Gold has obviously been on a tear for the last decade, reaping huge profits for bullion and mining investors alike. Trying to break back through $1,800 per troy ounce has been a true battle of the unstoppable force meeting the immoveable object, however. The stalemate doesn’t have most experts worried, though, as promulgations of gold eventually breaking back through to new highs are not hard to hear in the commodity industry. It was only about a week ago that Peter Sorrentino, a senior fund manager at Huntington Asset Advisors in Cincinnati, OH, told Bloomberg that gold is likely to reach $2,000 per ounce by April.
Going forward, the Eurozone is still a mess with the rest of the world questioning the feasibility of austerity measures by countries and cash is still being printed at a frantic pace as the capital infusions are necessary to keep countries afloat for the foreseeable future. As such, gold should retain its vaunted role as the ultimate safe haven for years to come as the pieces of the overseas banking puzzle are put back together.
This bodes well for undervalued junior gold plays in North America advancing their properties. Companies such as Encore Renaissance Resources Corp. (TSX-V:EZ) (Pink Sheets:ERRCF), a Canadian gold exploration company focused on developing its 75%-owned Bonaparte Gold Project near Kamloops in southern British Columbia, spring to the forefront with mid-term potential. The 2,216 hectare project has been the subject of exploration for three decades which has shown high-grade gold in drill intersections, underground mining and bulk sampling, yet the land still remains largely unexplored. Bulk sampling at Bonaparte in 1994 produced 3,160 ounces of gold from 3,700 tonnes with a grade of 26.5 grams per tonne. A second shipment of 364.61 tons trucked to Kinross Mill in Washington in 2010 was processed and yielded 161.95 ounces of gold with a 93% recovery rate.
In a 2009 NI 43-101 report, Shaun M. Dykes M.SC (Eng), P.Geo, said “It is likely that the portion (of the Bonaparte Gold Project) explored to date is only a small part of a much larger, more extensive mineralizing system that requires detailed exploration to define. In addition to the shear/fracture hosted mineralization, potential exists for large bulk tonnage, porphyry copper-gold mineralization.”
Last year, Encore brought in a new management team to oversee the advancement of an aggressive drilling program to delineate exactly how large the reserves are at the property and to move the project towards production. Through VLF-EM surveys, diamond drilling and sampling, more than 14 major gold veins have been identified on the property with the mineralized vein system remaining open in all directions and at depth. Many of the veins have produced multi-ounce gold values as high as 9.37 ounces per ton. Moreover, the project has excellent road access and nearby infrastructure fully intact.
On Wednesday, Encore broadened their position in the area by adding 243 hectares of highly prospective ground to the Bonaparte Gold Property through an assignment agreement with BCT Mining Corp for a 100% interest in the Bona NE (Bonaparte North-East) mineral claim #606387. In addition to possibly being an extension of known mineralized veins from the Bonaparte Gold Property, Bona NE is located in an area of the Thuya Batholith historically known to host high molybdenum values in Climax-type porphyry with quartz-diorite intrusions. The new claim directly adjoins Encore's claim block and is less than 2000 meters from the Bonaparte Gold discovery zone and the current Bonaparte Gold Bulk Sample Project. Per the agreement, BCT has agreed to assign the claims to Encore for total consideration of $456,640. BCT will retain a 2% Net Smelter Return, of which Encore can buyback 50% for $1,000,000 should the property go into commercial production.
Exploration has shown that the Bonaparte Gold Property hosts a series of high grade gold veins. After some restructuring, Encore is ready to dig-in and further prove-up the reserves on the project as the geology offers tremendous discovery potential. The upcoming 10,000 meter drill program should help bolster the property’s true value with the subsequent assay results serving as the catalyst that Encore needs to drive its market cap and share price well above today’s paltry levels.
