The Fraser Institute Says Saskatchewan is #3 in World
The issue of Resource Nationalism is getting more attention lately. With all the chaos in the world, I highly advise investors consider just where their money will be the safest and provide the best return. According to the Fraser Institute of Canada, Saskatchewan rates number three highest for investment in the world.
Governments range from utterly stupid to semi-sane and back. For most of the 20th Century Saskatchewan watched as the rest of Canada developed their gold resource riches. A change of government in the province took place in 2007 with the Saskatchewan Party taking over. Supportive of gold mining exploration and development the province provides a 25% rebate for drilling expenses. Still, the province only has a single operating gold mine, that of the Seabee Gold Mine owned and operated by SSR Mining.
Saskatchewan hosts the bulk of what is called the Trans Hudson Corridor. It is a greenstone belt similar to that of the Abitibi in Quebec with perhaps only one percent of the gold exploration spent compared to that of Eastern Canada. The THC begins south of the Canadian/US border and runs through the Dakotas. The Homestake Mine in South Dakota was part of the THC and produced just under 44 million ounces of gold and 9 million ounces of silver during its 122 years of production.
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I’m going to go into a short description of four different junior gold exploration companies with projects in Saskatchewan with one common denominator, Ron Netolitzky. Ron was winner of the Bill Dennis Prospector of the year for 1990 and inducted into the Canadian Mining Hall of Fame in 2015. He began his career in Saskatchewan with encyclopedic knowledge of the province and the minerals there. He was instrumental in the discovery of both the Snip Mine and Eskay Creek mine among others. He is “Mister Big” in Saskatchewan and associated in one way or another with all these companies.
Each of these companies has a variety of properties in Saskatchewan so I am going to put in a map showing who owns what and where each is located.
The first company I want to talk about is Taiga Gold (TGC-V) with a 20% interest in the Fisher Gold property with SSR Mining owning the other 80%. I wrote a detailed piece about Taiga about six weeks ago. You should go read it. Taiga has received a $3 million payment from SSR to complete their 80% earn in at Fisher and just completed a $2.5 million private placement. Taiga will be drilling the Fisher project with SSR this year to add ounces but will also be drilling the Orchid property and conducting exploration at Mari Lake and the SAM property during the summer of 2021. I should point out here that the province has an advantage over all of the other Canadian provinces in that exploration and drilling can take place twelve months a year. That is a great advantage on top of the 25% refund for drilling expenses from the province.
As of now, TGC has $5.5 million in the till with about 106 million shares. At today’s price for the stock, that gives them a total market cap of around $18.5 million Canadian and an enterprise valuation of about $13 million. One day SSR is going to make an offer for the remainder of the Fisher property. SSR has already invested more in the 80% they now own than the deal called for so it is pretty much a given that SSR will belly up to the bar and buy the remaining 20%. If TGC will advance any of their other projects in a significant way, it puts them in the driver’s seat. There is no reason to believe SSR can or will try to steal the 20% remaining for total control of Fisher. The only question is how much they will pay. All the drilling simply adds value to TGC’s 20% interest.
Eagle Plains (EPL-V) is a prospect generator. They find and stake attractive properties and in a booming market for junior resource companies they do deals with a combination of cash and shares. Ron Netolitzky was a director of Eagle Plains for many years and still sits on the advisory board. Most of the projects I am talking about were generated as a result of his many years of experience in Saskatchewan. The company controls literally dozens of properties in BC, the Yukon, and Saskatchewan.
Eagle Plains has 99.8 million shares outstanding with $4.8 million in the bank giving them a current market cap of $17 million and an enterprise value of $12 million. The company also holds $3.3 million in liquid shares.
SKRR (SKRR-V) has a flagship gold project with 100% ownership named the Manson Bay property with a historic non-43-101 resource of 72,000 ounces of gold from sixty-eight drill holes completed so far with interceptions of up to 10.03 meters of 15.39 g/t Au. Initial drilling at the Olson project show 39.8 meters of 1.09 g/t Au including 7.62 meters of 3.44 g/t Au and 1.53 meters of 13.80 g/t Au.
SKRR has an option from Eagle Plains to earn up to 75% of Olson. The company recently completed a short 1675-meter drill program with assays just released showing some nice intercepts with nine out of twelve holes showing significant mineralization.
SKRR is especially cheap with about $3 million in cash and a market cap of $9.4 million and an enterprise value of $6.4 million. They are generating nice results. Sooner or later the market is going to get it.
MAS Gold is our final entry with four 100% owned projects and a slew of former producing mines on their properties. Their Greywacke North project has an existing 43-101 from 2016 showing about 100,000 ounces of 7.5-10 g/t Au. Their 2021 winter drill program at Greywacke of just under 3,000 meters in fifteen holes showed results of 7.36 g/t Au over 9.9 meters and 3.79 g/t Au over 5.53 meters and 1.39 g/t Au over 10.12 meters at Greywacke North. In the Greywacke South zone they showed 3.8 g/t Au over 8.16 meters and 5.7 g/t Au over 2 meters and 10.87 g/t gold over 1 meter.
MAS Gold completed ten holes at their 100% owned North Lake deposit with three holes just released with excellent numbers. Hole 52 showed 0.927 grams gold over a 122.5-meter intercept. Hole 53 had 1.093 g/t Au over 30.7-meters and hole 54 generated 1.249 g/t Au over 117.2-meters. Ron Netolitzky is the Chairman of MAS Gold. He pointed out that hole 54 showed the highest gram/meter intercept drilled on the property to date.
As of the end of 2020, MAS Gold showed about $2 million net in cash but has probably spent about half of that. That would give them a $12 million market cap and an enterprise value of about $11 million. I would expect them to be looking to cash up soon in advance of a busy summer program. The company plans to work on a PEA on both Greywacke and Preview North. The share price has been held back due to an ongoing legal dispute with a former joint venture partner but after binding arbitration the court ruled they own 100% of Greywacke and Preview North projects.
These four companies are all pretty cheap in my view. I own shares in all of them except MAS. When a gold market bull period starts, it is pretty much limited to the majors and as time passes and the price of gold goes up, the interest goes down the food chain to the tiny juniors. When the Bitcon and Dogecon fools discover gold juniors you want to have your seat belt fastened. They will rocket higher.
All four of these companies are advertisers so naturally I am biased. Do your own due diligence.
Taiga Gold Corp
MAS Gold Corp