As a warm summer gave way to the great Canadian autumn, one junior mining company came out with tidings of solid economic news in the increasingly competitive gold field.
During the week following Labour Day, Winnipeg-based King's Bay Gold Corporation (TSX:Venture:KBG) told investors and prospective investors it had signed a Letter of Intent with Australia-based Coventry Resources Ltd. to sell its 100 %-owned Cameron Lake property in northwestern gold-rich Rainy River district.
KBG, formed in 1998, continues to have options on nearly two dozen claims covering the former Nucanolan Resource property adjoining Nuinsco's Cameron Lake Deposit which Coventry now owns.
The difference now is that Coventry can possibly earn an 80% interest in Cameron Lake, having parted with about $1 million. KBG will then take part in further exploration on its remaining 20%, once due diligence and the proposed sale gets the green light.
Over the last 12 years, KBG has strung together a portfolio of precious metal exploration prospects, most of them in Ontario’s Red Lake gold camp, a number of which show high-grade gold values, rare earths, rare metals and other industrially useful minerals and metals.
KBG marks itself as being unique among junior miners, in that it owns, and thus controls, most of the equipment required to carry out the various phases of exploration. Company literature says among the key pieces of equipment are diamond drill rigs, bulldozers and skidders, rod sloops, and thousands of feet of BQ and NQ drill rods. Controlling the equipment means controlling costs, which alone should make possible investors sit up and take notice.
Besides Cameron Lake, among the sites that are particularly promising: The Headway, a property located in Red Lake; the Raleigh Lake Rare-Earths prospect near the northwestern Ontario town of Dryden, Ontario; the Fort Frances property -- also in northwestern Ontario, where the search for diamonds is top priority; the Brooks Lake/Dash Lake gold near Nestor Falls, Ont; and Saskatchewan’s Berven and Devil Lakes properties neighbouring the Bingo gold deposit.
The announcement of the proposed sale to the Aussies got things buzzing among investors on Sept. 8, as more than 2.7 million KBG shares changed hands. The activity sufficiently warmed up the stock’s price by 2.5 cents, or more than 38%, to nine cents, in the upper echelons of a 52-week trading range that peaked just before last Thanksgiving at 13.5 cents, before dropping to a gully of 3.5 cents in June. But with this kick of adrenalin in its system, KBG could be one of those stocks that really grab investors’ attention, if it hasn’t gotten yours already.
