Modern-day treasure hunter White Gold Corp. (WGO:TSX.V; WHGOF:OTCQX; 29W:FRA) is tracking down the hardrock sources of the gold that prospectors began panning for in the region's streams in the late 1800s, producing a reported 20 million ounces of gold, CEO David D'Onofrio explained in a recent conversation with Streetwise Reports. With a huge land package of 420,000 hectares — just over a million acres — accounting for over 40% of the White Gold (Klondike) District, White Gold Corp. is in a prime position to capitalize on the modern-day Yukon Gold Rush.
“[White Gold] really checks all the boxes for what investors should look for in a gold exploration company."
Ryan, "a real explorer and creative forward-thinker" who has twice adorned the cover of the New York Times Magazine, had spent years studying and staking the Klondike District based on the thesis that if millions of ounces of gold have been found on surface and running into shallow streams, the hardrock source of this gold should easily dwarf what’s been panned in the area. With several juniors as partners, he began using methodical and innovative soil sampling methods to zero in on the previously unknown hardrock sources of the region's famed placer gold that the 19th century prospectors found in the streams. This work led to immediate success, resulting in the discovery of multiple major gold deposits totaling millions of ounces of gold, a feat almost unheard of in the exploration business, which also earned him numerous prestigious industry awards including PDAC’s 2010 Prospector of the Year.The company’s properties have already seen several major gold discoveries and boast combined gold resources approaching 2 million ounces. The first goes back to 2009, when Chief Technical Officer Shawn Ryan (then an independent prospector) hit the region’s first modern major gold discovery, the Golden Saddle, now delineated, expanded, and owned by White Gold Corp.
Ryan’s discoveries have led to multiple take-outs by major gold companies — one discovery, the Coffee, was sold to Goldcorp, now part of Newmont Corporation (NYSE: NEM, TSX: NGT), for $520 million. Another, the Golden Saddle, was acquired for $140 million by Kinross Gold Corporation (TSX: K, NYSE: KGC), which is now one of White Gold's major backers joining Agnico Eagle Mines Limited (TSX: AEM, NYSE: AEM), each owning over 17% a piece. Together, these industry titans provide valuable technical expertise to aid White Gold in its exploration efforts in Yukon, Canada, CEO David D'Onofrio stated.
Assembling a Large Land Package, Birthing a Unique Opportunity
Ryan went on to work with a leading Toronto-based investment group, PowerOne Capital — that’s when D'Onofrio got involved. "Shawn presented an opportunity to assemble the majority of the best properties in the White Gold [Klondike] District into one package...[effectively tying] up an entire district with such a prolific history in a Tier 1 mining jurisdiction that had really seen very limited modern-day exploration (with so much success with what had been done) was an almost unheard-of opportunity," D'Onofrio explained.
White Gold Corp. was formed in 2016 out of the consolidation of multiple properties that were previously optioned by Shawn Ryan to several juniors. Ryan developed a systematic, detailed exploration protocol for the company. It starts with soil sampling. Success there leads to bedrock sampling, and then rotary air blast drilling (RAB). The protocol saves the more expensive diamond drilling — which extracts solid cores for analysis — for the most truly promising targets. It’s a cost-effective triage that directs the company’s capital towards generating discoveries, something the company has been consistently doing since inception, D'Onofrio noted.
Lacking sophisticated exploration tools such as LiDAR and Very Low-Frequency (VLF) surveying, the Klondike miners of 100 years ago couldn't follow up their discoveries of placer gold with hardrock prospecting, D'Onofrio explained. The region lacks the easily tested rock outcroppings found in other mining districts. It was Ryan who finally cracked the code by investigating the mineralogy and geochemistry of the soils to get a sense of what elements might be in the hardrock. The company noted that, being unglaciated terrain, the soil in the region provides an accurate indication of the minerals contained in the bedrock immediately beneath, unlike land where the soil has been displaced kilometers from where it once lay due to glacier scrape. Since then, Ryan and his team have assembled a soil database of over 400,000 soils, one of the largest in the world. The key, however, lies in the consistent methodology used to collect these soils, allowing Ryan and his exploration team to systematically map out and test the entire district for the famed sources of the Klondike Gold Rush.
A Leg Up on the Competition
White Gold provides a unique opportunity, "It really checks all the boxes for what investors should look for in a gold exploration company," D'Onofrio stated. "After all, most juniors will never make it to where White Gold already stands, with significant defined resources, an exciting exploration pipeline in an emerging and under-explored district in a Tier 1 mining jurisdiction with over $100 million invested to date to understand the district and what has led to the successful discoveries."
Sophisticated industry leaders see the opportunity. In fact, two major mining companies, Agnico Eagle and Kinross, have been major shareholders since 2017, and just recently a group of top industry investors awarded White Gold the victory in the 2020 Mines and Money Global Pitch Battle Contest in December 2020.
