Why Australia Is The World's Most Exciting Gold Frontier
FN Media Group Presents GlobalInvestmentDaily.com Market Commentary
Oct 29, 2020, 08:00 ET
LONDON, Oct. 29, 2020 /PRNewswire/ -- Since the middle of 2019, we have been in a precious metals bull market, with gold prices hitting a new all-time high of $2079 on August 3, 2020. And silver prices have also been climbing steadily since the beginning of 2Q 2020, sending investors on the search for the best way to play this precious metals bull run for maximum upside potential. Mentioned in today's commentary includes: Kirkland Lake Gold (NYSE: KL), Great Panther Mining Limited (NYSE: GPL), Alamos Gold Inc (NYSE: AGI), Osisko Gold Royalties Ltd (NYSE: OR), Sandstorm Gold Ltd (NYSE: SAND).
In the search for high upside in this bull market, many investors smartly turn to the junior exploration sector, as companies in that space tend to offer the biggest potential bang for the buck. But it's important to understand that not all junior exploration plays are created alike. Seasoned investors in the space know that the key to success in the junior market is investing in the right people – and the right properties – at precisely the right time.
In the midst of today's ongoing precious metals bull comes Sentinel Resources Corp. (SNL; SNLRF) an under-the-radar exploration company that now seems poised to take advantage of a significant potential high-grade opportunity in Australia.
Australia is home to the largest and most cost-effective gold reserves on earth...as well as a number of outstanding recent junior exploration success stories, including Fosterville South Exploration (FSX) and Kirkland Lake Gold (KL).
The Australian Gold Market is the World's Largest and Most Cost-Effective
According to Nikkei Asian Review, "today, Australia has the world's largest economically viable gold resources and some of the world's biggest mines."[i]
But perhaps more important to investors in the junior exploration sector than a region's overall level of production is its ability to produce junior mining success stories – and Australia has delivered several notable recent examples:
- Fosterville South Exploration (FSX) soared from $1.48 in May to a peak of $5.38 this summer...
- Regis Resources Limited (RRL) climbed 72.54% in just five months this past summer[ii]...
- Capricorn Metals (CMM) soared 136.56% in the six months between March and September 2020[iii]...
- Musgrave Minerals Limited (MGV) – with a high-grade discovery in Western Australia –shot up 560.87%
Now along comes Sentinel Resources Corp. (SNL; SNLRF) in the midst of this sustained gold bull market with an impressive collection of new acquisitions in Australia that could help the company become the next junior mining success story Down Under.
Historically Prolific Locations in New South Wales
Sentinel Resources Corp.'s world-class leadership team recently announced key acquisitions in Australia that are likely to grab the attention of investors looking to play this market...and for good reason. The company acquired eight gold-focused exploration concessions totaling approximately 94,500 hectares located in New South Wales, Australia.
The concessions acquired by Sentinel Resources Corp. (SNL; SNLRF) include at least 198 historic gold mines and gold exploration prospects and historic production records indicate that gold grades were often multi-ounce.
These acquisitions offer Sentinel Resources the possibility of drill-ready targets with just a small amount of field work and sampling, and they include numerous high-grade historic gold mines and showings.
With a high level of focus on acquisition in the New South Wales area – and the increasing number of companies now moving into the region – acquiring such an impressive collection of targets is an extremely positive sign or Sentinel Resources Corp.. And they were acquired at a remarkably low cost – just AUD$10,000 per concession, plus required exploration expenses amounting to $25,000 in the first year and $50,000 in the second.
Investors looking for the next great story in the junior resource sector are likely searching for the next Fosterville South / Kirkland Lake Gold-style success story...and Sentinel Resources Corp. offers as strong a potential for that title as any other junior resource play in the space.
British Columbia Offers Robust Silver and Gold Potential
While the company's recent acquisitions in Australia are the properties grabbing most of the attention, Sentinel Resources' portfolio also includes attractive opportunities in both Canada and Peru.
