Gold Is On The Verge Of An Important Breakout Above $2100
In this report I highlight new picks including American Eagle Gold, Benton Resources, Dryden Gold, Exploits Discovery, Hercules Silver, Kootenay Silver and an Unnamed Pick.
On February 20, 2024, I published a report discussing why I think gold is primed to go over $2100, and that we would see a series of new record highs in gold during 2024. Gold had a good week capped off with a rally on Friday.
The likely reason was a new round of sanctions against Russia. The sanctions put into place when Russia invaded Ukraine was likely what ramped things up with the BRICS nations. Since then they have been making trade agreements to use their domestic currencies, talking about a BRICS currency, and their central bankers went into overdrive buying gold.
I don’t think a BRICS currency is coming for a few years, I do think they will keep making trade deals to use their domestic currencies and also to use gold in trade deals. The BRICS nations want to own less US dollars (USD) and US debt, and have alternatives to the USD as the world reserve currency. While all this is happening, they are putting themselves on the Gold Standard.
In the opening to that report, I discussed bullish arguments for gold. Then I discussed a group of gold stocks that included my special situation picks. You can find that report here.
My plan when I began writing it was to also include updates on my new picks and my roster of picks that I have been following for longer. I decided to cut it off at the special situation picks because it was getting long.
In this report, I will have updates on new picks. Then I will have a report prior to the PDAC which starts on March 3, in which I will update my roster of picks. It has been a few years since I went to the PDAC, and I will be attending it this year.
I have one speaking engagement on Sunday, March 3, at 3:35. I will be on a panel titled “The global economy vs. the resource sector: Finding a win-win situation.”
Every year, I have a decision to make, should I go to the PDAC or not. The PDAC is one of the largest mining conferences in the world, with hundreds of companies doing presentations and attending with display booths.
I’ve gone to many of them in the past, it is a great networking opportunity. My struggle on whether to attend or not is because during that week, plenty of companies put out news releases, and I like to cover them in my reports. This year I will attend and work on reports while I’m there and then for not long after I come back to my office.
I like attending because I enjoy public speaking. In addition, it gives me an opportunity to see my sponsors and picks in person and discuss their news, pending results and upcoming plans. It also gives me a chance to do research on new picks.
During my 30 years in the mining sector, I’ve built up a great network of industry people. I’m very blessed to call them friends and mentors. They are very busy, so I love that the PDAC brings many of them together under one roof and gives us a chance to catch up.
Another fantastic thing about the PDAC is that several investors that follow my reports attend and it is a chance to meet face to face and discuss the mining sector. If you are going, be sure to drop me a note and we can make plans to meet up. If you see me on the floor of the PDAC, be sure to say hello.
In January, there are a series of conferences that get the conference season started. The same thing happens in Toronto around the PDAC. Due to all the conferences, there is always a lot of news coming out from companies attending. I expect next week to be action packed. I won’t leave for the PDAC until later in the week, so I will be able to report on news prior to leaving.
The final reason that I decided to attend the PDAC this year is because I have launched a new special reporting service, so I want to discuss this with interested investors.
One of the great things about my research and reporting is that I get to interview and discuss the mining sector with industry leaders.
Often, prior to doing interviews or after, we get a chance to talk shop if you will. I love these sessions and often think that I would like to do this with more investors. Off camera, we don’t just talk about their companies, we also talk about the industry and other stocks. They often get in depth and I wanted to make myself available to investors to have similar sessions directly with me in a similar fashion.
This won’t affect my current reporting at Rocks And Stocks News, it will continue to be where I provide free reports to my audience that are paid for by my sponsors and paid subscribers. In fact, I think it will enhance it as I will be reviewing subscribers' picks and discussing them in my reports.
My free reports take plenty of my time, so I can’t take on a large group of subscribers to my new special reporting service, so I’ve priced it accordingly. To those that consider it and my early subscribers to the new service, thank you very much.
All right, now that I’ve got these things dealt with, let’s get on to talking about some of the newest picks at Rocks And Stocks News.
