Yesterday’s breakout in the precious metal could set the stage for a massive run in the medium to long term as a de-escalation in Putin’s military aggression against his sovereign (peaceful) neighbor appears highly unlikely.
If you were to quiz the likes of Pierre Lassonde, this currency of last resort has the potential to run hard short term.
A Feb 28th interview – Pierre Lassonde predicts $200 oil and $2,400 gold in a month as Putin’s war drags out
Economic weakness and inflationary pressures around the globe are dominant themes today.
Grains, metals, energy… this inflationary spiral may be about to find a whole new gear.
The one key metric traders will be watching for next week is the latest CPI numbers out of the U.S. (scheduled to drop on Thursday).
Phoenix Futures and Options LLC president Kevin Grady told Kitco news:
“We could see $150 oil soon. Inflation will be much higher because of energy. Wait until you see the next CPI number. It is going to be above 8%. And if they were using the old metrics, annual inflation would be running at 12%-15%.”
It would appear that traders didn’t want to go home for the weekend without long exposure, as a hedge against what carnage the weekend might bring, or simply to capitalize on the momentum underpinning the precious metal.
Take a look at Copper—one of the key building blocks of this modern age—taking out all-time historic highs yesterday, testing the $5.00 level.
Some of the companies we follow closely here at Highballer.
Goldseek Resources (GSK.C) – (GSKKF.OTC) – (4KG.FRA)
- 36.93 million shares outstanding
- $4.43M market cap based on its recent $0.12 close
Goldseek is currently in the thick of a 4,000-meter Phase-2 drill campaign at its flagship Beschefer Project located along the Detour Gold Trend of Quebec.
A Feb. 23rd headline:
Goldseek Commences 4,000m Drill Program at Beschefer Project
Phase-2 drilling is designed as an infill and expansion program with a focus on extending the historical high-grade zones that delivered hits like 55.63 g/t gold over 5.57 meters, 10.28 g/t gold over 8.00 meters, and 12.40 g/t gold over 3.78 meters.
This program will include 15 holes ranging from 130 to 400 meters.
Management’s objectives:
Infill drilling: Expand the size of the Central Shallow Zone and the East Zone by drilling both sides of the mineralized sections at 50 meters spacings. Six holes for roughly 1,900 meters are planned for this infill component. An additional six holes representing approximately 1,320 meters will test gaps in the mineralization and attempt to extend the influence of higher grades clusters.
Expansion Drilling: The Company’s geological model has defined an (undrilled) blind target that corresponds with the eastern extension of the East Zone. This zone was successfully extended 90 meters to the northeast during the 2021 campaign via a 0.96 g/t Au over 19.9 meter hit. Two holes for 575 meters will follow up on this successful 2021 stepout.
This next slide lays out the Company’s plans and objectives for 2022.
Jon Deluce, CEO:
“We are excited to start our winter follow-up drill program on the Beschefer Project, which has demonstrated size and grade potential. We look forward to building on the success of our maiden drill program highlighted by 4.92 g/t gold over 28.65 metres1 (141 Metal Factor), including 11.39 g/t gold over 9.1 metres1, which is the 2nd best intercept on the Property to date. The remainder of our maiden drill program consisted of low-grade with high-width intercepts (Ex. 2.17 g/t gold over 13.2 metres2), demonstrating the Project’s strong continuity and near-resource potential. We have a catalyst packed 2022 with a goal of drilling 10,000 metres at Beschefer and targeting a maiden resource towards the end of the year. We target releasing first assay results towards the end of March.”
Forum Energy Metals (FMC.V) – (FDCFF.OTC)
- 170.03 million shares outstanding
- $44.21M market cap based on its recent $0.26 close
Forum dropped two headlines in recent sessions concerning two highly prospective projects along their extensive U3O8 project pipeline.
On March 1st, the Company announced the commencement of drilling at its Highrock Uranium Project where it’s deployed the prospect generator business model in a joint venture with Sassy Resources.
