How A Junior Miner May Have Sparked A New Canadian Gold Rush


Gold performs like this solely occur very not often.

Since a significant gold discovery final yr in Quebec noticed a small-cap miner purchase up all of the adjoining property, many buyers have been watching intently. When that very same miner then acquired one of many province’s greatest past-producing mines, the joy grew to become palpable.

Then, the small-cap miner began drilling and, towards all our expectations, produced first-drill outcomes earlier than any of us had time to digest the information. And it was larger than we anticipated.

The junior miner might have hit a deposit that hasn’t beforehand been discovered even after a long time of exploration work happening in search of it—with some exploration happening for nearly a century.

Now, they’re aiming to spark one other gold rush of probably historic proportions.

Amex Exploration (TSX:AMEX) made the unique high-grade gold discovery final yr in Quebec–one of Canada’s premier gold territories and the playground of the tremendous main miners.

Amex’s founders knew what they began, with this discovery that had eluded massive miners for many years.

Amex had arrange stakes within the space as a result of it was near the past-producing Normetal Mine Traditionally, Normetal has produced ~10.1 million tonnes of two.15% copper, 5.12% zinc, 0.549g/t of gold and 45.25 g/t of silver.

The “closeology” logic that has enriched the mining business for hundreds of years was a play right here, as nicely. Many individuals thought the mom lode was close by.

Amex began drilling on its Perron Property, simply west of Normetal.

They ended up with an enormous discovery that turned them into one of many best-performing shares on the TSX Alternate in 2019 and among the many high 50 greatest corporations on the OTCQX in 2020. It additionally helped them reward shareholders with as much as 7,000% returns. Nobody will neglect that any time quickly.

What was going quietly on the sidelines of this discovery, appears to be like set to be much more promising.

Earlier than we had time to blink, Starr Peak Mining Ltd. (TSX:STE.V; OTC:STRPF) strategically acquired many of the land adjoining to Amex’s massive discovery.

Star Peak

Star Peak

However the even larger coup was this: In addition they scooped up the Normetal mine itself.

It was a really daring transfer for such a small firm, which we predict may imply a strong potential upside for this junior’s worth even in contrast with Amex.

Shortly afterwards, in February this yr, Starr Peak introduced a completely funded 20,000-meter drill marketing campaign.

After solely three weeks of drilling, the corporate introduced they introduced on a second drill rig. That’s a significant expense that an organization normally solely takes so early within the sport if drilling goes rather well. Now, they’re reported to have ordered a third drill rig to the property.

On Might 4th, we predict anybody watching this may have been very excited. The maiden drill results have been launched, and so they have been very optimistic. Now, extra buyers are beginning to watch, and for this reason:

Starr Peak in all probability had excessive confidence in its drill targets going into this, however the outcomes might have stunned even them. What they hit was greater than gold. They found proof of a VMS deposit with rock containing a number of base metals, together with zinc, copper, silver and gold.

And the corporate reported that they didn’t simply hit it in a single drill gap. They hit it in 12–so far. They apparently haven’t missed as soon as.

VMS deposits are included within the richest types of deposits on this planet.

VMS stands for Volcanogenic Huge Sulphide, and these deposits may be wealthy in base metals akin to copper, zinc, silver, gold and different minerals.

There have been only a few new VMS-style deposits found over the previous decade, and discovering one may imply attracting the eye of the large miners who’ve been looking out in useless. Which may put Starr Peak on some very severe radar.

The primary batch of drill outcomes that Starr Peak introduced this month had highlights of 20.94% Zinc, 0.43% Copper, 39.58 g/t Silver and 0.21 g/t Gold over an intercept of over 12.1 meters. In addition they highlighted a brand new discovery at depth with extra huge sulphides.

Star Peak

Star Peak

Star Peak

Star Peak

Outcomes from the lab are anticipated any day, and after they do come, we predict there’s potential for this firm to boost the joy ranges about their potential strike in an enormous method.

