Junior Explorer Receives a ‘Golden’ Investment

New Gold Inc. (TSX:NGD) recently took a 9.9% stake in junior explorer Northern Superior Resources (TSXV:SUP)

Thom Calandra | April 24, 2020 | SmallCapPower: Northern Superior Resources (TSXV:SUP) is Tom Morris‘ tiny (approx. $10 million market value) far northern Ontario explorer that just notched an above-par cash catch. New Gold Inc. (TSX:NGD) comes in as a 9.9% owner; NSU/NSPUF raises $3.9 million CAD, a big portion of that via “flow-thru” for exploration drilling at gold-silver-copper project TPK in Ontario. Yamana Gold in 2019 pulled out of TPK.

(This is an excerpt from an article originally published on thomcalandra.com on April 6, 2020)

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The TPK (Ti-Pa-Haa-Kaa-Ning) property is 50 kilometres west of the so-called mineral Ring of Fire and 150 kilometres east of Newmont Goldcorp’s Musselwhite Mine. I mention Tom Morris, Dr. Morris, and Northern Superior because Tom, a geoscientist, much like our Jean-Marc Lulin at Azimut Exploration in Québec, is about the most succinct yet complete describer of his properties (also in QUÉBEC) that I know. Tom is what is known as a precisionist, yet low key and as factual as can be, given the speculative nature of gold prospecting, I like this one take by Tom (and I own some of the shares and have for almost 2 years now):

At any rate, $3.9 million gives Northern Superior Resources enough cash to jump the gun on drilling anytime for almost the next two years. Knowing Dr. Morris, I believe the money will last at least through 2021.

Dr. Morris has something like two dozen targets lined up at TPK. He said something in a way in a note to me and other investors that is uncharacteristic for the seasoned Ontario and QUÉBEC prospector — his wording bordering on boldly, I guess. “Within the Big Dam area of the property, 4 to 8 holes (reinterpretation of historic drill core and fresh geologic interpretation) have us very confident in the potential to unlock a major breakthrough early on in our drilling program.” 

I think Tom is the one who puts that in boldMaybe that is why the stock has been rising for six months, or what?

Metals-cos: many of our neglected explorers (Xtra-Gold Resources), and producers (Victoria Gold), developers (Ivanhoe Mines), project spawners (Golden Valley Mines), and royalty-cos (EMX Royalty, Metalla Royalty) appear to be staging a catch-up with gold, silver, palladium’s physical gains. Our Ontario repository CEF, tagged above, is about trading near par or just at a premium less than 1% to its $2.9 billion of gold and silver repository holdings. Usually, CEF, the Sprott physical trust, trades at a discount — it is an open-end fund.

As premiums take hold, newbie investors start to take notice. As someone once told me, at some point, everyone will want to own gold (and silver, etc) right now, not tomorrow. Because they believe tomorrow will be too late. Or something like that?

Good luck getting the coins and bars right now. I guess some folks must pay a premium (2% or so but looks like it could go far thicker) for gold and silver. It’s about time! See GATA.org for more of that theme.

Briefly: Uranium‘s spot price is rising s-l-o-w-l-y to $28 a pound this week from approx. $26.50. “That’s off the announcement of (mine) closures. When the cuts kick in next week, things could rise fast,” Craig Parry of Isoenergy, says. ISO is the Athabasca Basin spinoff that high-grade discoverer Nexgen Energy delivered to the market in 2016.

Cigar Lake is the critical shutdown of supply — a Cameco uranium mine in northern Saskatchewan in Canada. Cameco was the first to rattle the so-called supply chain by saying it would temporarily close Cigar Lake given the COVID-19 pandemic. CCJ shares have risen 15% since the March 23 announcement. Collateral:

Cameco shares [CCJ] are the main beneficiary thus far of the U-308 rise in spot. Matt Geiger of MJG Capital just in San Francisco here. Matt explains Cameco shares have gained about 50% in the past 2 1/2 weeks. Matt tends to have a real-time take on moving events among natural resources equities; investing in the metals and agricultural developers are all he does with his 10-year fund.

The closure of Cigar Lake? “Which is kind of ironic, as only in very special circumstances would the market greet a company closing down its own mine as good news,” Matt says.

My own coverage and ownership is mainly Canalaska Uranium, which is in the Saskatchewan basin as a project spawner. Others I track and keep myself posted are IsoenergySkyharbour Resources, GoviEx Uranium, Energy Fuels.

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