Today we look at seven juniors that are exploring for Red Lake gold and could perform well in 2020
SmallCapPower | January 17, 2020: The Red Lake area of northwestern Ontario is one of the world’s most-prolific gold mining district, having produced approximately 28 million ounces of gold from 28 gold mines. Gold was discovered in the area back in 1925 but it wasn’t until 1995, about six years after Goldcorp’s Rob McEwen took control of the Dickenson mine, that a high-grade gold zone was discovered by Goldcorp, cementing Red Lake’s reputation for being a bonanza-grade gold mining area (the Dickenson mine has produced about 7.3 million gold ounces at nearly 19 grams per tonne). Newmont Goldcorp’s decision to sell its Red Lake operations for US$375 million in cash late last year has done nothing to deter exploration activities in the region, especially given Great Bear Resources Ltd.’s (TSXV:GBR) eye-popping drill results in late summer 2018. Shares of Great Bear have skyrocketed nearly 1500% since to current price of $8.71. In our report today, we take a look at a few of the juniors conducting exploration activities in the Red Lake gold district. Precious metals prices are poised to have another good year in 2020, which should continue to increase investor interest in these companies.
Great Bear Resources Ltd. (TSXV:GBR): As mentioned before, GBR shares have soared about 1500% since the summer of 2018 after drilling on the Hinge Zone at its Dixie project produced intercepts that included 16.35 metres of 26.91 g/t gold. Great Bear Resources’ early success prompted famed mining investor Rob McEwen, founder and former Chairman and CEO of Goldcorp, to take an 8% stake in the Company. GBR continues to benefit from a tight capital structure – just about 46 million shares outstanding and the Company asserts that it is fully funded for drilling for the remainder of 2020. The Dixie project is located just south of the former Newmont Goldcorp operations.
BTU Metals Corp. (TSXV:BTU): The Company’s flagship Dixie Halo project in Red Lake surrounds Great Bear Resources’ Dixie project, which has prompted speculators to push BTU’s stock price up more than 280% since November 25, 2019, to its current price of $0.35. On September 3, 2019, Great Bear Resources reported multiple gold discoveries along 3.2 kilometres strike length of the approximately 18 kilometre long LP Fault target, which included 42 metres of 5.28 g/t gold at 80 metres depth. BTU Metals management believes LP Fault’s southeasterly trend appears to extend into BTU’s property. The Company says Great Bear is actively exploring the LP Fault with three drills working towards BTU’s boundary. BTU Metals’ current drill program has focused on testing IP anomalies near the north boundary about 1.5 km south of GBR’s Hinge Zone. Historical results from several areas on Dixie Halo have shown up to 14 g/t gold in grab samples.
There is one important distinction, however, between the exploration that Great Bear Resources is doing compared with that of BTU Metals. GBR is exploring a quartz-hosted hydrothemal gold deposit similar to other mines and deposits in the Red Lake camp, while BTU is exploring volcanogenic massive sulphide (VMS) mineralization. VMS deposits have been historically rich in copper and zinc yet also have contained gold and silver concentrations that could be as rich as those found in hydrothermal deposits. BTU Metals Corp. is encouraged by just how underexplored the Dixie Halo property is relative to the neighbouring Dixie Project. BTU Metals claims there are fewer than two dozen historic holes on its property, while the Dixie Project had hundreds of holes in it before the acquisition by Great Bear Resources. On January 7, BTU announced that it has restarted drilling on the TNT target area, with core assay results for Drill holes 19 and 20 expected any day.
Rubicon Minerals Corporation (TSX:RMX): In early 2015, Rubicon and its Phoenix Gold Project in Red Lake showed much promise until the Company acknowledged in November of that year that the geology of the deposit was more complex than previously thought, after skipping important engineering steps, and that it needed to create a new development plan. RMX had already spent about $600 million and its stock plunged more than 50% when investors were notified. Fast forward to 2020, and Rubicon is now headed by George Ogilvie, the operator who brought Kirkland Lake Gold into production. The Company anticipates producing gold by the first half of 2021 and expects to explore another five to six targets within a 2 km range of the Phoenix Gold Project, which could add to its resource.
Pure Gold Mining Inc. (TSXV:PGM): Pure Gold anticipates starting production at its Madsen Red Lake project in late 2020. A 2019 Feasibility Study showed a Probable Mineral Reserve of one million gold ounces at 9 g/t, Life of Mine (12 years) All-in Sustaining Cash Costs of US$787 per ounce, along with initial capex of C$95 million. The Company asserts that it is fully funded for mine construction and exploration in 2020. Pure Gold Mining also boasts some big-name strategic investors that include Eric Sprott (made a $20 million investment in 2019), Rob McEwen, Anglogold Ashanti, and Newmont Goldcorp – collectively owning about 30% of the Company.
GoldON Resources Ltd. (TSXV:GLD): Situated next to Pure Gold’s Madsen Red Lake project is GoldON’s West Madsen gold property (optioned from Great Bear Resources). GLD also has its flagship 100% owned Slate Falls Gold-Silver Project in the area as well as its Bruce Lake property that adjoins BTU Metals’ Dixie Halo project. GoldON shares have skyrocketed 650% during the past year, to its current price of $0.90, as investors have benefitted from the Company’s ultra-tight capital structure – just about 16 million shares outstanding. Shareholders can expect results from both the Slate Falls and West Madsen project soon.
Dixie Gold Inc. (TSXV:DG): The Company’s stock has had stellar momentum during the past month, up 80% since December 30, 2019, to its current price of $0.18. This is likely due to the fact that Dixie Gold’s Red Lake Gold Project is one of the largest in the area, consisting of 1,241 mining claims representing about 25,269 hectares, and is located next to properties belonging to both Great Bear Resources and BTU Metals. It also doesn’t hurt that DG has just 25.7 million shares outstanding following a recent share consolidation.
West Red Lake Gold Mines Inc. (CSE:RLG): West Red Lake deserves a mention as the Company’s stock is up 88% during the past month to its most-recent price of $0.075, following the release of drill results on January 15, 2020, which included 12.14 grams per tonne gold over 13.5 metres. RLG has assembled a significant property position totalling 3,100 hectares in west Red Lake, which contains three former gold mines – the Mount Jamie Mine and Red Summit Mine properties are 100% owned by the Company and the Rowan Mine property is held in a 60%-owned joint venture with Red Lake Gold Mines.
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