Cassiar Gold, absurdly cheap at C$10/(pro forma) ounce!

Two weeks ago I woke up to the news that Trump had won. Stock market indices ripped, but commodities traded lower. Is Trump good for commodities? How about precious metals?

In my view, it makes little difference who the President is because U.S. debt levels are way too high, and growing interest payments are unsustainable. Meanwhile, geopolitical risk only seems to grow. Relations between the East (China/Russia/India), and the West (N. America/Western Europe) are in decline with no end in sight.

BRICs are lining up behind China to diversify away from the USD. As of Nov. 7th, Russia reportedly increased its purchases of gold (“Au“) by +35.5% to ~16,000 troy ounces/day. China’s per capita ownership of Au reserves is just 1/15 that of the U.S., and India’s is 1/55!

The Middle East is a tinder box, and Russia/Ukraine/NATO tensions are soaring. There are many reasons for Au to continue higher, or for fiat currencies to lose value. Suffice it to say, N. American projects are looking quite appealing. Canada has ubiquitous low-cost, green hydroelectric power and is a safe haven compared to parts of Africa & S. America.

South32 announced a $29M strategic investment (at a 15% premium, no warrants) into B.C. Canada’s American Eagle. A lot more strategic investments are coming! In Ontario, Orla Mining is making a big splash with the acquisition of Newmont’s Musselwhite Au mine for $810M, its first foray into Canada.

Au at ~$2,672/oz. sits at a very strong level, albeit down 4%, from an all-time high of $2,790/oz. Majors & mid-tiers will generate tremendous cash flows in 2025-26. So much so, they will be forced to make acquisitions (after further debt reduction & share buybacks).

Yet, M&A doesn’t increase the global supply of Au, it only drives valuations up. Amazingly, there are a handful of promising companies with projects in Tier-1 jurisdictions, excellent management teams, and key infrastructure in place, surrounded by world-class producers, with multi-million-ounce potential, trading at < $20/oz.!

In bull markets, transactions often get done at $50-$200/oz. An early-stage company that has numerous investment boxes checked, yet is valued at just $10 per (my estimate of ozs in the ground) is Cassiar Gold (TSX-v: GLDC) / (OTC: CGLCF).

It has a 59,000-hectare, district-scale project ~115 km south of the Yukon border on Highway 37. On November 12th the Company announced a 2nd set of drill results headlined by 113.0 m of 0.84 g/t Au from the surface. This interval lies outside the existing resource area. As important as the grade & intercept width is the consistency & continuity across Taurus.

Management is understandably proud of its drilling “hit ratio” of 99%, demonstrating a solid understanding of geology & structure. The hit ratio is supportive of the team’s long-term goal of 5M ounces and is something that much larger companies watching this story unfold should be impressed by.

Cassiar has an exceptional management team, board & advisors with a wide range of skill sets, and a notable global presence. Not only does the team have technical expertise, (incl. award winners), it also has an invigorating entrepreneurial spirit, evidenced by execs who have found, built, operated & sold mines around the world.

The team excels in exploration but is also strong in finance, M&A, project development, permitting/community relations & operations. Please take a few minutes to read the bios below. This is a remarkably well-rounded & experienced group for a company valued at just $21M.

The namesake Cassiar Project has booked 1.39M shallow, Inferred ozs on its Taurus deposit at Cassiar North. Cassiar South hosts Au showings, historical workings & many exploration prospects. Historical underground mines at Cassiar South yielded ~315,000 ozs grading of 10 to 20 g/t Au.

Veining occurs along a 15-km mineralization trend. Numerous Au-bearing veins have been identified that have limited or no drilling. Management thinks there’s potential for up to 500,000 high-grade ounces. Of 243 claims across Cassiar North & South, all but 10 are royalty-free.

The grade of 1.14 g/t (100% Au) is strong for shallow mineralization. For example, it’s ~2.6x the average of bulk tonnage B.C. mines/projects like; Centerra Gold’s Kemess at 0.36 g/t, & Mt. Milligan at 0.26 g/t, Artemis Gold’s Blackwater at 0.61 g/t, New Gold’s New Afton at 0.57 g/t, and Newmont’s Red Chris at 0.41 g/t.

Although at an earlier stage — 100% of ounces are in the NI 43-101 Inferred category vs. Measured & Indicated — > 75% of the Au is within 100 meters of the surface, and ~90% is within 150 m.

Taking a step back, since March 24, 2022, Cassiar’s enterprise value [“EV“] {market cap + debt – cash} is down about -70%, and its share price -85%, yet Au is +36%! and management has likely doubled the Taurus resource to (*my estimate*) 2M+ ozs.