New Picks
Over the past few months, I’ve added a new group of picks and wanted to discuss them in this section. Two are brand new picks that I have never covered in past reports. I will go over the companies in alphabetical order.
American Eagle Gold
They started out as a gold exploration company, then made an important new copper discovery in British Columbia, Canada. On January 8, 2024, they announced a remarkable hole with this headline in their news release: “American Eagle Intersects 302 metres of 1.09% Copper Equivalent within 606 metres of 0.74% Copper Equivalent.” If you like copper exploration, that intersection should catch your attention, it certainly caught mine.
Their CEO Anthony Moreau had a quote in the news release that does a great job of encapsulating their discovery. He stated, "The more we drill, the better NAK gets, as shown by the bold, westerly step out with NAK23-17. This risk paid off, revealing what may be a high-grade mineralized belt that remains open to the north and the south, and proving that the high-grade mineralization encountered previously in NAK23-11 is extensive in both the vertical and east-west dimensions. 2022’s drill program demonstrated that NAK is a copper and gold porphyry system with a very large near-surface footprint that extends to depth. Since then, we have identified increasingly high-grade zones throughout 2023. Intersecting 302 metres of 1.09% Copper Equivalent grade in our final 2023 drill hole suggests that our evolving understanding of NAK’s geology has been efficient and successful. We look forward to our 2024 drill campaign, and to continue making discoveries that deliver value to American Eagle shareholders and our partners in exploration in the Babine Lake region.”
After the news, their CEO got swamped so it took a few weeks to arrange our first interview. We had a great chat about the project, their team and an overview on the history of the company and their impressive discovery.
They have a very talented geologist in Charlie Greig as a shareholder, he is also running the exploration and active with advocating for the quality of their discovery in interviews. My audience may not recognize his name, but long term followers of my reports will certainly remember GT Gold. I picked that company early in their discovery and they ultimately were bought out. Charlie Greig was part of the geological team that found and advanced the discovery for GT Gold.
I appreciate that the company truly understands how important it is to use YouTube video interviews to tell their story. They have a section of their website devoted to videos which is a great place for you to learn about the company and their discovery. There are a lot of exploration companies in the mining space and investors' attention is pulled in many directions. Using videos to tell their story and keep investor’s attention requires consistent efforts, and they are committed to doing it.
I’m planning to meet with the company at the PDAC to arrange our next interview with Anthony Moreau and Charlie Greig.
When you do your homework on this company you will find they have a project with great access, with Teck as a major shareholder, they are funded for 2024 drilling and they have an impressive discovery. I’m looking forward to their 2024 drilling season as I think they will build on the success they have already made.
Benton Resources
Benton has made a high-grade copper discovery in Newfoundland, Canada. This project had been drilled in the past, but much of the historical drilling was done with very small diameter holes. The problem with that is it can grind up sulphides, plus have recovery issues, which ultimately can understate the actual grade and doesn’t give representative results.
The game changer for their Great Burnt project was when larger diameter drill holes were used. They fixed the recovery problem and did some twin holes which showed dramatically higher grades than the historical drilling with small diameter holes. This ultimately showed that the old holes done many years ago had serious issues.
In addition to doing the twinned holes to prove the theory of the problems with the old holes they also did important step out drilling to expand the known deposit. They got the project in late August, 2023, and then cranked up the drilling and have drilled over 20 holes.
If you look at the headlines on their news releases since they started drilling you will see several intersections of just under 20 metres to nearly 30 metres. The grades in those holes range from 3.07% copper, up to over 7% copper. Highlight subintervals include 10.28 metres of 11.16% copper and 13 metres of 8.31%. It is clear Great Burnt is an extremely high-grade copper VMS deposit.
One hole particularly stood out to me, hole GB-23-12 which hit 25.42m grading 5.51% Cu. That one impressed me because it is their deepest hole into the system and showed the deposit extends well beyond the historical drilling. It caught their attention as well because when they announced on February 21, 2024 that drilling has started up again, they highlighted that hole and pointed out that they are drilling below and around that hole.
