A new gold exploration in Quebec may be starting to ping radar because it keeps on hitting new mineralization and reports say it’s gone beyond gold.
The Amex discovery earned shareholders up to 7,000% returns at its height, and now we think Starr Peak is looking to do something even bigger because its maiden drill hasn’t just shown gold … It’s shown indications of a VMS (Volcanogenic Massive Sulphide) deposit with rock containing multiple base metals, including zinc, copper, silver, and gold.
This is a play with a huge past-producing mine that’s also right next door to the Amex discovery.
In our view things usually don’t line up this nicely for a junior miner, and the news flow that shows this crew hitting mineralization after mineralization indicates that we may be in for an exciting ride as a potential Quebec gold rush 2.0 kicks into gear.
We think the facts speak for themselves on this play, and here are just 5 of them that appeal to early-in investors:
Fact #1: Starr Peak Has Expanded Its Position Rapidly
On June 13, 2019, Starr Peak acquired a priority land package (NewMétal) in northwestern Quebec, directly east of Amex Exploration Inc.’s Perron Property and proximal to the past-producing Normétal Mine.
That package consists of 53 mineral claims covering 1,420 hectares in the Abitibi Greenstone Belt of Quebec, along the Chicobi Deformation Zone.
Just a year later, Starr Peak expanded its NewMétal property by acquiring land directly east of Amex’s project and adjacent to the past-producing Normétal Mine. That package consists of 11 mineral claims over 468 hectares—bringing Starr Peak’s total land package (so far) to 64 mineral claims covering 1,888 hectares.
But expansion continued …
On August 10, 2020, Starr Peak further expanded its NewMétal property by acquiring past-producing Normétal Mine, with 10 mineral claims over 391.53 hectares, and two additional properties: Rousseau Gold Property (12 mineral claims covering 470.17 hectares) and Turgeon Lake Gold Property (2 mineral claims covering 112.91 hectares).
Fact #2: The Company reports its initial drill target identification was comprehensive
Discovered in 1925, the Normétal mine was exploited from 1929 to 1975, with a total of 10.1 million tonnes extracted at a grade of 5.12 % Zn, 2.15 % Cu, 45.25 g/t Ag, and 0.549 g/t Au (Boivin, 1988). During historical production, the main focus was on copper, while gold was treated as a secondary product.
The neighboring satellite deposit Normetmar was discovered in 1965 and a historical resource estimate was determined through drilling and bulk sampling of 306,800 tonnes at a grade of 10.94 % Zn (GM38950, 1970).
Through the compilation work, the Company has determined that many portions of both the Normétal and Normetmar systems remain open for exploration with expectations of high-grade drill intercepts based on historical results.
Starr Peak (TSX:STE.V; OTC:STRPF) conducted comprehensive initial exploration of the main bloc of the NewMétal property, including the past-producing Normétal Mine, using VTEM surveying. Additionally, high-resolution drone mag surveying covering the entire property was conducted to define gold structures and help identify drill targets.
The company also completed an in-depth review and compilation of historical exploration and mining data from past work on both NewMétal and past-producing Normétal, along with data reported from the neighboring Perron Project run by Amex Exploration.
That data identified numerous, significant exploration targets in close proximity to the historical mine and resource. It also identified gold-rich zonation sulfides within the Normétal Mine sub-surface crown pillar left in place (GM49521, 1989).
In December last year, Starr Peak received high-grade gold results from grab samples taken on a field visit carried out in September 2020. Highlight assay results sampled on Turgeon Lake shoreline returned 157, 31.8 and 9.77 g/t Au, confirming the historical grab samples at Turgeon Lake gold showing.
Fact #3: Starr Peak has a 98% hit rate on drill hole targets
As of July 2021, Starr Peak has an approximately 98% hit rate on their reported drill hole targets.
Drilling began in January 2021, with top geological consulting firm Laurentia Exploration hired to launch exploration program on NewMétal property. This is the same firm that handled Amex Exploration’s exploration right next door.
Starr Peak’s initial drilling reopened historical hole 96-30-16b, allowing a geophysical borehole electromagnetic survey (BHEM) to be performed into this deep hole. Two additional historical holes (95-30-08 and 96-30-15) were also surveyed.
