In a precious metals bull market like the one I see returning in full force this year, investors seeking to maximize their leverage on this trend will naturally gravitate toward the exploration end of the junior equity spectrum.
Discovery success in a rising precious metals market has historically been a recipe for exceptional profits. It's just a matter of landing on the right prospects.
Two that come readily to mind are Westhaven Gold Corp. (WHN:TSX.V) and Silver Viper Minerals Corp. (VIPR:TSX.V; VIPRF:OTCQB). With Westhaven as a gold-focused precious metals story and Silver Viper as a silver-focused precious metals story, these two explorers allow investors to speculate on flagship projects that have already demonstrated their potential for growth via the drill bit.
Westhaven Gold's flagship asset is its Shovelnose project in south-central British Columbia.
An October 2018 drill result put Shovelnose on the market's radar, thanks to a discovery hole that hit 17.7 meters of 24.5 g/t gold and 107.9 g/t silver.
That's a world-class hit, and one that exhibited a style of low-sulphidation epithermal mineralization that has been found in other compelling deposits, including Hishikari in Japan (7.7 million ounces of 30 g/t–40 g/t gold) and Ecuador's Fruta del Norte (5.0 million ounces of 8.7 g/t gold).
Westhaven owns a massive, 35,000-hectare land position in the Spences Bridge Gold Belt where Shovelnose resides. The initial focus has been on Shovelnose, where new targets have been outlined and multiple targets remain to be tested.
Westhaven completed a 43,000-meter drilling program on the project, which is road-accessible and lies near major transportation routes and significant infrastructure. Highlights from this program in 2020 demonstrate the potential.
This past summer, the company reported good intercepts from the Lear target, which lies directly to the northwest of the known mineralization on the Shovelnose's South Zone and was defined by a north-trending magnetic low that is coincident with a resistivity high.
Hole 56 helped this batch to extend the Vein Zones 2 and 3 up to 230 meters from the South Zone. The hole hit 3.5 meters of 2.3 g/t gold and 7.2 g/t silver (including 0.7 meters of 7.0 g/t gold and 16.5 g/t silver) in Vein Zone 2 and 10.6 meters of 3.7 g/t gold and 10.4 g/t silver (including 3.1 meter of 7.2 g/t gold and 27.3 g/t silver and including 0.8 meters of 15.9 g/t gold and 61.3 g/t silver) in Vein Zone 3.
Previous drilling on the adjacent Alpine Zone to the west/northwest of Lear had also encountered high grade. Hole 2 cut 0.5 meters of 16.7 g/t gold. In addition, Hole 7 hit a lone intersection of mineable-grade gold (123.0 meters of 0.23 g/t).
More recently, Westhaven announced the discovery of the Franz zone on the project. The discovery hole at Franz (Hole 101) hit 7.8 meters of 14.8 g/t gold and 39.4 g/t silver and 16.3 meters of 2.4 g/t gold and 31.2 g/t silver. Both these intervals came at relatively shallow depths.
Westhaven followed up on this good initial result at Franz with a series of holes highlighted by Hole 108 (34.1 meters of 2.1 g/t gold and 16.5 g/t silver), Hole 107 (7.5 meters of 1.9 g/t/ gold and 23.6 g/t silver) and Hole 102 (1.8 meters of 8.1 g/t gold and 34.5 g/t silver). Other assays of note included Hole 112 (9.0 meters of 2.4 g/t gold and 65.6 g/t silver) and Hole 134 (17.7 meters of 2.9 g/t gold and 56.24 g/t silver). All of these holes included narrower, higher-grade intervals as well.
Most recently, Westhaven made a third high-grade discovery on the FMN zone. This discovery is the northwest extension of Vein Zone 1, which runs through the South and Tower/Mik zones. The best assay from the FMN zone came from Hole 139 (19.9 meters of 2.6 g/t gold and 139.8 g/t silver).
Stepping back and looking at the big picture, mineralization has been traced along Vein Zone 1 alone for around four kilometers. That leaves room for Westhaven to both extend that strike length further and prove up its continuity with infill drilling.
With the recent announcement of a C$13 million financing, Westhaven will be fully funded and busy providing drill results throughout the year.