Since Benton started drilling on Great Burnt, they have drilled in the deposit to show the grades are much higher than historical drilling, they have stepped out and grown it laterally and at depth. Without a doubt I believe they are onto a special high-grade copper deposit that is open to get much bigger and as VMS deposits are found in clusters, there is potential for additional discoveries.
This company is run by Steve Stares, he is one the Stares family which are legends in Newfoundland and award winning prospectors. Exploration is in their blood and they have grown up since children looking at rocks. They know what they are doing when it comes to drilling to make discoveries and are doing a fantastic job drilling at the Great Burnt project.
I have done one interview with Steve so far, I will meet with him at the PDAC and plan a follow up interview.
They could come out with news very quickly on the project as massive sulphides are easy to see in the drill core and they are good about getting that news out. Then they will follow that up with assay results.
They are clearly onto an exceptional high-grade copper discovery over tens of metres. I expect it will get more impressive with additional drilling.
Dryden Gold
This is a brand new publicly traded company that started trading in early January, 2024. It actually attracted significant interest prior to trading, in that they were able to raise several million prior to trading. They are focused on exploration in Dryden, Ontario, which is not far from Red Lake, Ontario.
Dryden, Ontario has the same geological characteristics as Red Lake, but it has remained underexplored. Part of the reason is because it was a patchwork of projects, then Dryden Gold came in to consolidate the claims so they are now held by one company. Previous work on their ground had found incredibly high-grade gold with few holes to follow up.
Dryden Gold got busy with drilling before becoming a public company. On February 21, 2024, they announced results from 13 holes completed in their phase 1 and 2 drilling campaigns. The highlight hole KW-23-009A intersected 26.11 g/t gold over 3.16 m, including 79.80 g/t gold over 0.33 m.
The stated goal of the early drilling had three main objectives, including to test high-grade shoot orientation, identifying new high-grade shoot periodicity and confirming the theorized expanded strike length within the Big Master gold system. These systematic efforts were done to get a better handle on the orientation of the high-grade gold shoot, find new ones and expand on known ones.
In the news release, their CEO, Trey Wasser stated, “These assay results mark a great start for Dryden Gold’s exploration team. All our goals for the first two phases of drilling were successful and as a result we are showing the significant near-surface, high-grade gold potential within the Gold Rock Camp portion of the district scale Dryden Gold project. These findings underscore the importance of our systematic drilling approach and highlight the potential to be unlocked in this strategic and underexplored land package.”
Orogenic gold systems have very deep roots, often going down for thousands of metres, but chasing them at depth early can be extremely risky and expensive. It is a much better approach to get a handle on the gold mineralization near the surface, and then use that information to vector into where to follow it along strike and at depth. It is encouraging to see high-grade gold at the top of an orogenic gold system as it bodes well for what they can find as they chase it deeper.
Often in these systems, the gold grades get higher the deeper they go as they get closer to the heat engine that caused the gold mineralization. A perfect example is the Red Lake Mine, Goldcorp had mined the near the surface gold mineralization with mixed success. Then they went deeper, hitting the bonanza-grade portion of the system at around 1000 metres and it just kept on going. The bonanza-grade portion was the company maker for Goldcorp because it had low mining costs and extreme high-grade, making for high margins.
Another spectacular orogenic gold mine is the Fosterville Mine in Australia that had a similar path to success as Goldcorp. Many times in these kinds of systems, companies get excited about the high-grade mineralization near the surface, put them into production with modest success, then have their company making success when they go after the big prize deeper into the system.
Before going after the depth potential, they need to learn everything they can with the near surface gold mineralization. The gold in these systems are extremely high-grade and contained within narrow, steeply dipping zones. A company could and likely would blow their share structure out going deep too early. When I look at projects like this, I like to see that the company exploring it is taking a systematic approach to vectoring in on the high-grade gold mineralization which is exactly what Dryden Gold’s team is doing.
