G2 Goldfields Continues to Unlock a New High-Grade Gold District in Guyana

• G2 Goldfields (GTWO) released a maiden 1.2M oz gold resource at 9 g/t in Guyana in 2022. An updated resource incorporating 2 years of additional drilling is expected in Q1 2024.
• A new discovery, OKO Northwest, was made in Nov 2023 with a highlight hole of 15m @ 6 g/t Au.
• G2 raised $22M at $0.90/share in a strategic financing with AngloGold in Jan 2024. Cash position is ~$25M, enough to fund exploration through 2024-2025.
• Focus is on shallow drilling to expand the overall scope and scale of the project along the 20km trend rather than drilling deeper. Goal is to determine ultimate size potential before doing economic studies.
• M&A seen as inevitable in the district. Insiders own 26% and G2 retained advisors and open to opportunities as a potential target or consolidator.

G2 Goldfields' High-Grade Gold District in Guyana

G2 Goldfields (GTWO) is an exploration company advancing the OKO gold project in Guyana, South America. With a substantial maiden resource already in hand, a major new discovery, a strengthened balance sheet following a strategic investment by gold major AngloGold Ashanti, and multiple avenues to grow, G2 Goldfields offers a compelling proposition for gold-focused investors.

Maiden Resource and Upcoming Update

Maiden Resource and Upcoming Update

In 2022, G2 Goldfields released a maiden resource estimate at their flagship OKO project, delineating 1.2 million ounces grading an impressive 9 grams per tonne (g/t) gold.

CEO Dan Noone stated: "We put a maiden resource out 2 years ago of 1.2 million ounces at about 9 grams a ton and we've been drilling for the next last 2 years."

Over 90% of this initial resource fell into the inferred category. However, the company has completed two years of additional drilling which is expected to both expand the resource and upgrade a significant portion to the indicated category. This updated estimate is on track for release by the end of Q1 2024 and will incorporate results from the OKO Main zone as well as the newer Ghanie zone to the south.

Interview with CEO Dan Noone

New Discovery at OKO Northwest

In addition to increasing confidence and expanding the known zones, G2 made an entirely new discovery called OKO Northwest in 2023, after the cutoff for the pending resource update. Noone commented: "We put out a hole recently which was 15 meters at 6 grams."

This discovery lies on trend to the northwest of the OKO Main zone where out of 24 reconnaissance drill holes, 16 encountered ore-grade mineralization, demonstrating the pervasiveness of the gold system. OKO Northwest will be a major focus for ongoing exploration to determine its ultimate size potential.

Well-Funded Following Strategic AngloGold Investment

In January 2024, G2 Goldfields closed a $22 million strategic investment by global gold producer AngloGold Ashanti at $0.90 per share, a significant premium to the market at the time. The company's cash position now stands at approximately $25 million. Noone stated: "It took us to $28 million. We're back down about $25 million now."

This is sufficient to fund G2's exploration programs for the next two years based on the current burn rate of around C$1 million per month. The company currently has five drill rigs turning, with the flexibility to scale up to seven rigs to complete between 3-5,000m per month. Such strong backing by a major gold producer is a strong vote of confidence in the quality of the OKO project and G2's management team.

Focus on Shallow Drilling to Expand Project Scope

Despite the obvious potential to extend OKO to depth, with neighboring Reunion Gold drilling their project down to 1km depth, G2 is electing to focus on shallow, open pittable ounces to determine how many viable mining centers exist along the 20km trend. The logic is that adding ounces at open pit depths will increase the company's options in terms of development scenarios and ultimate production rates.

As Noone explained: "[Drilling deeper] gives you more answers, but doesn't change the scope of the size of the mine that you're going to build... What adds value, we think, for our shareholders is keeping exploring along strike, figuring out how much there is, how many pits you're going to have."

By testing the shallower extensions of known zones and making new discoveries along the 20km trend, G2 is aiming to maximize the resource potential within open pit depths. This will give a clearer picture of how many ounces per vertical meter exist, which will drive the sizing of an eventual starter operation.

Refining the Geological Model

In 2023, G2 brought in a consulting structural geologist to refine the company's understanding of the controls on high-grade mineralization at OKO. This work identified the intersection of north-south shears and the axial plane of F1 fold hinges as the control on the emplacement of high-grade shoots grading greater than 40 g/t gold.

