Rocks And Stocks News List Of Junior Mining Stocks To Watch
Companies included in this report are Hercules Silver, NevGold Corp., Borealis Mining, Kootenay Silver, Alta Copper, Meridian Mining and Dryden Gold.
The mining industry needs a lot more gold, copper and silver exploration success. Compared to the demand for those metals their supply chains are weak from production down to exploration.
In my last report I talked about my picks of companies that have higher valuations than CAD $500 million. In this report, I will talk about picks that are below that level.
Hercules Silver recently announced their new drilling program is underway utilizing three drill rigs. In the third quarter of 2023, they burst onto the scene with a new copper porphyry discovery in Idaho. We picked them shortly after they announced their discovery hole.
The discovery hole caught a lot of investor attention, then Barrick made a series of substantial investments into the company. It took many by surprise because Barrick is very selective about the projects they invest in through juniors, and for them to pull the trigger after the first discovery hole was a bit of a shocker.
Over the winter, they compiled data from past work, new geophysics and drilling results, and with the help of geologists from Barrick designed this year’s drilling campaign.
When they made the discovery, they were sort of wildcat drilling a geophysical anomaly. They used widely spaced holes to get a handful of pierce points into the anomaly. It worked out very well as they hit thick intersections of copper mineralization in a porphyry.
This year they have a lot more data to go on and are well funded to go after it in a significant way. I’ve looked at the location of the three holes, they are step outs from their best hole, on the edge of the geophysical anomaly cutting across a key structure.
I’m looking forward to seeing the results of their current holes and where that leads to next. As they follow the structure to the northeast, they run into a large geochemical anomaly. In fact, there are several areas on their project with geochemical anomalies that collectively suggest they have a large system with the potential for a few copper rich porphyries.
After Hercules Silver made their discovery, it caused a staking rush, rightfully so, the copper mining business needs plenty more discoveries with the potential to turn into copper mines. The rate of copper discoveries have fallen off a cliff over the past decade plus, at the same time that demand from electric vehicles is ramping up.
NevGold Corp. (sponsor, please see disclosure below) was fast to move into acquiring ground around Hercules Silver. What gave them a leg up is they had been in the state of Idaho due to their Nutmeg project, south of Hercules Silver, that is an oxide gold project.
Recently, they announced that they picked up ground near Hercules Silver’s project, in similar geology, with key structures and historical mining on their Zeus project.
Their CEO is Brandon Bonifacio who formerly held a key position in Goldcorp assessing projects. I was very impressed with the ground they picked as it isn’t just claims on a map, the ground has plenty of potential in the same kinds of rocks as at Hercules Silver’s discovery.
I’m also impressed with their Nutmeg project, partially because it is an oxide deposit, but mostly due to the potential to find a network of epithermal veins below the oxides.
It is a very compelling project because the oxide gold mineralization is widespread and outcrops with a handsome grade for an oxide gold system. There is good potential that if a network of epithermal veins is the source below, it could be an important discovery. So far, all the drilling has been confined to within 100 metres of the surface, no drilling has been undertaken to explore for the source of the oxide gold.
With the part of Idaho where Nevgold is focused heating up due to the success that Hercules Silver has had, NevGold is well positioned to ride the coattails of that success. I’m looking forward to their drilling on the ground they picked up for porphyry exploration and drilling below the oxides at their Nutmeg project.
My highest conviction gold exploration pick is Goliath Resources. They have made an impressive gold discovery on their Golddigger project in the Golden Triangle of British Columbia.
In three short drilling seasons, they have found a series of stacked zones, they have drilled a little over 200 holes with almost all of them hitting gold mineralization. This is no small feat and shows that they have a big gold mineralizing system, equally as impressive is that a high percentage of the drill holes have also hit visible gold.
Prior to the 2023 drilling, the gold zones they drilled were in the sediments and at the contact of the sediments and volcanics. Then in the 2023 drilling campaign, they tagged gold mineralization in the volcanics below the contact and the sediments.
Hitting the gold in the volcanics is a major milestone as it shows the stacked zones of gold mineralization continues from the sediments, through the contact of the sediments and volcanics into the volcanics.
