U.S. Gold surges after obtaining Wyoming mining permit

U.S. Gold (Nasdaq: USAU) surged on Wednesday after the company said the Wyoming Department of Environmental Quality issued the surface mining permit for the CK gold project, a key milestone.

“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,” U.S. Gold CEO George Bee said.

Still needed are approval of the reclamation bond, which has been submitted, an OK from the Wyoming Pollutant Discharge Elimination System, which is in the final stages of approval, and state air quality permits, where technical work is under review.

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

Shares in U.S. Gold rose 11% to US$4.84 apiece in early afternoon New York for a market capitalization of US$51.9 million. Earlier, it hit a 52-week high of US$5.05 after opening the session at US$4.57.

“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,” executive chairman Luke Norman said.

Pivot to Wyoming

In August 2020, U.S. Gold pivoted to developing the CK project after spending years exploring prospective assets within 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 surrounded by a large, low-grade zone with potential for additional resources, the company says. U.S. Gold is exploring it 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 study also showed robust project economics, including an after-tax net present value (discounted at 5%) of US$266 million and an internal rate of return of 33.7%. Initial capital is estimated at US$221 million, giving it a payback period of two years.