85 cents | Market Cap $39.5 million
Nobody likes XTG as much as Xtra does. Almost everyday the company does a SEDI filing to document the redemption, retraction and cancellation of common shares (aka. buybacks).
In an industry famous for diluting equity holders and reverse splits, Xtra stands head and shoulders above the pack. Since inception in 2011 the company has never diluted shareholders via a private placement. After a decade of advancing their Kibi Project (Ghana), Xtrahas less shares outstanding in 2022 than it did in 2011!
Incredible. CEO James Longshore and I are aware of no other such example.
Therefore XTG is a black swan.
They did it via revenue sharing with artisanal miners (they process alluvial Gold from Xtra’s concessions) and conservative management. Last year Xtra generated more than $2 million (U.S.) pre-tax income, improving their liquid asset base to $10.8 million.
Some of those funds were invested into another crawler-mounted diamond drill rig, the 3rd in Xtra’s fleet of company-owned drill rigs.
Nice piece of equipment there. As it stands, Xtra is running 4 shifts daily (3 day crews and 1 night crew).
Longshore says we shouldn’t judge solely on total meters drilled. Rather a “good shift” looks like 30 m of good-looking core per 3 rigs, or about 120 m per day assuming 4 shifts.
Lately Xtra has been hitting good rocks from the newly found Boomerang zone. Tuesday morning they delivered 1.35 g/t Au over 50m (nice follow-through numbers after previously delivering 1.6 g/t Au over 77 m) extending this new zone from surface to 350 m down plunge.
“The latest drilling considerably extends the down-plunge and lateral continuity of the Lower Shoot Gold zone, and several boreholes also yielding multiple intercepts of new Gold mineralization indicating the potential for an extensive array of stacked Gold shoots. The widespread Gold mineralization encountered by drilling at Boomerang East over the last year supports our belief that we are dealing with a major multi-shoot Gold system, making us confident that the entire extension of the mineralization-controlling anticlinal fold hinge structure represents highly prospective exploration ground for the discovery of additional Gold shoots proximal to Boomerang East, as well as potentially new Gold systems further to the northeast,” said Longshore.
This ongoing exploration work forms part of an aggressive in-house drilling initiative focused on multiple resource expansion targets along the southwest (Zone 3) segment of the over 3 km long Zone 2 – Zone 3 anticlinal fold structure, stretching over 1 km beyond the recently published mineral resource estimate (roughly 800,000 open pit ounces grading 1.3 grams).
Judging by existing open-pit operations in Ghana, where most majors have mines, these would be economic (profitable) ounces at even $1,600 Gold.
To the extent XTG is under-appreciated given its <1 million ounces resource, astute watchers can ascertain they’re beyond that and moving toward 2 million ounces when including the Boomerang Zone.
Lack of liquidity is normally a negative and XTG is guilty of having low volume. However, during tough times illiquid stocks can be a place to hide out – sometimes they perform better than liquid stocks (which can become a go-to source for raising funds). XTG has shown relative strength, dropping only 29% from recent highs.
Nobody likes XTG like Xtra does. They’re repurchasing stock on a weekly basis. This provides shareholders with the opposite of dilution while also limiting downside.