By
Hassan Malik, SmallCapPower.com
Goldcorp’s
(TSX: G)
January 19, 2015, announcement that it would acquire Probe Mines Limited (TSXV: PRB)
for C$526 million in stock provided further validation of Probe’s flagship
Borden gold project in northern Ontario, which has an estimated Indicated
underground resource of 1.6 million ounces of gold at a grade of 5.39 grams per
tonne (g/t).
Drilling
on the property during the past few years has produced cores with grades as
rich as 10.3 g/t over 51 metres, although one Scotiabank analyst said
back in May of 2014 that most of that mineralization could not be mined
economically. Nonetheless, Goldcorp is willing to take a chance on this project
and will likely spend significant funds developing it. All of this could mean
better times ahead for the stock prices of at least three explorers with
properties in the vicinity.
Reliant Gold Corp. (TSXV: REC):
Reliant has Probe Mines (soon to be Goldcorp) as a 51% joint venture partner on
its Borden Lake South Property, which is comprised of 20 mining claims
representing 294 claim units covering approximately 4,704 hectares bordering
Probe’s properties to the south. Reliant has a favourable share structure at
just over 22 million issued and outstanding. Its stock price got a 29% lift
from the Goldcorp announcement but is now (Jan 21) back to $0.035 a share.
Nikos Explorations Ltd. (TSXV: NIK):
Nikos has an option agreement to earn a 100% interest in the 1,598 hectare
Borden Lake Extension property, which approximately 5 km southeast of Probe’s
high-grade gold zone. No drilling has been done by the company although a
recent very low frequency-electromagnetic (VLF) survey outlined seven anomalies
on the property. Nikos has just over 12 million shares outstanding and its
stock is currently (Jan 21) trading at $0.09 a share.
Kapuskasing Gold Corp. (TSXV: KAP):
Kapuskasing’s 17,600 hectare Borden North property is situated approximately 50
kilometers northeast of Probe’s project. Kapuskasing Gold controls six gold
properties surrounding Probe’s discovery to the north, east, south and west,
and recent sampling returned gold values of up to 7.69 g/t. The company has
just over 20 million shares outstanding with a current (Jan 21) stock price of
$0.08.
Although
not located near Probe Mines’ property, West
Red Lake Gold Mines Inc. (CSE: RLG) could also
benefit from Goldcorp’s latest acquisition. West Red Lake Gold has its 3100
hectare West Red Lake Project and has Goldcorp has a 40% joint venture partner
on the former-producing Rowan Mine Property. In a recent SmallCapPower
interview, West Red Lake Gold Mines’ Tom Meredith stated that West Lake has “similar geological
structures to Goldcorp’s main mines.” Goldcorp’s nearby Red Lake Mine and Campbell
Mine has produced 18 million ounces and its recent purchase of Probe could
signal that Goldcorp is looking to spend more development dollars in Ontario,
and that could include its joint venture with West Red Lake Gold Mines.
Disclosure: West Red
Lake Gold Mines Inc. is a client of Small Cap Power and Ubika Research and has
paid a fee for coverage.
