The gold market finally hit a speedbump in its bull run. After reaching over US$2,000/oz last week, many investors seem to have decided on that being the sweet spot to cash their earnings out, sending the precious metal’s price on a plunge from the previously mentioned high to its current value of US$ 1,950/oz.
The beginning of the covid-19 pandemic was bound to bring a boon of occasional investors into the sector. As the world continues to find ways to adapt to the novel way of living it brought about, the fear and uncertainty that came with it feels less haunting. This likely led investors to close their positions in the “safe haven” asset once the price hit its new all-time-high.
This is no surprise for the informed gold investor. It’s the cycle of a crisis. However, for those who remains bullish on the noble metal, this could be the ideal landscape to make a move. For many this was a lucky second chance to get on board. Now, exploration companies are actively throwing their hats into the proverbial ring, boasting projects with astounding potential upsides.
Meeting the contenders
One such company is Gold Terra Resource Corp. (TSX-V: YGT; OTC: TRXXF) – this junior gold explorer holds a massive district-scale position just by the city of Yellowknife. Aptly named the Yellowknife Gold Project, the position is in the vicinity of the historical Con and Giant mines – sources of over 14M ounces of gold.
An enviable location that allows for year-long access and a resource estimate of 735,000 oz as of November 2019, while impressive, are only the beginning. The company’s real strength lies at its helm: the company’s Executive Chairman is Gerald Panneton – co-founder of Detour Gold. During his time there, he managed to raise $2.89 billion in capital, and the company was ultimately sold for $4.89 billion to Kirkland Lake.
An exploration company that recently broke out of a comparable stage is Freegold (TSX: FVL), a gold and copper explorer operating in Fairbanks, Alaska. They boast both an advanced-stage project named Golden Summit, and Shorty Creek – a new copper-porphyry discovery.
Operating in Alaska is a huge advantage for FVL, with the jurisdiction being one of a long mining tradition with significant mineral resources. Native land claims are solved since 1971, and both of the company’s projects are just a short drive from Fairbanks – Alaska’s 2nd largest city.
Most importantly, they recently hit their high-grade targets.
The competitive edge
This past May, the company revealed that it had intersected higher-grade mineralization.
After halting their efforts due to the covid-19 pandemic, the company later resumed operations and, come May, had announced a significant discovery – 188 metres grading 3.69 g/t Au, including 2 metres of 169.5 g/t Au. Since then, the company’s stock has skyrocketed from the CA$ 0.08s all the way up to CA$ 1.83.
Kristina Walcott, President of Freegold said in a press release, “Management is tremendously excited with these results. The drill program is testing our interpretation that the high-grade CVS extends to the west and these results are confirming our interpretation.”
Interestingly, Freegold and Gold Terra have some intriguing similarities in logistics, location, infrastructure, and lack of political hurdles. These factors could be considered critical in the boost FVL experienced after hitting their high-grade targets, as investors consider them to be indicators of viability for continuous, profitable operations.
YGT is gearing up for its summer drilling program, shifting its focus from its Sam Otto project to the Crestaurum gold deposit. The objective will remain the expansion of the YCG’s previously mentioned resource estimate. Management believes the number may potentially reach as high as 5 million ounces.
The large resource estimate commands attention on its own, but it’s possible that an interview given by Executive Director Panneton last week is actually Gold Terra’s strongest selling point. In it, he shared just how invested he and the management team are and, considering his track record, it could be taken as a sign of just how much potential the tenured geologist sees in the Yellowknife City Project.
Not only did a good portion of his Detour Gold team make its way over to Gold Terra, but he also holds 5 million shares of the company stock personally and declined taking stock options.
The excitement is palpable, and Panneton doesn’t pull punches when explaining why he and his team are so high on this project. “‘This project is more exciting than Detour Lake.’ Why? Because it’s high grade, also because it’s untouched, un-drilled.”, he said in the interview. “And there are so many follow-up intersections, that were never followed up. Just for example, there’s an intersection that we released about two months ago publicly: eight grams per ton gold over eight meters drilled in 1961. It has never been followed up in more than 60 years. That’s why I’m excited, because I know this potential is there and it just needs to be drilled.”
A project with an enviable framework has obtained strong leadership with a proven track record – which might be just what the Yellowknife operation needed to finally reach a break out.
Drilling begins soon.
Gold Terra Resource Corp. (TSX-V: YGT; OTC: TRXXF) is a junior gold exploration company that has assembled a highly prospective district scale land position on the doorstep of the City of Yellowknife in the Northwest Territories. The company is currently focused on expanding and delineating gold resources at the company’s Yellowknife City Gold Project. With ready access to infrastructure and multiple new high-grade gold discoveries Gold Terra is on track to re-establishing Yellowknife as one of the premier gold mining districts in Canada.
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