As Europe heads into negative interest rates and with the best rise in the value of gold of any February in history, “experts” are on the rampage screaming, “gold is headed to $10,000/ounce!” Weren’t these the same individuals who proclaimed gold will dip below $1000/ounce after analyzing the gold chart? I can assuredly say that in the next decade, gold is not going to $10,000 US per ounce. But that doesn’t mean that the price of gold will not double or even triple in that time and if that were to be the case, the junior mining stocks will certainly outperform the rise of the yellow metal.
Some of my favourite mining gold mining stocks are:
Exeter Resources (NYSE: XRA, TSX: XRC). At PDAC, I had the opportunity to sit with the President and CEO of Exeter Resources, Wendell Zerb. I was looking forward to speaking with him about Exeter Resources as I was familiar with their story about 10 years ago and wanted to find out what they were currently up to. They hold a low-mid grade, high tonnage property called the Caspiche Project in Chile.
Mining is Chile is considered safe as there is not the predominant risk of the government expropriating mining related projects. Chile boasts the highest GDP per capita in South America and is home to many copper and mining related projects.
The company holds about $20 million in the bank and is cautious about spending money outside of the ground protecting shareholder value. Management has a track record of success and Exeter has had three significant mineral discoveries in the last decade. In 2010, Exeter spun out Extorre to shareholders on a 1:1 basis and Extorre was taken over by Yamana Gold for C$414 million or C$4.26/share (2012).
Exeter contols 100% of Caspiche. The M&I mineral resources contain: Oxides 1.7 Moz, Sulphides 37.9 Moz AuEq. The capex will vary on what direction the company wants to take by either mining standalone heap leach oxide gold or the combined oxide gold/sulphide gold-copper by drilling deeper. I believe the decision will be based on the gold/copper market in the next 1-2 years and Exeter’s share price. More information can be found:
https://exeterresource.com/projects/caspiche-chile/geology-mineralization/
The company has 88.4 Million common shares outstanding, fully diluted at 95.9 million shares. Around a $70 million market cap and over $20 million in cash, I believe Exeter will be a big share mover as the price of gold continues to rise.
Disclaimer: Currently, I hold no shares in Exeter Resources and am not getting paid to promote.
West Red Lake Gold Mines (Symbol: CSE: RLG). At PDAC I met with John Kontak, President and Tom Meredith, executive Chairman for about an hour. After hearing what they had to say, I knew West Red Lake Mines is headed for great things. Mr. Meredith was interviewed by xing.com where he describes in-depth how/why the company was funded and the geology of the Rowan Mine.
https://www.xing.com/communities/posts/exclusive-interview-with-tom-meredith-executive-chairman-of-west-red-lake-gold-mines-inc-1010185917
The company is focused on gold exploration and development in the prolific Red Lake Gold district of northwestern Ontario which has produced over 30 million ounces of gold from high grade zones. They hold the flagship high grade property, the Rowan Mine that yielded recent positive drill results including 26.97 gpt over 4m in the 2014 fall drill program. Tom Meredith stated,
"We believe the Rowan Mine property has the potential to host a significant high-grade gold resource, possibly one of world class." Goldcorp is a partner with West Red Lake Gold Mines. In his interview with xing.com, Tom Meredith states, “we are very pleased to have Goldcorp as a Joint Venture partner. We are operator at the Rowan Mine property and own 60 percent. 40 % are owned by Red Lake Gold Mines Ltd., a partnership of Goldcorp Inc. and Goldcorp Canada Ltd. They see significant geological potential on the property. Goldcorp's big gold mines are located at the intersection of two regional geological structures, and a similar intersection occurs 1 km east of the Rowan Shaft on the property. Having Goldcorp as a funding partner is a great benefit for us because the investment community will see their interest in the project as very important for the creation of shareholder value."
With such a strong partner in Goldcorp, low market cap of around $7.5M, a high grade property and strong management team, I believe West Red Lake Gold Mines is an undiscovered gem for investors.
Disclaimer: Currently, I hold no shares in Exeter Resources and am not getting paid to promote.
Discovery Ventures (TSXV: DVN). I have covered this exciting company in the past. In 2014, I had the opportunity to visit the Willa Deposit and the Max Mine located near the beautiful Trout Lake region in the Revelstoke mining division of British Columbia. The Max Project consists of 59 mineral claims totalling approximately 5,489 hectares and certain under surface rights located in Revelstoke mining division of the Province of British Columbia.
The Max Mine and Mill includes an underground molybdenum mine, crushing, milling and concentrating facilities, tailings storage facilities, mineral claims, mining leases, licenses and other holdings located near Trout Lake in the Revelstoke mining division of the Province of British Columbia.
I am checking out the rocks at the Willa Deposit
The Willa asset is now at the centre of Discovery's focus in development and expansion. Survey results indicate that at a cut-off grade of 3.5 g gold/t, current Measured and Indicated mineral resources stand at 758,000 tonnes grading 6.67 g gold/t, 0.85% copper and 12.54 g silver/t. The property has a surface area of approximately 5,329 hectares and consists of twenty-one mineral claims. Discovery has entered into an option agreement to acquire an 80% interest in the Willa property, subject to a 2.5% NSR royalty. The remaining 20% interest is held by the optionor of the property as a carried interest until there is commercial production on the property.
Approximately $18 million CDN has been spent up to date, and the deposit is presently open at all three sites. Support facilities include an extensive underground network to access the mineralization as well as a possible mill location just 135 km away.
President Dan Omeniuk has built a large and profitable trucking business (Trapper’s Transport Ltd). Dan's company recently agreed to a $7M credit facility to advance to the Willa/Max Project. He is excited to put the mine into production. We are excited about Discovery Ventures potential.
Disclaimer: Currently, I hold no shares in Discovery Ventures and am not getting paid to promote.
With all of this to consider, please visit our site at www.JuniorGoldReport.com and sign up for your FREE newsletter and stay informed in the junior mining space.
Happy investing!
Kal Kotecha PhD
Editor of the Junior Gold Report
email:
kal@juniorgoldreport.com
website:
www.juniorgoldreport.com
Kal Kotecha, PhD, is the editor and founder of the Junior Gold Report, a publication about small cap mining stocks that is read and enjoyed by thousands of investors. He was the editor and creator of the Moly/Gold Report, which focused on critical analyses and open journalism of companies profiting from the precious and base metals sector. The scope of his current activities include worldwide onsite analyses and reporting of developing companies. Kal has previously held leadership positions with many junior mining companies. After completing his MBA in Finance in 2007, Kal completed his PhD in Business Administration in January 2016. His thesis was on the Affective Heuristics of the 2008 stock market crash. He also lectures Economics at the University of Waterloo and Niagara College where he was voted Professor of the Year 2013/2014. Contact: kal@JuniorGoldReport.com