If one is NOT bullish on the medium-to-longer term outlook for silver (“Ag“), gold (“Au“), and other critical materials, stop reading now.
A great thing about today’s set up for hard assets is not necessarily that we’re in a commodities super-cycle like that of the mid-2000’s, but that prices of many materials are already up enough to support high-quality projects in Tier 1 jurisdictions across N. America.
The near-month Ag price of US$75/oz is -38% below January’s ATH (near-month futures) of ~ $122/oz., but +126% in the past year. While not as hot as Ag, Au is +37%, copper (“Cu“) +33%, and zinc (“Zn“) +30%.
In a commodities bull market, early-stage companies leveraged to critical metals like Au, Ag, Cu & Zn are well positioned. A company I like for its metals, jurisdictions and team is Advanced Gold Exploration Inc. (CSE: AUEX) / (OTCQB: AUHIF), with assets in Ontario, Canada and Nevada, USA.
After a rollback AUEX has just 24M shares outstanding. Its market cap is C$6M (C$0.25/shr. on May 21st). In April, a new Director/CFO (Jason Baker) was appointed, and in February management acquired a promising new asset in Nevada.
How many C$6M juniors have 100% ownership of three active projects in N. America, all with historical databases, all seeing exploration and/or drilling this year? In today’s dollars, the combined value of past work, plus legacy infrastructure on AUEX’s projects is greater than the market cap.
In addition to the metals mentioned above, AUEX has an antimony (“Sb“) kicker and showings of tungsten. In Nevada, the Company’s newly acquired, past-producing Silver Belle project is attractive. It has ~500 ft of underground workings (shaft + adits & cross-cuts).
This is a sizable 2,000-acre land package with open ground to the north, south, and west. There are multiple vertically extensive ore shoots, but no drilling, geophysics, or modern exploration has been done… Until now.
Silver Belle is a high-grade Ag/poly-metallic CRD project on the world-class Eureka-Battle Mountain mineral belt. Records from 1937 show grades of — 1,611 g/t Ag, 37% lead (“Pb”), 10% Zn, 1% Cu — from smelter-run, underground workings.
This was hand-sorted, selectively-mined material, but points to the potential to delineate high-grade mineralization. The classic CRD metal suite also includes antimony & tungsten — critical minerals with highly significant strategic value.
There was far less interest in Sb & tungsten in the 1930s than today. Now they are highly prized in military & aerospace applications. At a reported grade of 3,000 g/t Sb, that alone would be an incremental 0.6% added to the Project’s prospective Cu Eq. economics.
Notably, one need not rely on Sb & tungsten as anchors of value for AUEX, but they’re potentially important as critical materials that could attract government and/or commercial interest above and beyond the underlying Au, Ag, Zn, Cu, Pb.
I’m not suggesting that AUEX will necessarily get grants, but it could potentially benefit from elevated interest from strategic investors due to Sb & tungsten. Regarding tungsten, 80% is controlled by China, and the price is +900% in the past year alone.
A small portion, roughly 5%, of the economic value of Perpetua Resources’ fully-funded Au project in Idaho, USA comes from antimony, yet that company is a C$4.5B market darling with over C$110M in free-money government grants to date.
Regarding Silver Belle, CEO/Pres. Arndt Roehlig stated,
There’s considerable excitement around Silver Belle as it’s wide open at depth and surrounded by mines/projects owned by Newmont, Barrick, Nevada Gold Mines, Kinross, Hecla, Equinox Gold, KGHM Intl., McEwen Mining, and I-80 Gold.
The closest two projects/mines are I-80’s past-producing, high-grade Au Ruby Hill Complex and Kinross’ currently producing Bald Mountain heap-leach operation. Both are within ~40 km. I-80 & Kinross are acquisitive. They are known for making strategic investments in juniors.
Therefore, if/when a resource estimate is established, these producers and others could be interested. Importantly, this part of Nevada is not remote, there’s ample regional infrastructure.
Nevada is by far the largest Au producing State, and is routinely ranked #1 or #2 in the annual Fraser Institute Mining Survey.
Importantly, the Company is actively de-risking Silver Belle. A Phase 1 program launched in April included three weeks of detailed geological mapping. Eighty-seven (87) rock/soil samples are in the lab awaiting assays. All data will be compiled into a GIS database.
Upon completion, ProDeMin will prepare a NI 43-101 Technical Report with a thorough review of historical data and recommendations for drilling and resource definition.
Further drilling will determine if the Company is on the cusp of a larger structure. The geological setting is thought to be analogous to well known poly-metallic VMS systems like Glencore’s Kidd Creek (currently being acquired by Discovery Silver).
Management points out that Kidd Creek started out small, but grew into an operation now in production for over 50 years.
At the Buck Lake project in Ontario’s emerging Batchawana Greenstone Belt, the Company is working on a Cu-Zn-Ag VMS system covering a 3 km corridor (open in all directions) that has seen very limited modern exploration.
Buck Lake is within ~50 km of Sterling Metals’ Soo Copper project, ~130 km from Alamos Gold’s Island Gold Mine, and ~140 km from Wesdome Gold’s Eagle River Mine.
The Project is 55 km from the town of Sault Ste. Marie, (population ~80,000) via Highway & logging roads, and near regional rail. It’s close to Ontario’s hydro grid, with easy access to mining equipment/services.
Recent drilling returned massive sulphide mineralization, incl. 4.6% Cu + 98 g/t Ag + 1.2 g/t Au over 3.1 m (within a larger 11.8 m interval). Historically, up to 15% Cu plus 12–15% Zn was reported from 37 holes (8,054 m).
At the Doyle project, also in the Batchawana Greenstone, AUEX is targeting an Au system sharing notable geological similarities with the Hemlo camp, one of Canada’s most prolific Au districts.
Historical drilling returned high-grade intercepts including 46 g/t Au over 1 meter in an interval hosting visible Au, and a meter of 14.6 g/t in different hole. Like Buck Lake, Doyle has ~8,000 meters of historical drilling.
Doyle has not been drilled in over 30 years. However, recent LiDAR & airborne geophysics identified structural corridors associated with the known mineralized centers.
Management is securing permits for a 3,000-meter diamond drill program to test the depth and strike extent of high-grade Au mineralization along newly identified NE-trending structures.
Make no mistake, Advanced Gold Exploration Inc. (CSE: AUEX) / (OTCQB: AUHIF) is a high risk proposition, but one could not do any better than Ontario (#2 in the latest Fraser Survey) and Nevada.
And, one could hardly do better than gaining early-stage leverage to Au, Ag, Cu, Zn, Sb & tungsten. To reiterate, investors are not betting the farm on Sb/tungsten, they could do quite well with the other critical metals. Sb/tungsten is icing on the commodities cake.
Disclosures/disclaimers: The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about Advanced Gold Exploration, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market-making activities. [ER] is not directly employed by any company, group, organization, party, or person. The shares of Advanced Gold Exploration are highly speculative, not suitable for all investors. Readers understand and agree that investments in small-cap stocks can result in a 100% loss of funds. Readers agree to consult with financial advisors before making investment decisions.
At the time this article was posted, Advanced Gold Exploration was an advertiser on [ER], and Peter Epstein owned no shares in the Company, but might acquire shares in the open market in the near future.
Readers understand and agree that they must conduct due diligence above and beyond reading this article. While the author believes he’s diligent in screening out companies that, for any reason whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors, including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover events & news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector, or investment topic.
