Top 5 Emerging Deposit Development Stories…
Small caps tend not to correlate as well to the everyday market, as the majors and midtier do and most of their losses will happen on the worst sell-off days but rebound quick if ST prospects are bright and adding material value. At the current price in POG a 10% move is immaterial to many of these companies and will move only on the worst days down with POG but will tend to snap back very quick if the company is adding material value through a drill program or is undervalued in the first place.
I consider myself a reporter. Maybe a prospector at best… I am not a geologist, I am not an analyst, I am certainly not someone who I would take as the final say about any project. I even have a tendency to fall in love with certain stories. What I do best, is find a very good stories to follow, stories that hopefully unfold from small cap explorers to at least mid tier developer stories. This week I am going to focus on my TOP 5 emerging deposit development stories.
A lot of you guys want me to rank my favorite stocks and I would rate as strong buys on weakness. All these stocks may go down over the next month or so as we enter into tax a season combined with the new fundamental shifts over the last couple days and some already have peaked and come down a bit. If you can get any of these along the 50MA’s, consider yourself lucky. Remember, even if POG drops $100 from here, that sort of price move over the next month is not material, although they will respond to day to day fluctuations in the market. So here it goes. Remember… This is just about Gold.
All 5 stories are District Scale potential.
Things I look for in an emerging story…
- Large potential area (district scale)
- Shallow (fast track production potential)
- Consistent grade ( easy economics)
- High grade bonus (high grade always the best)
Gold Canyon GCU.V $1.44
Is probably one of the best development plays going in Red Lake. When I say development please don’t confuse that with developing a mine, not yet anyway. I am talking about developing a solid resource to the stage where the decision is made to produce (a very risky point in the investing stage).
The Portage zone follows a 6km structure south that is proving to be very large. Widths of the zone up to 150 meters wide with the north part pinching to 50 meters or so but most of the zone is 150 meters wide. Not only that but this deposit is open at depth and so far it is up to 350+ meters deep at the south end and 230 meters at the north end with the rest of the fall program mostly focusing on extending the depth of the north zone with one hole left at the south end of portage to be reported. Theory is that historical holes missed the zone south and from historical analysis of drill holes from previous operators is interpreted to have hit the edge of the zone.
Gold Canyon is stepping out this winter once the lake ices up and will be following the Alkaline Porphyry structure south. Further long intervals this winter will add material value to this deposit. I recommend this a very strong buy on weakness this month between $1 and $1.30.
Gold Canyon also has a highly prospective REE project that contains up to 12% TREO in the US, as well as a Gallium project which has the potential to be the biggest gallium project in the states. I would expect at some point the REE project could be spun off into a different company to recognize the value and start developing the project along the lines of a Rare Element Resources. GCU’s REE project is a hidden gem that not many know about and at this point is given no value to.
Keys to this deposit are that it is…
- Shallow(lake bottom)
- Deep and open at depth of 370 meters
- Wide most of it at 150 meters.
- 6km of potential strike… only 800 – 900 meters defined.
- Consistent Grade
- There grade at Portage is very consistent making it amenable to mining. Eradic deposits pose problems for flowsheets.
- Its in Red Lake
- Solid mining friendly jurisdiction
- Premium on takeover if it happens
Someone of note who follows this story… Bob Moriarty
Followed @ 0.25 (Mar ‘10)
Public @ 0.41 (Aug ‘10)
Coverage @ $0.70 (Sept ‘10) +$0.74 / 106%
Pelangio Exploration PX.V $1.05
Right now PX is my top international story and has corrected nicely and is a great buy anywhere under $1. In these times I don’t want too much international exposure, especially across a large body of water, and I see Africa as a battleground for economic loyalty, but I see Ghanaas being about the safest places to invest for the West in Africa.
They are working on a couple huge projects in Ghana called Manfro and Obuasi.
Manfro is the project to get the party started which is a low risk value added project and so far has been a success with drill intersections confirming both high grade gold and bulk potential low grade gold in 4 parts of the property within a 1km by 4km geochemical soil anomaly. This project is shallow and has the potential to be fast-tracked to production in mining friendly Ghana. Newmont prepped the property and packaged it to Pelangio to drill which so far has been a success.
The Obuasi Property is the potential company maker. The property lies adjacent to and on strike with AngloGold Ashanti’s World Class 60 million ounce Obuasi gold mineand so far PX has outlined 15km of the same structure that hosts Obuasi’s mineralization. Pelangio is continuing to further define this structure. The object is to find shallow Obuasi like mineralization on their property.
Not only that but PX has claims that are on strike and adjacent to LSG’s Thunder Creek discovery and in most likelihood hosts the same mineralization on their claims. That is one very rich discovery which is just one more reason to buy this stock. LSG will come knocking for that claim eventually.