They completed their phase 3 drilling that was focused on the Elora Vein, which is parallel to the system reported in the phase 1 and 2 programs. Their phase 4 and 5 programs are underway and expected to wrap up in early March. They will have plenty of holes to report from phases 3, 4 and 5. The holes from all of their phases will give them plenty of data to design their further drilling.
Prior to going public they received investments from a high profile group of investors including Rob McEwen, Eric Sprott and EuroPacGold Fund, their largest shareholder is Alamos Gold. Management is aligned with shareholders owning 17.7%.
I’m a big fan of orogenic gold systems because if an important one is found they are company makers. As Trey Wasser mentioned in the quote above they are off to a great start. I’m looking forward to the pending drill holes and future drilling.
Exploits Discovery Corp
They have a drill program underway at their strategically located claim immediately to the north of New Found Gold’s claim. The region they are in is an emerging orogenic gold system discovery camp that burst onto the gold exploration scene a few years ago due to the high-grade gold discoveries made by New Found Gold.
When New Found Gold made their early high-grade gold discoveries near Gander, Newfoundland, Canada, it started a big staking rush. Exploits was quick to react and secured a large land package in this important emerging camp. Although it is still very early days for this camp, it has geological similarities to the Abitibi gold region in Canada. The Abitibi region is one of the most prolific gold mining regions in the world. Obviously a lot more work needs to be done to show if that potential is reality. If it has even a small percentage of that success, it will become an important Canadian gold camp.
New Found Gold is by far the leader in the camp, they have made many discoveries of high-grade gold. Their current market capitalization is around CAD $800 million and it has been much higher. An exploration company only sees those kinds of valuations because they have delivered with the drill rig. They have multiple discoveries with the potential to become future mines.
A few of their important discoveries are on the north end of their claim called Everest, Honeypot and Jackpot. These discoveries are within a few hundred metres of Exploits’ Bullseye project.
In orogenic gold systems, you need crustal faults which are the path that the gold bearing fluids from deep in the earth’s crust follow to make their way closer to the surface. Secondary faults are also important as the gold bearing fluids can also make their way into them as well. The key crustal fault in the region so far is the Appleton Fault. New Found Gold has made discoveries associated with that fault which runs north to south and on secondary faults that run east to west.
Their Everest, Honeypot and Jackpot discoveries are associated with the secondary faults that look to continue onto Exploits’ claim. That is where Exploits’ is currently drilling on what it is safe to say are compelling targets. Mother Nature doesn’t care about how big or small an exploration company is, nor about claim boundaries.
I’m looking forward to drilling results from their current drilling and keeping my fingers crossed that the gold mineralization just on the other side of their claim boundary continues onto Exploits’ ground.
Hercules Silver
Hercules Silver had spent the past few years drilling into a silver discovery, then decided to drill a geophysical anomaly below and tagged an impressive copper discovery. I picked them shortly after they announced the discovery hole when they were trading around 60 cents. Not long after Barrick Gold made a few strategic investments into Hercules Silver.
This caught a lot of investors by surprise because Barrick is well known for being very selective about exploration projects they invest in. For them to make a strategic investment shortly after the discovery got the whole mining sector talking.
Barrick needs extremely big projects to move the needle, so they must feel that the thick intersections of copper mineralization in a porphyry system at Hercules’ project has good potential.
Over my career I’ve seen important discoveries in what many considered were not the right kind of rocks for such a discovery. This is the case for Hercules’ project in Idaho. I love hearing about these kinds of discoveries because they go against conventional wisdom. We don’t know yet if they have made an important discovery but they are going in the right direction.
They have only drilled a handful of widely spaced holes that were designed to test a blind geophysical anomaly, so obviously much more work is needed. The geophysical anomaly they were going off of was done in 2022 and was really designed to give them more information about the near the surface silver mineralization. It was confined to a small area of their claims. Since making the discovery they have done a new geophysical program that covers a much larger area and will give them better depth resolution.