Results returned three anomalies along the Normetmar downdip trend in depth. The deepest and strongest anomaly is characterized by a high conductance (1000 Siemens), which is interpreted has a thick conductor or a more conductive zone. The area of high conductance (135 x 75 metres) is untested, and the geophysical BHEM survey results provide strong confidence into the drilling targets initially highlighted.
They released surprising results from their maiden drill (more below) in the first week of May and then even higher-grade results in July—all of which has led to a large expansion of the drilling program.
Fact #4: Starr Peak encountered evidence of a type of deposit that major miners are said to be looking for
Starr Peak’s maiden drills results exceeded our expectations.
They didn’t just show gold; they encountered signs of a massive sulfide mineralization and a new discovery at depth. In other words, they found evidence of a VMS (Volcanogenic Massive Sulphide) deposit with rock containing multiple base metals, including zinc, copper, silver, and gold.
- Hole STE-21-08 returned 12.10 m of 20.94% Zn, 0.43% Cu, 39.58 g/t Ag and 0.21 g/t Au or 23.82% Zinc-Equivalent
- Hole STE-21-04 returned 12.30 m of 6.47% Zn, 0.22% Cu, 28.55 g/t Ag, and 0.11 g/t Au or 8.19% Zinc-Equivalent
Following reports of those results, on May 2021, Starr Peak increased its 5,000-meter drilling program to a 20,000-meter drilling program and brought on a third rig.
This exploration play looks to have picked up even more momentum with July 2021 results—the highest-grade results to date, with excellent highlights:
- Upper Zone (above 400m vertically)
- STE-21-09: 8.30 m of 10.09 % ZnEq including 2.70 m of 24.44 % ZnEq
- STE-21-17: 11.00 m of 9.01 % ZnEq including 3.00 m of 16.56 % ZnEq
- STE-21-27: 20.55 m of 7.04 % ZnEq including 5.10 m of 11.09 % ZnEq
- STE-21-29: 15.55 m of 9.94 % ZnEq including 10.10 m of 13.16 % ZnEq
- Deep Zone (below 400m vertically)
- STE-21-14: 6.65 m of 18.07 % ZnEq which includes 1.05% Cu
- STE-21-21: 8.70 m of 8.82 % ZnEq including 2.15 m of 13.38 % ZnEq
The July high-grade results extended the Deep Zone mineralized zone by at least 175 meters from a vertical depth of 680 meters to almost 850 meters. And the zone remains open in all directions.
Following the announcement of those results the company announced another drilling program expansion: from 20,000 meters to 40,000 meters.
Proving up this play could mean a brilliant diversification of strategic metals for Starr Peak. We think it would also likely put them on some big mining radar.
Fact #5: Starr Peak is Fully Funded for Drilling
Starr Peak reports it’s fully funded for drilling, with CAD$7.5 million in the bank as of July 22nd, 2021. It’s easy enough to follow the announcements of private placement money:
- March 2020: closed first tranche of private placement for $450,000
- May 2020: closed final tranche of PP for $555,000
- August 2020: closed flow-through PP for $1,110,000
- November 2020: closed flow-through PP for $2,650,000
- June 2021: closed institutional flow-through PP for $3,756,000
- July 2021: closed institutional flow-through PP for $2,310,000
And as of July 2021, the stock has 39,245,144 Issued and Outstanding Shares.
Fact #6: Starr Peak Has an Experienced Management and Advisory Team
In April this year, Dr. Jacques Trottier, PhD, joined on as Starr Peak’s Chief Technical Advisor. Dr. Trottier is the founder and Executive Chairman of the Board of Amex Exploration. He’s also experienced in VMS-type deposits.
“I am very pleased to join the technical exploration team of Starr Peak. I am very familiar with their NewMétal polymetallic project which is located just next to Amex’s Perron Gold project,” Trottier said in a statement when joining the Starr Peak team.
“Having been involved and worked on VMS-type deposits throughout my career, this project appears to be very promising. Prior to joining the advisory board, I completed an initial review of the technical data available, and I believe this project has the potential to host new additional mineralized areas similar to other significant deposits of the same type, namely the former Normetal Mine and the Normetmar showing located on this property.”
