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2020, a Transformative Year for U.S. Gold Corp. (NASDAQ: USAU): Robust Economics, District-Scale Exploration in Mine Friendly U.S. Jurisdictions; Interview with Edward Karr, Executive Chairman

on 1/10/2021
U.S. Gold Corp. (NASDAQ: USAU) is a U.S. focused gold exploration and development company, advancing its portfolio of exploration properties, including the CK Gold Project, located in Southeast Wyoming, as well as Keystone and Maggie Creek district scale exploration properties, on the Cortez and Carlin Trends in Nevada. We learned from Edward Karr, who is Executive Chairman of U.S. Gold Corp., that 2020 was a transformative year for U.S. Gold Corp, with the acquisition of Northern Panther Resource Corporation and the Challis Gold Project in Idaho, and with the appointment of senior mining industry executive, Mr. George Bee as President. Plans for 2021 include; getting out the pre-feasibility study on CK Gold Project by Q2 2021, full bankable feasibility study by the year end, and filing the mine plan permit with the state of Wyoming. Exploration programs are planned in Nevada and Idaho.

U.S. Gold Corp.

Dr Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, talking with Ed Karr, who is Executive Chairman of U.S. Gold Corp. Ed, I know you've had an exciting year and I'd like you to update our readers/investors about what's going on with U.S. Gold Corp. and your great projects in Wyoming, Nevada, and Idaho. Maybe you could start by giving them a broad brush overview and then talk about the most significant things that have occurred.

Ed Karr: Sure. I would be happy to, Al. Thanks so much for having us back and Happy New Year to you and all of your readers/investors. We wish everyone all the best for a safe and healthy 2021. I think it is setting up to be another pretty good year for precious metals, even base metals, and this sector overall.

As you mentioned, Al, we had an exciting 2020. It was a transformative year for U.S. Gold Corp. I will just run you and your subscribers through an overview and some of the changes that took place. In Mid-August of 2020, we acquired a private company called Northern Panther Resource Corporation. They had a project in Idaho called the Challis Gold Project. That became a new project for U.S. Gold Corp. and gives us our fourth project overall. We are now in three of, what I believe are, the best mining friendly States in the United States. We have our flagship CK Gold Project in Wyoming, our two district scale exploration projects in Nevada, which are Keystone on the Cortez Trend, Maggie Creek on the Carlin Trend, and now Challis Gold, which is located in Idaho.

In addition to acquiring the Challis Gold Project, Al, we also announced in mid-August, the appointment of seasoned mining industry veteran Mr. George Bee, joining U.S. Gold Corp. as our President. George has a real illustrious mining career. He has been in the industry for over 40 years. He is one of the world’s most accomplished mine builders, developers and operators. He spent 16 years of his career with Barrick Gold as a Senior Executive. He was the Mine Manager at Gold Strike and brought that project on as a major producer; the project that arguably made Barrick what it is today. He did a bunch of other work with Barrick. George has also been involved with juniors. He was the COO of Aurelian Resources. They had the big discovery at the Fruta del Norte deposit and then ultimately were sold to Kinross for 1.2 billion Canadian Dollars. So, he is very seasoned!

George did pretty extensive due diligence on our CK Gold Project in Wyoming before officially joining U.S. Gold Corp. He really likes the project, from a development standpoint, because it is on state of Wyoming ground and has a clear development path. When George came on in mid-August, he took the bull by the horns, Al, and drove the project very quickly forward. We are moving the CK Gold Project, right now, to a pre-feasibility study. Your readers/investors probably remember we currently have a preliminary economic assessment on the project. It shows a robust and viable project, but we are upgrading that right now to a pre-feasibility project.

George and his team hit the ground running in the beginning of September 2020. We started drilling out in Wyoming. We drilled all the way through early December, with 29 holes in total: a combination of core and RC. We are doing a lot of work on the pre-feasibility study for metallurgy, geo-technical studies, and also looking at resource expansion and hydrology. George is going well beyond the normal confines of a regular pre-feasibility study.

