Your view on FXG and FEG
I like to have your view-analyses on FXG and FEG please, thanks,
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Hi Xander,
Both Felix Gold (FXG) and Far East Gold (FEG) are interesting small-cap resource plays, both with a market cap sub $100m, although neither is what we’d consider a conventional gold investment. Both offer potentially significant upside, but they also carry substantial exploration, development and funding risks.
Felix Gold (FXG): FXG is an interesting proposition because, despite its name, the investment story is increasingly centred on antimony rather than gold. Its Treasure Creek project in Alaska has attracted attention because antimony is a strategically important critical mineral used in defence, electronics and industrial applications, with the US keen to develop domestic supply chains and reduce its reliance on China.
They have made tangible progress, including commencing extraction activities and successfully producing antimony metal through pilot-scale processing. This is encouraging, as it moves the story beyond exploration towards demonstrating a potential operating pathway.
We like the strategic positioning, particularly given the US government’s focus on domestic critical minerals. However, proving a pilot-scale process is very different from establishing a commercially profitable operation. Scaling production, securing funding and demonstrating attractive operating costs remain important hurdles.
Far East Gold (FEG): FEG is a more traditional gold exploration and development story, with its flagship Idenburg project in Indonesia providing the main attraction. The complication with FEG is they’ve been involved in a takeover dispute with Chinese group Xingye, which offered 13c per share before its bid was rejected. The situation has subsequently escalated into competing attempts to change the board. For us, this creates too much uncertainty around the company’s future direction, funding and ownership of its key assets.
FXG is the more interesting opportunity to us at present, largely because of its exposure to the strategic US antimony supply chain and the progress made towards demonstrating production, however, we’re certainly not experts in this space.
