The perfect storm is brewing and we can see it coming from a million miles away! Monetary stimulus with endless money printing, political and trade tensions with China, and now uncertainty about a second or even third wave of COVID-19; these are just a few issues we face in 2020 and beyond, with no clear resolution in the immediate future. Can you imagine the next few years? The time is now to safeguard your assets and Xtra-Gold Resources Corp. (“Xtra-Gold”) is a prime candidate for a defensive stock in your portfolio! Here’s why. We all know that gold can’t be printed or created. It is the oldest form of currency and is a hedge against both inflation and deflation. As cliché as it sounds, it’s a fact! But it can be discovered in places like the old “Gold Coast”, Ghana, where Xtra-Gold is focused on defining a potentially significant gold resource on its Kibi Gold Project (the “Project”). Xtra-Gold recently announced some exciting news with some high-grade results near surface after diligently executing a plan to put out two drill rigs in their Zone 3 near their maiden resource in Zone 2. Both rigs are drilling aggressively and recently hit a new gold zone. Let’s take a look at the Project surface map (Figure 1): Zone 2 at the top right corner is Xtra-Gold’s maiden resource, with Zone 3 in close proximity to its left. Take a very close look at their “Boomerang Zone”, highlighted in blue within Zone 3, which is where these recent results came from.
What’s so significant about this new zone? About 1.5km from their maiden resource (Zone 2), this new zone has the potential to add significant ounces to the Project. These ounces could generate substantial shareholder value! The “Boomerang Zone” returned assays of 30 metres-plus in width grading 1.25 grams per ton (“g/t”) of gold at surface. This is a major zone. But even more exciting within Boomerang, there is an 8-9 metre intercept grading 2 g/t and another one below that at 6 meters grading 4 g/t. Why is this important? Because if the continuity of the new zone can be verified by additional drill holes, Xtra-Gold could start piling up the ounces fast and put their Project “on the map” as a major discovery. If this drill program continues to show similar results in the months to come, Xtra-Gold shareholders stand to be rewarded, especially with gold prices at current levels (or higher). Additionally, Xtra-Gold announced in its latest quarterly earnings report that its Community Mining Project with locals took the company’s cash and liquid assets position from US$5.8 million to US$8.8 million within 90 days. Clearly, Xtra-Gold will not require outside cash to execute on their business plan. Hence, shareholders have protection from unwanted dilutive financings that can erode shareholder value. As a result, I believe the stock will appreciate significantly within an 1,800-dollar-pus gold price environment. Why should you consider Xtra-Gold right now? First of all, Xtra-Gold has hit some significant initial high-grade results in Zone 3 with plenty of cash on hand. This is very important for any exploration-stage company, because drilling for gold is expensive. Now with limited risk of any dilutive financings and a possibly massive untapped gold deposit, I believe this will prove to be an opportune time to buy the stock. Within the next 6 months or so, Xtra-Gold will determine through intensive drilling the size potential of the Zone 3 deposit. At a prospective 1 million or more ounces of gold in the ground, Xtra-Gold is incredibly undervalued at the current spot price of gold. It is also worth noting that Xtra-Gold’s Project is in close proximity and is geologically similar to Newmont Mining Corporation’s Akyem mine, which is a world-class deposit of 10 million ounces. Newmont is extracting that gold for US$575 cash costs, which makes Xtra-Gold’s concessions a premier gold asset if they can keep adding the ounces. With a huge gold bull market looming on the horizon, Xtra-Gold is poised to create massive shareholder value in the next 6 months and beyond. Its initial results for Zone 3 may just be the beginning. It’s only a matter of time before they announce their next results, and it might be too late to catch this opportunity at these modest valuations by then. Considering their healthy cash position and incredibly promising initial results, anyone who wants serious leverage to gold prices should definitely consider Xtra-Gold now. It’s an exciting time for gold bulls and with such a strong shareholder base and an incredibly disciplined Management Team on the ground focused on protecting shareholder interests, I believe this is one company that will deliver us a major gold discovery!