Gold’s Next Big Region Is Old Favorite

Gold’s Next Big Region Is Old Favorite

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Matt Badiali

Over the past decade, Red Lake, Ontario didn’t get the recognition it deserves for its gold production and exploration. That’s changing thanks to several new discoveries and a high-profile acquisition.

There’s something big happening in Northern Ontario. And if you are a gold investor, you need to know about it.

Over the past decade, Red Lake, Ontario didn’t get the recognition it deserves for its gold production and exploration. That’s changing thanks to several new discoveries and a high-profile acquisition.

Red Lake has over a century of mining history. According to the mining data site www.digigeodata.com, the region produced 29.5 million ounces of gold, 5 million ounces of silver, 59 million pounds of copper, and 362 billion pounds of zinc.

However, few gold investors would name it in their top five favorite gold producing regions. But that’s changing.

Today, the Red Lake district has a lot to offer investors interested in gold mining. Major mining companies are operating there. Mid-tiers are exploring and developing new gold mines. And two tiny juniors have winter drill programs that could turn up the next big discovery.

That’s not so farfetched, considering Great Bear’s Dixie discovery is only a couple of years old.

A Big Discovery Led to a Big Acquisition Price

 

Kinross Gold Corp.’s (K:TSX; KGC:NYSE) acquisition of Great Bear Resources Ltd. (GBR:TSX.V; GTBDF:OTCQX) for $1.4 billion put a high-powered spotlight on this attractive gold province in Northern Ontario.

This chart should make every junior gold investor sit up and take notice.

Great Bear drilled hole after hole of good to great gold grades in 2017 and 2018. However, the market didn’t care … until its Aug. 22, 2018, press release.

In that press release, the company announced the results of drill holes DHZ-003 (which hit 16.35 meters of 26.91 g/t gold) and drill hole DHZ-004 (which hit 7.0 meters of 44.47 g/t gold). The stock ripped higher on the news, as you can see in the chart below.

Great Bear’s Dixie Project doesn’t even have a resource calculation yet. But the potential is there. It holds wide intersections of strong gold grades. And it continues to grow.

Those results validated the quality of the Dixie discovery. After that, Great Bear became the company to watch. But it’s far from the only company doing great things in Red Lake.

What’s Red Hot in Red Lake

 

Red Lake is one of the premier gold producing regions in the world. Over 30% of Canada’s gold production comes from this part of Northern Ontario. The historic Red Lake Mine produced more than 25 million ounces of gold from rocks that ran 20+ grams per ton gold.

Today, CA$5.5 billion market cap Australian gold miner Evolution Mining Ltd. (EVN:ASX) operates the mines at Red Lake. The company acquired Red Lake in 2019 for just $375 million.

The new gold major spent the last couple of years re-engineering the reserves across the many deposits. Red Lake reserves now sit at 2.9 million ounces of gold. Evolution’s three-year plan for Red Lake is to produce 200,000 ounces of gold per year at a cost of less than $1,000 per ounce.

Evolution’s management clearly liked what they saw at Red Lake, because they acquired Battle North Gold for its Bateman Gold project in March 2021 for C$343 million. The Bateman project sits just northeast of the Red Lake camp, 10 km from Evolution’s Cochenour Mine.

Bateman (formerly Phoenix Gold), is an underground gold development project. It contains the high-grade F2 deposit. There is a small 3.56 million metric ton gold reserve of 635,000 ounces with a grade of 5.54 g/t.

More Opportunities For Investors

 

Evolution isn’t the only large producer with its sights on Northern Ontario. Major gold miner AngloGold Ashanti Ltd. (AU:NYSE; ANG:JSE; AGG:ASX; AGD:LSE) just announced that it would increase its stake in CA$250 million market cap junior Pure Gold Mining Inc. (PGM:TSX.V; PUR:LSE) to 19.9%.

AngloGold has its eye on the PureGold deposit, which boasts an indicated resource of almost 2.1 million ounces of gold with a grade of 8.9 g/t gold.

Not to be left out, giant miner Barrick Gold Corp. (ABX:TSX; GOLD:NYSE) just partnered with micro-cap Kenorland Minerals Ltd. (KLD:TSX.V; 3WQO:FSE) on its South Uchi project. Barrick agreed to spend $6 million on exploration over six years to earn 70% of the project.

South Uchi sits within the Birch Uchi greenstone belt in the Red Lake mining district. Where the other majors went for established deposits, Barrick likes the exploration option. As we saw with Dixie, Bateman, and PureGold, these giant greenstone belts around Red Lake still hold undiscovered gold deposits.

And there is great news for speculators who love exploration stories. Because two tiny companies are drilling gold projects in the region today, right smack in the middle of all those deposits.

Australian micro-cap explorer Ardiden Ltd. (ADV:ASX) owns the Pickle Lake gold project. The company is currently drilling the Esker Gold prospect on the property. That’s one of 22 gold targets on the massive Pickle Lake land holding. Like Great Bear’s Dixie project, Pickle Lake has many historical gold occurrences.

There’s also a pure-play Canadian junior drilling in the region.

Cross River Ventures Corp. (CRVC:CSE; CSRVF:OTC; C6R:FWB) kicks off its own 5,000 meter drill program on its McVicar Gold Project in February 2022. The winter drill program follows up a successful summer exploration program that identified the new Bear Head Zone, including a 19.5 g/t gold grab sample.

Cross River’s McVicar Gold Project ties up the important parts of the Lang Lake greenstone belt, approximately 150 km east of Red Lake.

As you can see, Red Lake holds many opportunities for gold investors. It’s a gold-rich region with huge opportunities, as we saw with Great Bear. That company was a 50-cent stock ($29 million market cap) in June 2018. Today it’s $28.40 per share. That’s a 5,580% gain in about three and a half years.

Ardiden is a AU$32.5 million company today. Cross River Ventures is a CA$6.2 million company. Both have prospective land packages and ongoing drill programs.

All eyes will be on these two tiny companies as we wait for news this winter.

Matt Badiali is a geologist and independent financial analyst. He spent 15 years researching and writing about great investments inside the natural resources sectors. He can be reached at www.mattbadiali.net.

Streetwise Reports Disclosure:
1) Matt Badiali: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Cross River Ventures. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: Cross River Ventures. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in the article are sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Cross River Ventures. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Kenorland Minerals, Barrick Gold, and Cross River Ventures, companies mentioned in this article.

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