There’s something big happening in Northern Ontario. And if you are a gold investor, you need to know about it.
Over the past decade, Red Lake, Ontario didn’t get the recognition it deserves for its gold production and exploration. That’s changing thanks to several new discoveries and a high-profile acquisition.
Red Lake has over a century of mining history. According to the mining data site www.digigeodata.com, the region produced 29.5 million ounces of gold, 5 million ounces of silver, 59 million pounds of copper, and 362 billion pounds of zinc.
However, few gold investors would name it in their top five favorite gold producing regions. But that’s changing.
Today, the Red Lake district has a lot to offer investors interested in gold mining. Major mining companies are operating there. Mid-tiers are exploring and developing new gold mines. And two tiny juniors have winter drill programs that could turn up the next big discovery.
That’s not so farfetched, considering Great Bear’s Dixie discovery is only a couple of years old.
A Big Discovery Led to a Big Acquisition Price
Kinross Gold Corp.'s (K:TSX; KGC:NYSE) acquisition of Great Bear Resources Ltd. (GBR:TSX.V; GTBDF:OTCQX) for $1.4 billion put a high-powered spotlight on this attractive gold province in Northern Ontario.
This chart should make every junior gold investor sit up and take notice.
Great Bear drilled hole after hole of good to great gold grades in 2017 and 2018. However, the market didn’t care … until its Aug. 22, 2018, press release.
In that press release, the company announced the results of drill holes DHZ-003 (which hit 16.35 meters of 26.91 g/t gold) and drill hole DHZ-004 (which hit 7.0 meters of 44.47 g/t gold). The stock ripped higher on the news, as you can see in the chart below.
Great Bear’s Dixie Project doesn’t even have a resource calculation yet. But the potential is there. It holds wide intersections of strong gold grades. And it continues to grow.
Those results validated the quality of the Dixie discovery. After that, Great Bear became the company to watch. But it’s far from the only company doing great things in Red Lake.
What’s Red Hot in Red Lake
Red Lake is one of the premier gold producing regions in the world. Over 30% of Canada’s gold production comes from this part of Northern Ontario. The historic Red Lake Mine produced more than 25 million ounces of gold from rocks that ran 20+ grams per ton gold.
Today, CA$5.5 billion market cap Australian gold miner Evolution Mining Ltd. (EVN:ASX) operates the mines at Red Lake. The company acquired Red Lake in 2019 for just $375 million.
The new gold major spent the last couple of years re-engineering the reserves across the many deposits. Red Lake reserves now sit at 2.9 million ounces of gold. Evolution’s three-year plan for Red Lake is to produce 200,000 ounces of gold per year at a cost of less than $1,000 per ounce.
Evolution’s management clearly liked what they saw at Red Lake, because they acquired Battle North Gold for its Bateman Gold project in March 2021 for C$343 million. The Bateman project sits just northeast of the Red Lake camp, 10 km from Evolution’s Cochenour Mine.
Bateman (formerly Phoenix Gold), is an underground gold development project. It contains the high-grade F2 deposit. There is a small 3.56 million metric ton gold reserve of 635,000 ounces with a grade of 5.54 g/t.
More Opportunities For Investors
Evolution isn’t the only large producer with its sights on Northern Ontario. Major gold miner AngloGold Ashanti Ltd. (AU:NYSE; ANG:JSE; AGG:ASX; AGD:LSE) just announced that it would increase its stake in CA$250 million market cap junior Pure Gold Mining Inc. (PGM:TSX.V; PUR:LSE) to 19.9%.
AngloGold has its eye on the PureGold deposit, which boasts an indicated resource of almost 2.1 million ounces of gold with a grade of 8.9 g/t gold.
Not to be left out, giant miner Barrick Gold Corp. (ABX:TSX; GOLD:NYSE) just partnered with micro-cap Kenorland Minerals Ltd. (KLD:TSX.V; 3WQO:FSE) on its South Uchi project. Barrick agreed to spend $6 million on exploration over six years to earn 70% of the project.
South Uchi sits within the Birch Uchi greenstone belt in the Red Lake mining district. Where the other majors went for established deposits, Barrick likes the exploration option. As we saw with Dixie, Bateman, and PureGold, these giant greenstone belts around Red Lake still hold undiscovered gold deposits.
And there is great news for speculators who love exploration stories. Because two tiny companies are drilling gold projects in the region today, right smack in the middle of all those deposits.
Australian micro-cap explorer Ardiden Ltd. (ADV:ASX) owns the Pickle Lake gold project. The company is currently drilling the Esker Gold prospect on the property. That’s one of 22 gold targets on the massive Pickle Lake land holding. Like Great Bear’s Dixie project, Pickle Lake has many historical gold occurrences.
There’s also a pure-play Canadian junior drilling in the region.
Cross River Ventures Corp. (CRVC:CSE; CSRVF:OTC; C6R:FWB) kicks off its own 5,000 meter drill program on its McVicar Gold Project in February 2022. The winter drill program follows up a successful summer exploration program that identified the new Bear Head Zone, including a 19.5 g/t gold grab sample.
Cross River’s McVicar Gold Project ties up the important parts of the Lang Lake greenstone belt, approximately 150 km east of Red Lake.
As you can see, Red Lake holds many opportunities for gold investors. It’s a gold-rich region with huge opportunities, as we saw with Great Bear. That company was a 50-cent stock ($29 million market cap) in June 2018. Today it’s $28.40 per share. That’s a 5,580% gain in about three and a half years.
Ardiden is a AU$32.5 million company today. Cross River Ventures is a CA$6.2 million company. Both have prospective land packages and ongoing drill programs.
All eyes will be on these two tiny companies as we wait for news this winter.
Matt Badiali is a geologist and independent financial analyst. He spent 15 years researching and writing about great investments inside the natural resources sectors. He can be reached at www.mattbadiali.net.
Streetwise Reports Disclosure:
1) Matt Badiali: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Cross River Ventures. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: Cross River Ventures. I determined which companies would be included in this article based on my research and understanding of the sector.
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