Monday, September 25, 2006 8:43:38 PM
*** Gold related post (USGL/McEwen) ***
McEwen Assures, Cortez Trend Consolidation "Still on Track"
By Jon A. Nones
25 Sep 2006 at 07:18 PM EDT
DENVER (ResourceInvestor.com) -- Six months have passed since U.S. Gold [TSX:UXG; OTCBB:USGL] announced its intention to acquire four surrounding companies in the Cortez Trend, located in Nevada. Chairman and CEO Rob McEwen gave listeners at the Denver Gold Forum 2006 a brief update about the delay.
“Our Lawyers assured me that this was going to be complicated but fairly straight forward,” said McEwen. “Complicated it was; straight forward it wasn’t.”
In March, McEwen announced the company’s intention to acquire four Canadian companies with properties in the Cortez Trend: White Knight Resources [WKR.V], Nevada Pacific Gold [NPG.V], Coral Gold Resources [CGR.V] and Tone Resources [TNS.V].
McEwen owns a 17% interest in White Knight Resources, 18.2% in Nevada Pacific Gold, nearly 20% in Coral Gold, 15% in Tone Resources. He also owns a 33.3% interest in U.S. Gold and roughly $350 million in gold stocks in total.
McEwen said as a major shareholder of these four companies, he has found it “a little frustrating” for a U.S. company to buy four Canadian companies.
On May 1, U.S. Gold officially made a bid for White Knight, offering shareholders 0.35 of a U.S. Gold share, representing a premium of approximately 25% - it was the only announced offer thus far. Then on June 5, U.S. Gold terminated its offer, citing delays in receiving various financial statements from White Knight.
In the press release, McEwen said all four companies had failed to deliver financial documents required by the SEC and TSX needed to make a formal bid.
“I’m extremely disappointed with the delays that we have encountered and the lack of cooperation that we have received from the other companies in this effort. We have diligently sought to obtain from each of these companies the necessary information to complete the required regulatory filings but their failure or inability to respond in a timely manner has worked to the disadvantage of our respective shareholders,” he said.
However, McEwen told attendees during his presentation that the merger was “still on track.”
Cortez Trend
U.S. Gold has identified 1.4 million ounces in the Cortez Trend, and recently raised $75 million for exploration. To date, the company has drilled 19 holes, reporting 6, but has released “nothing to make the world jump up and down,” said McEwen. The holes have expanded the depth of the deposit and confirmed lateral continuation, he added.
McEwen said exploration at present has only accounted for about 5% of the budget thus far, noting that U.S. Gold’s properties are virtually surrounded by very prolific deposits owned by Newmont [NYSE:NEM] and Barrick [NYSE:ABX; TSX:ABX].
According to McEwen, Barrick paid $4.2 billion for Placer’s Nevada assets. Barrick’s Cortez Hills mine, with 9.7 million ounces of gold, is just 10 miles from U.S. Gold’s Tonkin Springs. Compared to other countries, Denver alone is number three in gold production, added McEwen.
Gold Outlook
McEwen told listeners during a luncheon presentation that it’s too early in this gold cycle to walk away.
“It’s time to load up, not sell,” he said.
In 2001, gold bottomed at $250/oz, but by 2004, it had risen to $440. McEwen said by 2008, gold will test $850/oz and “it will significantly exceed $1000” by 2010. Adjusting for inflation, the high of $850 would be $2200 at today’s dollar value, he added.
Using the Dow/Gold Ratio, one ounce of gold bought the Dow in 1980, while in 1999, 44 ounces bought the Dow. Today, roughly 20 ounces of gold buys the Dow, and McEwen said this could drop to 2 ounces before too long.
“Gold is the ultimate currency in uncertain times,” he said.
Share Price Activity
U.S. Gold closed down 43 cents or 8.72% at C$4.50 on TSX today. Shares have fallen considerably from highs of US$10.30 hit in April on OTCBB.