Forum Commences Drilling at Highrock Uranium Project Under Option to Sassy Resources, Saskatchewan
Sassy can acquire a 100% interest in the project by spending a total of $3.5 million on exploration, making $350,000 in staged cash payments, and issuing 3.75 million Sassy common shares to Forum, also in stages.
The property is located just south (and on-trend) of Cameco’s Key Lake mine and mill site (Key Lake produced over 200 million pounds of uranium at an average grade of 2.3%).
This drill campaign will target the discovery potential of basement-hosted mineralization similar to NexGen’s Arrow deposit and Cameco’s Eagle Point mine.
Gravity surveys conducted by Forum at Highrock identified numerous gravity lows along a 10 kilometre long graphitic conductor: these may be zones of alteration associated with uranium mineral deposits. Eight widely spaced drillholes by Forum in 2016 tested only six kilometres of the conductor while four kilometres at the southern end of the property remain untested as well as the strongest gravity low at the north end of the project. Zones of chloritization, bleaching, elevated boron and other pathfinder elements in the north and central areas of the conductor were detected by this initial drill campaign (see Forum News Release dated June 1, 2016).
The North target, immediately south of Cameco’s Key Lake property boundary, will see the business end of the drill bit first.
Only one drillhole in 2016 (DDH HR-08) tested the south end of a very strong gravity low where the main conductor trends to the northeast. Weak alteration along a strong conductor was encountered in this hole, plus elevated uranium (8ppm), vanadium (442ppm), copper (421ppm), nickel (125ppm), lead (46ppm) and boron (116ppm). Over one kilometre of this conductive trend and gravity anomaly to the northeast will be drilled (image below).
Targets have also been prioritized along the central and south areas of the property (from DDH HR-06 to HR-07) and a four-kilometer stretch of ground further to the southwest.
Drill target priority will evolve as the program progresses and will run until spring breakup, or the $1 million budget is spent under the terms of the JV agreement with Sassy.
It’s important to note that Forum is the Operator of this 2022 drill campaign and will receive a 10% management fee on all exploration expenditures.
With $1M slated for this round, that management fee should work out to a tidy $100k in 2022.
Highrock represents another iron in the fire—another (zero risk) shot at a significant U3O8 discovery.
This next headline arrived on the heels of the Highrock news.
Forum Commences Drilling at Wollaston Uranium Project, Athabasca Basin, Saskatchewan
The wholly-owned Wollaston Uranium Project is strategically located 10 kilometers southeast of Cameco’s Rabbit Lake mill (and 30 kilometers southeast of Orano/Denison’s McClean Lake mill) along the eastern edge of the prolific Athabasca Basin.
Wollaston is positioned just outside the margin of the overlying Athabasca sandstone and is prospective for basement-hosted unconformity style uranium deposits like Cameco’s Eagle Point mine and NexGen’s Arrow deposit (map below).
Crews have completed gravity surveys over the main target areas slated for a proper probe of the drill bit during this round (map below). These surveys have been proven effective in detecting alteration halos surrounding potential uranium deposits associated with structures outlined by electromagnetic (EM) conductors.
The Company is using good science to narrow the field and prioritize drill targets at Wollaston.
The plan is to drill roughly 3,000 meters—10 to 12 holes—into targets developed along the western edge of the property. Most of these targets lie within three kilometers of a paved highway (Highway 905).
Ken Wheatley, Forum’s VP of Exploration:
“The northeastern area of the Athabasca Basin is the home to numerous uranium deposits. Since the original discovery of the Rabbit Lake mine in 1968, the McClean, Sue, Collins Bay and Eagle Point deposits have been mined, and the Midwest, Midwest A and Roughrider deposits are waiting for future development. The presence of two uranium processing mills within driving distance of the project adds immensely to the value of the project.”
Wheatley went on to state:
“Historic drilling tested the conductive units to a shallow depth, and in areas where there were radioactive boulders noted at surface. The ground gravity survey recently completed by MWH Geo-surveys International has developed a series of drill targets that were never before identified, being located at zones of structural disruption along the EM conductors.”
