Last week was a busy one for the metals—gold and silver—and a good number of the companies that populate the Highballer (shortlist) portfolio.
Gold, in USD terms, is only a hair shy of tagging all time historic highs.
Of course, in Canadian dollar terms, and a host of other currencies, gold has been carving out record-high ground for months.
This bodes well for companies operating in countries like Canada and Australia, like our shortlisted Pure Gold Mining.
Gold stocks, as measured by the GDXJ, have lagged this recent price trajectory in the metal.
These stocks are nowhere near their 2011 highs. A serious catch-up rally could be in the cards. In the medium to longer-term, I suspect we’ll witness a sustained rally, one that’ll rival the 2001 to 2011 bull run.
These are uncharted waters. I’m not sure we’ve ever experienced a confluence of destructive elements like this—negative rates, difficult-to-fathom global debt, dovish Central Bank policies, Printing Presses Gone Wild…
Smart Money appears to be piling into precious metals and PM stocks, including the companies we track closely here at Highballerstocks.
Even without the insanity that is today’s economic and monetary backdrop, lean project pipelines and the very real possibility that we’re at Peak Gold (we’ve reached a peak in discovery and production), gold’s recent tear is legit.
Those who understand these underlying dynamics have expectations of a gold bull run of epic proportions.
I (We) stand to watch…
We’ve pointed out in recent articles how the highest-quality companies in this sector are, due to popular demand, upsizing their PPs.
On July 21st, Cartier announced a $5M PP:
Then, only two days later, the company dropped the following headline:
The offering is priced at C$0.43 per FT Share. No warrants.
Stay tuned. I’ll have more to say re Cartier shortly.
There are very few ExploreCos in the junior arena with as much exploration upside as HighGold (author’s humble opinion).
The company’s 8,475 hectare Johnson Tract Project in Southcentral Alaska is a big system—some 12-kilometers of strike length.
The company already boast a high-grade polymetallic resource in its subsurface layers: 2.14 Mt grading 10.93 g/t AuEq for 750,000 ounces in the Indicated category, and an additional 0.58 Mt grading 7.16 g/t AuEq for 134,000 ounces in the Inferred category.
Here’s the breakdown (a 4.0 g/t AuEq cutoff was applied here):
Investors who follow the company closely anxiously awaited a drilling announcement, which came on June 30th—a phase one, 7,000 to 10,000-meter program utilizing two diamond drill rigs.
10k meters is an aggressive campaign.
Then, just last week, on July 22nd, the company dropped the following headline:
That more than doubles the minimum meterage commitment announced earlier.
The market responded to the news by pushing HighGold to new highs.
HighGold has five key target areas in and around their main deposit: the Northeast Offset target (a solid hit here alone could have a profound impact on the share price), the North Trend target, expansion of the main deposit itself, the new Footwall discovery target, and the Southwest Extension target.
According to this press release: “The expanded program will include additional holes at these five targets, as well as, plans to test new target areas.”
“With the recently announced $12 million bought deal financing HighGold has positioned itself to maximize the 2020 field season. The accelerated exploration program, which now includes three drill rigs and 15,000 meters of planned drilling, provides an opportunity to materially advance Johnson Tract this year. With an additional drill rig, we can test multiple target areas at the same time and rapidly follow-up on exploration success.”
For those who have performed their due diligence and established a core position in the company, this is music to the ears.
The following video offers a sweeping aerial tour of the five exploration targets highlighted above. It’s an impressive spin (with an excellent soundtrack).
This next video features CEO Green walking us through the highest priority drill targets with an excellent view from every angle. Note the district scale alteration—it’s pervasive across numerous frames.
The Northeast Offset target, one of the more compelling targets receiving a probe with the drill bit, is fleshed out in superb detail.
This target represents the (potential) continuation of the main JT deposit that was displaced by a fault. The previous operators of the project actually tagged the location of the displaced mineralization but failed to follow-up in any meaningful way.
Their loss—their lack of follow-through—is HighGold’s gain. If you watch the above video, you’ll see the company already picking up where these previous operators left off.
Pure Gold is our high-grade Red Lake play rapidly ramping up to production.
- Procurement of major equipment is now 94% complete;
- Total of 1,285 metres of underground mine development completed. Advance rate 60% better than mine plan;
- Initial access development to longhole stopes commenced;
- Installed alimak in existing shaft to support dewatering and shaft rehabilitation;
- Process plant prepared for installation of new equipment, with removal of legacy piping, pumps, motors, ball mill, gold room and pre-leach thickener;
- Steel and concrete work modifications inside process plant for new ball mill, gravity circuit and construction of hydraulic backfill plant commenced;
- Installed and occupied new buildings including administration, warehouse, and mine dry;
- Recruited key operational team members including safety, mining, milling, and technical services, with bulk of operational management team now in place;
- More than 145,000 hours without a lost time incident.
Management was targeting five meters of underground development per day—they’re getting eight.
On July 7th, we got our first look at both infill and step-out drill holes from a planed 30,000 drilling campaign designed to expedite the growth of the current resource base and aggressively expand new high-grade discoveries.
- 46.7 g/t gold over 7.0 meters from drill hole PGU-0118, including
193.5 g/t gold over 1.0 meter;
- 57.0 g/t gold over 1.0 meter from drill hole PGU-0121;
- 15.8 g/t gold over 2.3 meters from drill hole PGU-0117;
- 7.2 g/t gold over 5.0 meters from drill hole PGU-0113, including
22.3 g/t gold over 1.0 meter.
This is an ongoing underground drilling campaign.
