Gold prices have edged lower in trading Thursday as uncertainty over the U.S. elections have now ended. On Wednesday, the U.S. President-elect Donald Trump laid out his economic policies, which has calmed the market.
Interestingly, Trump’s economic policies should boost growth and lead to inflation. This is long-term positive for gold. However, prices are likely to stay under pressure in the near-term, especially as the Federal Reserve is likely to raise interest rates at its next meeting in December.
Gold prices, though, could find some support at around $1,200 an ounce as physical demand would be boosted at this level. That is good news for gold mining companies as they have brought down their costs over the last two years. Cash costs for miners average around $800 an ounce, giving them a healthy margin even if prices stay at around $1,200 an ounce.
Carlin Gold Corporation (TSX-Venture:CGD) is a Vancouver,-based company owning multiple properties. In addition to Cortez Summit, Carlin owns two additional properties in northern Nevada, both of which represent Carlin-type gold targets.
The JDS property consists of 77 100% owned unpatented claims located in Eureka County, approximately 13 miles southeast of Cortez Summit. The Willow property consists of 89 100% owned unpatented claims located in northeast Nevada, northwest of the Long Canyon gold discovery in the Pequop Mountains, owned by Newmont Mining Corporation.
The Company also controls, in a 50-50 joint venture with Constantine Metal Resources, Ltd., over 600 square kilometers of claims covering precious metal and base metal targets in the Selwyn Basin, Yukon.
This morning, the company announced that it has entered into an Exploration and Earn-In agreement with mining heavy-weight Barrick Gold Exploration Inc. (NYSE:ABX) on its Cortez Summit property, Eureka County, Nevada.
Barrick has the right to earn a 70% interest in the Property by making expenditures totaling $5 million U.S. by December 31, 2020, of which $500,000 U.S. is a firm commitment to be completed by September 1, 2017.
Upon expenditure by Barrick of $5 million U.S., a limited liability company will be formed to own the project with membership interests owned 70% by Barrick and 30% by Carlin. In addition to its 30% working interest, Carlin will retain a 2% net smelter return royalty on future production to be paid on a pro-rata basis according to membership interests. The 100% owned Property consists of 142 unpatented mining claims which are located adjacent to Barrick's Goldrush deposit.
This agreement with Barrick definitely excited investors as they bid up the price of CGD by 100% Thursday, closing at $0.06 a share. Even with the quick double in shares, the Company still only commands a miniscule $4.74 market cap at last check. With Thursday’s announcement, shares also printed a new 52-week high on their strongest volume day all year.
