something I've been asking a lot of the executives here today. You know, on the gold front here, you know, when investors hear gold, they often assume it's sort of purely a macro hedge. You know, from your perspective, what are the most important drivers of gold demand right now? Is it real rates, currency? Is it the geopolitics, central bank buying and you know, maybe
Well, yes. Yes, and yes.
Yeah. Exactly. I'm probably leading the witness here too much, but.
Yeah.
These do you think is maybe most underappreciated here today?
Geopolitics, sorry, but more importantly, the whole fiat system. You know, the U.S., the oil dollar, the entire system, and we've just sat here. You know, in the early 2000s when the dotcom bubble burst, there was a huge belief that all that money and created value was, you know, going to create a very bearish sentiment, and it was gonna put all sorts of pressure on the fiat system in the U.S. Seven years later, that occurred tremendously. You know, the 2008 collapse, where they printed more money into COVID, where they printed more money. You know, these things are just a pyramid scheme really. I mean, there's no trusting politicians, and there's no more trusting of the currencies that they're printing in the process.
I know that's a little bit of a pendulum swing in terms of a macro view, but I absolutely believe that's what's leading to central banks buying gold. I believe that's what is leading to huge amounts of private wealth in China, for example, buying gold. I think that gold has forever been the true store of wealth, and now we're starting to recognize that the system isn't quite what it is purported to be.
You know, mining supply has been sort of constrained by permitting and community expectations, capital discipline. You know, sort of looking globally right now, where do you see the biggest structural obstacles to new gold supply emerging and how does that backdrop affect the strategic value of high-quality projects in very stable jurisdictions?
Of course, because the easiest jurisdictions on the planet to permit and to mine are always the most challenging because their mining law is obviously inept. There's little concern or thought given to environment, to local community. I mean, it's a bit of a crapshoot. You know, as I'm saying this, everyone's probably thinking in the back of their mind, "Yeah, Africa, Asia, all over." Even when you get into Mexico, you know, we're seeing all this trouble that continues on down in Mexico and in different states with, you know, all the internal struggles that they have themselves. More and more people are looking for very, very safe mining jurisdictions. Okay, so what are these uber safe mining jurisdictions? We start looking Western Australia, Canada, the U.S.
Oh wait, but wait, all these countries have just been completely entangled in bureaucratic nightmares for years on permitting. You can't permit anything without tripping over all sorts of bureaucracy, land ownership issues, particularly in Canada, you know, First Nations issues. What is a safe jurisdiction? I can point to Wyoming where we're situated. We're on state ground. We went through the permit process, which was as arduous as it should be, which means we had to prove that we were not gonna wreck the environment and countryside, we were not going to heavily impact the local communities, that we were a net benefit to the community and ultimately, it was not gonna be a huge disruption, and we would not leave the site in any disrepair.
That is exactly what anyone would want from any kind of mining entity operating anywhere in the world. We're just so fortunate to be able to do so right smack dab in the middle of the U.S. in the middle of a bull cycle. A little phrase I've coined is, "The right stuff at the right place at the right time." You know, we've got it all happening for us, fortunately, at U.S. Gold Corp. You know, your jurisdictional question, it is a forever moving target, and I look at the Fraser List, and sometimes I think, "Wow, I don't agree." You know, British Columbia, Canada, I think that's rife with problems, you know, but that would be considered a safe jurisdiction. Moving target. There's a long answer, Robert.
That's helpful. You know, cost inflation, labor tightness, and really just long equipment lead times have also changed the, maybe the development math for many new mines.
Yep.
You know, what are the most persistent industry bottlenecks that you see right now, and where are you sort of finally seeing pressures ease, if at all?
Okay, that in itself is a case-by-case, completely case-by-case scenario. You take a project like ours, the CK Gold project in Wyoming, it's such a simple form of mining and operating. Really we're just open pitting, like a quarry, our ore. We crush it and grind it into a very fine sand. We run it through a flotation circuit, which is pretty much using truly similar to a laundry detergent just to attract the heavy metals and create a concentrate, and from there we just ship a dry sand concentrate off-site, it's very simple. Now, if you have to start dealing with building smelters and you know, producing doré on site, that's a whole different world.
Now you're talking about, you know, machinery and parts from all over the globe and, again, if you look at the U.S., now you're talking about potential import tariffs. Robert, what your question might have been an easy one to answer five years. In this new world, it is a very, very different question. I guess ultimately it is to the level of the amount of engineering that needs to go into a project is relative to how badly those costs can balloon and we're again fortunate that just a blaster, a crusher, and a grinder and a concentration circuit, just that's all we need.
Got it. All right. You know, let's zoom into your project a little bit more there. You know, when you talk about sort of the de-risking, you know, what are the handful of risks that actually matter most at this stage? And how are you sequencing your work to retire them in sort of the smartest order?
