The gold junior acquisition candidates we’ve discovered look most attractive to intermediate and senior gold producers looking to replenish dwindling reserves and resources
SmallCapPower | July 13, 2020: More capital seems to be flowing into the junior gold space, as the gold price recently broke through US$1800 per ounce. Gold miners have cut their exploration budgets in recent years, following a multi-year decline in the gold price after hitting an all-time nominal high in 2011. Now, these gold producers will be forced to replenish their dwindling reserves and resources, which is expected to boost M&A activity. Today we have identified what we believe are the Top 3 gold junior takeover targets.
*Returns are based on closing stock prices as of July 11, 2020
Great Bear Resources Ltd. (TSXV:GBR) – $17.78
Great Bear Resources is a Canadian gold junior exploring in the Red Lake Region of northwestern Ontario. Its flagship property, Dixie, is located just south of the former Newmont Goldcorp operations, covering an area of 9,140 hectares. The Company has reported multiple, high-grade gold drill results over the past two years, the latest being 10.06 grams per tonne (g/t) gold over 31.25 metres from a total mineralized interval of 4.07 g/t gold over 80.50 metres, announced on July 6, 2020. Great Bear Resources has approximately $53 million in cash, and the Company says it is fully funded for continuous exploration drilling through 2022. GBR has about 50 million shares outstanding.
Pure Gold Mining Inc. (TSXV:PGM) – $2.21
Pure Gold Mining’s Madsen project in the Red Lake District of northwestern Ontario is on track to become Canada’s next producing gold mine later this year. A 2019 Feasibility Study estimated Madsen would have 12.2 years of production, with peak annual production of approximately 125,000 ounces, at all in sustaining cash costs (AISC) of US$787 per ounce of gold recovered, based on a gold price of US$1,275 per ounce (the current price of gold is about 40% higher). The Madsen project has an Indicated resource of 2,063,000 gold ounces at 8.9 g/t, along with 467,000 Inferred ounces of gold at 7.7 g/t.
K92 Mining Inc. (TSXV:KNT) – $4.68
K92 Mining is focused on exploration and development of mineral deposits located in Papua New Guinea. The Company’s main asset is the Kainantu Gold Project, consisting of two gold deposits. On July 6, 2020, K92 announced second-quarter production of 25,762 ounces of gold, 531,406 pounds of copper and 10,867 ounces of silver, or a record 26,847 gold equivalent ounces. The Kainantu project has an Inferred resource of 3.9 million gold equivalent ounces, along with 1.3 million Measured & Indicated ounces, at an average head grade of 19.1 g/t gold, allowing it mine at all-in sustaining costs of US$886 per gold ounce during Q1.
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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