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London – July 28, 2021 -A new gold exploration in Quebec may be starting to ping radar because it keeps on hitting new mineralization and reports say it’s gone beyond gold. Mentioned in today’s commentary includes: Sociedad Química y Minera de Chile S.A. (NYSE: SQM), Freeport-McMoRan Inc. (NYSE: FCX), Gold Fields Limited (NYSE: GFI), Compañía de Minas Buenaventura S.A.A. (NYSE: BVN), Harmony Gold Mining Company Limited (NYSE: HMY).
Junior explorer Starr Peak Mining Ltd. (STE.V; STRPF) is aiming to pick up where another big gold discovery right next door by Amex Exploration left off …
The Amex discovery earned shareholders up to 7,000% returns at its height, and now we think Starr Peak is looking to do something even bigger because its maiden drill hasn’t just shown gold … It’s shown indications of a VMS (Volcanogenic Massive Sulphide) deposit with rock containing multiple base metals, including zinc, copper, silver, and gold.
This is a play with a huge past-producing mine that’s also right next door to the Amex discovery.
In our view things usually don’t line up this nicely for a junior miner, and the news flow that shows this crew hitting mineralization after mineralization indicates that we may be in for an exciting ride as a potential Quebec gold rush 2.0 kicks into gear.
We think the facts speak for themselves on this play, and here are just 5 of them that appeal to early-in investors:
Fact #1: Starr Peak Has Expanded Its Position Rapidly
On June 13, 2019, Starr Peak acquired a priority land package in northwestern Quebec, directly east of Amex Exploration Inc.’s Perron Property and proximal to the past-producing Normétal Mine.
That package consists of 53 mineral claims covering 1,420 hectares in the Abitibi Greenstone Belt of Quebec, along the Chicobi Deformation Zone.
Just a year later, Starr Peak expanded its NewMétal property by acquiring land directly east of Amex’s project and adjacent to the past-producing Normétal Mine. That package consists of 11 mineral claims over 468 hectares—bringing Starr Peak’s total land package (so far) to 64 mineral claims covering 1,888 hectares.
But expansion continued …
On August 10, 2020, Starr Peak further expanded its NewMétal property by acquiring past-producing Normétal Mine, with 10 mineral claims over 391.53 hectares, and two additional properties: Rousseau Gold Property (12 mineral claims covering 470.17 hectares) and Turgeon Lake Gold Property (2 mineral claims covering 112.91 hectares).
Fact #2: The Company reports its initial drill target identification was comprehensive
Discovered in 1925, the Normétal mine was exploited from 1929 to 1975, with a total of 10.1 million tonnes extracted at a grade of 5.12 % Zn, 2.15 % Cu, 45.25 g/t Ag, and 0.549 g/t Au (Boivin, 1988). During historical production, the main focus was on copper, while gold was treated as a secondary product.
The neighboring satellite deposit Normetmar was discovered in 1965 and a historical resource estimate was determined through drilling and bulk sampling of 306,800 tonnes at a grade of 10.94 % Zn (GM38950, 1970).
Through the compilation work, the Company has determined that many portions of both the Normétal and Normetmar systems remain open for exploration with expectations of high-grade drill intercepts based on historical results.
Starr Peak (STE.V; STRPF) conducted comprehensive initial exploration of the main bloc of the NewMétal property, including the past-producing Normétal Mine, using VTEM surveying. Additionally, high-resolution drone mag surveying covering the entire property was conducted to define gold structures and help identify drill targets.
The company also completed an in-depth review and compilation of historical exploration and mining data from past work on both NewMétal and past-producing Normétal, along with data reported from the neighboring Perron Project run by Amex Exploration.
That data identified numerous, significant exploration targets in close proximity to the historical mine and resource. It also identified gold-rich zonation sulfides within the Normétal Mine sub-surface crown pillar left in place (GM49521, 1989).