In Canada, the company's Waterloo Silver Project is located in British Columbia, home of one of the world's largest, most productive mineral trends. The 1,000 kilometer belt in north central British Columbia known as the Quesnel Trough has seen significant placer gold production. This production includes very large-scale mining operations such as the Kemess gold-copper mine which produced 303,475 ounces of gold as recently as 2004.
Peru Is Another Hotspot Flying Under The Radar
Sentinel's Salama Gold Project consists of four gold focused mining concessions totaling approximately 2,700 hectares, located in the Anta province of western Peru. Preliminary review shows that this region offers extensive areas of quartz veins with localized silicified breccias, that have been the focus of historic production by artisanal and small-scale miners. Sentinel (SNL; SNLRF) projects that there is potential on these properties for high and low sulfidation epithermal gold mineralization and breccia pipe stock-work style gold-silver deposits.
Canada's Gold Giants Are Having A Stellar Year
Kirkland Lake Gold (KL) is a growing gold producer operating in Canada and Australia that produced 974,615 ounces in 2019 and is on track to produce even more this year. The production profile of the Company is anchored by three high-quality operations, including the Macassa Mine and Detour Lake Mine, both located in Northern Ontario, and the Fosterville Mine located in the state of Victoria, Australia. Kirkland Lake Gold's solid base of quality assets is complemented by district scale exploration potential, supported by a strong financial position with extensive management expertise.
Kirkland is a company making all the right moves in the gold world. In fact, just recently, Kirkland and Newmont signed a $75 million exploration deal that could wind up being a game-changer for the industry.
Great Panther Mining Limited (GPR) has had a stellar year despite the global COVID-19 pandemic impacting its production back in March. In fact, since its yearly low, the company has seen its share price rise from $0.43 to $1.13, representing a 162% return for investors that got in at the right time.
In its most recent production report, Great Panther announced that its production had increased from the second quarter and is on track to meet or exceed its 2020 full year guidance. In addition to its growing production, the company also reported a fairly healthy balance sheet, giving investors some more confidence to hold the stock as this year's gold rally continues.
Alamos Gold Inc (AGI) is another billion-dollar miner having a notable year. It's recently corrected from its 5-year high of $10.60, but it has still seen healthy returns this year, thanks in part to its promising exploration push and record high gold prices.
In September, Alamos announced new results from surface exploration drilling at the Island Gold Mine. John A. McCluskey, President and Chief Executive Officer explained, "They not only demonstrate the significant potential for additional growth in Mineral Reserves and Resources but further validate our decision to install a shaft as part of the Phase III Expansion."
Osisko Gold Royalties Ltd (OR) has been particularly busy this year, scrambling to make the most out of gold's unprecedented rally. It's made headlines with a string of deals, especially surrounding its Cariboo gold project in central British Columbia. In fact, in early October it announced multiple new high-grade discoveries at the project managed by Barkerville Gold Mines, a wholly owned subsidiary of Osisko.
The success at the Cariboo project also highlights the company's commitment to working with the community in a sustainable fashion. Just recently, it signed an agreement with the Lhtako Dene Nation to ensure the protection of the land and water near the drilling locations.
Chris Pharness, Barkerville Gold Mines VP Sustainability and External Relations of BGM noted, "It has been an honor and a privilege to be welcomed in the community and to hear the hopes and aspirations that LDN leadership and members have for their people."
Sandstorm Gold Ltd (SAND)
is a gold royalties company that follows in the footsteps of Wheaten Precious Metals, Franco-Nevada and the aforementioned Osisko Gold Royalties, giving investors a chance to cash in on this year's gold boom while still maintaining some aversion to risk. Though it has not had quite as an impressive of a year as some of its pure-mining peers, it has still posted some moderate returns, especially considering the state of the wider resource market.
Like other gold and resource companies, Sandstorm took a hit when it saw a number of its assets temporarily halt operations to prevent the further spread of COVID-19, but it has since clawed back some of its losses, and is on track to see further gains as its operations return to normal. In addition to its upwards trajectory, it's also sitting on a healthy balance sheet. Nolan Watson, President and CEO of Sandstorm, explained, "We're excited at Sandstorm to have a strong balance sheet, a strong portfolio, and significant growth ahead."
By. Stephen Bloom
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