Nexus Gold Corp (NXSGD)

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The problem I have with Nexus is that its market cap ($21 million) is out of line with respect to other junior exploration companies. Broadly speaking, I would say you have three types of junior exploration companies - 1. Dead-in-the-water companies without a significant defined resource (Market Cap of <$10 million). 2. Companies with a potentially economic resource (Market Cap of $25 to 50 million). 3. Companies with a high-grade discovery and/or a path to near-term production (Market Cap of $70 to 100 million).

At its peak, Nexus had a market cap of $48 million. That put it ahead of companies that have defined million-ounce resources that are marginal at today’s gold price such as New Paramount ($25 million) or Comstock Mining ($41 million).

Two things can happen to bring Nexus’ Market Cap in line with other junior exploration companies - 1. it can either make a significant discovery in Burkino Faso. In that case Corvus Gold might be a realistic model to shoot for with its high-grade discovery (Market Cap of $79 million). 2. It can fail to find a discovery and its price will continue to slowly erode until it is more in line with other juniors.

This is why it very much needs a positive announcement regarding its current drilling. Without it, the price has nowhere to go but down.