There may be nothing the key miners latch on to extra tightly than a junior discovery of gold–not to say the potential bounty of a VMS, which makes a play much less depending on gold alone.

We’re experiencing a copper scarcity proper now, with hovering demand, and analysts focusing on $13,000 a metric ton within the coming months, from simply over $9,000 in the present day. Zinc, too, is benefitting from bullish sentiments which have pushed costs to multi-year highs. And silver is seeking to escape, together with gold.

Starr Peak (TSX:STE.V; OTC:STRPF) may very well be proper on the middle of all of it with its newest outcomes.

They usually have been solely in search of gold, which could have been adequate to catapult this firm to the eye of the business. A VMS discovery makes this a a lot larger sport.

Amex definitely appears to assume so.

One week earlier than the VMS discovery was introduced by Starr Peak, the Amex Chairman and Founder was appointed as Starr Peak’s Chief Technical Advisor, making him–and his world-class reputation–the head geologist. It was a significant transfer of confidence.

Starr Peak could also be set to change into Amex II, which is sufficient for us to anticipate to begin seeing buyers circling round this one. Over the previous three years, Amex has grown from a small junior gold firm to now a significant gold identify with a market cap of roughly $300 million. Once more, Amex buyers noticed returns of as much as 7,000%.

And Amex stories they’re nonetheless drilling, proper subsequent door to Starr Peak, with about $30 million within the financial institution to maintain at it. Analysts are calling for Amex’s market cap to probably push as much as $1 billion as they proceed to drill.

Starr Peak has additionally progressed nicely prior to now 12 months, attracting some early-stage Amex shareholders from the start.

This VMS discovery means one thing very important for Starr Peak–just for starters. In our view, this isn’t only a junior miner anymore. It’s an approx. $75 million market-cap contender.

After 80 years of exploration by main miners, we imagine that Starr Peak may need discovered the mom lode, and we’re eyeing its potential to change into one other business success story, like Amex.

Majors Are Trying To Win Massive In 2021 Too

After years of shunning gold and gold miners, one of many world’s most infamous buyers, Warren Buffett, has lastly modified his stance on valuable metals. In an announcement final yr, Berkshire Hathaway mentioned it was shopping for $564 million value of Barrick Gold (NYSE:GOLD; TSX:ABX) shares at a time when gold was hovering. This flip flop in the direction of gold by Buffett may have an effect on what number of different buyers view it as an funding alternative, as nicely. The Oracle of Omaha’s funding in Barrick and alter in tune on the gold entrance shouldn’t come as a lot of a shock, nevertheless. As the way forward for the financial system appears to be like more-and-more unsure, and the Federal Reserve continues to print cash at a file charge, strong gold miners like Barrick have drawn quite a lot of consideration for buyers.

Barrick is a top-tier gold miner with a worldwide footprint. The Toronto-based gold large operates in 13 international locations, together with Argentina, Canada, Chile, Côte d’Ivoire, Democratic Republic of the Congo, Dominican Republic, Mali, Papua New Guinea, Saudi Arabia, Tanzania, the US and Zambia. Although Newmont surpassed Barrick as the most important gold miner when it acquired Goldcorp, Barrick remains to be a drive to be reckoned with.

Newmont (NYSE:NEM, TSX:NGT) is the only greatest gold firm on this planet, however that doesn’t imply it doesn’t nonetheless have some room to run. The corporate has a strong stability sheet with little debt and it’s nonetheless rising. Based in 1916, and based mostly in Greenwood Village, Colorado, Newmont is a veteran miner with one of many high government groups within the enterprise, and its operations span 11 international locations, together with gold mines in Nevada, Colorado, Ontario, Quebec, Mexico, the Dominican Republic, Australia, Ghana, Argentina, Peru, and Suriname.

And so far as administration is worried, Newmont does not have any weak spots. Its board contains veteran mining executives like Bob McAdam of Barrick Gold, Tom Albanese of Rio Tinto, Joe Jimenez of Dow Chemical Firm and John Wiebe of Kinross Gold Company.

