Though gold, in U.S. dollar terms, is still consolidating its recent gains, the Senior and mid-tear gold stocks have gone on a tear of late. Newmont (NEM.NYSE), one of the largest gold Producers on the planet, tagged multi-year highs in recent sessions (a decade long weekly chart below):
The Senior royalty stocks have performed even better. Franco-Nevada (FNV.TO), a top-shelf royalty-streaming play, just tagged all time highs (a decade long weekly view below)…
The share price trajectory of royalty giant Wheaton Precious Metals (WPM.TO) is even more impressive (a one-year daily chart)…
The above price action is a clear indication that the bull market in mining is ON, says this humble observer. And these are very early days in what I expect to be an epic run in the companies that produce, and probe the Earth’s subsurface layers in search of mineral wealth.
I’m watching the junior arena closely for evidence that ‘smart money’ is beginning to position itself in some of the higher quality entries.
I believe we’re seeing it now.
HighGold Mining (HIGH.V) isn’t just breaking out to the upside in price, it’s breaking out in volume too. Note that the company has only been trading for around eight months…
I’ve been a fan of HighGold since it premiered last fall, featuring it on numerous occasions, including last week after the company tabled a high-grade resource for its flagship Johnson Tract project in Alaska.
The company developed a robust geological model based on relatively tight-spaced drill holes, detailed surface mapping, a high-quality database, extensive re-logging and re-sampling of historic drill core, the inclusion of nine new drill holes (including the twinning of two historic holes), and extensive geological interpretive work.
These high-grade, high-quality AuEq ounces-in-the-ground backstop the company’s current $62M valuation and may be indicative of Johnson Tract’s resource expansion and exploration upside.
On the subject of upside, the following JT drill hits are the reason we’re here:
- 108.6 meters grading 10.4 g/t Au, 7.6% Zn, 0.7% Cu, 2.0% Pb and 8 g/t Ag (JT82-004 Original Discovery);
- 71.4 meters grading 20.9 g/t Au, 9.8% Zn, 0.9% Cu, 1.6% Pb and 9 g/t Ag (JT88-034);
- 137.7 meters grading 11.3 g/t Au, 2.4% Zn, 0.5% Cu, 0.5% Pb and 4 g/t Ag (JT93-067);
- 107.8 meters grading 12.4 g/t Au, 7.1% Zn, 0.9% Cu, 1.6% Pb and 9 g/t Ag (JT19-082);
- 59.2 meters grading 8.2 g/t Au, 8.8% Zn, 0.4% Cu, 0.1% Pb and 5 g/t Ag (JT19-085);
- 75.1 meters grading 10.0 g/t Au, 9.4% Zn, 0.6% Cu, 1.1% Pb and 6 g/t Ag (JT19-090).
With $11M in its coffers and roughly $6M worth of $0.70 itm (in the money) warrants, a fully funded multiple rig campaign is expected to begin in early July where a number of high priority targets, including the prime Northeast Offset target, will see a proper probe with the drill bit (last year the company drilled 2,200 meters in the space of five weeks with a single rig).
The company can drill Johnson Tract right on through October. The minimum we should expect is 7,000 meters for this upcoming field season.
Judging by the price/volume action over the past two sessions, the market is waking up to the Tier-1 potential of Johnson Tract.
A May 7th interview with CEO Darwin Green…
Last week, in a Highballer piece titled, Companies on our shortlist in the news – Defense (DEFN.V), HighGold (HIGH.V), and Skeena (SKE.V), we noted that the 49th state is going out of its way to let the world know it’s open for business.
Just the other day, the office of Governor Mike DonLeavy officially declared May 10th Alaska Mining Day.
NOW THEREFORE, I, Mike Dunleavy, GOVERNOR OF THE STATE OF ALASKA, do hereby proclaim May 10, 2020 as:
Alaska Mining Day
in Alaska, and encourage all Alaskans to recognize the importance of mining in the founding and early development of Alaska’s history, and to appreciate the efforts of all Alaskans involved in the mining industry today.
On May 5th, Cartier Resources (ECR.V) tabled a much-anticipated resource estimate for the North and South Gold Corridors at its flagship Chimo Mine project located along one of the most prolific greenstone belts on the planet—the Abitibi Greenstone Belt.