In addition to this underground activity, two surface rigs have commenced drilling at the Wedge zone, located three kilometers from their milling facility. The company states that this is one of the key growth areas outside of the phase one mine plan. Previous drilling in this area includes 33.3 g/t gold over 8.3 meters and 21.3 g/t gold over 10.3 meters.
Last week, on July 22nd, the company dropped the following headline:
These permits appear to be a formality, the upshot of the company’s attentive navigation of the permitting process, and the close ties the company has fostered with the First Nations and local communities.
“I am exceptionally proud of the tremendous groundwork our team has completed to establish the foundation of a long-life mining company in Red Lake. Since first acquiring the project, we have worked very closely with the First Nations, local communities and regulators to materially advance the project and to transform a brownfields site into a sustainable modern mine. To date, our work has clearly established a robust, scalable mining operation, while concurrently improving the surrounding environment through the progressive removal and reclamation of legacy works. In production, our PureGold Mine is expected to generate over $470 million in direct salaries over the life of the phase 1 mine and will provide significant economic benefits to the local communities and surrounding region through both direct and indirect taxation and expenditures. While proud of our rich Red Lake history, we are truly excited about the future as we establish a new, modern mining complex that will provide meaningful employment and be an economic driver for years to come.”
As we highlighted in a recent Highballer report, Skeena’s four million ounce open-pittable resource at Eskay Creek is now all theirs—100%.
The market approved of this transaction, pushing Skeena common to yet another multi-year high…
And after announcing the commencement of a PFS to follow-up on a robust 2019 PEA, the company embarked on an aggressive 24,000-meter phase one drilling campaign designed to upgrade Inferred ounces to the higher confidence Indicated category. It will also test highly prospective areas in the near-mine environment to expand the current resource and add to the ounce count (the company is permitting some 137,000 meters of exploratory drilling to test both brownfield and greenfield targets).
This means that they’re drilling into the winter—a Golden Triangle winter.
Eskay Creek captures all of the glory coming out of the Skeena’s Golden Triangle camp. But the company’s Snip Gold Project could easily command flagship status in any other company’s project portfolio.
On July 21st, the company dropped the following headline:
This underground resource may appear modest, especially when compared to Eskay Creek’s near-surface gold inventory, but check out the grades (above image).
Paul Geddes, Vice President of Exploration & Resource Development:
“Our efforts in the coming months will focus on expanding these now well-defined resources with expansion drilling in the newly evolving 200 Footwall Corridor as well as other near-mine targets. In parallel with SRK, Kathi Dilworth, Skeena’s Chief Resource Geologist, has developed a very robust and defendable resource model that will formulate the basis of future economic studies.”
Drilling will commence shortly at Snip to follow-up on exploration success from last summer.
Strategic has the potential to generate newsflow from a number of projects in its massive portfolio of Yukon based properties, but Mount Hinton is currently center stage.
The project came to light in August of 2019 via the following headline:
This year, the company hit the ground running as soon as the exploration window opened in early June.
Investor’s, waiting patiently for an update, were dealt the following headline last week (July 22nd):
“The project hosts several high-grade gold-silver vein sets, including the Granite North Zone where a rock sample of mineralized talus collected in 2019 returned bonanza-grade assays of 2,340 g/t gold and 597 g/t silver.”
Highlights from this 2020 chip sampling program include:
- 1.2 meters grading 200 g/t gold and 90 g/t silver from the South West Zone
- 1.22 meters grading 26.9 g/t gold and 49 g/t silver from the Granite North Zone
“At the South West Zone, continuous chip sampling was completed at two locations, 10 meters apart, on a newly-discovered vein. One chip sample yielded 200 g/t gold with 90 g/t silver over 1.2 meters and the other sample graded 80.3 g/t gold with 72 g/t silver over 1.0 meter. The hanging wall and footwall of this vein were poorly exposed and were not sampled. Only minor amounts of sulphide minerals were noted in these samples. Visible gold was reported in the higher grade sample.”
“At the Granite North Zone, continuous chip samples of bedrock were collected across parts of a vein exposed in a hand trench, at two locations spaced 1.35 meters apart along strike. Neither the hanging wall nor the footwall of the vein was exposed at either location. The first samples returned 26.9 g/t gold with 49 g/t silver over 1.22 meters and the other sample assayed 6.29 g/t gold with <5 g/t silver 1 meter. Visible gold was noted in the lower grade sample, but neither sample contained significant sulphides. The chip sampled hand trench is situated about 250 meters uphill of the bonanza grade float sample discovered in 2019.”
“The South West and Granite North zones lie 2 kilometers apart on opposite sides of the Granite Creek Basin, near the center of the Mt. Hinton property. The Granite Creek Basin is a glacial valley with steep, mostly-talus covered slopes flanking a broad, till-covered floor. Gold veins have been discovered on the slopes and in a few short excavator trenches that have been dug into the valley floor. The veins are hosted by the same quartzite unit as hosts the uncommonly rich silver veins that characterize other parts of the prolific Keno Hill district. The Granite Creek Basin is located within a larger, 6 kilometer by 4.5 kilometer area that is defined by mineralized veins and strongly anomalous gold-in-soil geochemistry. Placer operations are working in all creeks draining the area of veining and anomalous geochemistry.”
These results correlate nicely with previously reported (high-grade) surface values.
I’m quoting directly from this July 22nd press release as these details heighten the geological prospectivity of the project.
I suspect drilling will commence any day.
That’s it for this one.
Full disclosure: of the companies featured above, Cartier Resources is a Highballer marketing client. The author has no marketing relationship with the others. The author owns shares in Cartier, HighGold, and Strategic.Disclaimer - Legal Notice
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