The management team also includes Yves Rougerie, PGeo, Starr Peak’s new VP of Exploration, who brings a wide range of exploration and project management experience to the table, including with VMS Cu-Zn deposits across North America.
We think this is still a quiet exploration play flying below the radar, but major miners may be watching what happens next as Starr Peak (TSX:STE.V; OTC:STRPF) digs deeper into what could be a coveted VMS deposit and works towards a potential repeat of Amex Exploration’s success—and beyond.
Resource Companies Are Booming
Sociedad Química y Minera de Chile (NYSE:SQM) has seen its stock price nearly double from $30 in mid-February 2020 to its current price of $47.23. Sociedad Química y Minera, for example, signed in December a long-term supply deal with LG Energy Solution, which in turn supplies batteries to carmakers such as Tesla and GM. Under the deal, SQM will supply battery-grade lithium carbonate and lithium hydroxide to LG Energy Solution between 2021 and 2029.
The Chilean firm also announced a capital increase of up to US$1.1 billion, most of which will be used for lithium carbonate expansion in Chile, where SQM plans to more than double its production.
Sociedad Química y Minera sees the lithium industry growing at around 20 percent per year in the long term, supported by rising EV sales and emission reduction goals from China to the United States.
While Freeport-McMoRan (NYSE:FCX) is primarily known for its significant copper mining operations, the resource giant also has a fair influx of gold as well. In fact, its Grasberg mine in Indonesia holds of the world’s largest deposits of copper and gold. But that’s just scratching the surface of the miner’s global assets. Freeport-McMoRan also has extensive operations across the Americas, including mines in Arizona, Mexico and Peru.
Though its business struggled as global demand for copper took a hit, panic-buying from China has lifted prices higher in recent months – and that’s good news for Freeport-McMoRan. In addition to climbing copper prices, gold prices hit record levels, which will add even more to the mining giant’s bottom line.
Freeport-McMoRan has had a solid year, with the price of its stock bouncing off a low of $5.31 back in March 2020 to a high of $36.65 today, representing a strong 590% gain for shareholders in just over a year’s time.
Gold Fields (NYSE:GFI) has catapulted itself into the global mining elite in recent years thanks to its forward-looking vision and exceptional management. Based out of Johannesburg, South Africa, Gold Fields is one of the de facto leaders in the region. With operations in South Africa, Ghana, Australia and Peru, Gold Fields is well-diversified.
In 2019, Gold Fields produced over 68 tons of the precious metal, up nearly 8% from the year before. And thanks to last year’s rally in gold prices, it produced even more, setting itself up to a great start to 2021.
Last September, Gold Fields was trading at only $5.12 per share, but thanks to its increased production, and the dramatic rise in gold prices, it’s now trading at $9.27, which means investors who held on have brought home near 100% returns – with many analysts suggesting the stock could go even higher.
It’s rare to see miners from outside of North America on the New York Stock Exchange, but Compania de Minas Buenaventura (NYSE:BVN) is an exception. Listing on the NYSE in 1996, Minas Buenaventura has clawed its way up the ranks of the global mining elite. Currently valued at $3.51 billion, the mining giant is far from its all-time highs. But it’s not down for the count just yet.
Minas Buenaventure is exposed to six different mining properties around the globe which bring in an estimated 945,000 ounces of gold every year. But that’s not all its got going for it. It is also has exposure to a number of silver mines which produce as much as 26.5 million ounces per year, and tens of thousands of metric tons of industrial metals such as zinc, lead and copper from its domestic mines.
Harmony Gold (NYSE:HMY) is another South African miner which has exploded onto the radars of investors this year. Though it’s only the third-largest miner in the country, it has made some stellar moves in the marketplace. Domestically, it has nine underground mines in the resource-rich Witwatersrand Basin and one open-pit mine in the Kraaipan Greenstone Belt. It also has a major joint-venture with Newcrest Mining in Papua New Guinea.
In 2020, Harmony raised a whopping $200 million to partially fund a key acquisition of AngloGold’s assets in its home country. The deal is expected to more-than-triple its gold production to as much as 1.8 million ounces per year.
