Today’s gold price of $1,861/oz. is down 10% from its August high of $2,073/oz. Yet many high-quality gold companies have sold off > 30% from 52-week highs. Well-known producers such as Oceanagold, Gold Fields, IAMGOLD & Kirkland Lake are down an average of ~36%.
Smaller bellwether names like Victoria Gold, Novo Resources, Freegold Ventures, Tudor Gold & Vizsla Resources are down an average of ~45%. Are these large & mid-tier names oversold? Among small-cap gold juniors the declines have been even steeper. One name that looks oversold is Falcon Gold Corp. (TSX-V: FG) / (OTCQB: FGLDF).
Some companies have seen their share prices decline because they’re struggling to raise equity capital. Others have expensive exploration programs ahead, onerous work commitments / project payments, or little-to-no near-term catalysts. And, significant delays at analytical labs across Canada has certainly not helped.
Multiple projects, multiple near-term catalysts, drill results in January
Falcon will have ~C$1.5M in cash, after an announced capital raise closes. In addition, there’s ~C$2.0M of in-the-money warrants. The following are near-term catalysts; 1) drill permits for high-grade gold-silver Spitfire-Sunny Boy claims, 2) ongoing drill results from the flagship Central Canada project, 3) drilling at Sunny Boy, 4) Stage Three drill program at Central Canada, 5) analytics from airborne geophysical surveys, and 6) [hopefully] a maiden resource in 1h 2021.
Also in the first quarter, management hopes to announce a significant acquisition or earn-in agreement on a project in North America. Careful due diligence on a few select opportunities is underway. The pullback in gold & silver prices since August is helping in negotiations.
Falcon is well into Stage Two of its 2020 drill program at Central Canada, located near Atikokan in northwestern Ontario. Central Canada is ~22 km east of Atikokan, and ~160 km west of Thunder Bay.
The property has 13 claims and hosts an historic producer with a shaft & mill site. The project is on a parallel system to the one that Agnico Eagle’s 4.5 million ounce Hammond Reef deposit is tied to. Central Canada is ~20 km southeast of Hammond Reef.
After seven holes / 1,055 meters this past summer, the Company successfully incorporated new and historical geological & analytical data into a model of the deposit. Management is making good progress on Stage Two drilling. The purpose is to supplement previous work and deliver a maiden mineral resource estimate. Current drilling is expected to total nine holes.
Stage Two drill program well underway, 9 holes to be completed
Importantly, the program will be infill / definition drilling, which is needed to establish a mineral resource estimate. The first two holes, totaling 489 meters, have been completed. Stage Two holes, at ~230 m each, are nearly twice as long as the seven holes from Stage One.
The gold-mineralized zone that hosts the Central Canada project is a significant structure that appears to cross numerous lithologies and strikes east-northeast, extending well beyond the area drilled by the Company in the summer.
Readers are reminded that the property hosts a past producing mine. In December, 1934 the Central Canada mine reportedly outlined ~230,000 ounces of 9.9 g/t gold (NOT NI 43-101 compliant). Management believes the 3 m interval of 10.2 g/t gold found at 67 m depth may be confirmation of the historical mine resource from the mid-1930s.
Falcon’s CEO, Karim Rayani, stated,
“We are very pleased with the progress and milestones achieved in such a short time. Not only have we acquired strategic ground placing Falcon as one of the largest landholders next door to Agnico Eagles Hammond Reef deposit, we have set the framework for undertaking an inaugural mineral resource calculation. We are thrilled to have started Stage Two at the Central Canada property — stakeholders can look forward to a very active winter.”
In 2012, TerraX Minerals drilled three holes totaling 363 m, spaced ~55 m apart, that tested 110 m of strike along the main Central Canada structure. This main structure was identified from trench sampling in 2010.
Grab samples with values as high as 39.6 g/t gold and channel samples of 2 m @ 2.5 g/t Au were obtained. The first TerraX hole, CC12-01, intersected a mineralized interval of 10.6 m averaging 1.3 g/t gold, including 1.8 m of 4.8 g/t gold.
When Falcon started drilling this year, its first hole was designed to undercut TerraX hole CC12-01. It did, successfully intersecting gold mineralization at 67 m, an interval of 10.2 g/t gold over 3 m within a broader zone of 1.2 g/t gold over 19 m. The same hole intersected additional high-grade material at 104 m, returning 18.6 g/t gold over 1 m.
Mr. Rayani, commented, “The positive implications of our drilling and intersections of Central Canada mine mineralization are more than encouraging. We will be submitting hundreds of samples for analyses as the program advances….”
Awaiting drill permits on the Spitfire-Sunny Boy claims
As mentioned, drilling on the Spitfire-Sunny Boy claims near Merritt B.C. should start in January. Channel sample results confirmed high-grade gold mineralization on the past-producing Master Vein. The samples come from a blasted trench along strike with the best sample averaging 59.8 g/t gold (1.7 oz./ton) over 2.2 m, incl. 1.0 m of 122 g/t gold (3.6 oz./ton).
The gold mineralization & geological setting of the project bear meaningful similarities to other more advanced projects in the region such as the epithermal gold projects, Prospect Valley & Shovelnose, being actively explored by Westhaven Ventures. A number of excellent results from Shovelnose in 2018-19 included 12.7 m of 39.3 g/t gold and 46.9 m of 8.95 g/t gold.
All eyes are on Falcon Gold’s (TSX-V: FG) / (OTCQB: FGLDF) past producing Central Canada Gold mine project as drill results from ongoing Stage Two drilling start to be released in January. Management is actively looking for more exciting properties in Canada, but will only pounce on compelling, well-priced opportunities.
Management is also anxious to get drilling permits and start drilling the high-grade Spitfire-Sunny Boy claims. There are lots of investment catalysts to watch out for in the next several months.
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