Considering that the distribution of the high-grade gold and visible gold is so widespread, this is shaping up to be an important gold discovery in a prolific mining camp well known for big high-grade systems.
I’m extremely impressed with their discovery and can’t wait for their 2024 drilling season to get underway in the coming weeks. It is rare for gold explorers to make grassroots discoveries, the reason this one has come along is because it was until recently covered by glaciers.
What has me most excited about their next campaign of drilling is that they will do a lot of drilling into the volcanics. It will be interesting to see if the stacked zones in the sediments have a series of stacked feeder zones below.
Plus, they have a VMS target, at the north end of their claims that I have my eye on. The VMS targets outcrops and has very high-grades from the surface sampling. This target is called Treasure Island, it has widespread sulphide mineralization that has the potential to become another exciting discovery.
Treasure Island gives them the potential for base and precious metals, while Surebet is shaping up to have the potential for a Tier 1 gold discovery in the Golden Triangle.
Borealis Mining (sponsor, see disclosure below) is another of my favourite gold focused exploration companies. In fact, they have a wonderful opportunity for exploration success and near term production in Nevada.
Their project had seen historical oxide gold mining, with a processing facility, tailings and stockpile for processing on a fully permitted mine. What I’m especially intrigued about is the exploration potential.
When I was doing my homework on the project, I read a technical report that talks about an extremely large alteration zone of 20 square miles. It mentions that this is one of the largest alteration zones in Nevada. Yet, it remains underexplored.
Their CEO is geologist Kelly Malcolm who is a very talented exploration geologist who has found millions of ounces of gold during his career. He has surrounded himself with a who’s who of mining executives.
What attracted the team they have compiled as a private company, and enabled them to raise around $15 million as a private company is without a doubt the quality of their project.
They got the project from Waterton, through a small cash payment and issuing them a 19.9% interest upon the company going public. Recently, famous mining entrepreneur Rob McEwen bought Waterton’s stake in the company off of them. Plus, they have Eric Sprott as a significant shareholder.
They are in the final stages of taking the company public, when they do, they will have a tight share structure with a powerful group of key shareholders, strong management and an outstanding project.
When I was first being introduced to the project, what stood out to me was that I could immediately see the large zone of alteration from Google Earth. It reminded me of the old saying in mining that big systems leave big footprints.
A couple more things popped out of the technical report I read. One was that the project was compared geologically to the Yanacocha Mine, South America’s most important gold mine.
Secondly, very little drilling was done below the oxide zones that were mined. Right beside the best oxide zone they mined was a hole that got into the sulphides below that hit high-grade gold.
On the exploration front, they have plenty of targets to drill in the big alteration zone. Plus, as you go down the ridge where the alteration is located there is thin cover that is another prime area to look for more oxide mineralization. The best pit that was mined in the past mining was in this area of thin cover beside the alteration zone.
Then they have under the oxides to follow up with drilling for high-grade gold in sulphides below. The depth targets are very important to Kelly Malcolm and his team, in fact as a private company they have already drilled holes at the depth targets with assays pending.
As a private company, they have positioned themselves to hit the ground running as they become a publicly trading company soon.
Kootenay Silver is my favourite silver exploration company. Their project is in Mexico, where they have drilled high-grade silver in epithermal veins. Mexico is the most important source of silver anywhere in the world. Most of the silver production has come from high-grade silver epithermal veins.
They have a cluster of epithermal veins, but most of their drilling has been focused on a few of them. I won’t go into all of the hits, because the list is pretty big. You can find the details of their drilling success on the company’s website.
In late April, they announced the closing of a CAD $10.35 million financing. In early April, they announced that drilling is underway. They are cashed up to do a lot of drilling to expand on their Columba project.
Looking at the grades from Columba, it reminds of the early days of drilling at SilverCrest’s Las Chispas mine in Mexico. I think Kootenay Silver has their teeth into an impressive high-grade silver discovery at Columba and they should have plenty of news from the 15k metre drilling program.
I’m a big fan of copper, but it is not easy to find a lot of copper focused juniors. Alta Copper (sponsor, see disclosure below) has a top 10 copper development project in size and grade, held by a junior.
