Allegiant Gold (AUAU) - Growing 1Moz Au, 8moz Ag. Farm-out Funded

Allegiant Gold is a gold exploration company headquartered in Vancouver, BC. It is listed on the Toronto Stock Exchange (TSX-V: AUAU) and the OTC Markets (OTCQX: AUXXF). The company spun out of Columbus Gold and created two businesses, one based in French Guyana and the other in Nevada. 

We met with Peter Gianulis, CEO, Allegiant Gold. He started his career with Salomon Brothers in the mid-90s in one of the company's hedge funds which he helped grow into a multi-billion dollar business. He started his own private equity hedge fund in 2005 focused on the natural resources sector which was in operation for 12 years. He functioned as a board member and assisted other mining companies with mergers and acquisitions. Peter has a mining career that spans over 24 years and has been a Board Member at Allegiant Gold since 2009. 

Company Overview

Allegiant Gold is a mid-stage Gold exploration company based out of Reno, Nevada, and Vancouver, BC. Eastside is the company's flagship project located 30km from the Tonopah town in Nevada. This project has an inferred resource of 1 Moz gold and 8 Moz silver.

Allegiant Gold is the only junior mining company where the management and insiders hold a significant portion of shares on the open market. Since September 2019, the combined entity has purchased up to 17% of outstanding shares in the open market.

The drilling operations have been ongoing for the past 12 months. The company has a conservative approach towards marketing as it seeks to generate interest based on its business plan and exploration results rather than being overly promotional.

Allegiant Gold currently has 10 projects in its portfolio across Nevada, Arizona, and New Mexico, out of which 3 projects are already farmed out, collectively generating a cash flow of $1 M. This covers the company's G&A (General and Administrative expenses) costs across all landholdings. These 3 projects include Four Metals, farmed out to Barksdale, The Mogollon Silver Project, a high-grade site farmed out to Summa Silver, and finally the Bolo project that is farmed out to New Placer Dome. 

The Mogollon Project

The Mogollon Project is located between the borders of Arizona and New Mexico and features an epithermal high-grade Silver deposit. This site is farmed out to Summa Silver, one of the industry's premier silver companies.

This project has been under the ownership of Allegiant Gold for the past 15-20 years and preceding the farmout, it was sold to Santa Fe Gold. In 2011, the site was sold back to Allegiant Gold in a multi-million dollar deal. The site was later farmed out to New Placer Dome in 2018, which sold back. Currently, the site is farmed out to Summa Silver, a well-funded company that has recently commenced drilling operations.

Summa Silver is being run by Galen McNamara who has a strong working relationship with Allegiant Gold over the course of the past 14 months. The company has plans to drill between 5,000 m - 10,000 m over the course of the next 12 months. The company has also applied for a permit which is expected within the next two months. 

The Bolo Project

The Bolo project is fully owned by Allegiant Gold and managed by New Placer Dome, who is working towards a 50% earning on this project and is scheduled to spend CAD $1.5 M to comply in accordance with a farmout agreement. The drilling targets for this site range from 6,000 m - 8,000 m which will vary based on the choice of core drilling or RC drilling.

The Four Metals site 

This site is owned by Barksdale and is a part of the land package acquired by the company. This site has the potential to be turned into a base metal district in Arizona. 

The Nevada Advantage

Nevada is one of the top jurisdictions globally based on the ease of doing business and offers significantly lower drilling costs along with an exceptional infrastructure. 

Allegiant Gold has already drilled 10,000 m of the 15,000 m drill program. In the coming 12 months, the company seeks to drill an additional 30,000 m which includes their own drilling operations combined with their partners across the 3 farmouts. 

Based on the most recent drill, the company is looking to follow up on the intercepts, which have shown promising results and are considered some of the best in Nevada in the past two decades. The company will be exploring the Mogollon site with Summa Silver and the Bolo site with New Placer Dome.

Capital Raised

Allegiant Gold currently has a market cap of $37 M. The company is well-funded and has $78 M outstanding shares. The company takes a cautious approach when it comes to the issuance of shares and has a disciplined approach towards raising additional capital for exploration.

Allegiant Gold raised $3 M from the market in July 2020 which was utilized towards drilling targets. The company sees itself as a moderately long-term investment opportunity, where a 3-5 year investment will offer exceptional dividends. Over the course of the next 7 months, the company is looking to farmout two additional projects. 

Targets 2021 and Beyond

Allegiant Gold has a strategic approach towards the projects where program development is based on the findings of the assays. The program evolves as more data is collected. 

The Eastside project is the company's flagship site and is scheduled for a 3-year exploration program where they seek to double the resources. The drilling results so far have shown that the site is open across every direction. 

The north end of the Eastside project features a pit zone that was drilled in December 2020. The company has drilled 49 holes on the south end of the property and discovered low-grade mineralization at shallow depths and on the surface. This location is currently being evaluated for a potential starter pit area. It features a strong infrastructure along with excellent connectivity to the highway.

At The Eastside project, the company has planned a PEA (Preliminary Economic Assessment) along with scoping studies. They plan to drill an additional 20,000m at this site by 2022, aiming to reach a 2 Moz supply.

The Castle area at Eastside already has several hundred historical holes present and the company has already drilled 49 additional holes. In order to grow this site, there's a need for infill and expansion drilling. 

To find out more, go to  the Allegiant Gold website.