Safe-haven markets continue to take a beating as stronger-than-expected US economic data destabilizes the burse landscape. Last week’s precious metals earnings were wiped out on news of rising yield rates and unexpectedly strong equity indices.
U.S. Treasury yields rose to fresh one-year highs. The yield on the 10-year U.S. Treasury note broke above 1.45% for the first time since February 2020 on Thursday, adding to recent advances.
High Ridge Futures’ David Meger commented for CNBC: “We’re seeing bond yields move higher over the last few weeks and that once again has taken some of the wind out of the sails in the gold market.”
While the market is in turmoil presently, this is in line with gold’s now-7-month consolidation process... The Oreninc Canadian Resource Financing Index increased in the trading week ending February 19th, 2021 to 93.72 from 89.45 a week ago. Financings increased even as gold prices remained near their recent lows. Higher-risk juniors seem to be soaking up capital at a frenzied rate. And the capital isn’t lacking, as more impatient investors have seen enough and moved out for the sector – making place for cashed-up speculators looking for favorable entry points.
Seasoned investors tend to take advantage of this kind of landscape, making new positions in promising projects at a time the sector as a whole feels circumstantially devalued. Two Canadian companies with proven records supporting the notion are Cache Exploration Inc. (TSXV: CAY) and Golden Lake Exploration (CSE: GLM).
Value players within reach
Vancouver’s Golden Lake Exploration Inc., a junior mining exploration company, engages in the acquisition, exploration, and development of mineral property assets. The company focuses on gold and copper deposits. Its 100%-optioned Jewel Ridge project in Nevada consists of 96 unpatented lode mining claims and 30 patented claims covering an area of 728 hectares.
Also from Vancouver, Cache Exploration is an exploration-stage company focusing on acquiring, exploring, and developing mineral properties. Its flagship is the Kiyuk Lake gold property – a project consisting of 70 mineral claims located across 590 square kilometers in Nunavut, 50km north of Manitoba and 350km west of Arviat. It recently announced the signing of an LOI to expand its operations to Krasnoyarsk, Russia.
The Projects
Golden Lake operates two projects: the Jewel Ridge property in Eureka, Nevada, and Copperview in south-central British Columbia.
Jewel Ridge is on the south end of Nevada's Battle Mountain - Eureka trend, along strike and contiguous to the former Barrick Gold-operated 2Moz Au Archimedes/Ruby Hill and Timberline Resources' advanced-stage Lookout Mountain project to the south. The property consists of 126 patented mining claims over 728 hectares. On the other hand, the Copperview project consists of 28 claim blocks totaling 27,927 hectares. The project is situated on the same regional geologic trend as and surrounding the MPD Property owned by Kodiak Copper Corp.
Cache’s flagship and focus is the Kiyuk lake property– a 590-square-kilometer district-scale project in Nunavut. The project hosts a high-grade, open-pit mine with a 43-101 certified resource.
Nunavut’s particularity and potential stem from its coordinates – being further North than most similar projects, it’s practically virgin land. The region has hardly been traversed historically – let alone explored for minerals. Major deposits are often found in unexplored territories with the characteristics that Northern Canada boasts – and it’s a well-known fact. Newmont’s 2008 foray into the same area, later acquired by Evolving Gold, shows that the major players have an interest in the region as well.
As for Cache’s Kiyuk Lake property itself, its most compelling feature is the multiple gold showings recorded over a 15km strike zone. While many still require drilling, results have been promising so far. Grades ranging from 2 to 4 g/t Au were recorded ranging from surface.
The property’s Rusty Zone is set for another season of focused drilling, aiming to update and expand the site’s estimated resource. The site has a fully-functioning camp already in place, currently focused on exploring for near-surface gold.
"It's looking like it's an open-pit target. We've gotten some of the highest grades of open-pit targets in North America; in the last drill program, we're averaging over three grams per tonne. Most open-pit mines in the world are averaging under one gram per tonne," said Jack Bal, Cache Exploration CEO. "If we can drill enough gold up there, it's a very good opportunity for a major mining company to come in and take us out."
Some of the site’s best drill results on record include 38m at 4.2 g/t Au from surface and 36m at 4.95 g/t Au from 134m using a 0.5 g/t Au cut-off. A recent hole returned 250m at 1.6 g/t Au from 8.2m using no cut-off. “The drill results from this deposit have been very encouraging," added Bal. "Our big focus is to commence a drill program, which will begin in the next 30 days. We will drill 4,000 to 5,000 meters and really take this deposit to the next level."
Making The Grade
Cache is currently gearing up for its March drilling program, aimed to expand the Kiyuk lake property resource estimate with an approximate goal of 1 Moz Au.
"We were very lucky to get the Kiyuk Lake project. It is one of the highest-grade open-pit targets in the world," said Bal, before elaborating on the potential of Canadian deposits. "This is where you're going to find the big deposits that become big mines."
The company engaged the services of Discovery Mining Services – the industry's most trusted provider of remote exploration camps. Discovery Mining Services has expertise in expediting, logistical support, environmental clean-up support, equipment rentals, and dangerous goods documentation and packaging expertise for small to large projects, camps of 2 to 200, grassroots programs to advanced exploration.
“Our Kiyuk Lake drill program will commence within 30 days,” he continued, “and we will have two drill programs this year," he continued. "As results start to come in, I think the stocks will do very well."
As for the Russian Lysogorskoye project, with the LOI in place, Cache is now executing the corresponding due diligence, with management aiming to get it to production stages in the shortest term possible.
The Lysogorskoye Gold Deposit holds a formerly operated underground mine within a 5.34 sq. km. license area located, in the vicinity of the Abakan-Taishet rail network. The camp zone has access to electricity, good roads, and a very skilled local workforce. The project may present an opportunity for rapid recommissioning for the production of gold ore.
The Krasnoyarsk gold mine has produced in the past. Its corresponding historical resource on record is over 1.7 Moz Au.
A small float, rising investor interest (Cache raised roughly $2.4 million in the past 30 days, with more investors looking to come on board) and highly-prospective projects make Cache Resources a gold play worth visiting during this gold stock flash sale.
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