Fundamental Catalysts In Junior Mining Sector Lead To Bullish Breakouts
Jeb Handwerger | Feb 02, 2016 01:51AM ET
Some important developments are taking place in the junior mining sector which must be followed by astute investors who are timing a potential market bottom in the TSX Venture. I recently returned from the Vancouver Resource Investment Conference with some exciting developments. Things could turn quickly for resource investors and when they do one should be ready to sew the rewards of years of plantings during one of the worst bear market cycles in modern history for commodities. For many years I have been studying some of the top performers and believe fundamental developments like what follow are indicative of potential technical breakouts.
First off news coming out of Gold Standard Ventures Corp (N:GSV) that the major gold producer Goldcorp (GG) is investing $16 million is a wonderful development for Nevada junior gold miners as this is a clear signal to the Newmont Mining Corporation (N:NEM) and Barrick Gold Corporation (N:ABX) that Goldcorp Inc (N:GG) is looking for Nevada exploration assets. Jonathan Awde, President, CEO and Director of Gold Standard commented, “We view this investment by Goldcorp as a validation of the exploration success we have had at the Railroad-Pinion project. With the proceeds from the private placement we will look to aggressively expand the 6km Dark Star corridor, the location of the recent North Dark Star discovery, which we believe has the potential to host a significant gold system.”
This reminds us of the recent $14.6 Mil CAD deal with Eldorado Gold Corporation (TO:ELD) and Integra Gold (TO:ICG or ICGQF) in Quebec. ”Recent drill results from the Lamaque Project, and specifically the Triangle Zone, continue to demonstrate the excellent upside potential of the deposit, which is situated in the world-class gold district of Val-d’Or, Quebec. The Eldorado investment allows us to substantially increase our current program with the objective of enhancing our confidence in existing mineral resources and adding to an already substantial gold resource base. With five drill rigs operational by the end of the month and almost 100,000 metres of planned drilling in 2015, this investment provides us with the financial resources to more rapidly move forward with an active fall and winter drill program which is anticipated to include ten operating drills at the project,” commented Stephen de Jong, President and CEO of Integra. “Eldorado is a leading gold producer with excellent technical expertise and proven capabilities in developing mines across the globe, and their investment in Integra represents a major endorsement of the Lamaque Project and the team behind it. This investment brings the Company’s cash balance to $27 million which enables us to continue to execute on our exploration and development plans as we build value for our shareholders.”
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Attention should also be paid to NuLegacy Gold Corp (Nulegacy Gold Corporation (TO:NUG) or NULGF) who recently completed a 70% earn-in with Barrick Gold Corporation (N:ABX) on the Iceberg Gold Deposit in the Cortez Trend. Goldcorp or another major should take note of the recent decision by Barrick to retain a minority interest as this could be an excellent way to secure ground in the heart of the Cortez Trend adjacent to three of Barrick’s lowest cost and safest gold mines.
Fission Uranium (TO:FCU or FCUUF) just announced that their first wildcat exploration hole hit a whole new high grade area of uranium 135m west of R600W. Ross McElroy, President, COO, and Chief Geologist for Fission, commented,”This is an incredible start to the drill program and shows the continued blue-sky potential of PLS. Our first wildcat exploration drill hole was collared on line 840W, located 135m west along strike of the R600W zone and increases the on-trend mineralized strike length at PLS to 2.47km. Whether this is a continuation of the high-grade R600W zone to the west or a new zone will have to be determined with further drilling. As part of exploration drilling, we had only planned for one drill hole in this area, however, the strength of these results warrants follow up drilling.” I am also closely following Fission 3 (TO:FUU or FISOF) which I believe is setting up for a technical breakout at 12 cents as they have a bunch of high priority targets.
Watch this interview with Treasury Metals (TO:TML) CEO Martin Walters. This may be the top undeveloped project in Ontario with the highest grades and the lowest capital and operating costs at the advanced mine permitting and engineering stage. They own the Goliath Gold Project right outside Dryden in Northwestern Ontario. Investors are looking for high grade gold projects with low capital costs and this company fits the bill. I would not be surprised if majors such as Goldcorp are looking at this asset as an acquisition.
Good news comes out of IDM Mining (TO:IDM) that they acquired Oban Mining’s (TO:OBM) Yukon Properties. Please note IDM is run by Rob McLeod who founded Underworld Resources which was bought out by Kinross for $140 Mil after a major gold discovery of 1.4 million ounces in the Yukon. He is well known in the industry as one of the most creative exploration geologists and IDM could be quite exciting if this junior gold market bottoms for Rob to get some capital to explore this amazing land package. IDM has been in a nasty downtrend but that could change soon. Look for a breakout above the 200 day moving average at $.10 CAD.
Royal Nickel “RNC” (TO:RNX or RNKLF) made two acquisitions transforming itself from a nickel developer into a base and precious metals producer. “The acquisition of SLM and VMS will provide RNC with cash generating operations, leveraged exposure to nickel, gold and copper production, and serves as a platform for potential growth in two promising and prolific metals producing regions in excellent mining jurisdictions,” said Mark Selby, President and CEO of RNC. “With the addition of the SLM and VMS assets, RNC will benefit from exposure to current nickel, gold and copper production, RNC’s large scale, shovel ready, Dumont Nickel Project, management synergies, and a pipeline of compelling nickel, copper and gold exploration projects.”
Disclosure: I own Integra, NuLegacy, Fission, Fission 3, Treasury Metals, Idm Mining and Royal Nickel. NuLegacy Fission 3, Treasury and IDM are current sponsors. Integra and Royal Nickel were past sponsors. Please do your own due diligence. I have a conflict of interest as a shareholder and prior/current business relationships and am not a financial advisor.
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