Given the high gold grades that the company has been hitting at relatively shallow depths at Westhaven, the 2021 program management is teeing up could catapult the company's share price to a whole new level. The good news is that the resource the company has already drilled will likely justify a major portion of the company's current market value, thereby lowering the downside risk for this high-profile exploration story.
Simply put, gold grades this solid, outlined mainly near-surface and over such a considerable strike length, argue for Westhaven Gold becoming one of the breakout gold exploration stories of this next phase of the gold market.
Another precious metals exploration story to keep on your radar—this one more silver-focused—is Silver Viper Minerals.
Silver Viper is part of the Belcarra Group. These were the players responsible for transforming Orko Silver's La Preciosa project in Durango, Mexico from a grassroots project into a 270-million-ounce silver deposit, which it subsequently sold to Coeur Mining for C$350 million.
Silver Viper's La Virginia looks like it could follow in La Preciosa's footsteps. The project lies 220 kilometers east-northeast of Hermosillo and spans 37,700 hectares. It was originally identified in 2007 by Minefinders, which drilled the project's Rubi-Esperanza claims between 2010 and 2012. In all, these claims come with data from 52,653 meters of drilling in 188 holes at Rubi-Esperanza by prior operators.
Pan American Silver took over Minefinders in 2012, drilled La Virginia for another year, and subsequently staked a large group of claims around Rubi-Esperanza. Silver Viper's December 2018 deal with Pan American for La Virginia totals $3.0 million in cash payments due over five years.
Silver Viper made the first two installments of $50,000 and $75,000, respectively, in June 2019 and June 2020. It will continue to make the remaining payments each subsequent June. The payments will continue to escalate before ending in a 2023 balloon payment of $2.58 million.
Historical drilling by prior operators focused on the Con Virginia and Las Huatas zones at La Virginia, with both areas featuring gold-silver mineralization within low sulphidation epithermal veins. Highlights from earlier work on these zones include 23.5 meters of 897 g/t silver-equivalent and 18.0 meters of 384 g/t silver-equivalent.
With full access to the historical data, Silver Viper is working on a resource estimate for the known areas at La Virginia while its exploration efforts continue on a new discovery called El Rubi.
Located five kilometers north of the main exploration area on the project, El Rubi was defined by five holes completed in 2018. The highlight assay from that effort came from Hole 201 (13.3 meters of 3.16 g/t gold and 228 g/t silver).
The recently completed Phase 2 drilling program at El Rubi hit a combination of narrow, high-grade intervals and much longer, mineable grade intervals. Between this program and historical work at La Virginia, the project has more almost 300 holes worth of drilling data to work with.
Silver Viper just released assays from El Rubi, the first of the 2021 drill program. Hole LV21-289 intercepted the highest silver and gold grades to date at the target, with a 0.5 meter intersection returning 10,681 g/t silver and 738 g/t gold. For the first time, high-grade base metals were found at El Rubi, 6.74% lead and 7.11% zinc.
The best assays from the holes drilled in 2020 at El Rubi included 1 meter of 77.9 g/t gold and 133 g/t silver in Hole 283 and 1.5 meters of 493 g/t silver and 9.7 g/t gold in Hole 277. Hole 245 cut 110.5 meters of 38 g/t silver and 0.76 g/t gold along El Rubi's Western Stringer zone.
With drilling continuing to expand El Rubi both along strike and at depth, the company's geologists see potential for the target to expand considerably from here.
Next up will likely be that resource estimate for La Virginia as a whole, which will combine the drilling at El Rubi with updated historical resources for the project.
If the gold market returns to form prior to this resource estimate, we'll likely see a nice bump in Silver Viper's share price. Longer term, the targets outlined on La Virginia provide significant blue-sky upside to the company's story.
Editor's Note: To get immediate details on two more of Brien Lundin's top picks for this year, simply CLICK HERE.
With a career spanning four decades in the investment markets, Brien Lundin serves as president and CEO of Jefferson Financial, a highly regarded publisher of market analyses and producer of investment-oriented events. Under the Jefferson Financial umbrella, Lundin publishes and edits Gold Newsletter, a cornerstone of precious metals advisories since 1971. He also hosts the annual New Orleans Investment Conference.
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