In March of 2020, Harmony dropped to a low of $1.93 in March as a result of the wider market downturn, but it soared by 260% in a matter of months, now trading at a high of $6.95 per share before falling back to today’s price of $4 per share.
Though First Majestic Silver (NYSE:AG, TSX:FR) recently took a significant blow, as a strong dollar weighed on precious metals resulting in a poor quarterly earnings report, there’s still a lot of bullishness surrounding the stock. Adding to the negative numbers, however, was a string of highly valuable acquisitions which are likely to turn around for the metals giant in the mid-to-long-term. And it’s already beginning to pay off, with First Majestic’s stock sitting comfortably above its 5-year trading average.
While its primary focus remains on silver mining, it does hold a number of gold assets, as well. Additionally, silver tends to follow gold’s lead when wider markets begin to look shaky. And with analysts sounding the alarms of a global economic slowdown, both metals are likely to regain popularity among investors.
Wheaton Precious Metals Corp. (NYSE:WPM, TSX:WPM) is a company with its hands in operations all around the world. As one of the largest ‘streaming’ companies on the planet, Wheaton has agreements with 19 operating mines and 9 projects still in development. Its unique business model allows it to leverage price increases in the precious metals sector, as well as provide a quality dividend yield for its investors.
Recently, Wheaton sealed a deal with Hudbay Minerals Inc. relating to its Rosemont project. For an initial payment of $230 million, Wheaton is entitled to 100 percent of payable gold and silver at a price of $450 per ounce and $3.90 per ounce respectively.
Randy Smallwood, Wheaton’s President and Chief Executive Officer explained, “With their most recent successful construction of the Constancia mine in Peru, the Hudbay team has proven themselves to be strong and responsible mine developers, and we are excited about the same team moving this project into production. Rosemont is an ideal fit for Wheaton’s portfolio of high-quality assets, and when it is in production, should add well over fifty thousand gold equivalent ounces to our already growing production profile.”
Pan American Silver (NASDAQ:PAAS, TSX:PAAS)is a world-class mining operation with active projects in Mexico, Peru, Canada, Bolivia and Argentina. Though silver has seen better days, it is still a favorite among investors stocking up on safe haven assets.
Last year, Pan American made a major acquisition of Tahoe Resources, absorbing the company’s issued and outstanding shares. Michael Steinmann, President and Chief Executive Officer of Pan American Silver, said: “The completion of the Arrangement establishes the world’s premier silver mining company with an industry-leading portfolio of assets, a robust growth profile and attractive operating margins. We are also now the largest publicly traded silver mining company by free float, offering silver mining investors enhanced scale and liquidity.”
Sandstorm Gold Ltd (TSX:SSL) is a gold royalties company that follows in the footsteps of Wheaten Precious Metals, Franco-Nevada and the aforementioned Osisko Gold Royalties, giving investors a chance to cash in on this year’s gold boom while still maintaining some aversion to risk. Though it has not had quite as an impressive of a year as some of its pure-mining peers, it has still posted some moderate returns, especially considering the state of the wider resource market.
Like other gold and resource companies, Sandstorm took a hit when it saw a number of its assets temporarily halt operations to prevent the further spread of COVID-19, but it has since clawed back some of its losses, and is on track to see further gains as its operations return to normal. In addition to its upwards trajectory, it’s also sitting on a healthy balance sheet. Nolan Watson, President and CEO of Sandstorm, explained, “We’re excited at Sandstorm to have a strong balance sheet, a strong portfolio, and significant growth ahead. As at this moment, we are entirely debt-free. We have $52 million in the bank. These are good times for Sandstorm and I genuinely think they’ll keep getting better. “
Osisko Gold Royalties Ltd (TSX:OR) has been particularly busy this year, scrambling to make the most out of gold’s unprecedented rally. It’s made headlines with a string of deals, especially surrounding its Cariboo gold project in central British Columbia. In fact, in early October it announced multiple new high grade discoveries at the project managed by Barkerville Gold Mines, a wholly owned subsidiary of Osisko.
The success at the Cariboo project also highlights the company’s commitment to working with the community in a sustainable fashion. Just recently, it signed an agreement with the Lhtako Dene Nation to ensure the protection of the land and water near the drilling locations.