Cartier Increases Gold Resources of the Chimo Mine Property
The resource estimate along these two corridors produced:
- 754,300 tonnes at an average grade of 5.11 g/t Au for a total of 123,910 ounces gold in the Indicated category;
- 1,196,300 tonnes at an average grade of 4.69 g/t Au for a total of 180,550 ounces gold in the Inferred category.
When you add these resource numbers to the Central Gold Corridor, the combination of North, South and Central now host a total mineral resource of:
- 4,017,600 tonnes at an average grade of 4.53 g/t Au for a total of 585,190 ounces gold in the Indicated category;
- 4,877,900 tonnes at an average grade of 3.82 g/t Au for a total of 597,800 ounces gold in the Inferred category.
That’s 1,182,990 ounces all told. And the company continues to test the depth potential of Chimo along the 5B4-5M4-5NE and 5CE Zones where recent drilling tagged 22.0 g/t Au over 2 meters.
Mineralization at Chimo consists of 27 gold-bearing zones hosted within 17 gold-bearing structures. The exploration potential peripheral to these gold-bearing zones remains open.
It would appear Chimo is destined to grow.
CEO Philippe Cloutier:
″These additional resources, situated near surface and accessible by existing infrastructure, is a considerable advantage to launching a mine project. Furthermore, two drill rigs are in the field to pursue drilling of Zones 5B4-5M4-5NE and 5CE where continuity of the mineralization has been shown to extend to a depth of 1,300 meters″.
Though some may complain that the Cartier price chart deserves a much steeper trajectory, there’s a nice (constructive) symmetry to this stair-stepping pattern. Also, note the elevation of the accumulation/distribution indicator at the bottom of the chart—it suggests to this humble observer that ‘smart money’ is entering the fray…
Readers of this weekly letter are well aware that Cartier is NOT a one-trick pony. A few years back, Cartier management acquired a robust pipeline of brownfield projects for pennies on the dollar—one of the reasons I shortlisted the company.
Drilling will soon be carried on the Benoist, Wilson, and Fenton properties. These projects are all drill-ready with prioritized targets along the geometric extensions of known gold deposits.
The Benoist project is next on deck where previous drilling encountered the following values:
- 37 meters grading 6.5 g/t Au (inc 19.5 meters @ 10.9 g/t Au);
- 53.6 meters grading 5.6 g/t Au (inc 9.3 meters @ 11.6 g/t Au);
- 56.1 meters grading 5.3 g/t Au (inc 7.8 meters @ 10.5 g/t Au);
- 25.8 meters grading 4.0 g/t Au (inc 5.6 meters @ 7.9 g/t Au).
The company has more than $ 5.5 million in its coffers, along with significant corporate and institutional backing from Agnico Eagle (AEM.TO) and a number of Quebec investment funds.
Here, a recent interview with CEO Cloutier telling the Cartier story to a wider audience. It’s a good thing—more eyes on what I consider to be one of the better (undervalued) development-exploration plays in the junior arena.
Defense Metals (DEFN.V) released a 3D geological model for its Wicheeda Rare Earth Element (REE) deposit after the market closed on Friday afternoon.
“Based on the modelling completed by Defense Metals’ technical team, there remains significant potential for expansion of the Wicheeda Deposit to the north in the down plunge direction where 2019 drilling indicates the deposit remains open.”
On deck is an updated mineral resource estimate, and I suspect we won’t have long to wait for that news to drop.
Craig Taylor, CEO of Defense Metals:
“With the completion of our first 3D model for the Wicheeda REE Deposit we have made significant headway in our technical understanding of the geologic controls on REE mineralization. The new geological model arms our technical team with a strong fundamental predictive model that will serve to guide efforts to advance and expand the Wicheeda REE Deposit“.
Defense, too, has been gaining traction, stair stepping higher in recent weeks…
Lastly…
One of the companies on my shortlist—White Gold (WGO.V)—hasn’t produced much in the way of news in recent weeks. As a consequence, its share price remains mired in the lower end of its 52-week range, waiting for a catalyst to trigger a push to higher ground.
Current prices may represent a low risk entry point.
My maiden article on the company summarizes some of its more compelling fundamentals…
White Gold – unparalleled discovery potential in Canada’s Yukon
END
—Greg Nolan
The U.S. symbols for the companies featured above are as follows: HighGold (HGGOF.OTC), Cartier (ECRFF.OTC), Defense (DFMTF.OTC), White Gold (WHGOF.OTC).
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