In 2019, Newmont acquired Goldcorp – a transfer that appeared considerably controversial for shareholders on the time. However its $10 billion acquisition has paid off in an enormous method as gold costs soared to file highs as buyers, spurred by the COVID pandemic and weakening U.S. greenback, piled into secure haven property. Because the acquisition, gold costs have soared from $1282 to $2006 per ounce, fueling a 90% rally within the firm’s share value earlier than the gold rush cooled down a bit.

Yamana Gold (NYSE:AUY, TSX:YRI), one of many world’s high gold corporations, has seen its share value hit particularly exhausting this yr. Yamana had been on an upward pattern since February when it introduced that three mines have been closing and greater than 1 billion {dollars} can be reduce from their budgets as a part of ongoing austerity measures resulting from slumping costs for valuable metals and weak demand for mining gear throughout the business.

At first of this yr, Yamana signed an settlement with business giants Glencore and Goldcorp to develop and function one other Argentinian venture, the Agua Rica. Preliminary evaluation suggests the potential for a mine life in extra of 25 years at common annual manufacturing of roughly 236,000 tonnes (520 million kilos) of copper-equivalent steel, together with the contributions of gold, molybdenum, and silver, for the primary 10 years of operation.

Kinross Gold Corp. (NYSE:KGC, TSX:Ok), one of many world’s largest gold producers, is consistently seeking to increase its operations and has discovered success in lots of areas. The corporate mines for gold throughout six continents, with operations in Brazil, Ghana, Mauritania, Russia and the US. It additionally operates a three way partnership with AngloGold Ashanti Restricted that gives mining providers at two websites in West Africa—one in all which was lately awarded an environmental allow from the federal government of Guinea.

Kinross Gold Company is a worthwhile company–consistently. It’s a safer guess, if not one that can ship you beautiful upside. That is for the extra cautious gold investor.

Kinross has grown earnings per share (EPS) yearly by 44%, compound, for the previous three years. It’s a diversified gold firm that engages within the acquisition, exploration, and growth of gold properties in Canada, the US, Russia, Chile, Brazil, Ghana, and Mauritania.

Identical to AngloGold, Kinross has been having fun with dramatic enhancements in revenue margins and money move because of the surge in gold prices–and this pattern seems set to proceed with the gold outlook remaining decidedly bullish. With all elements remaining fixed, Kinross ought to be capable to notice excessive single-digit EPS enlargement within the present yr.

Kirkland Lake Gold (NYSE:KL, TSX:KL) is one other one in all Toronto’s best gold miners. Although not fairly as established as Barrick or Newmont, Kirkland is not any stranger to putting headline grabbing offers within the business. Actually, only recently, Kirkland and Newmont signed a $75 million exploration deal that might wind up being a game-changer for the business. The 2 corporations have agreed to separate the price 50/50 over 5 years with every firm investing $15 million yearly into joint initiatives between each corporations for exploration functions solely – at this level it looks like a win.

In response to a joint press launch in late 2020, “Newmont has acquired an choice from Kirkland on the mining and mineral rights topic to a royalty payable by Newmont to Royal Gold, Inc. (the Holt Royalty) in trade for a $75 million fee to Kirkland Lake Gold. Newmont can train the Choice solely within the occasion Kirkland intends to restart operations on the Holt Mine and course of materials topic to the Holt Royalty”

This alliance will present Kirkland with money move to guage new alternate options for the way forward for the mining advanced, dive deeper into its current properties, and weigh different alternatives the place the 2 gold corporations could possibly discover frequent floor sooner or later.

AngloGold Ashanti (NYSE:AU) is the third-largest gold mining firm by manufacturing quantity. And although it has had some issues over the previous decade, particularly within the early 2010s when the gold market took a significant hit forcing many miners, together with AngloGold to shutter operations, the mining large has persevered.

AngloGold is without doubt one of the extra numerous miners on the planet, shielding itself from country-specific regulatory troubles or civil strife. It has operations on 4 continents together with Africa, Australia, South America and North America.