In December last year, Starr Peak received high-grade gold results from grab samples taken on a field visit carried out in September 2020. Highlight assay results sampled on Turgeon Lake shoreline returned 157, 31.8 and 9.77 g/t Au, confirming the historical grab samples at Turgeon Lake gold showing.
Fact #3: Starr Peak has a 98% hit rate on drill hole targets
As of July 2021, Starr Peak has an approximately 98% hit rate on their reported drill hole targets.
Drilling began in January 2021, with top geological consulting firm Laurentia Exploration hired to launch exploration program on NewMétal property. This is the same firm that handled Amex Exploration’s exploration right next door.
Starr Peak’s initial drilling reopened historical hole 96-30-16b, allowing a geophysical borehole electromagnetic survey (BHEM) to be performed into this deep hole. Two additional historical holes (95-30-08 and 96-30-15) were also surveyed.
Results returned three anomalies along the Normetmar downdip trend in depth. The deepest and strongest anomaly is characterized by a high conductance (1000 Siemens), which is interpreted has a thick conductor or a more conductive zone. The area of high conductance (135 x 75 metres) is untested, and the geophysical BHEM survey results provide strong confidence into the drilling targets initially highlighted.
Then, on March 2021, Starr Peak (STE.V; STRPF) brought on a second drill rig to focus on high-priority BHEM anomalies.
They released surprising results from their maiden drill (more below) in the first week of May and then even higher-grade results in July—all of which has led to a large expansion of the drilling program.
Fact #4: Starr Peak encountered evidence of a type of deposit that major miners are said to be looking for
Starr Peak’s maiden drills results exceeded our expectations.
They didn’t just show gold; they encounterd signs of a massive sulfide mineralization and a new discovery at depth. In other words, they found evidence of a VMS (Volcanogenic Massive Sulphide) deposit with rock containing multiple base metals, including zinc, copper, silver, and gold.
More precisely:
- Hole STE-21-08 returned 12.10 m of 20.94% Zn, 0.43% Cu, 39.58 g/t Ag and 0.21 g/t Au or 23.82% Zinc-Equivalent
- Hole STE-21-04 returned 12.30 m of 6.47% Zn, 0.22% Cu, 28.55 g/t Ag, and 0.11 g/t Au or 8.19% Zinc-Equivalent
Following reports of those results, on May 2021, Starr Peak increased its 5,000-meter drilling program to a 20,000-meter drilling program and brought on a third rig.
This exploration play looks to have picked up even more momentum with July 2021 results—the highest-grade results to date, with excellent highlights.
The July high-grade results extended the Deep Zone mineralized zone by at least 175 meters from a vertical depth of 680 meters to almost 850 meters. And the zone remains open in all directions.
Following the announcement of those results the company announced another drilling program expansion: from 20,000 meters to 40,000 meters.
Fact #5: Starr Peak is Fully Funded for Drilling
Starr Peak reports it’s fully funded for drilling, with CAD$7.5 million in the bank as of July 22nd, 2021. It’s easy enough to follow the announcements of private placement money:
- March 2020: closed first tranche of private placement for $450,000
- May 2020: closed final tranche of PP for $555,000
- August 2020: closed flow-through PP for $1,110,000
- November 2020: closed flow-through PP for $2,650,000
- June 2021: closed institutional flow-through PP for $3,756,000
- July 2021: closed institutional flow-through PP for $2,310,000
And as of July 2021, the stock has 39,245,144 Issued and Outstanding Shares.
This is still a quiet exploration play flying below the radar, but major miners may be watching what happens next as Starr Peak (STE.V; STRPF) digs deeper into what could be a coveted VMS deposit and works towards a potential repeat of Amex Exploration’s success—and beyond.
Resource Companies Are Booming
Sociedad Química y Minera de Chile (SQM) has seen its stock price nearly double from $30 in mid-February 2020 to its current price of $47.23. Sociedad Química y Minera, for example, signed in December a long-term supply deal with LG Energy Solution, which in turn supplies batteries to carmakers such as Tesla and GM. Under the deal, SQM will supply battery-grade lithium carbonate and lithium hydroxide to LG Energy Solution between 2021 and 2029.
