There is more in central Newfoundland than moose, salmon fishing and bogs.
The rocky terrain south and west of Gander apparently contains high grade gold deposits — gold that was discovered by mining giant Noranda in the 1980s.
But the small deposit of one-third an ounce per tonne was too low grade back then to warrant expanding exploration. At today’s prices one-third an ounce per tonne is considered high grade. How things change!
The “gold belt’’ lay there with intermittent small scale exploration right beside the Trans-Canada Highway until four years ago when New Found Gold spotted and staked the 65-mile long geological belt.
New Found isn’t the usual run of the mill mining exploration company. Senior management and insiders have a lot of experience finding and building mines.
Founder Collin Kettel of the merchant bank Palisades which owns a 17 per cent stake in New Found, is also founder of Gold Spot. Gold Spot technology was used to help outline the potential mining district.
Two other mining companies — Marathon and Daldarian — are advancing gold deposits just to the south and west of the New Found site.
Company owners kept the New Found development privately-owned until this summer when over 30 million shares were sold to the public, raising $33 million for exploration of the huge area. Exploration drilling of 75,000 feet will target two spots.
Ownership is now Palisades, 33 per cent; legendary mine investor Eric Sprott, 18 per cent; Novo Resources, 11 per cent; insiders, eight per cent; management, four per cent; and the public 19 per cent.
The first drill hole hit an unheard of three ounces of gold over a long distance. Few holes in the drilling since have encountered uneconomic gold.
Few have been as spectacular as the first but have been well into the money.
The geological structure in the Gander region bears similarity to gold deposits in Ireland, the Carolinas and the prolific Abitibi region of Quebec.
Considerable drilling is still required to outline an economic deposit, then develop and confirm reserves for a potential mine, making New Found Gold a risky speculative investment.
The potential rewards in share price gains have more than usual possibilities — high grade drilling results, lots of financing and investors with Midas touch in mining — not your run of the mill mining explorer.
New Found Gold warrants the stockwatch list if not being in that small mad money part of investors’ portfolio.
At a current $1.62 a share the stock has moved up sharply from the $1.30 issue price in July.
GoldSpot Discoveries, currently trading at 12.5 cents a share, might be worth adding to the watch list. Founded by New Found Gold founder Collin Kettel, Gold Spot uses artificial intelligences connected with various industry tools and existing science to spot highly prospective gold potential.
Crunching the data with sophisticated math, Gold Spot has worked with Yamana, Sprott, McEwen Mining, Hochschild, Vale, and Integra Resources among others. In addition to payment, Gold Spot takes a royalty on future production.
As well as identifying the best drill prospects Gold Spot works on optimal mine development open pit or underground.
CAUTION: Remember when investing, consult your adviser and do your homework before buying any security. Bizworld does not recommend investments.
Ron Walter can be reached at ronjoy@sasktel.net
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