AngloGold has been recording extremely spectacular bottom-line enlargement. The miner’s efficiency has been underpinned by a file yr at Geita in addition to exceptional performances on the Kibali, Dawn Dam, Iduapriem, Siguiri, and AGA Mineração operations.

Whereas Freeport-McMoRan (NYSE:FCX) is primarily recognized for its important copper mining operations, the useful resource large additionally has a good inflow of gold as nicely. Actually, its Grasberg mine in Indonesia holds of the world’s largest deposits of copper and gold. However that’s simply scratching the floor of the miner’s world property. Freeport-McMoRan additionally has intensive operations throughout the Americas, together with mines in Arizona, Mexico and Peru.

Although its enterprise struggled as world demand for copper took successful, panic-buying from China has lifted costs larger in current months – and that’s excellent news for Freeport-McMoRan. Along with climbing copper costs, gold costs hit file ranges, which is able to add much more to the mining large’s backside line.

Freeport-McMoRan has had an unbelievable yr, with the value of its inventory bouncing off a low of $8.74 again in Might 2020 to in the present day’s value of $43.71, representing a 400% enhance in only one yr’s time.

By. Christine Bachmann

**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ

CAREFULLY**

Ahead-Trying Statements

This publication accommodates forward-looking data which is topic to quite a lot of dangers and uncertainties and different elements that might trigger precise occasions or outcomes to vary from these projected within the forward-looking statements. Ahead wanting statements on this publication embrace that costs for gold, silver, copper, zinc and different base metals will retain their worth in future as presently anticipated, or may proceed to extend resulting from world demand and political causes; that Starr Peak can fulfill all its obligations to amass its Quebec properties; that Starr Peak’s property can proceed to attain drilling and mining success for gold and different metals; that historic geological data and estimations will show to be correct or no less than very indicative; that high-grade targets exist; and that Starr Peak will be capable to perform its enterprise plans, together with timing for future exploration and drilling; that the preliminary drilling outcomes might be confirmed as additional exploration continues; that Starr Peak will achieve the eye and curiosity of bigger mining corporations; that Starr Peak’s exploration outcomes will proceed to indicate promising outcomes justifying ongoing exploration and potential growth efforts. These forward-looking statements are topic to quite a lot of dangers and uncertainties and different elements that might trigger precise occasions or outcomes to vary materially from these projected within the forward-looking data. Dangers that might change or stop these statements from coming to fruition embrace that politics don’t have almost the robust impact on gold and different base steel costs as anticipated; that demand for base metals might not proceed to extend; that the Firm might not full all its introduced mineral property purchases for numerous causes; that the Firm might not be capable to finance its meant drilling and exploration applications; Starr Peak might not increase ample funds to hold out its enterprise plans; that geological interpretations and technological outcomes based mostly on present knowledge might change with extra detailed data or testing; that the preliminary drilling outcomes might not be confirmed throughout additional exploration; that Starr Peak will fail to realize the eye and curiosity of different mining corporations; that Starr Peak’s exploration outcomes might fail to search out extra promising outcomes justifying ongoing exploration and/or growth efforts; and regardless of promising outcomes from drilling and exploration, there could also be no commercially viable minerals or ore on Starr Peak’s property. The forward-looking data contained herein is given as of the date hereof and we assume no duty to replace or revise such data to replicate new occasions or circumstances, besides as required by legislation.

DISCLAIMERS

This communication is for leisure functions solely. By no means make investments purely based mostly on our communication. We’ve not been compensated by Starr Peak however might sooner or later be compensated to conduct investor consciousness promoting and advertising for TSXV:STE. The data in our communications and on our web site has not been independently verified and isn’t assured to be appropriate.

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NOT AN INVESTMENT ADVISOR. The Firm is just not registered or licensed by any governing physique in any jurisdiction to provide investing recommendation or present funding suggestion.

ALWAYS DO YOUR OWN RESEARCH and seek the advice of with a licensed funding skilled earlier than investing. This communication shouldn’t be used as a foundation for making any funding.

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