Snowline Gold Corp. (SGD:CSE; SNWGF:OTCQB) is a large Yukon-focused gold exploration company. Its assets include an eight-project portfolio covering more than 333,000 hectares. The junior exploration company announced on June 9 that it had expanded its flagship Rogue gold project in the highly prospective yet underexplored Selwyn basin by some 80% to 94,397 hectares.
The firm's projects are located in the prolific Tintina gold province, host to multiple million-ounce-plus gold mines and deposits, including Kinross's Fort Knox mine, Newmont's Coffee deposit, and Victoria Gold's Eagle mine.
The Canada-based gold exploration company's project portfolio also includes the Einarson, Tosh, Cliff, Rainbow, Cynthia, and Ursa claims. The Einarson property consists of two main claim blocks and several outlying claim groups covering 61,690 hectares, while the Cliff Property covers approximately 2,724 hectares.
The Tosh Property covers approximately 3,700 hectares, some 20 kilometers (km) from the paved, all-season Alaska Highway. The Rainbow Property covers approximately 1,225 hectares, the Cynthia Property covers approximately 1,399 hectares, and the Ursa claims cover some 7,755 hectares.
The company claims that its "first-mover land position and extensive database provide a unique opportunity for investors to be part of multiple discoveries and the creation of a new gold district."
The Catalyst: Expanding the Rouge Property
Before the new staking, the Rogue Property comprised 442 mineral claims covering 11,227 hectares. Now, according to the announcement, the firm has expanded the project by 80% by staking substantially all remaining open ground across what it is calling the "Rouge plutonic complex" — the broad geological feature responsible for gold mineralization at the Rogue project's Valley discovery and other nearby reduced intrusion-related gold system (RIRGS) targets.
The new staking almost doubles Snowline Gold's 100%-owned Rogue project to 94,397 hectares while consolidating the 60 km by 30 km "plutonic complex" feature for systematic, comprehensive exploration.
According to the World Gold Council's Gold Outlook 2023, "Following a challenging 2022, we expect consumer gold demand in China to return to 2021 levels thanks to fewer COVID disruptions, a cautious economic rebound, and a gradual pick-up in consumer confidence."
In addition, the company engaged in strategic and targeted staking at the Cynthia, Einarson, and Ursa projects. As a result, it now holds some 333,900 hectares total, solidifying its competitive advantage across multiple gold discoveries and mineralization styles.
Snowline Gold CEO Scott Berdahl says, "We know from our 2022 drill results at Valley that the Rogue plutonic complex has the necessary geological ingredients to produce a significant gold system."
"The Valley discovery highlights the geological potential of the rest of this regional-scale geological feature, where limited historical work and our own efforts have produced an abundance of intriguing results, anomalies, and discoveries."
"We have actively built, progressively and systematically, not just a first-mover position but effectively an only-mover position in a fertile area that we believe has the potential to become a new gold district," he concludes. "We can now comprehensively and responsibly explore this area, focusing not only on advancing our existing targets but on making additional discoveries as well."
Why This Sector? Gold Remains the Global Money Metal
According to the World Gold Council's Gold Outlook 2023, "Following a challenging 2022, we expect consumer gold demand in China to return to 2021 levels thanks to fewer COVID disruptions, a cautious economic rebound, and a gradual pick-up in consumer confidence."
"China's economic growth is likely to improve next year," the report continues. "Signs that COVID-related restrictions are easing after the local authority optimized its zero-COVID policy in November should improve consumer confidence and boost economic activity. Meanwhile, Chinese regulators announced measures to support the local property market . . . these stimuli may help stabilize real estate investment and housing demand and encourage an upturn in consumer demand."
On April 13, Forbes magazine published an analyst roundup that was quite bullish about the yellow metal. The article recounts, "CMC Markets recently said a Fed pivot will trigger a sell-off in the U.S. dollar and tank bond yields, sending gold prices up to between US$2,500 and US$2,600 per troy ounce."
"European gold bar and coin investment are likely to remain robust in 2023 as retail investors — especially in Germanic markets — look to protect their wealth. Even a decline in inflation is unlikely to encourage lower demand, given underlying risks."
On April 13, Forbes magazine published an analyst roundup that was quite bullish about the yellow metal. The article recounts, "CMC Markets recently said a Fed pivot will trigger a sell-off in the U.S. dollar and tank bond yields, sending gold prices up to between US$2,500 and US$2,600 per troy ounce."
"Randy Smallwood, CEO of precious metals streaming company Wheaton Precious Metals (WMP), recently forecast gold prices to hit US$2,500 per ounce," the article continues. "Other asset managers are even more bullish on gold in 2023. In December, Swiss Asia Capital managing director and chief investment officer Juerg Kiener said mild global recessions in 2023 could send gold's price as high as US$4,000 an ounce by the end of the year."
