Crescat's Geologic and Technical Director Dr. Quinton Hennigh began his slide presentation by talking about E2Gold Inc. (ETU:TSX.V), a mining company that began trading earlier this year. E2's Hawkins gold project is on an intriguing property in Ontario, Canada. There, the company is pursuing the McKinnon target, which is showing signs it could be a Hemlo, a 24,000,000 ounce (24 Moz) gold deposit discovered in 1980 and located roughly 150 kilometers from Hawkins, in the same terrane. The McKinnon resource stands at about 6,200,000 tonnes of 1.65 grams per tonne (1.65 g/t) gold for 328,800 ounces of gold.
E2 has drilled 17 holes in McKinnon and hit gold. Results are back for all of the holes, and they showed small intercepts with pops of higher-grade material. The company plans to drill along strike to the west and to the east.
Whereas Hemlo's geological system has been debated for decades, Hennigh considers it a syndepositional deposit associated with seafloor volcanism. He said the geology he's seen so far at McKinnon is similar to that of Hemlo. To find out if there in fact is a Hemlo at McKinnon, the company needs to drill a line of holes about 500 meters (500m) below the surface, Hennigh said.
If those holes return intercepts of, say, 20m of 10 grams, or 2, 3 or 4m of 30 grams, Hennigh said, the deposit would start to look like Hemlo; Hemlo's average grade was about 0.5 ounce per ton.
An absolute winner of an intercept would be 80m of 20 grams.
Despite E2Gold's progress this year, the stock price has not responded well, Hennigh noted. The company's market cap is about CA$10 million.
"The fact that stock price is fairly depressed here says nothing but opportunity," he added. "If [E2] finds the kind of prize they’re hunting for, it could be very, very impactful."
Next, Hennigh provided updates on various other exploration companies.
Grande Portage added a second drill at its Herbert gold project, in Southeast Alaska, and thus is drilling more aggressively. With that second rig, the company might even be able to drill more meters than it initially planned.
Eskay released a prefeasibility study for the Eskay Creek gold-silver project. It outlines a net present value of CA$1.4 billion and an internal rate of return of about 56%. The company plans to flow and sell high-quality concentrate; gold and silver recoveries were shown to be well into the 80s.
Labrador is continuing its methodical exploration and just released more drill results. One hole returned 0.5m of 276.6 grams. This 147 gram-meter hole is the best drilled to date at the target.
Ethos' first round of prospecting on its Toogood project, in Newfoundland, returned "amazing" grades in outcropping, of about 0.5 kilograms per ton. The company is greatly undervalued and thus presents a buying opportunity.
"This is an exciting, early-stage discovery," Hennigh said.
White Rock has been working on a field program, following up on stream sediment anomalies. In doing so, it found outcropping sulfide that appears high grade. Both samples contain sphalerite and galena and one contains chalcopyrite, all indicative of a high-grade zinc, lead and copper system along with the known gold and silver. The company is going to drill test right away.
Goliath finished drilling a second hole on its Golddigger property. (On the slide, red arrows show the planned progression of drilling.)
GBM's flagship property, in Queensland, Australia, hosts a number of epithermal vein systems. The company just added the Twin Hills project, which has a resource of about 1 Moz. The total resource on the property, inclusive of Yandan, Mount Coolon and Twin Hills, is about 1.5 Moz, and the company has not even done any significant exploration. Hennigh said he expects GBM to explore.
In preparation for its upcoming drill program, Tectonic is now conducting a Titan survey of its property. The procedure, which looks at the electrical properties of the rock in subsurface, will likely generate drill targets.
"We want to see a robust drill program this year," Hennigh concluded.
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Streetwise Reports Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) Dr. Quinton Hennigh is Crescat Capital’s full-time Geologic and Technical Director. You should assume that as of the publication date, Dr. Quinton Hennigh has a position in the securities discussed and therefore stands to realize significant gains in the event the price of security moves.
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