As plenty of my readers have seen the last few days, inflation continues to roar as central banks continue to push their transitory narrative. Last Wednesday, it was reported that July consumer prices jumped 5.4%, beating estimates.
Producer prices also soared last week to 7.8% annually in July, which is the most on record. My readers should not be surprised by this as I have been saying inflation would not be transitory since that narrative was introduced by central banks several months ago.
The Federal Reserve has kept interest rates near zero for the past 12 months as it continues to pump endless liquidity in financial markets with $120 billion in emergency monthly bond purchases.
One of the primary reasons for the sell-off in gold the past week is due to the fact market participants believe the Fed will soon begin tapering or start increasing interest rates. I do not think either tapering or an interest rate hike will be happening anytime soon as:
- If the Federal Reserve started unwinding its balance sheet, the stock market would crash.
- They will want the economy to continue to overheat to service record debt.
In saying that, I continue to be incredibly bullish commodities and, specifically, high-quality development companies.
I have been following Kesselrun Resources for months as it looks to advance the 100% owned Huronian gold project.
Huronian Gold Project:
The Huronian project is 100% owned and is a 4600 hectares land package. It is in a great jurisdiction as it is about 100 km west of Thunder Bay, Ontario.
The historic resource contains 550,000 ounces of gold (+14 g/t gold).
- 44,592 oz Au @ 15.3 g/t Au Indicated
- 501,377 oz Au @ 14.4 g/t Au Inferred
It is a former producer as it was in commercial production between 1932 – 1936, where it produced 30,000 ounces of gold and 170,000 ounces of silver.
The company is fully financed and is currently conducting a 20,000-metre drill program this year with the ambition of publishing an NI 43-101 compliant resource estimate after the program is complete.
The project has three zones:
- Huronian Zone
- NE strike and down dip extents
- Parallel structures unexplored
- McKellar Zone:
- SW strike and down dip extents
- Parallel structures unexplored
- Fisher & Fisher North Zones
- On strike and down dip extents
- Parallel structures underexplored
So far in 2021, the company has reported some great drilling results:
- 20HUR028 0.8 g/t Au over 13.0 m including 8.7 g/t Au over 1.0 m adjacent to mined out stope
- 20HUR029 2.7 g/t Au over 7.0 m including 13.0 g/t Au over 0.9 m
- 21HUR040 0.6 m of mined out stope followed by 7.3 g/t Au over 2.9 m including 34.2 g/t Au over 0.5 m
- 21HUR054 16.2 g/t Au over 4.1 m including 81.5 g/t Au over 0.6 m
- 21HUR066 10.5 g/t Au over 1.9 m including 22.0 g/t Au over 0.9 m
- 21HUR075 13.6 g/t Au over 3.0 m including 41.8 g/t Au over 0.9 m
It is worth noting that the company’s neighbour, Goldshore Resources, has commenced its 100,000-meter drill program on its Moss Lake Deposit which hosts 1.75 million ounces @ 1.1 g/t in the inferred category.
The Huronian project is on strike from Goldshore’s adjacent Moss Lake gold deposit, which, if the company reports some strong drilling results, should positively affect Kesselrun’s valuation.
In about a month, I will be doing a full editorial on Kesselrun, talking about its entire portfolio of assets.
Today I am joined by the companies President and CEO, Michael Thompson, to provide an introduction of Kesselrun to my readers:
Hi Michael, thank you for taking the time to introduce the Kesselrun story to the Gold Telegraph readers.
Firstly, can you provide a bit of an overview of the company’s 100% owned Huronian and Bluffpoint assets?
Thanks Alex and thank you for the chance to tell Gold Telegraph’s readers about Kesselrun and the incredible opportunity the Huronian and Bluffpoint projects present.
Kesselrun Resources is a gold exploration company based in Thunder Bay, Ontario with two projects, the Huronian and the Bluffpoint projects. Both projects give shareholders leverage to a rising gold price environment in a safe jurisdiction with excellent infrastructure.
The Huronian project is a former high grade gold producer with a sizable historic resource estimate located next to, and on strike from Goldshore’s PEA stage Moss Lake project, recently vended in to Goldshore by Wesdome Gold.
The Bluffpoint project is located along the same structure that hosts New Gold’s Rainy River gold mine. Bluffpoint is at an earlier stage than Huronian but results so far indicate a very large gold mineralizing system.
Can you talk about some of the recent results from the ongoing 20,000-metre 2021 drill program at Huronian?
I noticed a pretty significant high-grade shoot that was discovered on the fisher zone in early June.
Are you pleased with the progress so far?
We are extremely pleased with the results so far at Huronian. Our focus has been on the three zones that comprised the historic resource estimate, Fisher, Fisher North and McKellar, as well as committing a significant number of metres on the actual Huronian zone where the historic production took place.
These historic resource zones had previously, for the most part, only been drilled to shallow depths and we have been successful in expanding the zones along strike and at depth.
At Fisher, our model suggested there should be numerous high-grade shoots in addition to the one known shoot. We were very excited to have discovered a second high grade shoot and have been drilling to expand both shoots to depth as well as infill drilling and testing for further shoots on strike.
McKellar has had similar progress as Fisher. We have discovered a new high grade shoot there as well and have been working hard to expand both shoots at depth as well as expand the footprint on strike.
The Huronian zone, although the local of the historic mining, had previously received little exploration attention. The Huronian zone is approximately 10 metres wide with numerous gold bearing quartz veins and the historic mining only exploited one of those veins at any given location. Consequently, we believe there is potential for remnant resources in amongst the historic workings and results to date have proven that.
As well, we have been drilling the depth extents from the working with great success. On top of that numerous kilometres of strike extent to the northeast remain untested.
Is the company still planning on publishing a new resource estimate by the end of the year?
Our main goal is, of course, to put a maiden resource estimate on the books at Huronian. The challenge was always going to be accomplishing it in such a tight timeline.
The results to date, in our opinion, certainly give us the confidence that we are well on our way to accomplishing that goal. The 8 week turn around time in receiving results from the labs has been unexpected. We are currently evaluating the timeline and formulating our plan forward.
Nonetheless a maiden resource estimate is top priority, however, in no way would the maiden resource suggest that the full high-grade resource potential has been tapped. There is still lots of drilling to do
If you don’t mind, Michael, can you touch on your extensive track record in the mining sector?
I have approximately 25 years of experience in the mineral exploration industry.
I have worked for major companies as well as junior explorers, worked in mines and remote exploration projects, on advanced exploration projects and grassroots prospects. I have worked throughout North and South America on both precious and base metal projects.
Finally, I always love asking my guests their current take on the overall precious metals/mining market.
What do you think of the current environment in the gold and silver space?
Well, that is a tough question. Someone I worked with once said that whatever the current situation is the only certainty we have is that tomorrow will be different than today. I think the same holds for the gold and silver market. The current actions fiscally by world governments can only result in higher gold in silver prices. It is not and if, just a when. Investing in attractively priced junior explorers with top tier assets poised for growth in a rising gold market is, in my opinion, not a bad decision.
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The author does own shares of Kesselrun Resources (TSX-V:KES). KES is a paid advertiser on the Gold Telegraph.