Why This Company? Has the Holdings, Doing the Due Diligence
In addition to its recent bout of staking, the Snowline technical team has been compiling and digitizing historical work from various campaigns in the Rogue project carried out in the late 1960s, early 1980s, and mid-1990s.
This accrued information is being collated and added to the company's already-extensive database from work done in and around the project area in the early 2010s and more recently by the company itself.
Roughly 21% of the 2,530 newly staked claims fall within or partly within the fixed areas of interest (AOIs) defined in the company's December 1, 2020, deal with 18526 Yukon Inc., through which Snowline Gold acquired its extensive Yukon data sets and its initial Yukon mineral properties.
Jeff Clark of The Gold Advisor wrote, "Our favorite Yukon gold explorer staked roughly 80% more land, their holdings now totaling a whopping 333,900 hectares. The company doesn't just have a first-mover position in the area but now pretty much an only-mover position: SNOWLINE GOLD."
Claims staked within the AOIs are subject to a 2% net smelter return (NSR) and are incorporated into existing buydown provisions which allow Snowline Gold to reduce the NSR to 1% on a project-by-project basis. The remaining 79% of newly staked claims have no underlying royalties.
18526 Yukon is a privately held project generation company 40% owned by Snowline Gold CEO Berdahl.
In addition, the company is also pursuing a modest drilling program at the Rouge site to further establish its viability. Drill hole V-23-034 encountered moderate to high quartz vein densities in granodiorite throughout the length of a 425-meter hole, with 106 observations of trace visible gold distributed within quartz veins in the top 337 meters. At least three distinct vein orientations have been recognized, with gold mineralization present in all three.
The final 40m of the hole, from roughly 385 to 425 m downhole, had high quartz vein densities but no visible gold and a lower abundance of bismuth and tellurium indicator minerals. Assays are pending for this hole, and the first drill rig has moved and commenced drilling on V-23-036.
A second rig has extracted 168 m of core from V-23-035, Snowline's second drill hole of 2023. The core shack has received samples, and logging has begun. The hole thus far has seen continuous vein densities of five to seven veins per meter in granodiorite, with 16 instances of visible gold observed throughout this length.
Why Now? Only Mover Position
In a Friday, June 9 newsletter, Jeff Clark of The Gold Advisor wrote, "Our favorite Yukon gold explorer staked roughly 80% more land, their holdings now totaling a whopping 333,900 hectares. The company doesn't just have a first-mover position in the area but now pretty much an only-mover position: SNOWLINE GOLD."
Technical Analyst Clive Maund was initially quite bullish on the stock this year, recommending it on February 1 and explaining that "Snowline Gold is therefore regarded as a strong Buy here, and positions can be protected by the simple expedient of placing a stop beneath the nearby support."
"Note that if Big Money should run these stops by briefly forcing the price beneath the support in order to shake people out and mop up their holdings, but it then bounces back above the support, any liquidated positions should be bought back."
However, on June 6, three days before the new staking announcement, he recommended that shareowners take profits because the stock "has a habit of spiking rather dramatically higher and then dropping back more slowly."
"Could it continue higher after we sell?" Maund asked rhetorically. "Sure, it could, and if it rallies again in the early trade today, it will give us an opportunity to sell into strength, and if it carries on even higher after we sell, we won't be concerned because there are plenty of other promising PM stocks where we can immediately deploy the freed funds that are less risky than this is becoming, and we will be looking at some of them as the day progresses."
As skittish as the stock price may seem, it's hard to argue that Snowline Gold isn't pushing hard to be the only player in what looks to be a large, rich new field.
Streetwise Ownership Overview*
Snowline Gold Corp. (SGD:CSE; SNWGF:OTCQB)
Ownership and Share Structure
According to Reuters, 8.48% of the company's stock is held by management and insiders. Ana Cox Alvarez del Villar de Gubbins has 7.94%, with 11.12 million shares. Independent Director Gunther Roehlig has 0.45%, with 0.63 million, and Independent Director Calum Morrison has 0.07%, with 0.10 million.
19.64% is with strategic investor 18526 Yukon Inc., which has 27.50 million shares.
17.52% is held by institutional investors. Crescat Capital LLC has 13.82%, with 19.36 million shares. 1832 Asset Management L.P. 2.62%, with 3.67 million, and Van Eck Associates Corp. has 1.07%, with 1.50 million.
The rest is with retail investors.
As of May 1, Snowline Gold had a basic market cap of US$392.1 million, with some US$40.9 million in cash on hand.
It had 140 million basic shares outstanding, along with 7.7 million options (US$0.30 - US$3.02 strike price) and 10.5 million warrants (US$0.53 - US$2.50 strike price) for a fully diluted base of 158.2 million shares.
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- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Snowline Gold Corp.
- Owen Ferguson wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor/employee.
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