Elevation is producing 30,000-40,000 ounces of gold per year at Moss. While the production and cash flow is a big positive, the real potential exists in increasing production over the coming years, supported by a 1M oz resource that continues to grow.
The company reported it had gold equivalent production of 7,209 ounces in Q321, down from the preceding quarter when it reported 7,823 gold equivalent ounces. The company reported revenue of $12.1M, and earnings from mine operations of $2.9M before depreciation and depletion. During the same September quarter from a year ago Elevation Gold reported production of 14,673 gold equivalent ounces, and revenue was $26.8M.
"The ramp-up of the 3A Heap Leach Pad now allows the mining team to focus on pre-stripping the south wall of the East pit to allow for higher grade material to be mined in Q1 2022," said Michael G. Allen, President of Elevation Gold. "In addition, the crusher team has been focusing on improving operational efficiencies to increase throughput in alignment with higher grade material being mined."
Using a $1757 gold price and $22.10 silver price, Moss generates a US$50.6 million after-tax NPV(5%). Those metal prices are below today’s spot prices and this analysis only assumes that the mine life at Moss will extend to 2025 at a mining rate of 11,000 tons of ore per day. Considering that the life of mine plan published earlier this year only includes proven & probable reserves (184,500 ounces of gold and 2.2 million ounces of silver), it is virtually certain that the mine life will extend beyond 2025 (due to the 490,200 ounces of gold and 5.75 million ounces of silver in the measured & indicated category that aren’t in the life of mine plan). In addition, there is also significant potential for the production rate to increase beyond 11,000 tons per day.
With a market cap of US$44M at todays close, which includes US$7M in cash, the market is currently giving Elevation zero value for the potential of increased production and exploration success across its 168 sq km land package at Moss. Never mind the Hercules Project in NW Nevada, which encompasses another 100 sq km. Both are located in top teir jurisdictions and Elevation’s current market valuation offers one of the best risk/reward propositions for a micro-cap junior GOP at this time, while being controlled by a serially successful management team. If the gold price manages to break out of its massive cup & handle pattern above $2k by late Q1/2022, a fifteen-bagger from these levels over the next 12-18 months is a very real possibility