They haven’t announced the results of the new geophysical survey, but I think it could reveal a lot about the potential of what they have found. I will be looking for where the holes penetrated the anomalies in the new survey. I’m also eager to see what the anomalies look like deeper below what they have already hit. I suspect that the minimal drilling done so far to test the old geophysical anomaly has only touched the edges of the system, not the guts of it. The new geophysical survey should help them design where to drill next.
Another great thing about Barrick’s investment is that they have very talented geoscientists that will lend a hand to Hercules’ team to help plan their future drilling.
After the geophysical information comes out, then I will be looking forward to seeing them get more drilling underway. They are cashed up to go at this hard, so the project will get a fair shake with drilling.
Kootenay Silver
Shortly after this company consolidated their shares and reported excellent drill results, I made them a pick and had their CEO on a couple interviews to discuss the results and their Columba project in Chihuahua, Mexico.
At Columba, they have hit thick intersections of high-grade silver in epithermal veins. I’ve lived in Central Mexico for several years and have closely studied epithermal veins. There are plenty of silver mines in Mexico, and many of them are hosted in epithermal veins. When I see the silver grades and thicknesses that Kootenay has hit at Columba it reminds me of some of the most important silver mines in Mexico.
A couple of camps that I have researched in depth are around Fresnillo, Mexico which is where MAG Silver has their mine in joint venture with Fresnillo PLC. Another is around SilverCrest’s Las Chispas mine in Sonora, Mexico. What makes these two camps so impressive is that they are high-grade and low cost mines that generate remarkable free cash flow. Mexico has many epithermal mine camps, and the country is the largest silver producing country worldwide.
Although Columba is still in the early stages of discovery, it is already an impressive project due to the thick intersections of high-grade silver. As is often the case in epithermal vein systems they come in clusters. They have a cluster that in their corporate presentation compares favourably to the size SilverCrest’s Las Chispas cluster of epithermal veins.
They have been focused on some of the known veins that remain open for exploration drilling, plus have the potential to find blind veins as well. Epithermal veins have zonation of grades along strike and at depth with the key portions being in the boiling zone of the system. Figuring out where that boiling zone is in the veins is crucial for the ones they are drilling as well as new discoveries as it tells them approximately how deep they need to drill to tag the boiling zone. Another exciting aspect is that sometimes the boiling zones can be stacked.
In early February, 2024, they announced a $2.5 million financing that was over subscribed to $3.7 million and closed on February 22nd. Now they are well financed to do a lot of drilling. It is a challenging market to raise money for exploration, the fact that they were able to oversubscribe and get it done is a sign of the quality of their Columba project.
I’m looking forward to their next round of drilling as I expect they will continue to deliver great drill results from their Columba project. I’m very bullish on silver, but it is challenging to find strong silver discovery stories, Kootenay definitely has one at Columba.
Sendero Resources
They just started trading as a public company in early October, 2023. They are focused on the Vicuna district in Argentina, which is becoming famous in the mining sector due to the phenomenal success of the Lundin Group of companies. The Lundin companies are picking off world-class copper projects down there and Sendero has a large land package surrounded by the Lundin companies.
When I started looking at the Lundin discoveries, I immediately noticed the big alteration zones around where they are making them. My first question for Sendero was are there big alteration zones on their ground, sure enough there are. When metals bearing fluids hit the country rock they chemically alter the rock and in the case of Vicuna leave extremely large alteration zones. That is a heck of a great place to look for big deposits, the Lundin companies have made such discoveries and I think Sendero has a good chance to as well.
Well before the Lundin companies started making noise with their discoveries, the CEO of Sendero had acquired the ground that now belongs to Sendero. He knows the country very well as he was the former VP of Barrick Argentina.
They also have a renowned geologist on the team, David Royle, who is credited with multiple important discoveries in South America, made while working for major mining companies.
They have the right address to make world class discoveries, they are in the middle of one of the hottest discovery plays in the world, they have an exceptional team and they are drilling as we speak.