Someone of note who follows this story… Jay Taylor.
Covered @ $0.55 (Sept ’10) +$0.50 / 91%
North Country Gold NCG.V $0.97
NCG has gone on a great run and is a very promising emerging story out of Nunavut Territory. They are the premiere land holding in the territory that covers 300km of strike length of potential targets similar to the Three Bluffs Project. They are sitting on the underexplored Committee Bay Greenstone Belt in Nunavut territory that truly has world class mining camp potential. North Country Gold owns all of it!
Nunavut was once thought to be too remote and the seasonal aspect of drilling has kept the Committee Bay Greenstone Belt one of Canada’s best kept secrets. That is soon about to change as NCG continues to make headlines and develop Three Bluffs. The area is now seen to be viable with Agnico-Eagle’s 3M oz Meadow Bank deposit going into production. Meadow Bank going into production demonstrates that the area is economically viable for production. With Meadow Bank in production, it will bring a lot of much needed infrastructure to the area such as roads, airstrips and other key infrastructure developments that make exploration in the area much more economically viable.
Currently the resource at 3 Bluffs stands at 750k oz’s at 6 g/t, but are working on at least 1 million oz’s at 3 Bluffs in Nunavut. Not only that, but the true potential of 3 bluffs is just beginning to be realized after releasing the results of their Titan 24 survey of 5km strike from Three Bluffs to Hayes revealed very prospective targets and confirmed IP map with drilling to date. This project is open at depth and has the potential to be at least a 3 – 5M oz deposit. NCG is currently targeting Three Bluffs open pit potential to be fast-tracked into production. Currently at 6g/t resource, the open pit potential is very attractive mine starter with depth potential for an underground mine that could be operating well into this century.
I cannot stress enough the district scale potential of NCG’s Nunavut property. A common theme among my top picks is the district scale potential that all these companies provide for exploration upside. North Country Gold has the biggest prospective land position of all my top picks. Three bluffs is the first of many targets on North Country Gold’s massive property with district scale potential in NT. NCG has 4 other targets that are just as impressive as 3 Bluffs.
Why do I like NCG so much? Undervalued on 3 Bluffs potential alone. Then add 4 more high grade projects like 3 Bluffs and NCG’s market cap is a tiny spec of sand for what it could be if they define four more 3 Bluffs over the next 3 or 4 years. IF NCG can define 5 deposits all between 2 – 5 million ounces, then North Country Gold’s market cap will be more along the lines of ATC’s in the Yukon.
NCG could be on Agnico-Eagle’s shopping list considering they are in the area.
Someone of note who follows this story… Hoesgen
Covered @ $0.48 (Sept. ’10) +$0.49 / 102%
Atac Resources ATC.V $8.00
ATAC Resources I have followed since fall of 2009 somewhere around $1, I liked the Tiger Zone so much that it is in my 2009 Gold Discoveries spreadsheet, but seriously didn’t start looking at other Yukon discoveries until after Underworld was bought out. I posted about ATAC in early August at $1.80 when they started releasing very good results from the Tiger Zone, little did I know what they were about to hit at Osiris at the other end of the property.
What is significant is that ATAC is on this belt that forms a geological contact but two major formations which is ideal for gold mineralization. The reason why ATC seems overvalued to many is that they only have one drill hole. What most don’t realize is that that one drill hole pretty much confirms ATAC’s theory that the whole Rau belt is mineralized form one end to the other. That is close to 160km of continuous strike length of this project for which only a small portion of the trend has been explored for gold. The discovery at Osiris confirms this theory and makes ATC extremely prospective for gold for multiple gold discoveries.
I really think Kinross has their eyes in the Yukon and ATAC has got to be on Kinross’ wishlist as well as Victoria Gold who is a near term producer in the Yukon. VIT also has a very nice high grade discovery on the Eagle Gold Property that is similar in nature to ATAC’s discovery. If the writing was ever on the wall, it looks like Kinross could be the premiere player in the Yukon if they snapped up Victoria or ATC… or even both!
ATC is in my top five stocks even at $8 for the prospective nature of the whole 160 km belt that is starting to be considered the next Carlin Style Trend. ATC didn’t release results last week and I doubt they will release results this week with the negative outlook on the markets and POG. I would look to see results closer to the end of November or early December now. ATC is a major buy on weakness.
