Economic gold deposits are becoming very difficult to find. Today we are beginning to see a situation where ounces are becoming produced much faster than they can be replaced. In fact, in the last ten years, twenty of the world’s leading gold producers have seen their remaining years of mine life decline.
This has caused a major uptick in activity with regards to takeovers, mergers, and strategic partnerships. Its quite clear the industry is beginning to reach a critical stage, which is where more capital expenditures are beginning to go to mineral exploration due to the risk of some companies running out of viable gold reserves to mine.
In fact, former Goldcorp chairman, Ian Telfer, has forecasted a perpetual decline in gold production from its current peak. This is not a new story in the gold industry as the rate of gold mine discoveries has been declining for over three decades. The reason why following the peak gold story is important is that on top of its output repercussions at the major producers, we live in an exciting time for the gold industry.
The coronavirus has created a lot of economic uncertainty globally, which coincides with escalating tensions between the United States and China. This creates an environment that is quite bullish for gold due to unprecedented economic uncertainty.
Central Banks globally continue to print endless amounts of money in response to the coronavirus, and local economies are falling into deep recessions. Many countries are expected to post record budget deficits alongside plummeting GDP figures in the quarters to come. This puts pressure on fiat currencies with regards to devaluation, so outstanding debts become manageable. We expect negative real interest rates to persist for quite some time with Central Banks adjusting interest rates to keep this in order, which poses the threat of countries drifting into negative interest rates. We won’t go into that in this article, but it shows the type of environment we are currently navigating through.
With peak gold here and a favorable gold market emerging with regards to elevated prices, its worth mentioning a recently listed company on the Canadian Securities Exchange, which is Goldseek Resources.
Goldseek Resources Inc is a Canadian gold exploration company with a diverse portfolio of assets in Ontario and Quebec, Canada. By identifying four projects in world-class mining locations, Goldseek is poised to deliver shareholder value through rigorous exploration and development on these properties. Their mission is to find the next major discovery in the mining camps of Urban Barry, Quevillon, Hemlo, and in the Fenelon gold camp, which resides on the Detour gold belt.
The Horizon Project:
Goldseek’s Horizon gold project resides in Hemlo, Ontario and shares a 5km border with Barrick Gold:
Hemlo has produced more than 21 million ounces of gold, and Barrick has been operating continuously for more than 30 years in the area. It consists of the Williams mine—an underground and open pit operation—located about 350 kilometers east of Thunder Bay, Ontario.
Goldseek will actively explore their Horizon property, which shares a 5km border with their Barrick neighbors. The property resides in the archean greenstone belt, which hosts the world-class gold camp.
Apart from producing 21 million ounces of gold, the belt’s gold endowment is uncharacteristically low. In other Archean terranes, a greenstone belt that hosts a 20 million ounce gold endowed minerals system would normally host several additional 1 million ounce deposits and numerous smaller deposits, prospects, and showings.
This absence of other deposits is likely due in part to overlying glacial cover, which inhibits exploration. In part, there has been a lack of effective systematic exploration, which speaks to an overly model-driven focus on Hemlo-style mineralization and the arguments around the geological controls at Hemlo.
The Bonanza Project:
The Bonanza gold project is located in the Urban Barry Camp, where 7.1 million ounces of gold have been discovered to date. The company’s property covers 12,000 acres and has Melkior Resources and Osisko Mining on both sides of their property.
Interestingly, Goldseek shares a 28km border with Osisko’s great bear target (see map above for proximity), which had assay returns of up to 3.07 g/t gold, 26.2 g/t silver and 0.43% copper.
The Bonanza property has 11 TDEM anomalies that look very interesting.
The company has a 2020 work program planned for the project which includes:
“Phase I – Till and boulder sampling program
Exploration using boulder tracing and systematic till sampling down-ice from the magnetic lineament will help Goldseek to reduce the areas of interest by pointing which areas of the lineament could host mineralization. This could also find new mineralization in the greenstone belt in the northern part of the property.
Phase II – IP Survey
A local IP grid would suffice to define the different context available for drilling.
Phase III – Trenching and Drilling
By identifying the type of IP response given by the mineralized boulder found during Phase I, we will be able to specifically determine which IP anomaly to test by trenching or drilling.”
We recently caught up with Jonathan Deluce, President and Chief Executive Officer of Goldseek Resources and asked him a few questions about the remainder of 2020:
- What are the plans for the remainder of 2020? Is the company going to be aggressive at advancing its exploration projects?
“Our plans for the remainder of 2020 will provide continuous news flow for our investors as we undertake summer/fall programs on each of our four properties. We believe that each of the properties has significant potential, but now it’s time to prove it through cost-effective programs planned by our experienced technical team.”
- What made management interested in acquiring properties in the Urban Barry and Hemlo gold camp?
“A similarity in both camps is our focus to only acquire projects in top mining jurisdictions. With the current economic conditions, I believe this is only getting more important, and producing mining companies in tier 1 jurisdictions are seeing a premium to their valuations.
We believe that the Urban Barry camp will be one of Canada’s next major mining camps during this bull run. Osisko and Bonterra are developing world-class high-grade gold deposits, and the $4.7-Billion development deal announced includes powerlines out to the camp. We have a 15km conductive trend identified on the property that we look forward to exploring this summer.
The Hemlo camp has seen renewed interest by Barrick with them tasking “Barminco with turning Hemlo into Tier Two UG gold mine”. We believe this camp has a lot of potential for new discoveries, and Goldseek has three targets with strong potential.”
- What types of catalysts should investors expect to see over the remaining 6 months?
“Investors should expect continuous news (catalysts) over the next six months with work programs commencing on each of the four properties. By limiting G&A expenses and putting the vast majority of our funds raised into the ground, we can perform a lot more exploration per dollar raised compared to our peers. We will benefit alongside shareholders and not at their expense.
Our first significant catalyst will be our maiden 1,500m drill program at our Horizon (Hemlo) Project this summer, where we look forward to testing the three targets identified.”
- Goldseek also has a property in the Fenelon gold camp, what type of exploration work are you planning to do there?
“We are currently reviewing the historical data on the property to put together a summer work plan. The target of focus will be the VTEM anomaly defined in 2017 by Midland Exploration. The modeled conductor indicates that the top of the conductor is located between 50m and 500m depth. This target provides Goldseek with a near-term drill-ready target in the Fenelon Camp.
We look forward to providing our work plan in the coming weeks.”
- With 4 core assets is the company looking to add more assets in the future?
“We are always on the look-out for assets that will increase shareholder value. However, maintaining our tight share structure is of priority, so any acquisitions will be carefully assessed to ensure the capital outlay is justified.”
We would like to thank Jonathan for the update. We will be doing a follow up article at some point this quarter showcasing the company’s progression and highlighting its Fenelon project.
Goldseek Resources trades on the Canadian Securities Exchange under the symbol “GSK” with a market cap of $6.3 million with 19.9 million shares outstanding.
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