Post by
AlwaysLong683 on May 27, 2021 2:42pm
Possible Manic Behaviour in Newfoundland...?
Mania seems to have broken out in Central Newfoundland recently as some companies appear to be staking claims to any and all land packages they can get their hands on, perhaps thinking they are going to hit large high-grade gold discoveries in most places they drill, or that there are multiple Fosterville deposits in the territory and they want to find one or more of them.
In other words, if there's property available anywhere Central Newfoundland, companies seem to be claiming it.
Sassy (SASY) appears to be Exhibit A in this regard.
In their press release dated May 4, they acquired land in Central Newfoundland that took their property holdings from 156 square kilometres to 1,381 square kilometres.
Where they done?
No.
A mere 10 days later, in their press release dated May 14, they gobbled up even more land to take them from 1,381 square kilometres to 2,257 square kilometres.
These apparent land claim addicts now have no less than 8 distinct claims packages of various sizes littering the landscape from North Central Newfoundland to the South West portion of the island.
A second example (though less extreme, at least so far) is SIC and their recent partnership with BEX.
SIC's May 20 press release announced they had formed a "strategic alliance" with BEX to "jointly acquire and explore gold opportunities in Newfoundland".
In that same press release, they announced they and BEX had acquired a 786 square kilometre claims package to be called the "Golden Hope Joint Venture" in South-Central Newfoundland and a 50-50 Joint Venture re. BEX's 156 square kilometre Kepenkeck Gold Property, both of which are located in Southern Newfoundland.
Where SIC / BEX done?
Also, no.
In their press release dated today (May 27), SIC announced they and BEX jointly-acquired an additional 81 square kilometre package called the Grey River Gold Project, also in Southern Newfoundland.
With this latest joint-venture, SIC now has a total of over 1,500 square kilometres of land in which they have either direct ownership or co-ownership, so they now have interest in six land claims packages scattered across Newfoundland with a sum total land area approximately equal in size to NFG's single, contiguous Queensway package:
SIC (Moosehead)
SIC (Fleur de Lys)
SIC (Crippleback)
BEX / SIC (Golden Hope)
BEX / SIC (Kepenkeck)
BEX / SIC (Grey River)
I've read about all the apparent gold mining brainpower involved with SIC and BEX, but ultimately, in my view, because gold exploration is unpredictable by definition, the best chance an average investor has in achieving success investing in a gold mining stock is seeing which companies have already established results, how disciplined they are in their approach, and how realistic their plans are in terms of quality rather than quantity, as any new exploration / drilling costs money, and the more distinct land packages you have, the more it costs to explore, sample, and drill in each of these locations with no assurances that you'll find results good enough and large enough to ultimately lead to mining the area.
I guess the only thing that remains to be seen is whether it’s SASY or SIC/BEX that ends up staking the greatest number of separate claims packages on the island that they plan to eventually drill on......?
Thus, some questions regarding SASY and SIC:
1) How long will it take them to drill on all these properties and produce assay results from that drilling (3 years, 5 years, 10 years, 20 years, more.....?). Perhaps they are thinking VERY LONG term, as in many decades from now.....?
2) How much money is it going to cost to properly survey and drill on all these territories, where will this money come from, and what will it cost existing shareholders re. share dilution, etc. as they proceed with this massive initiative….?
3) If these companies do get the funding and do the drilling, just how impressive will the assay results be in each area?
4) How many of these claims will eventually be abandoned / cancelled after money is spent surveying and drilling and coming up dry or with not enough juice to warrant continuing the project?
Maybe the plan is, if you stake claims in enough land packages, one or more is bound to hit and it'll all have been worthwhile in the end...?
Contrast the above to NFG.
NFG has one contiguous claims package (Queensway) covering 1,500 square kilometres and two faults running right through it from north to south with the only break in the property being the TransCanada Highway. NFG also holds significant ownership in two other companies (LAB and NFLD) whose properties are adjacent to Queensway. Though I would personally prefer if NFG just stuck to Queensway given its enormous size and sweet spot in Central Newfoundland, they may eventually try to take out LAB and / or NFLD to extend their claims to both the north and the south of Queensway……? Perhaps NFG is taking a “wait-and-see” approach and will decide at some point whether to acquire one or both of them or just sell their LAB and/or NFLD shares and use the proceeds to further develop Queensway.....?
As an aside, given that Eric Sprott seems to be betting on almost ALL the horses in the Newfoundland gold race, I personally don't put too much stock into learning which or how much of any given company he owns (he owns approximately 18% of NFG), as he more-often-than-not seems to be getting these shares at a significant discount to their market price, so he's got immediate paper gains in these names right off the bat. Even if the share price doesn't move a cent, he still makes good money on the deal. If the share price appreciates, he adds to his existing gains. Nice investing if you can get it.