The geology is the same as those around them, they have compiled plenty of data for their project, now they just need to go out and make a discovery or two. That is no small feat for sure, but it sure looks like they have a great shot to pull it off.
Unnamed Pick
This company is currently private, they are still in somewhat of a stealth mode until just before they start trading, so I only wanted to provide a heads up about them now.
Their project is in Nevada, it is a past producing mine with permits, a processing plant that is ready to quickly go into production. The past operators left a lot of material on the heap leach pad and the pits are open to go back into production at a very low cost.
When I was doing my homework on this company, I had a chance to get an online tour of the project with their CEO. Immediately what stood out to me is all the alteration on the project. When metals bearing fluids interact with the country rock it chemically alters the rocks. As they say in mining, big systems leave big footprints.
I also got my hands on a scientific paper that was written about the project. It starts with, “The hydrothermal system is one the largest areas of epithermal alteration and mineralization in the state of Nevada, estimated at more than 20 square miles.” It is so big that you can easily see it from Google Earth.
In addition to being a project that can quickly go into production with very minimal capital costs, because it is already built and the plant is in great shape, it is also wide open for exploration.
The alteration is right along a ridge covering a large area, right below that is the alluvial covered valley. Past production was in alteration zones on the ridge and going out into the alluvial covered area. Which shows that in addition to the alteration zones along the ridge, the covered area beside them are key targets as well.
All of the past mining was in the oxides and transition material. They can expand on the oxides and keep following it deeper into the sulphides below. One of the best holes they hit was high-grade and the only hole to go into the quartz sulphide zone right below the oxides.
The CEO is very talented, I’ve known him for several years. He worked at one of Canada’s largest gold mines, and then became the VP Exploration that discovered an impressive discovery that clearly looks like it will be a future Canadian gold mine. In fact, he is one of the best exploration geologists I know.
One of the key people that joined his team left a high paying job at one of Canada’s largest gold mines where he was part of the team that built it and operated it. The two of them make an excellent team, one knows how to build and operate a gold mine and the other knows how to explore for additional deposits on the project.
As a private company they have assembled a marquee team of mine builders and explorers. They are already drilling the project, so when they become a public company it won’t take long for them to start putting out a lot of news that will keep flowing as they secured millions in financing as a private company.
I’m looking forward to giving you more details about the company’s project and to do a series of interviews with their CEO.
It is very rare for me to find a company that has been so well built for success coming out of the gate as a newly listed company. Especially with a project that they got very cheap, is ready to go back into production and is wide open for exploration. In Nevada.
All the best,
Allan Barry Laboucan
Disclosure
Dryden Gold is a sponsor of Rocks And Stocks News. Exploits Discovery Corp. is a sponsor of Rocks And Stocks News.
Rocks And Stocks News does not make buying or selling recommendations. The reports are for information purposes only. Sponsors pay a fee to Rocks And Stocks News for content creation. The business model of Rocks And Stocks News is to fund research and reporting on the sector, picks and sponsors through corporate sponsorship. We are thankful to sponsors for enabling commentary free of charge to readers and viewers of the reports. When reporting on sponsors it is on behalf of the sponsors discussed in the portion of the report mentioning the sponsor. Before making any investment decision it is important for you to speak with your financial advisors to consider your risk profile. It is also important to do your homework. To help in that process, Rocks And Stocks News means to be a gateway by doing reports and interviews of management of sponsors and picks. The reports and interviews should not be considered investment advice. Allan Barry Laboucan is the founder and owner of Rocks And Stocks News, he has worked in the mining sector since 1993 and has been reporting on the sector since 2005. He has worked with and been mentored by very talented geoscientists in geology, geochemistry and geophysics. He uses the skills he has picked up during his career to assess sponsors and picks in the reports. Whether a company is a pick or a sponsor they go through the same filter and are reported on when important news is made that Allan Barry Laboucan wants to discuss on the Rocks And Stocks News platform. He may own shares in sponsors and picks for investment purposes.