U.S. Gold listed on TSX in late August. McEwen said U.S. Gold has applications with two senior U.S. stock exchanges, with news about this hopefully coming out later this month.
http://www.resourceinvestor.com/pebble.asp?relid=24166
McEwen Assures, Cortez Trend Consolidation "Still on Track"
By Jon A. Nones
25 Sep 2006 at 07:18 PM EDT
DENVER (ResourceInvestor.com) -- Six months have passed since U.S. Gold [TSX:UXG; OTCBB:USGL] announced its intention to acquire four surrounding companies in the Cortez Trend, located in Nevada. Chairman and CEO Rob McEwen gave listeners at the Denver Gold Forum 2006 a brief update about the delay.
“Our Lawyers assured me that this was going to be complicated but fairly straight forward,” said McEwen. “Complicated it was; straight forward it wasn’t.”
In March, McEwen announced the company’s intention to acquire four Canadian companies with properties in the Cortez Trend: White Knight Resources [WKR.V], Nevada Pacific Gold [NPG.V], Coral Gold Resources [CGR.V] and Tone Resources [TNS.V].
McEwen owns a 17% interest in White Knight Resources, 18.2% in Nevada Pacific Gold, nearly 20% in Coral Gold, 15% in Tone Resources. He also owns a 33.3% interest in U.S. Gold and roughly $350 million in gold stocks in total.
McEwen said as a major shareholder of these four companies, he has found it “a little frustrating” for a U.S. company to buy four Canadian companies.
On May 1, U.S. Gold officially made a bid for White Knight, offering shareholders 0.35 of a U.S. Gold share, representing a premium of approximately 25% - it was the only announced offer thus far. Then on June 5, U.S. Gold terminated its offer, citing delays in receiving various financial statements from White Knight.
In the press release, McEwen said all four companies had failed to deliver financial documents required by the SEC and TSX needed to make a formal bid.
“I’m extremely disappointed with the delays that we have encountered and the lack of cooperation that we have received from the other companies in this effort. We have diligently sought to obtain from each of these companies the necessary information to complete the required regulatory filings but their failure or inability to respond in a timely manner has worked to the disadvantage of our respective shareholders,” he said.
However, McEwen told attendees during his presentation that the merger was “still on track.”
Cortez Trend
U.S. Gold has identified 1.4 million ounces in the Cortez Trend, and recently raised $75 million for exploration. To date, the company has drilled 19 holes, reporting 6, but has released “nothing to make the world jump up and down,” said McEwen. The holes have expanded the depth of the deposit and confirmed lateral continuation, he added.
McEwen said exploration at present has only accounted for about 5% of the budget thus far, noting that U.S. Gold’s properties are virtually surrounded by very prolific deposits owned by Newmont [NYSE:NEM] and Barrick [NYSE:ABX; TSX:ABX].
According to McEwen, Barrick paid $4.2 billion for Placer’s Nevada assets. Barrick’s Cortez Hills mine, with 9.7 million ounces of gold, is just 10 miles from U.S. Gold’s Tonkin Springs. Compared to other countries, Denver alone is number three in gold production, added McEwen.
Gold Outlook
McEwen told listeners during a luncheon presentation that it’s too early in this gold cycle to walk away.
“It’s time to load up, not sell,” he said.
In 2001, gold bottomed at $250/oz, but by 2004, it had risen to $440. McEwen said by 2008, gold will test $850/oz and “it will significantly exceed $1000” by 2010. Adjusting for inflation, the high of $850 would be $2200 at today’s dollar value, he added.
Using the Dow/Gold Ratio, one ounce of gold bought the Dow in 1980, while in 1999, 44 ounces bought the Dow. Today, roughly 20 ounces of gold buys the Dow, and McEwen said this could drop to 2 ounces before too long.
“Gold is the ultimate currency in uncertain times,” he said.
Share Price Activity
U.S. Gold closed down 43 cents or 8.72% at C$4.50 on TSX today. Shares have fallen considerably from highs of US$10.30 hit in April on OTCBB.
U.S. Gold listed on TSX in late August. McEwen said U.S. Gold has applications with two senior U.S. stock exchanges, with news about this hopefully coming out later this month.
http://www.resourceinvestor.com/pebble.asp?relid=24166
Dan 
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