Starting in early September 2020, we began collecting all of the project environmental baseline data. We will need 12 months’ worth of data before we can file our mine plan permit. We might be in a position to do that by September of 2021. As you can see Al, a lot of progress has been happening out there in Wyoming since George came on board. We have recently put out a couple of press releases on some of our initial drill result assays in Wyoming and we are quite excited about these initial results. We put out our first press release on December 16. Due to COVID and limited staffing, some of the assay laboratories in Nevada, specifically the ones that we are using in Reno, we are using BV, have been a little backed up. There has been a nice flurry of activity in the exploration sector in 2020. That is a good thing for the industry. But unfortunately, due to a lot of drilling and core and chips coming into the assay labs and limited staffing, they are a little bit backed up and delayed.

It took a little longer than expected to get our first assay results, but we did put out our first press release on December 16th. We talked about our first metallurgical hole. That was an exciting press release for us. We drilled that first hole down to 600 feet, 177 and a half meters, and it showed continuous gold, copper, and silver mineralization, with an average gold equivalent grade of 1.126 grams per ton. This is a nice, respectable grade for an open pit project. And this is one of the real highlights out of the CK Gold project in Wyoming. You have real consistency of grades throughout this deposit. That makes it very conducive, and amenable to future mining because, we believe, there won't be a lot of waste. The mineralization is really consistent throughout the deposit.

A couple other highlights on that first hole: when we drilled down, we drilled it to a planned 600 foot depth, because it was a metallurgical hole. Interestingly, that hole ended in some real exciting mineralization. The hole terminated at its planned depth in mineralized material exceeding two grams per ton gold. To us, this implies that there's very good resource expansion potential for attractive grades at depth and also to the Northwest. This is an interesting development and gives our shareholders additional blue sky upside to the project! Two grams per ton are nice attractive grades and we were very pleased with that hole.

And then, even more excitingly, on December 29th we announced another press release on our fourth hole. This hole was very exciting for us because it drilled down to 800 feet. Again, Al, we encountered that same continuous mineralization and the highlight was the first 257 feet, 78.3 meters, from surface down to 257 feet, where we drilled 5.708 grams per ton gold equivalent. Again, this is from surface. All of us, at U.S. Gold Corp., believe this is a real potential game-changer for the CK Gold Project. Many people in the past have thought that CK Gold was predominantly a sub economic, lower grade deposit. We know on the PEA we have 1.1 million ounces of MII gold and 300 million pounds MII copper. I think this hole CK20-04cB really dispels the notion that the project is only a low grade deposit. We are encouraged with drilling 5.7 grams per ton from surface down to 257 feet, as that is a higher-grade intercept. The CK Gold project has a higher grade center, which starts at surface. This is important, as it will most likely be the first phase of a future potential mine plan. The take away is that this project will start immediately mining mineralized material, which bodes very well from an initial cash flow and capital standpoint. There will not be years of pre-mining overburden on this project.

So we were tickled pink with those results. You are literally right in mineralized material right away, there is zero strip ratio on this material, right in 5.7 gram gold equivalent mineralization, which is potentially highly economic. And the project overall has a very low projected strip ratio. We think this is really exciting. It shows us there is blue sky, upside potential for the CK Gold Project in Wyoming. We are awaiting all of our other drill results right now. As we get more and more assays, we will release these results through future press releases to the market.

This bodes well, we believe, for our future PFS and project development. We might get resource expansion at the CK Gold Project, from our drilling in 2017, 2018, and now 2020. We are hoping to get some credits for the silver that we are seeing in the deposit. Also looking at the PEA project economics, Al, we did an internal update in March last year and the CK Gold Project at $1,600 gold and $2.80 copper shows a $321 million NPV (5%). Today I think all your readers/investors probably know we're about $1,937 gold and $3.50 copper. We think we could also get a commodity price increase going into the PFS from the PEA. Due to the delay of all our assay results, we are now anticipating to have the full PFS technical report done sometime in Q2 2021. We should have more press releases coming out, and a lot of potential future catalysts on the CK Gold Project. So readers/investors should continue to watch the news closely.

Dr Allen Alper: Very impressive results and very impressive appointments! I'm really amazed with your accomplishments in the past year and during the tough COVID time. So that's really excellent and excellent recent drill results! Very impressive!

Ed Karr: Yes. Thanks, Al. We think this is a real game changer for U.S. Gold Corp. and the CK Gold Project. We have a very clear pathway forward. We want to get this pre-feasibility study done and out to the market. We believe it is going to be a robust, positive report. If that is the case, we plan to move right ahead into a full bankable feasibility study. We would like to have that done by the end of 2021 and file the mine plan permit.

