3 Gold Explorers To Put On Your Radar Now

May 23, 2017 7:44 AM ET

Summary

Gold exploration stocks are high risk, but high return stocks that carry leverage to the price of gold.

Strong drilling results is a positive sign for explorers as it typically leads to a larger resource, a positive technical study, or interest from gold miners or investors.

Here are three gold exploration stocks with recent positive drilling results or other news and my thoughts on each stock.

3 Gold Exploration Stocks to Put on Your Radar

Gold exploration and development companies carry more risk than typical mining companies, but also more upside. These are earlier-stage companies that have yet to make a large discovery, but are actively drilling to expand resources.

As I've mentioned before, I hold a significant amount of gold explorers in my real-life gold portfolio, as this is one reason why I've been able to outperform benchmark indexes such as the VanEck gold miners index (NYSEARCA:GDX) and other indexes. I've hand selected these stocks based on my own research.

I look for projects with strong exploration upside in politically favorable mining jurisdictions, such as Canada. Other major positives include a strong management team with heavy insider ownership and projects located near currently producing mines, as I think this increases the chances of a takeover.

Here, I've listed three gold exploration companies that are worth putting on your radar following solid exploration results, as I'll explain below.

Alexandria Minerals (OTCQB:ALXDF)

I'm featuring Alexandria Minerals because the company recently reported some of the best drill results at its Quebec property to date. On May 10, Alexandria said that drilling at Orenada Zone 4 (on its Cadillac Break property in Quebec) intersected high-grade gold veins.

Drill highlights include: 9.00 g/t gold over 13.85 meters, including 16.23 g/t gold over 5.05 meters; 6.29 g/t gold over 15.35 meters; 4.85 g/t gold over 12.00 meters, including 9.15 g/t over 3 meters. These results come from a previously untested area.

This is the main focus area for Alexandria now. By the end of May, the company plans on having three drills active in this area.



Alexandria still awaits the results of 22 gold assay results to see how far gold minerazliation extends west at this deposit, possibly to as far as Orenada Zone 2 (see map above).

If gold mineralization extends from Zone 4 to Zone 2 at an average grade of 2 grams per ton gold, there's strong potential for a 2 million ounce gold deposit within this 2 kilometer stretch alone, according to Mary Vorhis, VP of corporate development and investor relations. Orenada currently contains less than 600,000 ounces of gold in all resource categories.

For some background, Alexandria's Cadillac Break property stretches 35 kilometers long and this Orenada deposit is located close to the Lamaque project and the Sigma-Lamaque Milling Complex and Mine, owned by Integra Gold (OTCQX:ICGQF), which is being acquired by El Dorado Gold (NYSE:EGO).

Alexandria also has strong support from well-known precious metals investor Eric Sprott, who recently invested $2 million in the company via a private placement, as well as Agnico Eagle (NYSE:AEM), which owns 7% of the company. Management and insiders own 6%.

The company is well-funded, as it currently has $7 million in cash and another $2.3 million in credits and other assets, according to Vorhis.

Alexandria remains a top holding of mine in my gold portfolio and I'm confident of its inclusion in my top gold stocks for 2017 list.