Sociedad Química y Minera sees the lithium industry growing at around 20 percent per year in the long term, supported by rising EV sales and emission reduction goals from China to the United States.
While Freeport-McMoRan (FCX) is primarily known for its significant copper mining operations, the resource giant also has a fair influx of gold as well. In fact, its Grasberg mine in Indonesia holds of the world’s largest deposits of copper and gold. But that’s just scratching the surface of the miner’s global assets. Freeport-McMoRan also has extensive operations across the Americas, including mines in Arizona, Mexico and Peru.
Though its business struggled as global demand for copper took a hit, panic-buying from China has lifted prices higher in recent months – and that’s good news for Freeport-McMoRan. In addition to climbing copper prices, gold prices hit record levels, which will add even more to the mining giant’s bottom line.
Gold Fields (GFI) has catapulted itself into the global mining elite in recent years thanks to its forward-looking vision and exceptional management. Based out of Johannesburg, South Africa, Gold Fields is one of the de facto leaders in the region. With operations in South Africa, Ghana, Australia and Peru, Gold Fields is well-diversified.
In 2019, Gold Fields produced over 68 tons of the precious metal, up nearly 8% from the year before. And thanks to last year’s rally in gold prices, it produced even more, setting itself up to a great start to 2021.
It’s rare to see miners from outside of North America on the New York Stock Exchange, but Compania de Minas Buenaventura (BVN) is an exception. Listing on the NYSE in 1996, Minas Buenaventura has clawed its way up the ranks of the global mining elite. Currently valued at $3.51 billion, the mining giant is far from its all-time highs. But it’s not down for the count just yet.
Harmony Gold (HMY) is another South African miner which has exploded onto the radars of investors this year. Though it’s only the third-largest miner in the country, it has made some stellar moves in the marketplace. Domestically, it has nine underground mines in the resource-rich Witwatersrand Basin and one open-pit mine in the Kraaipan Greenstone Belt. It also has a major joint-venture with Newcrest Mining in Papua New Guinea.
In 2020, Harmony raised a whopping $200 million to partially fund a key acquisition of AngloGold’s assets in its home country. The deal is expected to more-than-triple its gold production to as much as 1.8 million ounces per year.
By. Charles Kennedy
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Forward-Looking Statements
This publication contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this publication include that prices for gold, silver, copper, zinc and other base metals will retain their value in future as currently expected, or could continue to increase due to global demand and political reasons; that Starr Peak can fulfill all its obligations to acquire its Quebec properties; that Starr Peak’s property can continue to achieve drilling and mining success for gold and other metals; that historical geological information and estimations will prove to be accurate or at least very indicative; that high-grade targets exist; that Starr Peak will be able to carry out its business plans, including future exploration and drilling programs; that the preliminary drilling results will be confirmed as further exploration continues; that the lab results from Starr Peak’s initial exploration program will confirm evidence of a significant VMS deposit; that Starr Peak’s exploration results will gain the attention and interest of larger mining companies and investors; that Starr Peak’s exploration results will continue to show promising results justifying ongoing exploration and possible development efforts. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that politics don’t have nearly the strong effect on gold and other base metal prices as expected; that demand for base metals may not continue to increase; that the Company may not complete all its announced mineral property purchases for various reasons; that the Company may not be able to finance its intended drilling and exploration programs; Starr Peak may not raise sufficient funds to carry out its business plans; that geological interpretations and technological results based on current data may change with more detailed information or testing; that the lab results from Starr Peak’s initial exploration program may not support evidence of a significant VMS deposit; that the preliminary drilling results may not be confirmed during further exploration efforts; that Starr Peak will fail to gain the attention and interest of other mining companies and investors; that Starr Peak’s exploration results may fail to find additional promising results justifying ongoing exploration and/or development efforts; and despite promising results from drilling and exploration, there may be no commercially viable minerals or ore on Starr Peak’s property. The forward-looking information contained herein is given as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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