The Latest from McKinley Gold Mine (April 2024)
A General Message from Eric
Dear Valued Investors, I am pleased to report that March was an exceptional month for both the gold market and our mining project. Despite some early snowfall and cool temperatures, weather conditions are improving, with temperatures expected to reach the upper fifties and low sixties in April. During March, we commenced roadwork for site restoration on the upper portal road, enabling our team to begin sample mining. Moreover, gold prices hit an all-time high, reaching $2,300 per ounce. In addition to on-site work, we are also preparing for investor visits in April.
Metallurgical Testing Progress
We are in ongoing discussions with our contract metallurgist regarding testing work, metallurgical processes, and the need for an on-site assay laboratory. Kappes Cassiday & Associates (KCA) is preparing a scope of work and timeline for metallurgical testing.
Road Construction Updates
Upper portal road construction has begun, although progress has been slow due to encountering hard rock formations that have been present for over a century. However, we have overcome the most challenging part and are moving forward. We plan to complete this road construction by the first week of April.
Power Supply Strategy Developments
We have contracted an electrician to evaluate our power needs and provide an estimate for installing line power to the project.
Gravity Circuit Advancements
We plan to collect metallurgical samples by the end of April. Based on the testing results, we will determine the gravity circuit size, model, and flow.
Safety Measures
We have been working on MSHA (Mine Safety and Health Administration) safety elements required to re-initiate underground activities. Due to changes in MSHA’s position on underground activities, we may need to reevaluate our timeline. The change means increased scrutiny on safety with quarterly inspections, potentially leading to early citations. Despite increased scrutiny from MSHA, we remain committed to operating in compliance with safety standards and expect some initial citations as a reminder of regulatory authority.
Progress Against Plan
Please find the attached progress report.
Gold Market Insights
The gold market experienced a remarkable surge in March 2024, with prices reaching an all-time high of $2,300 per ounce. This significant increase can be attributed to several key factors:
- Global Economic Uncertainty: The ongoing global economic uncertainty, fueled by persistent inflation and geopolitical tensions, has driven investors to seek safe-haven assets like gold. As central banks continue to grapple with the challenges of managing inflation while maintaining economic growth, investors have turned to gold as a hedge against market volatility and potential currency fluctuations. The appeal of gold as a stable and secure investment option has only grown stronger in the face of economic uncertainty, contributing to the record-breaking prices witnessed in March 2024.
2. Middle East Conflicts: Escalating tensions and conflicts in the Middle East have further contributed to the rise in gold prices. Geopolitical instability in the region has increased the demand for gold as investors seek to mitigate the risks associated with political and economic uncertainty. The Middle East has long been a hotbed of geopolitical tensions, and the recent escalation of conflicts has only served to heighten investor concerns. As a result, the demand for gold as a safe-haven asset has surged, driving prices to unprecedented levels.
Given these factors, we remain optimistic about the prospects for gold prices to remain above $2,300 per ounce in the near term. As global economic uncertainty persists, geopolitical tensions continue to shape market sentiment, and supply chain disruptions limit gold production, the fundamentals for the gold market remain strong.
As our mining project progresses, we are well-positioned to capitalize on the favorable gold market conditions. Our team remains committed to advancing our project efficiently and responsibly, ensuring that we are able to deliver value to our investors in this promising market environment. With our focus on sustainable mining practices and our strategic location, we are confident in our ability to navigate the challenges posed by supply chain disruptions and emerge as a key player in the global gold market.
We will provide the April site visit report in the next monthly letter.
Featured Story — What’s the origin of “McKinley”?
William McKinley, the 25th U.S. President, served from 1897 until his assassination in 1901. He was a strong advocate for the gold standard and signed the Gold Standard Act in 1900, which established gold as the sole basis for redeeming paper currency. This ended the practice of bimetallism, where silver could also serve as a monetary standard.
After McKinley’s assassination in September 1901, he was succeeded by his Vice President, Theodore Roosevelt, then William Howard Taft, who served as the 27th U.S. President and signed on our McKinley Mine’s claim.
The gold peg system, also known as the Bretton Woods system, was ended by President Richard Nixon on August 15, 1971, in what is known as the “Nixon Shock.” Nixon announced that the U.S. would “temporarily” suspend the convertibility of the dollar to gold, effectively ending the Bretton Woods system and ushering in an era of fiat currency.
Since the end of the gold peg system, the value of currencies against gold has indeed been continuously dropping. Without the constraint of a fixed exchange rate to gold, governments have been able to expand the money supply, leading to inflation and a decrease in the purchasing power of currencies relative to gold.
The price of gold, which was artificially held at $35 per ounce under the Bretton Woods system, has risen significantly since 1971, reflecting the decline in the value of fiat currencies against this precious metal over the past 50 years since Nixon’s decision.