With copper testing all-time highs yesterday (March 4th), the Company’s Janice Lake Project may stage a comeback in the coming weeks/months with its largely untested, district-scale Cu potential. If Rio Tinto Exploration Canada (RTEC) isn’t interested in pushing the project further along the curve, some other company will (authors best guess).
Teuton Resources (TUO.V) – (TEUTF.OTC) – (TFE.FRA)
- 56.22 million shares outstanding
- $120.3M market cap based on its recent $2.14 close
For those new to the Teuton story, the following link will take you to my maiden piece published seven weeks back: A new addition to the Highballer list – Teuton Resources Corp.
Teuton is another company that has been quick on the draw with news releases in recent sessions.
A March 1st headline:
Here, Teuton announced having entered into a private placement with Sanatana Resources to the tune of 4,000,000 (non-flow-through) units priced at $0.15 per.
These funds—$600k all told—will be used to push Sanatana’s Oweegee Dome Property further along the exploration curve (and for general working capital purposes).
To say that Teuton management knows their Golden Triangle rocks would be an understatement. They obviously like what they see developing at Oweegee Dome.
Sanatana and ArcWest have confirmed the presence of at least three Cu-Au porphyry targets in the 31,077 hectare Oweegee Dome Project in the initial exploration that started in August 2021.
Dino Cremonese, Teuton’s President and CEO:
“This investment was made because of the merit of Sanatana’s Oweegee Dome property located east of Highway 37 and north of Meziadin Lake in the Golden Triangle region of northwestern British Columbia. The Oweegee Dome property is similar to Teuton’s Treaty Creek property in that both are very large and host extensive gossans indicating pervasive hydrothermal activity. When I first staked Treaty Creek in 1984, the general consensus was that it was a separate system from the Sulphurets region to the south, an area now controlled by Seabridge Gold’s KSM property (host to some of the largest reserves of copper and gold in the world) and the Brucejack property (recently acquired by Newcrest for $3.5 billion from owner Pretium Resources). Although five different companies optioned Treaty Creek from 1990 to 2007, it was not until the sixth optionee, Tudor Gold, took on the property and hired Ken Konkin in 2019 that its promise was realized. A re-interpretation of geology and a re-orientation of drilling led to a maiden resource of 19.4 million gold equiv. ounces in early 2021**. The main deposit, the Goldstorm, is still being explored for further expansion and three satellite zones hold promise for further resources to be developed. One might say that the Oweegee Dome property is at an earlier stage of its evolution, nevertheless, the new mineralized zones discovered in surface outcrop in 2021 do suggest potential for the discovery of a future porphyry copper-gold deposit. The property is scheduled for drilling at the beginning of the 2022 field season and Teuton’s private placement investment ensures it will have a substantial stake in this venture.”
Thinking ahead, Teuton recently purchased 570 acres along the Granduc Mining Road just east of the past-producing Scottie Gold Mine (~30 miles north of Stewart, BC).
Staging areas are often difficult to find in settings with intense (mining) activity. These 570 acres include a large (road accessible) flat-lying section that will provide a good staging area to service Teuton’s many properties in the region (Eskay Rift, Big Gold, Pearson, Four Js, Powder, Mach, Tennyson, Leduc Silver and Catspaw properties).
Thinking ahead even further, a mill could be built on this newly acquired ground should a viable resource be discovered on any one of Teuton’s properties in the area.
Spin-Out Transaction Contemplated
I’m a HUGE fan of these spin-out transactions. If you go to the ABOUT link at the top of the page, I detail one particular spin-out that generated a considerable amount of joy in my life during the previous bull cycle.
If a Company believes their secondary assets are NOT being given the attention they deserve, spinning them out into a separate entity can unlock that latent value.
Teuton’s rationale:
Since the maiden resource on the Treaty Creek property was published in March of 2021, both of Teuton’s joint venture partners in the project have completed or are near completion of spin-out transactions of their non-Treaty Creek assets. Teuton is currently investigating a spin-out of its own, which would involve most of its non-Treaty Creek assets consisting of 30+ mineral properties and royalty interests.