Robust Deposits and Exceptional Discovery Opportunity Mean High Value
D'Onofrio believes the company is highly undervalued, and so do industry analysts. A decade ago, the 10 or so junior companies whose properties were assembled into White Gold were worth around $5 to $7 a share combined. "Today, the company is trading at 50 cents, which roughly equates to $30 per gold ounce, a significant discount to peers and other high-grade, open-pittable deposits in Canada. And this valuation then doesn’t give any value to the blue sky exploration opportunity on the company’s massive land package, what many investors are most excited about," D'Onofrio said. "This is even as the price of gold has gone up, the company’s deposits have significantly increased in size and new discoveries have been made further validating the thesis of the untapped potential of this prolific district, creating a huge disconnect between the value in White Gold and the market’s valuation.”
"When we merged the properties with Kinross’s Yukon portfolio," D'Onofrio recounted, "gold was at $1,200, and within three years of working on it we were able to increase the size of it by over 50% to just under 1.6 million ounces today, which is a phenomenal return on investment. In the meantime, gold prices have surged [to around $1,800] and that's been a huge bonus – and we've also acquired an additional 230k oz deposit nearby and made two new discoveries in very close proximity to that deposit that would be accretive to the overall resource base of the project all significantly increasing the value of what could be a very robust project."
Another major value add not being reflected, according to D'Onofrio, is that the territorial and federal governments have been making and are planning a major investment into local infrastructure and upgrading the local road system that will make the Klondike District much more accessible specifically to support mining and exploration. "This scale of investment is almost unheard of and further supports the investment thesis for the district. The Resource Gateway project will see hundreds of kilometers of haul-grade road improvements, the majority of which will run through the heart of the company’s incredible land package. The Yukon government is very serious about developing quality resource projects in the area and have been incredible partners."
White Gold has been building value each year and is continuing to do so in 2021 with a very active exploration program. It did have to moderate its 2021 summer drilling ambitions slightly to account for the COVID-era's smaller camp sizes, however the company was still able to work on four high-priority targets to follow up on recent high-grade discoveries, as well as a half-dozen other earlier stage projects.
D'Onofrio noted that some highlights of the 2021 exploration program include diamond drill programs on the Ryan’s Surprise, Ulli’s Ridge and Betty projects. Ryan’s Surprise and Ulli’s Ridge lie just 2km west of the company’s flagship Golden Saddle and Arc deposits and saw diamond drilling and RAB drilling to follow up on high-grade mineralization encountered in the previous season. Last year, the company drilled six diamond holes at Ryan’s Surprise, all of which encountered significant high-grade gold mineralization. Highlights include 17.40 grams per tonne (g/t) Au over 3.47m, 10.96 g/t Au over 3.76m and 8.69 g/t Au over 12.30m. 2021 drilling was designed to further test the extent and strike length of this gold zone. At Ulli’s, 2020 probe samples encountered a 25m wide zone (6 samples) averaging 2.119 g/t Au, including a maximum of 8.516 g/t Au. 2021 drilling at Ulli’s also further tested the extent and strike of this shallow mineralization.
At the south of the company’s massive land package, White Gold conducted the maiden diamond drilling program at the Betty property, which lies on strike with the multimillion-ounce Casino deposit owned by Western Copper and Gold (TSX: WRN; NYSE American: WRN) and the Coffee deposit owned by Newmont Corporation (TSX: NGT; NYSE: NEM). "The Betty property is truly in elephant country," D'Onofrio noted. "The geological setting of Betty is ideal, with soil anomalies lining up along the Coffee creek fault, a major regional geological fault that structurally controls the gold mineralization found at the Coffee and Casino deposits. When Ryan first assembled the White Gold package years ago, this property was one of everybody’s favorites. This target has seen some very encouraging results in past seasons. It’s incredibly exciting to be the company performing the first diamond drill program ever on such an exciting target."
Although the company playfully named one of this summer’s diamond-drilling targets Ryan's Surprise, it’s hard work and hard science — not luck — that propel today’s treasure hunters to precious metals and profitability.
Earlier this week, the company announced RAB drilling results on the Ulli’s Ridge that were "very promising and further support the extensiveness of gold mineralization in the area," D'Onofrio said. As the company receives the remainder of assays from the summer program, news flow should be consistent in Q4 2021 and Q1 2022.
The future is very exciting. The next step? D'Onofrio looks forward to more exploration results over the coming months and also to seeing some of White Gold's deposits being advanced toward production, and for White Gold continuing to explore the district, "making discoveries [and] monetizing them for decades to come." White Gold's strength, he stresses, is exploration. "That is the M.O. of this company. We're discovery specialists. And that’s the best way to drive value creation for investors. And with the more work we do and success we have, it’s increasing our optimism even further for the potential of this prolific and underexplored district. Stay tuned."
1) Jon Sobel compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None. His company has a financial relationship with the following companies referred to in this article: None.
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