Risk assets have bounced back sharply since Friday after investors digested a stronger-than-expected U.S. jobs report for the month of June. While the strong jobs report has raised the possibility of a rate hike from the Federal Reserve, it also highlights the strengthening U.S. recovery.
As markets have turned into risk on mode, gold prices have seen a pullback. The pullback in gold also comes from around a key resistance level. Fundamentally gold still looks attractive as there is no certainty over when and at what pace the Fed would hike interest rates. However, the strong jobs report has weakened the bullish case for gold somewhat. Having said that, for miners, a slight pullback in gold prices won’t weaken the bullish case.
The main reason for this is that miners have brought down their costs significantly during the last two years. Even if prices drop by 10%-15% from current levels, gold miners will continue to enjoy healthy margins and generate significant cash flows.
Nexus Gold Corp. (TSX-Venture:NXS), a Vancouver-based exploration stage mineral exploration company, has seen a sharp rise in its shares today. Nexus Gold has focused its exploration efforts on the Walker Ridge Gold Project (Walker Ridge), a drill-ready, multiple target, Carlin-type gold exploration project located in the Independence/Jerritt Canyon Gold Trend, Nevada in the United States.
NXS shares are soaring in trading today after the company announced that it has entered into a definitive agreement with Bureau D’Etudes des Geosciences et de L’Environnement (the"Optionor"), pursuant to which Nexus will acquire the right to earn up to 100% interest in the Bouboulou Exploration Permit located in Burkina Faso, West Africa (the "Bouboulou Concession" or "Property").
NXS will have an option to acquire up to 75% interest in the Property, in consideration for cash payments of $500,000 U.S. and the issuance of 900,000 common shares of Nexus, over a period of three years. Following the acquisition of a 75% interest in the Property, Nexus will have the option to acquire the remaining 25% interest in the Property through a cash payment of $1,000,000 U.S. with a 1% net smelter return royalty remaining with the Optionor.
The Bouboulou Concession covers an area of 38.3 square kilometres and is located approximately 100 kilometers north by northwest of the capital city of Ouagadougou, Burkina Faso.
At last check, NXS shares were trading 22.22% higher at $0.0550 on volume of 3.21 million, which is substantially above the daily average volume of 214,206.
