CANADIAN STOCK EXCHANGES SEPTEMBER – 2010
E. A. Schiller
We have a couple of tigers by the tail with a golden trail in Yukon Territory
Summer has come and gone and fall is upon us and time for NFL football. Canada’s CFL is half way into its football schedule and weekend football madness is in full swing in North America. Stock markets were up in mid September with metal prices showing a lot of strength especially gold and silver and herein I am going to mention a few special situations that I have been watching. Gold hovered in the $1250 per ounce range in early September and by mid-month it was north of $1275 and silver came close to $21 per ounce and showed signs of moving into higher levels. Silver is a poor mans’ gold and looking back to September 2000 it was 4 dollars plus an ounce with a four times increase to 2010. Gold was $200 plus an ounce in September 2000 and today at $1275 is a plus six bagger.
For starters we travel to the Yukon, one of Canada’s three northern Territories where two companies (our golden tigers) recently reported impressive results on their gold projects. ATAC Resources Ltd. (ATC-TSX-V) announced the results of their first drill hole at the Osiris Target on its Sten Claim block on the Rau Gold Project in central Yukon. The project comprises a northwest striking Tiger sulphide zone and a contiguous parallel Tiger oxide zone 650 meters long up to 150 meters wide, averaging 40 meters wide and open in three directions. A separate East sulphide zone lies to the east of the Tiger zones. Surface samples taken over the 650 meter strike length range from 78.54 m averaging 1.71 g/t Au to 56.69 m averaging 5.95 g/t Au. Hole OS 10-01 intersected 9.26 g/t Au over 31.13 meters within a larger interval between 56.08-121.28 meters that averaged 4.65 g/t Au over 65.20 meters. Mineralization in the Osiris Target is a Carlin-type target and was drilled to test a gold-arsenic soil geochemical anomaly where 60% of the samples graded in excess of 1 g/t Au. Seven drill holes have been completed with an additional two holes planned for the current exploration season. Six of the drill holes tested a 300 meter section across the apex of the moderately plunging antiform that hosts the gold mineralization in drill hole 0S-10-01. The Project comprises 4 properties totaling over 600 sq/kms of favourable geology and geochemical anomalies. ATC stock in August was around 2 dollars and rose to over 6 dollars, then came off in early September to under 5 dollars and then creeped up in mid September rose to $6.65.
A company that has an another “tiger by the tail” is Northern Tiger Resources Inc (TRN-TSX-V) and their 3Ace bonanza property in southeastern Yukon. As first revealed at the Prospectors and Developers Convention in Toronto this past March the project has progressed to the drilling stage after announcing spectacular chip sampling over the Main Discovery Zone of the 3Aces. In recent sampling, fifteen chip vein samples over a 50 meter plus strike length of the vein ranged from under an ounce ( six samples) to nine samples that ranged over an ounce to one that assayed 29.56 ounces per tonne Au over a width of 1.10 meters. Three additional veins have been discovered (Sleeping Giant, Green Zone and North Zone) within the 2 km by 2 km mineralized area. A minimum six hole (1000 meter) drill program will commence in September to test the subsurface extent of the Discovery Zone. The stock traded around 12 cents in March than rose to 65-70 cents in early-mid September up from 30 cents in late August.
From the land of the mid night sun we travel to the Red Lake area of western Ontario where gold mining has been the principle source of activity in one of Canada’s famous gold camps. The Red Lake camp has produced over 25 million ounces of gold since production started in the mid - thirties however the major production commenced in 1948-49 when the Dickenson and Campbell mines opened. To 2006, Campbell produced over 11 million ounces of gold from almost 20 million tons of milled ore at an average grade of 0.56 oz/t. Campbell in 2009 produced 622,700 ounces of gold from 781,000 tonnes of ore at a grade of 26 g/tonne. Two significant explorers in the area are Rubicon Minerals Corp (RMX-TSX-V) in a joint venture with Goldcporp Inc (owners of the Campbell and Dickenson mines) and Claude Resources Ltd (CRJ-TSX-V) on their Madsen Mine project.
