Stock Market Uncertainty Accelerates Gold Price Rally
Editorial Feature | April 5, 2023 | Industry
This Junior Explorer is Positioned for a Potential New Discovery
Gold prices are once again rising, reaching past $2,000 per ounce for the second time in a week1.
Goldman Sachs recently raised its 12-month gold price forecast by $100 per ounce to $2,050, joining Citibank, Commerbank and ANZ in increasing targets.
Market analyst Peter Grandich, who correctly predicted the stock market crash last year, expects undervalued assets like gold to outperform2 and sees mining companies as the real opportunity because mining shares relative to gold haven’t been this cheap in decades.
Junior mining companies in particular are poised for success, especially this well-financed, high-grade gold exploration company, that’s strategically positioned in some of Canada’s most prolific mining regions.
The targeted approach and revised exploration plan has led to an expanded footprint of high-grade gold, with discoveries exceeding 22 grams per ton (g/t) gold over 1.5 metres and a hit rate of nearly 55%.
The Flagship Gold Project At James Bay - Eau Claire
The company has wasted no time at all getting to work on its flagship Eau Claire project, whichh already had a Preliminary Economic Assessment (PEA) completed earlier in 2018.
The project comes with an M&I Resource of 808,000 oz of gold at 6.65 g/t Au, and an additional Inferred Resource of 458,000 oz at 7.48 g/t Au.
Quebec is famously hospitable to mining operations, and very desirable to producers with its hydroelectric power that’s already 30% cheaper than any other G7 country, as well as an added discount rate that’s given to the mining industry.3
Last year, the company set off to demonstrate the potential to significantly expand the deposit in all directions at its Hinge Target.
In August 2022, intercepted multiple zones of gold mineralization, with one hole exhibiting four zones of high grade and broad widths of more moderate grade, including:
- 3.50m of 4.79 g/t gold
- 1.00m of 14.19 g/t gold
- 3.50m of 5.86 g/t gold
- 1.00m of 20.6 g/t gold
- 17.50m of 1.29 g/t Au.4
Two months later, they shared results for six core drill holes which tested five target areas at Eau Claire, significantly expanding the mineralized footprint. Highlights of the drilling included:
- 4.0m of 5.75 g/t gold
- 1.0m of 21.40 g/t gold
- 3.5m of 5.86 g/t gold.5
The multiple stacked zones of gold mineralization clearly demonstrate that Eau Claire remains open to the west and has the potential to be expanded significantly with approximately a 25% increase to the mineralized footprint realized to date.
In January 2023, the company announced results for the final three 2022 core drill holes at Eau Claire6 successfully expanding the high-grade gold mineralized footprint in the Hinge Target, Gap Zone, and eastern expansion target zones.
To date, all eleven holes drilled into the Hinge Target have yielded a hit rate over 55% above the Eau Claire underground M&I resource grade of 6.3 g/t gold and more than 80% higher than the underground cut-off grade of 2.5 g/t gold, a greater than 20% increase from the historical hit rate. These findings have provided a clear focus for deposit expansion going ahead through 2023.
Drill hole 22EC-059 encountered eight zones of gold mineralization over a length of 350 meters (m), including:
- 1.50m of 22.77 g/t gold
- 1.50m of 15.30 g/t gold
- 1.50m of 6.46 g/t gold
Importantly, the reported intercept of 1.50m of 22.77 g/t gold at a downhole depth of 181.5m, approximately 155m below surface, is one of the shallowest high-grade intercepts to date inside the Hinge Target zone.
In February 2023, they shared an update on targeting at its fully owned Lac Clarkie project, which is located directly to the east of its Eau Claire project.7 Through the conclusion of a B-horizon soil sampling program, the company has defined a total of eight gold targets.
Six of the targets are located along the Cannard Deformation Zone, which contains numerous gold occurrences along its >100 km mapped extent, including this companies Eau Claire Deposit and the Percival Prospect.
In mid-December 2022 the company announced results from eight core drill holes at Percival, including an 85m step-out from historical high-grade mineralization that intercepted 13.5m of 8.05 g/t gold and a 150m step-out that intercepted 7.5m of 4.38 g/t gold, (including 3m of 8.7 g/t gold, and 3m of 5.5 g/t gold.)
This discovery further validated the Eau Claire project’s expansion opportunities to add overall high-grade ounces. They are already preparing a second phase of drilling with the intention of significantly increasing high-grade mineralization down plunge and to the west, thanks to these promising results.8
Joint Venture with Newmont
To the Northwest of the Eau Claire project is the 14,000-hectare Éléonore South JV, where the company is working with +$33-billion Newmont Corporation.
As per the terms of the JV, this company retains 50.022% and Newmont 49.978%.
The project is certainly interesting, as it’s a large-scale high-grade untested gold in till anomaly. The JV parties “see a tremendous amount of exploration upside” moving forward.9
Cashed Up with Other Sources of Cash to Draw From
Back in April 2022, the company completed a private placement that brought an additional C$11 million in cash.
In February of the same year, they completed the sale of its Homestake Ridge project to Dolly Varden Silver, of which they received C$5 million in cash and 76.5 million common shares.
In October, they raised C$6.8 million through the sale of 17 million Dolly Varden Silver common shares to a well-known US mutual fund institutional investor, providing even more capital for exploration at Eau Claire and the Éléonore South JV.10
Ownership interest in Dolly Varden is now sitting at 59.5 million shares, representing 23.5% of Dolly Varden’s outstanding common shares.
And in March 2023, the company closed another private placement for C$8.75 million in cash,11 further strengthening the company’s treasury which now sits at C$16.8 million.
What to do now…
As previously stated, significant developments occur rapidly for new discoveries in the mining industry, and this company is already active with numerous drills targeting multiple targets in favorable mining districts in Quebec.
Be certain to continue following this company’s story by signing up with your email address to receive company-issued news and updates.
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