Headlines abound on inflation right now. Transitory Inflation Can Be a Lasting Affair" and "Inflation is All Over the Place" are two already this week in the Wall Street Journal. A recent report from Fox Business revealed that 224 CFOs at S&P 500 companies referenced inflation during their latest quarterly conference calls. That’s the most demonstrating concern about rising inflation since just after the Great Recession a decade ago.
The simple fact is that the U.S. was printing money at a feverish pace during the coronavirus pandemic. An unavoidable downside to money printing, no matter how many soft, placating words like "transitory" some pundits want to use, is inflation; plain and simple. This fact will have investors looking at gold and gold stocks, as the price of gold typically is inversely related to the U.S. dollar because the precious yellow metal is denominated in U.S. dollars. Therefore, when inflation rises and devalues the greenback, gold’s value should increase along with inflation.
Generally speaking, rising gold prices are good for most classes of metals.
That means companies like Idaho Champion Gold Mines Canada Inc. (CSE:ITKO) (OTCQB:GLDRF) could become increasingly popular for advancements at its 100%-owned highly prospective mineral properties in Idaho: the Baner Project in Idaho County and the Champagne Project located in Butte County near Arco. The company also has four cobalt properties in Lemhi County, which can bolster the stock owing to a dearth of cobalt production in North America and the importance of cobalt in electric vehicles.
Last week, Idaho Champion released an update on the 2021 exploration program at the Champagne Project. The project was previously an operating mine (an open-pit heap leach operation) operated by Bema Gold until the mine was closed in 1992 when gold was trading around only $350 per ounce. The Champagne deposit is known to have a near surface cap of gold-silver mineralization emplaced by deep-seated structures, although the property has never been drilled deep or undergone exploration with modern technologies.
Drilling earlier this year discovered a new corridor of mineralization to the northwest of the past producing open pits. ITKO management has prioritized targets in the current drill program on the displaced roots of veins of the Mine Hill polymetallic (substance composed of a combination of different metals) system and neighboring breccias (different types of rocks) that cumulatively include gold, silver, copper, lead and zinc mineralization. The targets are further supported by an induced polarization survey, which measures the electrical chargeability of rocks to identify the presence of metals, which located a large anomaly 800 meters west of Mine Hill. 2,900 metres of new drilling on these targets has been completed with four drill cores now sent to the lab for assay while Idaho Champion completes cutting and logging three additional drill cores.
Drilling has confirmed that alteration and veining do continue into the rocks that underlie the caldera (large depression formed when a volcano erupts and collapses) and volcanic rocks. Initial data from portable X-ray fluorescence points to deeper mineralization being silver-copper mineralization, rather than lead-zinc minerals closer to the surface.
In layman’s terms, Idaho Champion may be on the cusp of a substantial new silver, lead, zinc, and copper find as their drilling progress continues in the Idaho mountains. Any confirmation of new finds or updates on existing drilling could catalyze the stock higher. With shares at a sub $10-Million market cap, and inflation erosion shifting investors focus to gold and other precious metals, this may become the sleeper stock to watch in the coming weeks and months.
