There is an old adage in mining: the best place to look for a new mineral resource is next to an existing mine.
The logic is elementary. Finding a new mineral resource is generally a needle-in-a-haystack proposition. But once a commercial resource has been found and developed there is a strong possibility of discovering additional resources associated with that geological formation.
This strategy doesn’t only apply to existing mining operations. There are also many exciting mining exploration opportunities associated with historical mining operations.
Just look at Eskay Creek – now owned and operated by Skeena Resources (NYSE:SKE).
Skeena Resources began consolidating historical land packages in British Columbia’s famed Golden Triangle. Among those land packages was the Snip Project and the Eskay Creek Project. SKE has become the third-largest landholder in this prolific mining district.
Historically, Eskay Creek produced 3.3 million ounces of gold and 160 million ounces of silver at average grades of 45 g/t gold and 2,224 g/t silver from 1994 -2008.
Skeena began re-exploring Eskay Creek in 2018. Since then, Skeena has discovered/proved an additional pit-constrained resource at Eskay Creek of 4.6 million ounces AuEq.
This new discovery helped to make SKE a ten-bagger between 2018 and 2021.
Where can investors find a potentially similar high-grade gold consolidation opportunity? New Zealand.
Rua Gold consolidates historic high-grade gold district
Dynamic Wealth Research readers are
already familiar with
Rua Gold Inc. (CAN:RUA / US:NZAUF).
Rua Gold is a junior gold exploration company with two high-grade gold land packages in New Zealand: the
Reefton Goldfield Project and the
Glamorgan Project.
The Glamorgan Project is located on the North Island. It is an early-stage exploration project (staked out by Simon Henderson), which demonstrates a very similar geological footprint to the
10+ million ounce Waihi Gold Mine owned/operated by OceanaGold Corp (CAN:OGC).
More advanced is Rua Gold’s other flagship gold project: Reefton Goldfield, on the South Island.
The Reefton Goldfield Project is situated in the historical Reefton Goldfields District. This was the location of (first) a major gold rush in the 1860s and (second) many very high-grade gold mining operations that sprang up in the 1870s.
The Reefton Goldfield Project already encompasses several high-grade and even bonanza-grade historical gold mining operations.
On
July 15, 2024;
Rua Gold announced the acquisition of the Reefton assets of ASX-listed Siren Gold. Transaction highlights include:
- Triples Rua’s Reefton Goldfields holdings from 34,000 hectares to ~120,000 hectares, in one of the least explored high-grade gold districts in the world
- Majority of these land packages are fully permitted for exploration, with drill rigs currently already on site
- Acquisition consolidates all previous historical gold mining operations in the Reefton Goldfields district with the exception of the Blackwater and Globe Progress mines
CEO Robert Eckford framed the Big Picture here for investors.
“These are the orogenic type districts that have been know to be company makers. Fosterville made Kirkland what it was, Red Lake was the backbone of Goldcorp, and NFG and SXG have had market caps ranging between $500m and $1b pre resource.
By doing this consolidation we become the major district land holders in this under-developed, under-explored region, and finally the camp is active with our neighbour already sourcing $200+ million investment from Aus Super for a land package that is >5% the size of ours!”
What is the exploration potential of this consolidation strategy, in this particular orogenic gold geology? We
previously offered investors an answer to that question: Southern Cross Gold (ASX:SXG).
The same Lachlan Orogen geological formation that encompasses the Reefton Goldfields extends (below the sea) into eastern Australia.
Multi-million ounce, high-grade gold potential
The world-famous
Fosterville Gold Mine (now owned by Agnico Eagle) is the best-known example of this geology: a multi-million ounce deposit with gold grades that exceed 20 g/t Au.
More recently, Southern Cross began exploring some of these same historical orogenic gold workings – at depth – and this is what it uncovered:
- 455.3 meters @ 7.2 g/t Au
- 404.4 meters @ 5.1 g/t Au
- 331.5 meters @ 6.8 g/t Au
Jaw-dropping intercepts of high-grade gold, all at depths below 400 meters. Southern Cross hasn’t yet proven a multi-million ounce gold resource, but experienced mining investors will be very optimistic based upon these numbers.
Rua’s Reefton Goldfield Project already hosted several of these at-depth, high-grade gold opportunities. The Company’s recent acquisition has added additional prospects.
Seven high-grade historical gold mining operations with gold mineralization open or unknown at depth. Any one of these could be another Southern Cross.
Investors may start to get some answers here soon.
Rua Gold is presently conducting a three-phase, 2,500-meter drill program at Reefton.
This helps to give investors a better idea of the investment potential of Rua Gold Inc. Dynamic Wealth Research has previously laid out some guidance on the current value of these highly prospective gold exploration properties.
Federation Mining acquired the (previously mentioned) Blackwater property for $30 million. Blackwater does have an existing 700,000 ounce gold resource – which Federation is looking to put into production.
However, the grades on the Blackwater property are much lower than the grades of all of the historical gold operations that Rua Gold now holds as part of its Reefton Goldfield Project.
Is ‘a bird in the hand worth two in the bush’? Maybe. Is a “bird in the hand” worth seven in the bush? Maybe not.
Rua Gold’s overall land package for its Reefton Goldfields Project has now been increased by nearly a factor of four. And we haven’t even begun to discuss the
blue-sky potential of the Company’s Glamorgan Project on the North Island.
Yet, even with the price of gold once again powering above $2,400/oz, Rua Gold’s entire market cap is only $31 million.
Some mining investors may be tempted to chase further gains with Skeena Resources or Southern Cross Gold – each of which has already produced a ten-bagger.
For investors seeking a
ground-floor, high-grade gold exploration opportunity in one of the world’s least-explored high-grade gold jurisdictions, Rua Gold offers a stellar value proposition.
Ruagold.com
Rua Gold corporate presentation
DISCLOSURE: Rua Gold Inc. is a client of Dynamic Wealth Research.