Teuton recently engaged Kim Maguire, corporate transaction tax specialist at major Canadian law firm Bennett Jones. The Company has also retained Sandra Raath of Pearlman Lindholm, who has specific expertise in structuring spin-out transactions.
The Company is in the process of receiving advice as to the various tax, regulatory, business and other legal considerations of a spin out transaction. Once this process is complete, it will make a decision on whether to proceed. Another announcement will be made at that time.
And directly on the heels of the March 1st headline, the Company released this piece of news…
Here, Teuton received intel from JV partner Optimum Ventures (OPV.V), a report highlighting encouraging results from a limited surface exploration campaign conducted on the Harry Project in late 2021.
Harry—where Optimum is earning an 80% interest via spending commitments plus cash/share payments in favor of Teuton)—is strategically located in BC’s prolific Golden Triangle. There’s a lot going on in this part of the Triangle.
Swann Zone Surface Sampling***
The sampling program was conducted on and in the region of the Swann prospect, which is exposed over a small area and consists of quartz and semi-massive to massive mineralization with visible gold within an intensely altered zone. Determination of its true width and strike length will be part of the focus in the 2022 exploration program.
This next detail from the March 2nd press release is an interesting development…
Following the surface sampling program, Optimum completed four short diamond drill holes on the Swann zone as a requirement under the option agreement on the property. Due to a quick onset of winter and Covid complications, these four drill holes were boxed and put in locked storage prior to being logged. Optimum geologists have now retrieved the drill core from storage and have logged, split and sent it for assay. Logging of the core has indicated up to 6 m of semi-massive to massive mineralization associated with highly altered sericitic rocks and quartz veining. Cut core showed silvery galena, indicative of silver in the Stewart area, green sphalerite and dull black stringers of tetrahedrite. In cut surface samples, fine visible gold is observed in the sphalerite, galena and tetrahedrite.
“Optimum completed four short diamond drill holes on the Swann zone…“? I doubt shareholders saw that coming.
The 1,333-hectare Harry Property is bordered by Ascot Resources to the east and south, Pretium Resources (now Newcrest) to the north, and Scottie Resources to the west (refer to the map above).
The property lies along the northwestern portion of a geological corridor prospective for gold-silver mineralization that hosts several former and operating mines.
“The property hosts several 500 meter wide zones of intense alteration that trend northwest along the claim length. Within this intense alteration, sericite, with abundant pyrite, is prevalent. Quartz veins, Quartz breccias and semi-massive sulphides occur within these alteration zones. This type of alteration and mineralization is found at the nearby gold deposits currently being developed by Ascot Resources Ltd.”
The Work completed in late 2021, while only on about 10% of the property, indicates that sulphide zones occur within quartz bearing structures trending both east-west (south dip). Where these structures are crosscut by northwest trending structures (dipping east), semi-massive to massive sulphides occur. Within these sulphides, sphalerite, galena, tetrahedrite, chalcopyrite and pyrite are present. Fine visible gold is occasionally present within the massive mineralization. The Swann zone is several hundred meters east of the Milestone, where 2020 trench sampling returned 7.86 oz/ton gold (269.5 g/t) across a 2 metre width.
I’ll have more on Optimum and this highly prospective Gldn Tri project in a future Highballer report. Where Teuton is concerned, Harry represents yet another iron in the fire.
Defense Metals (DEFN.V) – (DFMT.OTC) – (35D.FRA)
- 160.59 million shares outstanding
- $53.8M market cap based on its recent $0.335 close
Defense dropped two rounds of drill results last week from their wholly-owned Wicheeda Rare Earth Element Project located in the Prince George region of British Columbia.
(click on the images below to bring them into better focus).
A March 2nd headline:
All four holes presented here—the first four from the Company’s 29 hole, 5,349-meter diamond drill campaign conducted last fall—tagged high-grade mineralization above its 0.5% total rare earth oxide (TREO) cut-off.
