While there is an argument that gold and silver will experience rising prices going forward because of inflationary pressures related to stimulus, Bank of America sees industrial uses for silver as a more important driver going forward. Analysts at the bank expect a significant rebound in supply this year, but for there still to be a deficit of 281 million ounces and for output to remain below peak levels a few years ago. As for opportunity, investors should take note that BofA analysts see a "relatively empty" project pipeline.
That has to be music to the ears of management at Sterling Metals Corp. (TSX-Venture:SAG), as the company hopes to have the start of the next great Canadian silver district in its 13,500-hectares Sail Pond project in Newfoundland’s Great Northern Peninsula. Sterling last year optioned the property from a local subsidiary or Altius Minerals (TSX: ALS) that resulted in Altius owning about 20% of SAG.
The property is a new discovery, with initial finds dating back only five years. The early exploration work has been compelling, to say the least. Sail Pond has been subject to an IP survey, limited gravity and magnetics studies, geochemical and geophysics work so far. Channel and grab samples show strong silver and base metal findings at surface that suggest world-class potential.
Just a few examples of silver (Ag) assays including 4,526.1 grams per tonne (g/t) Ag, 2,030 g/t Ag and 1,880 g/t Ag. Copper (Cu) is present in abundance too, with some highlights including 14.9% Cu, 9.4% Cu and 8.0% Cu. Prolific findings of base metals – such as zinc, lead and antimony have also been returned. The early results have been dubbed some of the highest silver grades ever to come out of Newfoundland along with incredibly high base metal values.
If these metals were found across a few hundred square meters, it would be reason enough to keep exploring. However, the findings span an incredible 12 kilometres and remain open in all directions as best as anyone can tell at this point. That’s district-scale potential and inspires speculation that Sail Pond could be a repeat of the massive Keno Hill district in Western Canada that produced over 200 million ounces of silver from just 5.3 million tons of ore through the late 1980s.
An isotope analysis by the Newfoundland Geologic Survey showed the mineralization at Sail Pond to be strikingly similar to that of veining found at world class deposits like Keno Hill and Silver Valley district in Idaho. What’s particularly eye-opening is the fact that this type of veining is almost never found on the East Coast in North America, which has captured resource investor’s attention about the truly anomalous nature of SAG and Sail Pond.
Investors have rallied around Sterling Metals, with two private placements recently completed to put more than $6.0 million in the company’s coffers with the potential for another $10.0 million with the exercise of warrants in the future. The money will be deployed to initiate the first ever drill program at Sail Pond, which is slated to be 7,500-10,000 meters.
Given the backdrop of a thin project pipeline for the industry and fact that demand isn’t going to abate, little Sterling Metals and its $20 million market capitalization could become a popular name in the space should the drill bit create cores rich in silver and other base metals consistent with the early samples.