Moving 75 miles to the east of Red Lake a company that has stirred up a lot interest is Gold Canyon Resources (GCU-TSX-V) and their Springpole Gold Project. The closest former producing mine was the Casummit, 10 kms to the north that produced 101,875 oz gold and 9,788 oz silver. Springpole, first discovered in 1928 was explored intermittently with a variety of owners starting with individual prospectors then more systemically by Gold Fields Mining/Noranda Mining later Sante Fe Pacific Gold who were then bought out by Newmont Mining. Gold Canyon, with 100% ownership has been exploring here since 1995 and has drilled over 300,000 feet on this project. Springpole is an alkali igneous complex with a strong northwest striking sheared fabric within which gold is associated with disseminated pyrite and biotite alteration. Three northwest striking mineralized zones have been identified – the Main and contiguous Portage Zones covering Springpole Lake and the parallal SPROG-EE Zone north of Springpole Lake. Current drilling is directed to expanding the Main and Portage Zones to the southeast. Current potential gold resources are 1.5 millions of gold on the Portage Lake Zone and 0.4 million ounces on the Main and SPROG/EE Zones, both at a grade of about 1.5-2.0 g/t Au. A recent revaluation of all drilling and the application of new modeling techniques has led to a new approach to the exploration program here with room for increased potential gold resources. It appears that all zones could be merged into a single open pit which would result in the expansion of currently identified resources to larger values. Gold Canyon stock trades in the 70 cent range up from 25 cents in July. Based on the revaluation of past and 2010 drill data a major 10,000 meter plus drill program is under consideration to commence in 2011 to upgrade gold resource numbers and collect metallurgical samples for floatation and leach tests
From gold we switch to some industrial minerals and specialty metals that are in vogue and sure to become important contributors to batteries and related products. Dayjin Resources Corp (DJI-TSX-V) is on the eve of becoming a potential producer of lithium, potassium and boron. Potash is without a doubt the number one industrial mineral tossed about in the news with the BHP take over bid for Saskatchewan potash producer Potash Corporation of Saskatchewan (POT-TSX). POT and fellow Saskatchewan potash producers Mosaic Company (MOS-NYSE) and Agrium Inc. (AGU-TSX) all have risen in concert with the potash hype. Lithium is to become the next generation of battery source material and boron is principally used to produce insulating fibre glass and to make bleach (sodium perborate). Dajin has a series of mineral concessions totally 100,000 hectares within which contain 80,248 hectares in the Salinas Grande/Guayatayoc salt lakes basin in the Salta and Jujuy provinces of Argentina. Project data indicate permissive brine chemistry and concentrates similar to those currently being produced from elsewhere in the region. Completed geophysical surveys have identified multiple layers of sub-surface source rocks with grades in the range of 1,400 mg/l lithium and 16,000 mg/l potassium. A 13 drill hole program is scheduled to commence this fall on two of the high priority basins. Dajin stock traded in the 15 cent range this summer and firmed up to 20 cents in early-mid September.
Rare earths (measured as REEs) are now a popular prospecting commodity and it seems everybody is out there chasing the 15 elements in the lanthanide series plus yttrium and scandium. These rare and not so rare elements are used in batteries, magnets and the aerospace industries. Great Minerals Group (GWG-TSX-V) is one of the first companies to get into the rare earth search with their Hoidas Lake property in northern Saskatchewan. From there they expanded into production facilities that manufacture alloys and high purity materials in the US and in the UK. The company has REE exploration projects in Canada at Hoidas Lake and Douglas River, Saskatchewan, and Benjamin River, New Brunswick, and Deep Sands, Utah and joint venture programs at True Blue, Yukon, and Red Wine, Labrador. In the Western Cape, South Africa they a REE project at Steenampskraal Mine. The stock was at 15 cents in mid-June, 30 cents on September 1 and in mid-September was trading around 40 cents.