Drill holes WI21-33 through WI21-36, collared from the same pad, and were designed to expand the Wicheeda deposit and further upgrade the existing resource categories.
- DD hole WI21-33 – 3.17% TREO over 196 meters including 3.63 TREO over 50.25 meters (near surface) and 4.29% TREO over 55 meters (at depth);
- DD hole WI21-34 – 2.97% TREO over 114 meters including 3.84% TREO over 67 meters;
- DD hole WI21-35 – 3.87% TREO over 119.80 meters;
- DD hole WI21-36 – 2.35% TREO over 171.90 meters including 3.45% TREO over 34.55 meters and 3.02% TREO over 38 meters.
These are some fat hits—weighty grades over significant widths. All of these broader intervals began within a few meters of surface.
Drill hole WI21-33 expanded Wicheed’s high-grade REE mineralization 32 meters beyond the current (mineral resource) pit shell.
Drill hole WI21-33 was collared near the northern drilled extent of the Wicheeda REE Deposit and was designed to expand and further delineate inferred resources at depth where the final hole WI19-32 of the Company’s highly successful 2019 drill campaign yielded assays of 3.76% TREO over 75 metres (click on the images below to magnify).
Drill holes WI21-35 and WI21-36, infill holes designed to upgrade the Inferred tonnage to the higher confidence categories, augments Wicheeda’s excellent continuity at depth.
Resource delineation drill holes WI21-35 (-55o dip / 080o azimuth) and WI21-36 (-55o dip / 080o azimuth), drilled on section under 2019 drill hole WI19-31 that returned 4.57% TREO over 83 metres, established continuity of significantly REE mineralized dolomite carbonatite at depth with WI21-35 yielding 3.87% TREO over 120 metres; and WI21-36 intersecting a mixed-country rock bearing interval grading 2.35% TREO over 172 metres; including higher grade near surface and at depth intervals of 3.45% TREO over 35 metres and 3.02% TREO 38 metres, respectively.
Luisa Moreno, President and Director:
“We are encouraged by the results of these initial four drill holes that have not only returned exceptionally high grade REE intervals but have also expanded mineralization beyond the mineral resource pit shell. We look forward to being able to release results as they are received from the remaining 25 diamond drill holes in the coming days and weeks. The 2021 drilling is expected to contribute to the expansion and upgrading of mineral resources we so recently demonstrated in our positive Wicheeda REE Project PEA.”
The March 3rd headline:
Infill drill holes WI21-37 and WI21-38, collared from the same pad, were designed to push the existing resource into the higher confidence categories (M&I).
- Drill hole WI21-37 – 3.19% TREO over 137.85 meters including 4% TREO over 55 meters (near surface);
- Drill hole WI21-38 – 3.08% TREO over 80.65 meters including 6.01% TREO over 23.4 meters (near surface).
The 6.01% near-surface hit represents the highest grade REE mineralization intersected on the project to date.
President Luisa Moreno again:
“We continue to be encouraged results of 2021 resource expansion and infill drilling campaign. The two holes reported today have returned the highest grade REE intercept to date at 6.01% TREO, while also confirming significant widths of potentially economic grade REE’s consistent with our geological and resource models.”
The Company is on a roll here.
The Company expects to receive additional assay results from the 2021 Wicheeda REE Deposit resource expansion and delineation campaign in the coming days and weeks.
The Company’s share price is too.
END
—Greg Nolan
Full disclosure: All of the companies featured in this piece are Highballer clients.
** 815.7 million tonnes grading 0.74 g/t gold equiv. at a 0.30 g/t gold equiv. cut-off. For detailed results refer to the Teuton news release dated March 9, 2021, available on SEDAR.
*** Grab samples are solely designed to show the presence or absence of any mineralization and to characterize the metal tenor in this mineralization. Grab samples are by definition selective and not intended to provide nor should be construed as a representative indication of grade or mineralization at the property; and the grab samples analysed from the property reflect a broad range in grade from below detection limit to the grades highlighted herein.
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