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March 16, 2024

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Contact Gold (C.V) stock is up over 100% today. Here’s why!

Contact Gold (C.V) is a gold junior explorer that is focused on making district scale gold discoveries in Nevada. The company’s land holdings are on the prolific Carlin and Cortez gold trends which host numerous gold deposits and mines.

Today, the company announced that it has entered into a four-year US $10 million earn-in agreement with a wholly owned subsidiary of Centerra Gold (CG.TO) on the company’s Green Springs oxide gold project.

Centerra has an option to acquire a 70% interest in Green Springs for cumulative earn-in exploration expenditures of US$10,000,000 and aggregate cash payments to the Company of US$1,000,000. The first-year work commitment of US$1,500,000 is guaranteed.

“We are very happy to be partnering with Centerra on the Green Springs project. Centerra is a renowned international gold producer, and their partnership at Green Springs will allow us to significantly accelerate exploration at the project far beyond what Contact Gold can accomplish in the current market.” said Matt LennoxKing, President & CEO of Contact Gold. “Securing multi year funding for Green Springs allows Contact Gold to give the Green Springs project the amount of exploration work it needs, and dedicate additional capital to our resource stage Pony Creek gold project, located on Nevada’s prolific Carlin Trend.”

 

Since 2019, Contact Gold has drilled 132 holes for 16,769 metres at Green Springs. New oxide discoveries have been made. Centerra Gold’s team must see the potential of a major scale discovery here.

Here are the highlights from the earn-in agreement:

  • Centerra has made a cash payment of US$150,000 to Contact Gold to secure the option.
  •  Centerra will solely fund a minimum commitment (“Minimum Commitment”) of US$1,500,000 in exploration expenditures during the first year of the earn-in, or pay the difference to Contact Gold in cash.
  • To satisfy the earn-in, Centerra shall make a total of US$10,000,000 in exploration expenditures over a four-year timeframe, and pay annual cash payments to Contact Gold totaling US$1,000,000.
  • Contact Gold will be the project manager for exploration at Green Springs for the first year of the Earn-in Agreement (thereafter Centerra has the right to be project manager), and shall collect a management fee based on eligible expenditures through the earn-in.
  • The next phase of exploration, including follow-up drilling is expected to commence in Q1 2023. The Company has identified multiple drill targets, and the necessary permitting to begin the 2023 program is already in place.

TradingView Chart

The stock loves the news, currently up 133% for the day. We also have BIG volume. The largest volume on the stock this year with currently 1,465,001 shares traded. This is big as it could hint at momentum continuation. With this type of volume, you would expect some more follow through.

In terms of the chart, the stock remains in a downtrend, but this could be shifting. I have drawn out a trend line, and today’s pump is currently reacting at the trend line. If we can get a daily candle close above it, this would be a bullish sign. Another strong positive is the fact we have price back over the $0.03 zone which was resistance. It has now turned to support.

Looking ahead, I would watch the $0.06 zone for the big breakout. The technicals look promising, and we have fundamental news to back the momentum strength. Keep this stock on your watchlist.

 

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