Nevada King surges as Centerra takes 9.9% stake

Canadian miner Centerra Gold (TSX: CG; NYSE: CGAU) is paying $10 million (US$7.3 million) for a minority stake in junior Nevada King Gold (TSXV: NKG; US-OTC: NKGFF) to boost its exposure to the biggest gold-producing U.S. state. Shares of Nevada King soared.

Centerra’s investment, which is expected to close in the second quarter, is part of a $16-million financing announced by Nevada King Tuesday. Centerra will pay 21¢ apiece for a 9.9% equity stake in the company, 27% more than Monday’s closing price of 16.5¢ in Toronto trading.

Nevada King is focused on advancing its Atlanta project, a past-producing open-pit gold operation along the prolific Battle Mountain trend. Toronto-based based Centerra is already familiar with the Western United States, thanks to its Goldfield project in Nevada and its strategic investment in Liberty Gold (TSX: LGD; US-OTC: LGDTF), which is advancing the Black Pine project in southern Idaho.

Centerra’s investment in Nevada King represents “a meaningful positive endorsement given the comprehensive due diligence Centerra would have completed prior to the investment decision and Centerra’s technical expertise as a producer and a developer with a project also in Nevada,” Desjardins Capital Markets mining analyst Allison Carson said Tuesday in a note.

Nevada King soared 27% to 21¢ Tuesday morning in Toronto, boosting the company’s market value to about $89 million, as wider markets fell on renewed Middle East fighting. The stock has traded between 12¢ and 32¢ in the past year. Centerra dropped 0.1% to $22.46 for a market capitalization of about $4.5 billion.

Investor rights

Once the deal closes, the two companies will enter into a customary investor rights agreement that will grant Centerra financing participation rights and information rights, subject to certain conditions.

Nevada King chairman Collin Kettell and Michael Parker, the company’s largest shareholder, are both taking part in the financing to maintain their respective stakes. Their investment will raise about $6 million, Nevada King said.

Proceeds of the financing will go towards accelerating exploration across the Atlanta property, as well as for general working capital, the company said. The project sits on the Battle Mountain trend, about 264 km northeast of Las Vegas.

Atlanta has emerged as one of the higher-grade oxide deposits in North America. It holds 27.7 million measured and indicated tonnes grading 1.14 grams gold per tonne for contained metal of about 1 million oz. gold, according to a 2025 resource estimate. The overall tonnage has more than doubled compared with a 2020 resource estimate.

Satellite targets

Exploration over the past two years has shifted from defining the core Atlanta resource zone to testing satellite targets across the property. These include Atlanta South and Atlanta North along the West Atlanta Fault, as well as newer discoveries such as Silver Park East and the Western Rim target.

Nevada King’s land package around Atlanta covers about 130 sq. km. The Vancouver-based company has completed more than 100,000 metres of drilling on the property, resulting in multiple high-grade gold discoveries. It also holds several exploration properties in the state, including Lewis and Horse Mountain.

Centerra operates British Columbia’s Mount Milligan mine and the Öksüt open-pit mine in Turkey. It also has a development pipeline that includes Goldfield and the Kemess project in B.C.

Nevada dislodged Finland as the best jurisdiction for mining investment globally, according to the Fraser Institute’s most recent Annual Survey of Mining Companies, which was released last month.