US Gold Corp (NASDAQ:USAU) could significantly outperform market expectations, according to analysts, as development at its CK Gold Project in Wyoming continues in 2025.
Roth Capital Partners recently initiated coverage of the company with a Buy rating and a price target of $10, calling the company "undervalued" based on its CK Gold Project.
Analysts highlighted multiple factors that could unlock significant upside for the company, including the potential for a partnership or sale of the aggregate business, resource expansion, and the repurposing of the pit for water storage.
"We believe upside scenarios, currently not factored into our valuation, include a partnership or sale of the aggregate business, resource expansion, repurposing of the pit as water storage, and new discoveries at other projects," Roth analysts wrote in their report.
“The aggregate business could generate near-term value and reduce dilution for U.S. Gold Corp.,” they added.
Roth also pointed to the potential for a partnership or a carve-out of the aggregate business at the CK Gold Project, which could provide immediate capital or significantly reduce capital requirements for the project’s development. However, the analysts emphasized that this upside was not included in their price target, as the structure of such an agreement remains unclear.
Wyoming’s next gold-copper mine
Paradigm Capital echoed the positive sentiment in their coverage, with a Speculative Buy rating and a target price of $16.50.
Paradigm’s analysts highlighted that the CK Gold Project, now fully permitted and shovel-ready, is positioned to become Wyoming's next major gold and copper mine.
The project, which received its Mine Operating Permit in April 2023 and an Air Quality Permit in November, is now clear to proceed with development. An updated pre-feasibility study (PFS) is expected by the end of the year, followed by a definitive feasibility study (DFS) in mid-2025.
Paradigm analysts believe the commodity price increases will offset inflationary pressures on capital and operating costs, making the project even more attractive.
"We are confident that this will be Wyoming’s next gold (and copper) mine," Paradigm analysts wrote, adding that the PFS completed in 2021 demonstrated strong economics.
Paradigm also noted multiple near-term sources of potential upside for the CK Gold Project. These include expanding the resource base, converting waste rock into saleable aggregate products, and improving gold recovery rates.
The inclusion of aggregate as a potential revenue stream could further enhance the project’s economics and increase its overall value.
"We see several sources of upside, including expansion of the resource and the potential to convert ‘waste’ rock into saleable aggregate products," Paradigm analysts wrote.
Shares of US Gold Corp (NASDAQ:USAU) were up 1.3% on Wednesday at $6.78 in New York.