In 2022 the Company was valued as high as ~$78/oz., today it sits at just $10/oz. Either something has gone terribly wrong, or the stock is massively oversold. Not only has Au soared, but producers’ valuations have grown, some by a lot.

Cassiar is a more attractive takeover target than ever, at a time when suitors have pristine balance sheets and urgently want to expand. Not only is $10/oz. absurdly cheap, Cassiar’s ounces are high quality — near-surface — and 100% Au, not Au + other metals that may not have good recoveries.

To be clear, management is in no rush to sell out anywhere near current levels. See comparable companies above, valued at an average of $61/oz. The Project hosts 17 portals, 25 km of underground workings, production records & well-understood metallurgy.

There are two active mine permits and a permitted 300-tonne-per-day gravity/flotation mill + four tailings facilities. This is an asset-rich junior.

Management believes the replacement value (in today’s dollars) of above & below-ground infrastructure, the mill & tailings facilities, camp + exploration studies, active permits, drilling, etc. is over $200 million. Compare that to Cassiar’s EV of $22M.

The Company also holds a 100% interest in the promising Sheep Creek project, also in B.C. The Sheep Creek district had historical production of 742,000 ounces at ~14.7 g/t Au from 1900 to 1951.

The 2024 exploration program featured 30 diamond drill holes (7,168 m, 239 m avg. length). Twenty-seven were done at Taurus and three at Newcoast. Assays from 19 holes, geophysical surveys, and findings from field programs are pending.

Newcoast is a roughly 3 km corridor with shallow & outcropping quartz veining similar to those observed at Taurus, 2.5 km to the north. Six holes totaling 2,172 m were drilled at Newcoast in 2023 + three more totaling 1,245 m in 2024.

Highlights this year include; 113.0 m at 0.84 g/t, 18.1 m of 2.28 g/t Au, 40.8 m of 1.68 g/t, 31.9 m of 1.82 g/t, 58.5 m of 1.10 g/t, and 73.4 m of 0.75 g/t. These are strong results for near-surface mineralization, well above the current resource cut-off grade of 0.50 g/t Au.

President & CEO Marco Roque points out that 46,369 meters have been drilled on the Project since the last resource estimate in 2022, and ~29,090 at Taurus. A linear extrapolation suggests there could now be ~2.16M ounces in an updated resource expected in 1H/2025. However, there could be more than 2.16M, for two reasons.

First, there are gaps in the resource (see slide #15 of the corporate presentation), infilling those gaps can capture a lot of ounces/meter. Second, the cut-off grade will drop from 0.5 to perhaps 0.35 – 0.4 g/t Au, which will add ounces, but lower the overall grade slightly.

Northern B.C. is a hotspot of activity. An interesting transaction earlier this year was Franco-Nevada’s investment of $8.1M for a 2% royalty on Scottie Resources’ 58,500-hectare land package. This is noteworthy because Scottie is a pre-maiden resource company.

Talk about a vote of confidence in a company and a jurisdiction. If Franco is willing to make this bet, might it be interested in Cassiar? Or, perhaps Wheaton Precious Metals, Royal Gold, Osisko Gold Royalties, Triple Flag, and Sandstorm Gold could follow Franco’s lead.

BHP, Barrick Gold, Teck, Agnico Eagle, Freeport McMoRan, Boliden AB, Hecla Mining, Alamos Gold, Sumitomo, SSR Mining, Kinross, Evolution Mining, IAMGOLD, Hudbay Mining, South32, Eldorado Gold, Coeur Mining & Wesdome Gold also have mining interests in Canada.

Cassiar has what producers urgently desire, a sizable resource of 2M+ low-risk ounces with the potential to reach 5M ounces, in a safe, prolific jurisdiction. Even better, a brownfield opportunity that could be in production this decade.

Collectively, mid-tiers & Majors will have the appetite & wherewithal to acquire dozens of multi-million-ounce projects across Canada. Today’s valuation of $10/oz. for Cassiar’s exciting project offers a compelling risk/reward proposition, not for a takeout at a 40% premium in 3-6 months, but for a much bigger prize.

Disclosures: The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about Cassiar Gold, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is not to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market-making activities. [ER] is not directly employed by any company, group, organization, party, or person. The shares of Cassiar Gold are highly speculative, not suitable for all investors. Readers understand and agree that investments in small-cap stocks can result in a 100% loss of invested funds. Readers assume and agree they will consult their licensed or registered financial advisors before making investment decisions.

When this article was posted, Cassiar Gold was an advertiser on [ER] and Peter Epstein owns shares of the Company purchased in the open market.

Readers understand and agree they must conduct due diligence above and beyond reading this article. While the author believes he’s diligent in screening out companies that, for any reason whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, or reported facts.