Right. I can actually talk to these posthumously because they've all been done and executed by us. The permit. Everything is all about permitting. Again, if you're on federal ground in the U.S. or Canada, you can be permitted, ready to go, and an NGO or some other third party can come in and contest that permit to mine. Where we are on state ground in the state of Wyoming law dictates that now that we've been awarded our permits to mine, if anyone wanted to interrupt that agreed-upon process, they would actually be suing the state of Wyoming, not us. Again, fortunately for us, we had extremely little to no objection, formal, certainly no formal objections to the project because of its location.
You know, it's already located near an active quarry that's producing a granodiorite as an aggregate source into the Colorado Front Range, so that's our neighbor. We're 20 mi outside of town, far enough not to disturb too many people. A very simple and clean mining operation, no smokestacks. Again, no, you know, we're not extracting gold and doré on site, so we're not. No need for any of the mess. No cyanidation, any of that carbon. What we managed to do was be very open with the community and, to us, the most important thing was having the community on side.
We had a standalone website accessible to the local community 24/7, which got into everything from, you know, when we'll be blasting, what the noise impact will be, what the shock impacts will be, how we're gonna use water, when we're using water, the amount of power, how we're receiving the power. Every variable that this mine was going to utilize, traffic studies, you know, of course, numerous different environmental, wind, wastewater impact studies, all that was laid bare into the community as they were executed and completed. Town hall sessions with local government and with the local community again. Keeping everyone abreast of what was happening was very key. You know, it's social license at the end of the day.
Again, it's so unique where we are in Wyoming, where we could go through that process and have the conviction and safety in the process that ultimately the permits to mine that we now have. The amount of people I talk to, Robert, who are very sophisticated miners, people who are in this industry, and I finish telling them for the third time we're fully permitted, and they're like, "Oh, yeah, but what about air quality and you still have to do your." I'm like, "No, we have all of them. They are all done and completed, so. Uncontestable." It's a very unique part of the world where we're located. There's that word again.
From a technical standpoint, what is sort of the single most important question investors should focus on for the asset right now? You know, what sort of looks like a great answer versus something that might be concerning to them?
Yeah. Well, I mean, the brief amount of time for development, it's an 18-month build. We're in this, you know, the early stages of a secular bull cycle in gold for the reasons that you and I discussed at the onset of this discussion. You know, we've gotten through all those permitting risks. That's ticked, done. We've gone through all our pre-feasibility work, and now we've completed a 18-month fully bankable definitive feasibility study, line items, contracts. You know, we're also blessed to be located in the middle of an employment hub, which is Cheyenne, Wyoming. You know, more than 120,000 people live there. They predominantly work and service the resource exploitation industry, you know, from coal mining, trona, uranium, oil and gas.
There's every myriad of resource that harvested in the state of Wyoming. That's why there's no income tax in the state of Wyoming. That active workforce is living 20 minutes away from our project. When we need metal fabrication, electrical engineers, plumbing, et cetera, we're not having to build a man camp and fly people in and convince them to come in and work for us. We're operating in these people's hinterland. You know, with massive distribution centers and data centers being built just 5 or 10 mi away from our projects, a huge amounts of construction crews. It's a gig employment opportunity, and it's just surprising how actually quite simple it is, and it'd be great to have some of you come out and visit sometime.
You know, as you mentioned, the pre-feas came out earlier this week. You know, couple of high-level points or takeaways from that.
Yeah. This project just gets better and better as the metals price get better. You know, we came out with a just shy of $640 million, 5% discounted net present value on the asset. We used approximately $3,200 gold, $4.70 copper. You know, both metals are significantly higher than that, as we all know. It has a remarkably good return on investment. But ultimately, when you start looking at the spot gold price, we have so much upside here. We've not taken into consideration. We designed and permitted everything around our 1.7 million ounce reserve, but beyond that there's, you know, we see at least 1 million-1.5 million ounces of additional upside to the deposit.
That will have a huge impact on the economics of this project moving forward. Another really interesting side note that we don't spend enough time on, and I look forward to doing so now that we've completed our definitive feasibility, is our waste product a very, very high quality granodiorite. You may have remembered me mentioning that Martin Marietta just to our south, making aggregates 2.5 mi to our south in an open pit. Well, our waste material is of the same quality as theirs. That's $20-$25 rock. We've got 40 million tons of it just in the reserve calc alone that has zero value right now, associated to it. It's being harvested and paid for through the mining operation that's sitting on surface for free.
Many economic upsides, not just for us as a company, but for the local community, for taxes, for royalties, et cetera. You know, we're just I think the risk variables that you're referring to have been pretty much all been taken care of by us. The outstanding one, of course, being project level financing, which is right what we're about to embark on.
Let's go there, right? 'Cause, you know, I think development stage companies live or sort of die by the capital strategy and as much as really just the geology, right?
Yes.
... how are you thinking about financing in this environment, cost capital, partnerships, you know, project finance versus equity and dilution?
This project lends itself so nicely to debt, and there is a lot of money on the sidelines chasing very few fully permitted opportunities like this. The bottom line is we've got you know a pivotal project you know sitting in the midst of the hottest bull market going and a lot of dollars chasing opportunities to finance these type of operations. Which is also gonna trigger obviously I think some M&A interest. Look, we're gonna consider every attractive business offer around this company, whether it be debt financing, whether it be merging with another other developer or producer. Whatever is gonna end up with the best bottom line to our investors equity investors is the pathway we're gonna follow. Why is that? Well, that is because management insiders are equity investors in the company.