Ultimately, we believe we will have strong support from the state of Wyoming to push this forward. The state of Wyoming has a 5% NSR on the project and the money goes towards the school system. We could really help out the teachers and kids by ultimately getting this project into production. The project also has the potential for job creation in the greater Cheyenne area. There are a lot of synergies and positive aspects to this project to push it forward and our team is very excited about it. George Bee saw this opportunity and came out of his comfortable semi-retirement to lead the project and Company forward.

Dr Allen Alper: Well, that's excellent and it's amazing how rapid the exploration development work is coming along.

Ed Karr: Thanks. With the project being led by George Bee, shareholders can rest assured the project is in a steady set of hands. At our AGM in November, George was appointed President, CEO, and Director of the Company. I was the former President, CEO, and Founder, but I've stepped aside. I'm still on the Board as Executive Chairman. U.S. Gold Corp. now has a strong combination, with George's technical capabilities leading all of our projects forward, and myself with a strong financial/capital markets background, helping out on the Board, dealing with investors, raising money, and dealing with auditors, shareholders, corporate governance and things like that. George has a whole team of industry consultants that he has been working with for years and years, people he trusts tremendously on metallurgy, on permitting, on mine planning and engineering. It has been a real pleasure to watch George and his technical team move this project forward.

Dr Allen Alper: That's fantastic! That's excellent! Could you tell our readers/investors about the progress being made in Nevada and also Idaho?

Ed Karr: Yes. Thanks for that, Al, absolutely. We are excited as well about our two Nevada exploration projects, Keystone specifically. Keystone is on the Cortez Trend about 10 miles, south of Barrick's Cortez Hills complex. Ken Coleman, our Chief Geologist, is very excited about Keystone. We have a big project here. It is district scale, 20 square miles, about 12,000 acres. We have done a tremendous amount of work at Keystone, from mapping to permitting, geophysics, soil samples, geochemistry, and of course, drilling. The project shows; tremendous potential, incredible looking host rocks, upper plate, lower plate, brecciation, alteration, abundant pathfinders like realgar, orpiment, stibnite, and arsenic are all over the project. Several soil samples, in key target areas, show very high concentrations of arsenic.

We have a lot of smoke and all the right indicators pointing towards a major discovery and we really believe where there is smoke, there should be fire. We think there are multiple world-class potential discoveries on this project. Now, going forward into 2021, we are analyzing all the data, developing new exploration programs. We want to get out to Keystone to drill this, specifically some of our high potential targets, including the Sophia target area and the Greenstone Gulch target area, and try to come up with a world-class discovery.

Dr Allen Alper: That's excellent! That's such a great jurisdiction and Nevada is like fifth in gold production.

Ed Karr: Correct. This is elephant country, both for Keystone and our other Nevada project, Maggie Creek, which is located on the Carlin trend. Maggie Creek is right next door to Newmont's massive Gold Quarry deposit. That is a 26 million ounce mine and it looks very prospective at Maggie Creek. Newmont's Rainbow deposit is right on our Southern claim boundary. We did a district-wide gravity survey at Maggie Creek last year. We also put out a press release, with a technical PowerPoint. We have real targets emerging at Maggie Creek and we want to get out to drill those as soon as we can in 2021.

Dr Allen Alper: That's excellent. Could you tell our readers/investors a little bit more about your Idaho project?

Ed Karr: Of course, I would be happy to. Challis is our Idaho exploration project. The real key to Challis Gold is that the project has a historic, not current, 43-101. It shows a nice resource of about 313,000 ounces of gold, at a decent grade of 1.22 grams per ton, with a low potential strip ratio. One of our new Directors, who just recently came on, Robert Schafer, a very well-known mining industry veteran, is really excited about Challis Gold. He believes that it has tremendous exploration upside potential, and could be potentially a million to a million and a half ounce opportunity. Challis is on federal government ground. It is on US Forest Service land. We are currently permitting this for a Plan of Operations and as soon as those permits are in place and approved, we would like to get out there with a nice exploration program.