Someone of note who follows this story… The Coffin Brothers
Followed @ $1 (Oct. ’09)
Covered @ $1.81 (Aug. ’10) +$6.19 / 342%
Trelawney Mining TRR.V $1.97
Trelawney Exploration is quickly becoming a favorite and has been quickly bumped up into the top 5 in new discovery development stories. Trelawney is the story that is the closest to near term mine potential than any of the others, but still with huge upside discovery potential on their Chester Property which hosts 12 known gold mineralized structures. The Chester property sits between the Timmins and Sudbury Mining regions in a greenstone belt that is though to be the south west extension of the Abitibi greenstone belt and is just north of the Larder Lake Cadillac Belt which hosts Kirkland Lake’s World Class Gold Deposit.
Cote Lake and its near term shallow bulk tonnage potential has excited the market, but the Chester 1 deposit could be up and running early 2011 with an average grade of 13.4 g/t gold. Chester 1 has a non compliant Measured resource of 159,000 tons @ 0.43 oz/t for 68,400 oz’s of gold. This high grade project already has a 5,500 foot production ready decline to a
In addition to Chester 1’s measured resource, TRR has another 200,000 oz’s indicated at Chester 2 and 3 and an additional 200,000 oz’s inferred at 0.19 oz/t. Their plan is to produce an initial 33,000 oz’s per year at Chester 1 while driving a drift to Chester 2 and double initial production from Chester 1 of 250 tons a day to 500 day bringing annual production to 66,000 oz’s per day within 24 months.
Just recently Trelawney announced that their Cote Lake Deposit on which they have had very good success this year has shallow bulk tonnage potential of 3 – 6 million oz near surface deposit. Open pit projects in my opinion have the best potential to be fast-tracked into production. Trelawney is well positioned to take advantage of high gold prices with projected near term production well in excess of 100,000 oz’s gold per year in 4 -5 years time if Cote Lake gets the go ahead. Cote Lake is the western extension of Chester 2 and is open at depth and would be the next logical step for expansion of the underground mine.
Just on Chester alone, Trelawney is sitting an a major undefined gold deposit that will have short term production potential from 2 sources. A shallow bulk tonnage low grade deposit and an underground high grade mine at Chester which already has $30 million worth of infrastructure and is just waiting for the key to turn to start production. Chester looks like it is going to run very deep and could be a high grade mine that will be in operation for years to come.
I don’t want to put any targets on the Chester Properties but for sure it is World Class with potential to host at least 10 million oz’s on just this property alone. Trelawney is positioned very well for success and could be the next LSG type story with this little bulk tonnage Cote Lake as a bonus for near term success.
Someone of note who follows this story… Kevin O’ Leary
Followed @ $0.79 (March ’10)
Coverage @ $1.30 (Oct ’10) +$0.67 / +52%
Top 5 Grassroots Exploration – all these companies I got onto before the drill bit hit the ground.
Harte Gold Corp HRT.V
Followed @ $0.275
Coverage @ $0.55 + 0.17 / 31%
- Just drill validated their ip map. This is more and more looking like a major discovery in the Hemlo region.
Mineral Mountain MMV.V
Covered @ $0.41 + 0.11 / 27%
- Acquired 3 highly prospective properties. Shining Tree, Rainy River and Kootenay Arc. Kootenay Arc to me is the potential company maker.
Soldi Ventures SOV.V
Covered @ $0.20 + 60%
- Have acquired a very prospective land position in the emerging Rainy River Gold Camp.
Northern Superior SUP.V
Covered at $0.37 + 0.16 / 43%
- RainyRiverdrilling TPK property which is District Scale in nature. LSG took a significant position in SUP which confirms prospective nature of TPK Property.
New Dimensions Resources NDR.V
Coverage @ $0.18 +0.04 / 22%
- Recently acquired a property along the same geological belt that ATAC’s Rau property follows. Confirmed historical samples on the property make it highly prospective, but very early in nature. Also have a property in Peru that is very near FDN and hosts rocks that are similar to FDN in nature
Recent Discoveries… Always do your DD when investing in something new…
Top Stories… These guys are now drill validated…
Avala Resources AVZ.V
Coverage @ $0.70 +0.85 / 121%
Avala is going to be huge in my opinion. Every country is going to want to have their gold deposits developed because in my opinion it will add value to their countries material wealth in the new world which will eventually see a shortage in every commodity in the future if current growth rates and consumption rates keep up. Avala Resources has one massive sediment hosted deposit and now that they have validated this one with the drill is a clear buy.
Great Trench results… could be another Avala if the drill bit wins!
Dorato Resources DRI.V
Momentum play for next week, still investigating… DO YOUR DD!!!
Bonterra BTR.V$0.69 – Announced very high grade results in the Quebec. This area is full of gold and BTR.V could drill have upside momentum. I start following it at .50 cents but was hesitant to mention it because it spiked so high and was late on the news. If BTR is too expensive then try SLT at .09 as they acquired property right next to BTR’s discovery.
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