With this knowledge, G2 has been able to better target these high-grade zones and demonstrate their continuity. As a result, the upcoming resource update should more accurately reflect this understanding and allow more confident tracing of the high-grade mineralization.

M&A Seen as Inevitable; G2 Open to Opportunities

Given the ongoing consolidation in the gold sector and the emerging gold district in Guyana, G2 Goldfields sees the potential for mergers and acquisitions as inevitable. To that end, the company has retained an advisor to evaluate opportunities as they arise. With AngloGold already owning 11% and other companies operating in the district, G2 could be either a target or a consolidator.

Importantly, the management and insiders have significant skin in the game, owning 26% of the company. This means their interests are well aligned with those of shareholders. When the time comes, Noone believes they will be well-positioned for productive discussions with interested parties.

Continued News Flow

Looking ahead to the remainder of 2024, investors can expect steady news flow from G2 Goldfields. In addition to the upcoming resource update, ongoing exploration results will be released as drilling continues at multiple targets including OKO Main, OKO Northwest, and the earlier stage Tracy and Aremu targets along the broader OKO trend.

The company will also be advancing project development initiatives such as metallurgical test work and converting claims to mining licenses in order to streamline the permitting process. With five drill rigs turning and a strong balance sheet, G2 is well-positioned to deliver strong results in the months ahead.

G2 Goldfields represents a compelling opportunity for gold investors seeking exposure to an emerging gold district in mining-friendly Guyana. With a substantial resource grading over 9 g/t gold, a transformational new discovery at OKO Northwest, a strong balance sheet backstopped by a major gold producer, and multiple avenues for growth, G2 offers significant upside potential.

As drilling continues at a rapid pace and development studies progress in the background, the company is well-positioned to deliver a steady stream of positive news flow in the months ahead. With the gold market gaining renewed momentum, G2 Goldfields may well become the newest addition to portfolios of astute gold investors.

Investment Thesis for G2 Goldfields

• GTWO offers exposure to a substantial (1.2M oz @ 9g/t) and growing gold resource in mining-friendly Guyana
• Upcoming Q1 resource update to expand and upgrade the existing resource based on two years of drilling
• New high-grade discovery at OKO Northwest highlights potential for further growth along the 20km trend
• Strong balance sheet ($25M cash) and backing from major producer AngloGold Ashanti
• Methodical exploration approach to demonstrate full scale potential of the OKO district
• Tight share structure and high insider ownership at 26% aligns management with shareholders
• Steady news flow expected from ongoing exploration and development activities
• M&A potential as the Guyana gold district continues to consolidate

Macro Thematic Analysis

The positive shift in sentiment towards gold and gold equities was palpable at the recent PDAC conference in Toronto. After a prolonged period of bearish sentiment and limited capital availability, the mood among investors and companies was decidedly more optimistic. The gold price has risen over $100/oz in the past couple of weeks, breaking out of its trading range.

According to G2 Goldfields CEO Dan Noone: "In the last week since we've been down there and having follow-up meetings now, people are interested in buying gold stocks. So it's, hopefully, it's broken out and we can have a good market."

This newfound bullishness on gold appears to be driven by a combination of factors, including rising inflation concerns, geopolitical uncertainty, and a recognition that gold has been undervalued relative to other asset classes. The fact that this move is being driven by physical buying from central banks and other large institutions suggests it has legs.

For junior gold companies like G2 Goldfields, this represents a significant tailwind. With an advanced, high-grade project in a top mining jurisdiction, a major strategic shareholder, and multiple paths to value creation, G2 is well positioned to capitalize on the improving sentiment towards gold equities. As Noone noted, generalist investors are starting to dip their toes back into the space and the company is seeing interest from new institutional investors.

The key for G2 and its peers will be to deliver on their exploration and development plans against this supportive backdrop. Those companies which can demonstrate strong growth potential via the drill bit and navigate the permitting and engineering challenges should be well rewarded by the market. With the gold price now comfortably above $1,900/oz and looking poised for further gains, the junior gold space could be at the start of a long-awaited bull market.