Dr Allen Alper: Sounds excellent! Could you tell our readers/investors a little bit about your share and capital structure? I think you've done an amazing job there.

Ed Karr: Thank you Al. Yes, we are proud of the fact that we have an extremely tight share structure. We have a clean cap table currently today. There are about 5.87 million shares of common outstanding. We have some warrants as well and if all of the warrants are exercised, it could bring in about another $13 million to treasury. There is no long-term debt in the Company. We have been fortunate that, historically, we have been able to fund the Company through equity investors on good terms. We are traded on NASDAQ. We are one of the very few exploration companies listed on the NASDAQ. Our symbol is USAU: U.S. Gold. Our shares trade pretty well being on NASDAQ and with the price of gold going up recently and some of our drill results that we have recently announced, the market has reacted quite well. There is decent liquidity these days in the stock.

And Management and insiders, Al, we are pretty significant shareholders in this Company. We specifically want to keep the share structure tight because any time we raise money, as investors, we are getting diluted as well. We hope to keep a really clean, really tight cap structure going forward and continue to fund the Company through high quality equity investors.

Dr Allen Alper: Well, that's excellent! It's great to see Management having skin in the game and having the same kind of rewards as we investors have.

Ed Karr: We are really committed to that. If you look at myself, I have participated in most of the private placements we have done. Historically, I bought a lot of stock out on the market. We have all taken a lot of our compensation in stock. We believe we are quite well aligned with the shareholders. Ultimately I believe there is still a lot of potential upside in U.S. Gold Corp., with our CK Gold Project in Wyoming alone. And then all of our exploration projects. If we can hit a big discovery hole, say at Keystone, being so close to Barrick on the Cortez Trend, I think it will get very exciting, very quickly.

Dr Allen Alper: Well, that really does sound exciting! It sounds like 2021 is going to be a very important year for U.S. Gold. Could you highlight what some of your plans are for 2021?

Ed Karr: Certainly. Our top priority focus is the CK Gold Project in Wyoming, specifically getting the pre-feasibility study out, probably by Q2 2021. We are anticipating a positive report and plan on continuing to press the project forward, hopefully to a full bankable feasibility study, perhaps by the end of 2021 and then file the mine plan permit with the state of Wyoming. In Nevada, in 2021, I think you will see exploration programs at both Keystone and Maggie Creek and then onto Challis in Idaho. If we get our permits in place and approved, we will certainly have exploration programs in place in 2021 at Challis as well.

Dr Allen Alper: That sounds excellent. Could you tell our readers/investors the primary reasons they should consider investing in U.S. Gold?

Ed Karr: I think, Al, the top reasons are you have a U.S. company with U.S. projects in very safe mining-friendly U.S. jurisdictions - in Wyoming, Nevada, and Idaho. You have a Company with an incredibly tight share structure, listed on the NASDAQ. You have a Company that has cash in the bank, with no debt and you have a seasoned Management Team led by Mr. George Bee, one of the world's premier mine builders and developers. We have an incredible Board of Directors, with people like Ryan Zinke, the former Secretary of the Interior on our Board, with Robert Schafer and Tara Gilfillan, mining industry veterans, with strong boardroom experience to support the whole team.

We also think, from a macro standpoint, gold, precious metals, even base metals are going to continue to do extremely well in 2021 into 2022. We have an incoming President Elect Biden administration that I think is going to continue to keep their foot on the stimulus accelerator. This should bode quite well for the sector and we see good times ahead for gold, silver, and copper.

Dr Allen Alper: That sounds excellent. Those are very compelling reasons for our readers/investors to invest and U.S. Gold Corp. Is there anything else you'd like to add, Ed?

Ed Karr: If anyone wants to get more information, they can go to our website, which is and watch our SEC filings. We put out a press release right at the end of the year, announcing our January Investor Webinar Schedule. I would invite everyone to take a look at that. We are going to be doing four webinars in January. Our first one will be on January 5th. We will be holding them every Tuesday throughout the month and if people want to tune into one of those webinars, they should get a good overview of the Company and then they can ask questions as well. People are also encouraged to reach out to Management directly anytime.

Dr Allen Alper: That sounds excellent! We’ll publish your press releases as they come out so our readers/investors can follow your progress.

U.S. Gold Corp.
Investor Relations:
+1 800 557 4550

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