They are working on an optimized PEA on their Canariaco project, which assesses it in the context of what a large-scale mine would look like economically. The reason they are taking this approach is because they have a major mining company, Fortescue as a key shareholder, and want to answer the economic questions that a major mining company would want answered.
Another important upcoming development is exploration drilling. Past PEA work and drilling has been mostly focused on one zone. There are two nearby zones with limited drilling. Based on the drilling, it looks like the Canariaco Norte and Canariaco Sur zones could be one big zone. Connecting those two zones with drilling would open the possibility of making one big open pit that tackles both zones.
Copper discoveries have fallen off a cliff over the past decade plus, this can be seen in the lack of copper projects in development. The cupboard is pretty bare, when the world needs a lot more copper mines to feed the demand from electric vehicles, alternative energy sources, aging power grids in developed countries, and building power grids in the developing countries.
Alta Copper’s Canariaco project is a much needed copper development project for the major mining companies.
Meridian Mining is somewhat of an undiscovered gem for gold-copper VMS development companies. What initially attracted me to their project is the impressive statistics in their PEA.
Highlights of the PEA include that it has a low capex to build at around $200 million. Due to the extremely high IRR of nearly 60%, the payback of the capex would happen within a year. Most gold-copper projects these days have much higher costs to build, lower IRR and longer paybacks of the capex. This is a unique project that can be built by a junior and those are rare.
Their project is in Brazil, which is quickly becoming one of the top destinations for mining companies in South America. Practically every major mining company is in the country already. This speaks volumes about the mining friendliness in the country.
On the exploration front, their drilling has been focused on two VMS zones. The main zone is the one that they did a PEA on. The other one, is in close proximity and could have the material trucked over to the contemplated processing facility, thus would not need to pass the same economics of a standalone operation.
They are looking at a hub and spoke model, with the key zone being where they build a mine and then truck material over to that plant. VMS deposits are known to occur in clusters, they have a large land package that they feel covers an entire belt of VMS deposits.
Dryden Gold is in the very early stages of trying to unlock the potential for high-grade gold discoveries at their large land package in Dryden, Ontario.
The two key people that they have tasked with this effort are their President Maura Kolb and VP Exploration Anna Hicken. These two ladies come to the work with plenty of experience in orogenic gold systems in Red Lake, Ontario while working for Goldcorp.
While at the Red Lake Mine they found a lot of gold and got plenty of experience looking at the key geological indicators crucial for making discoveries in orogenic gold systems. They are taking a very scientific approach to exploration that benefits from their experience finding high-grade gold in Red Lake.
The geology of nearby Dryden, is much like that at Red Lake, yet Dryden remains relatively under explored due to the ground in the area being a patchwork of claims prior to Dryden Gold’s arrival to consolidate the district.
They recently announced the comprehensive work they are doing to inform their drilling efforts. With two sharp geoscientists leading the charge, I’m looking forward to seeing the results of their work and future drilling.
In Closing
This is my current list of key picks under CAD $500 million market caps. I have more that I am following closely and awaiting developments to include them on the list.
My next report could be considered contraversial as I will be explaining why I see gold as a much better investment than Bitcoin. The claws could come out for the Bitcoin crowd.
All the best,
Allan Barry Laboucan
Disclosure
NevGold is a sponsor of Rocks And Stocks News, they are presented for the benefit of the company and for readers and viewers of Rocks And Stocks News reports. Allan Barry Laboucan is a shareholder of NevGold. Allan Barry Laboucan is a shareholder of Goliath Resources and also holds warrants to purchase additional shares. Borealis Mining is a sponsor of Rocks And Stocks News, they are presented for the benefit of the company and for readers and viewers of Rocks And Stocks News reports. Allan Barry Laboucan is a shareholder of Borealis Mining and also is a consultant offering corporate development advice. Alta Copper is a sponsor of Rocks And Stocks News, they are presented for the benefit of the company and for readers and viewers of Rocks And Stocks News reports. Allan Barry Laboucan is a shareholder of Alta Copper. Dryden Gold is a sponsor of Rocks And Stocks News, they are presented for the benefit of the company and for readers and viewers of Rocks And Stocks News reports. Allan Barry Laboucan is a shareholder of Dryden Gold.
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 which he discloses when discussing them in the reports.
