Hitting bonanza grades during a gold bull means
good things for investors.
GoldStockBull subscribers know that gold mining stocks have done quite
well in recent months. But companies that have recently found bonanza-grade
gold have upside potential above and beyond that of their peers.
2019 is proving to be a great year for gold. As COMEX Gold consolidates
above $1,400 and now even $1,450, it's clear that the six-year bear market
has come to an end.
In fact, when measured against some fiat currencies, including the
Australian dollar (AUD), gold has even reached all-time record highs!
What about gold mining stocks that offer significant leverage at times
like these?
In this article, we look at two gold mining companies that have recently
discovered "bonanza-grade gold intercepts." What does that mean?
Bonanza Grade Gold Definition
As an investor, it's crucial to keep an eye out for the latest news about
the companies you hold shares in. Most trading platforms make this easy by
showing links to the latest press releases put out by companies in your
portfolio.
But there's a problem. The press releases of mining companies often
contain industrial jargon that investors may not understand. One example is
the term "bonanza-grade gold."
Grade refers to the extent of mineralization of a deposit of metal ore.
The higher the grade, the more gold there is inside a smaller space of rock.
Miners want large deposits of higher-grade ore because it makes their
operations more efficient. Higher-grade deposits yield more gold while
requiring less work. Discovering a deposit of bonanza-grade gold is rare and
bodes well for the future of a junior miner.
The World Gold Council defines a high-quality underground mine as having a
gold ore density between 8 and 10 g/t (grams per ton), while a low-quality
underground mine has a gold ore density of 1 to 4 g/t. Some view
bonanza-grade as more than 34 grams of gold per tonne or more than one troy
ounce of gold per ton.
Put another way. . .it means big profits if it is discovered in large
quantities. And those profits will be passed on to shareholders as the gold
explorers move the project into production.
For a good overview and description of this and other mining-related terms
not covered here, see this excellent article on Investingnews.com.
Now to the two mining companies that have just discovered bonanza-grade
gold recently: Westhaven Ventures Inc. (WHN:TSX.V) and Pure Gold
Mining Inc. (PGM:TSX.V).
Pure Gold Discovers Bonanza-Grade Gold
Pure Gold is a Canadian company that is "100% focused on the goal of
developing Canada's next gold mine in the Red Lake district of northern
Ontario." The Red Lake district is one of the premier gold-producing
areas of Canada, with over 29 million ounces of gold being mined there to
date.
The PGM team published a preliminary economic assessment in February that outlined
profitable prospects for the Madsen Red Lake Gold Project. And that study
assumed a gold price of 1,275 USD per ounce!
From the press release: "This first round of results continues to
demonstrate the continuity of our geological model and has reinforced the
high-grade nature of both the Wedge deposit and the broader Madsen gold
system as a whole," stated Darin Labrenz, President and CEO of Pure
Gold.
Labrenz goes on to say how this discovery has been established as part of
a related system that is five kilometers in length.
To that end, the release also states this: "The resources at Wedge
form a part of a series of genetically and geometrically related high-grade
gold zones that span a five-kilometer structural corridor from Madsen to
Wedge, with expansive gaps along strike and down plunge that remain highly
prospective for additional resource growth."
To clarify, this means that there are empty caverns inside the drilling
locations, some of them being horizontal (along the strike) and some of them
being vertical (down-plunge). It's not currently known whether or not these
empty spaces also contain bonanza-grade gold, but that is a firm possibility.
Westhaven Discovers Bonanza Grade Gold
Westhaven Ventures holds the single largest claim of land on the Spences
Bridge Gold Belt (SBGB) in Vancouver, British Columbia. The SBGB is
underexplored and in close proximity to existing infrastructure, meaning
exploration costs are low and potential mining rewards are high. The company
has three big projects—Prospect Valley, Shovelnose, and Skoonka Creek.
Given recent bonanza-grade gold intercepts at the Shovelnose operation,
the company's activities look promising indeed.
The most notable takeaway from their recent press release is this: "Hole
SN19-11 returned 2.98m of 176.33 g/t Au and 131.43 g/t Ag, including 1.00m of
521 g/t Au and 381 g/t Ag in Vein Zone 1."
Translation: In this drill of about three meters, one-third of it was
bonanza-grade gold and silver, with concentrations over 50x and 30x what
miners consider high grade,respectively.
Other strikes included high-grade and bonanza-grade intercepts at depths
of anywhere from 17 to 52 meters. All of these occurred in Vein 2, in the
South Zone of the Shovelnose operation, which the company plans on expanding
in light of these findings.
These Recent Finds Equal Big Investment Potential
Both of these companies increased their odds of moving their respective
projects into production as a result of discovering these unusually
high-grade deposits. It also suggests that they selected prime locations for
their operations, where additional bonanzas may be waiting to be found. And
eventually, it means their economic studies will return more favorable
numbers and their profit margins will be higher than previously expected.
Combine all of that with the price of gold breaking out against all fiat
currencies in 2019, and it's hard to see a scenario where these miners don't
do exceptionally well.
At Gold Stock Bull, we focus on identifying undervalued junior gold miners
with high-grade projects that have yet to be fully appreciated by the wider
market. The GSB portfolio has posted very strong gains in 2019 and we believe
the best is yet to come.
We just added a new junior gold company to our watch list that hit
bonanza-grade gold recently and has attracted investment capital from some of
the brightest names in the industry. This company has a market cap of around
$100 million, but the share price has huge upside as gold moves to $1,500 and
higher. We think this could be a five-bagger for those that buy early!
Subscribe
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Disclaimer: Gold Stock Bull holds the companies mentioned in the GSB
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