Newfoundland’s Crazy Gold Rush and a Quality Gold Junior
Symbol:BRAS.CSE
Summary
A gold rush has begun in Newfoundland
A frenzy of gold drilling in Newfoundland
Big Investors such as Eric Sprott have large bets in the Area
Gold targets increased with Inflation being a core theme of 2022
Introduction
Newfoundland is experiencing a gold rush previously unseen; rivalled only by the Yukon Gold Rush. Mines, and prospective mines, from the Baie Verte Peninsula to the Gander area and as far south as Millertown are in various stages of production. A claim staking gold rush among junior explorers is taking place.
Anaconda Mining Inc. and its Point Rousse project, are producing gold already. Others, like Marathon Gold’s Valentine Lake Project, are poised to start production in the near future.
The big discovery is New Found Gold which IPO’d at $1.30 CAD and now is at $7.90 with a 1.3 Billion dollar market cap. Eric Sprott was the notable investor in that deal.
Sprott, a well-known investor in mining projects, has been providing financing to a number of junior mining companies searching for gold in Newfoundland and Labrador.
Pace Of Activity Increasing
Looking at a Map of Claims from Sept 2020 compared to July 2021, shows the level of interest in the Newfoundland Gold Belt increasing at a frantic pace.
MINING CLAIMS IN NEWFOUNDLAND SEPT. 2020 VS. JULY 2021
Alongside the geology, Newfoundland and Labrador are ranked among the top 10 mining jurisdictions world-wide by the Fraser Institute. The area boasts excellent infrastructure including roads, grid power, port facilities, complete mining services as well as a skilled and experienced workforce.
BRASCAN GOLD
Brascan Gold got my attention as it holds 2 properties in Newfoundland. Their “Middle Arm” property and their “Black Cat Property” are both in the mining-friendly region of Baie Verte. The area is mineral-rich and has excellent infrastructure to keep costs low coupled with a highly skilled local work-force.
BRASCAN’S MIDDLE-ARM PROPERTY
The Middle Arm Fault gold property is surrounded by mine operators, developers and explorers such as Shoreline Aggregates, Maritime Resources (TSX-V: MAE), Rambler Metals and Mining (AIM: RMM), Anaconda Mining (TSE: ANX) and a few other companies that mined narrow, high-grade gold veins.
In fact, the Middle Arm gold property is adjacent to the Whiskers Valley project owned by Maritime Resources which is a big positive, and 14 km north of Maritime’s past-producer Hammerdown gold deposit.
BLACK CAT PROPERTY
The Black Cat Property is located West and adjacent to the Gull Ridge Property held by Maritime Resources. The property spans a portion of the regionally significant Baie Verte-Brompton Line (BBL) which is interpreted as an NNE striking crustal scale fault. The BBL is one of 4 large suture zones that formed during the closure of the Iapetus Ocean. These crustal scale suture zones have been found to be related to the distribution of major ore deposits in Newfoundland and Ireland with the most significant deposits being the Dalradian Deposit in Ireland, Valentine Lake and the Queensway Project being explored by Newfound Gold.
The Black Cat Project was explored in the late 1980s by Canaustra Gold Limited that identified several significant gold occurrences in soil anomalies as well as identified a number of gold grains in till from various locations across the property. In recent years, local prospecting groups have held the claims and have reported local gold and copper occurrences from surface grab samples; as well several strongly mineralized quartz-pyrite veins outcropping on surface.
The combination of gold occurring in soils and tills and grab samples on the property in close proximity to the Baie Verte Brompton Line makes this area a highly prospective gold exploration target.
Source: BRASCAN WEBSITE
Macro Environment for Gold
2022 is shaping up to be a great year as Inflation is one of the core themes. During times of hyperinflation, gold outperforms.
Analyst Targets
Goldman Sachs predicts gold at $2,300 an ounce this year.
Bank of America set its mid-term forecast at $3,000 an ounce.
Bloomberg Intelligence has gold soaring to $4,000 an ounce by 2023.
And Frank Homes, CEO of U.S. Global Investors, which is famous for its mining mutual funds, didn’t blink at the $4,000 forecast. He agreed.
Conclusion:
The areas noted have garnered the attention of major investors either as a direct gold play or proxy to ride a perceived gold price rise. The ongoing M&A activity adds yet another positive. Being in the right areas that have solid infrastructure and aspects of closeology to other plays bodes well for companies like Brascan. The premise is simple; all portfolios should have some gold exposure, always. Brascan represents a quality play that would fit nicely into almost any investment horizon for all the reasons noted.
Disclosure: I own shares of BRASCAN GOLD and plan on buying more.