You know, we're in lockstep with our shareholders. That's also a very important point, Robert, because we both know, having spent many decades in this business, that there's a lot of lifestyle executives out there. We don't fit in that category. We're gonna make the decisions that make our equity go higher.
Yeah. Maybe just unpacking that just a little bit more if we can. You know, when is the philosophy rather on project design, you know, sort of optimizing or for maximum NPV. Is it robustness to downside scenarios, small footprint, fastest path to cashflow? You know, and maybe it's just really all of the above, as you kinda mentioned but-
It was even more simpler. What George Bee, you know, our CEO, who's a renowned mine builder, built some of the largest gold mines on the planet for Barrick. What we set out with as our task was first we need to have a project that's going to grab the imaginations of the investment community. It needed to be a minimum 1 million ounces. You know, we're 1.7 million ounces gold equivalents approximately. It also needed to be, you know, in that 100,000 ounce per annum production profile range. We ticked both those boxes. We established a mine plan around that approach, which was our two iterations of pre-feasibility.
From the pre-feasibilities, we were then able to go and negotiate ultimately our permits to mine, which again, is the whole myriad of things I've taken you through, air quality, water quality, environmental, archaeological, local impacts, all the work that we did with the community. Ticked all of those boxes off and got through them. Everything has been completed. Now it is simply going out and finding the best partner for this project. Now, the best partner might be someone who wants to offer us 80% debt and, you know, a light equity package. That partner may be another mid-tier operator, producer who says, "Hey, look, we bolt-on another near 100,000 ounces of gold production per annum. We're gonna get a massive re-rate that would be. You know, and we've got the capital to build CK.
You know, maybe we partner up with it in that kind of light. Or again, with this big aggregate component, which is gonna interest you know, the multi-billion-dollar aggregate industry, maybe we have some sideline partnership where our waste material actually lowers our cost of production at the copper-gold side of things and we continue to build it ourselves. We are focused on building this ourselves, but there is a myriad of variables in a bull cycle that are being presented to us every day.
All right. Thank you for that. What do you think the biggest misconception the market has about the company right now?
We flew under everyone's radar. You know, we were a bit of a surprise act onto Bay Street in January, February of last year. You know, we listed straight onto Nasdaq, not a traditional, you know, junior mining exchange or marketplace. We really kept our heads down through the permit process. We didn't want to attract too much negative attention from unnecessary, you know, unassociated NGOs and such. We didn't bang the drum too hard while we were going through the permitting phase, and we'll refer to that as the boring phase of the business. Let me tell you, Robert, don't let the engineers tell you otherwise. It's a heinous time to be a shareholder and investor in a company because it's long, slow, arduous. There's not much excitement.
I think anyone who's familiar, of course, with the Lassonde curve can speak to that. Well, we're well through the trough of the Lassonde curve now, of course, and we're coming up the value upside back end of that. We've been through all the hard yards. We've fought a good fight and look what we've got. Look at our definitive feasibility study. We've got tremendous economics. A project that's completely unencumbered by anything project-level or corporately. There's no right of first refusals. There's no additional royalties. There's just state-level royalty and a clean slate project that we're about to advance into production.
Wow. Last couple of minutes here. You know, what does sort of success look like here for the company? What are maybe the two or three milestones investors should be watching for?
Right.
to ensure that you're on track here?
Right. Well, the day after our definitive feasibility study, of course, we came out with a pretty impressive list of the additional benefits to the project. The definitive feasibility outlined, of course, our just baseline economics on producing gold, copper and silver, doing, you know, reclamation work, post-production, you know, just bare bones mine the reserve. The reality of the CK Gold project of course was released the next day, which is, oh, by the way, you know, there's another million ounces of upside to the project. Oh, we have all this aggregate value. Post-production, the pit's gonna be not reclaimed and turned back into flat topography. It's actually gonna be used by the local community as a water reservoir to tie into the neighboring two reservoirs that are about a mile away from our project.
All these additional values, those are what we're gonna be spending our time focusing on and going after here into quarter two, quarter three, while we do the you know, project level financing, which is, while some would consider it ho-hum, you know, once this thing is financed, once that package is in hand, there's another whole rewrite for the company there too. A lot of excitement on the horizon I believe for our equity shareholders.
All right. Very good. Well, Luke, thank you very much for the time today. Greatly appreciate your insights and participation in the summit here. Thank you everybody for watching, of course. If there are any questions for the company, you can obviously reach out to the investor relations team there, or I'd be happy to try to help out as well. Shoot me an email, Blum, B-L-U-M@lythampartners.com. We have additional presentations, fireside chats coming up. Please stick around. Again, thank you very much. Appreciate your time here, Luke.
Thank you, Robert, and I look forward to meeting everyone.
Take care.