One of Our Lottery Tickets Becomes a Gold Producer in June

Will its stock level up on the news?

Back in 2020, a gold explorer named Pure Gold defined a high-grade deposit in Red Lake, Ontario, built a state-of-the-art mill to process it, and had a very nice run as investors sent its market cap above $1 billion.

Then the problems began. Grades, initially nice and high, started to decline. Costs rose, profits evaporated, and the stock began an inexorable decline that ended at zero with Pure Gold’s 2022 bankruptcy.

In 2023, a group of veteran mine operators bought the property for a fraction of the $300 million Pure Gold had put into it, with the goal of upgrading the infrastructure and more efficiently mining the reserves. In other words, they intend to get it right this time.

Now the moment of truth approaches. Production is scheduled to start in June, and positive cash flow is promised shortly thereafter. Will the stock be revalued accordingly, as this lottery ticket becomes a cash-generating producer in a safe jurisdiction? Here’s hoping.