There is more news coming out of the emerging gold district in northern Saskatchewan’s Trans-Hudson Corridor. Earlier this week, we reported on the merger of SSR Mining Inc
(US:SSRM / CAN:SSRM) and Alacer Gold Corp
(CAN:ASR / US:ASRPF).
SSR Mining is owner/operator of the lucrative, multi-million ounce Seabee Gold Mining Complex. Seabee is a high grade/high margin gold mining operation in the Glennie Domain of the Trans-Hudson Corridor.
Seabee produces ~120,000 ounces of gold per year, at a cash cost of roughly US$385 per ounce. Recent head grades at the Seabee Mill have been above 10 g/t ton.
There is also news this week from SKRR Exploration Inc
(CAN:SKRR). SKRR has a growing portfolio of gold properties in northern Saskatchewan. Most of its landholdings are in the same region as the Seabee Property.
This includes an option agreement to acquire the Irving Gold Property from Edge Geological Consulting. The Irving Property is a collection of gold claims directly to the southwest of SSR Mining’s Seabee Complex.
Originally, this comprised 10 mining claims, spread across 6,457.14 hectares. Now (via staking) 5 additional claims have been added, encompassing an additional 6,362.9 hectares.
A regional map sheds more light.
The Irving Property is closely intertwined with the Fisher Property of Taiga Gold Corp
(CAN:TGC / US:TGCDF). However, SSR Mining holds an option to acquire up to an 80% interest in the Fisher Property.
SSR’s subsidiary for this JV just announced new exploration results.
- 13.74 g/t gold over 2.29 meters*
- 12.13 g/t gold over 1.5 meters*
- 9.1 g/t gold over 1.92 meters*
(* Intervals estimated to be 70 – 90% of true width)
SSR Mining has already completed most of its earn-in requirements. This means that the Fisher Property could very soon be (majority) owned by SSR Mining.
This brings us back to SSR Mining’s recently announced merger. One of the primary drivers of this merger is increased balance sheet strength. The new entity will have ~US$700 million in cash and marketable securities.
The management of both SSR Mining and Alacer Gold were very bullish about the exploration upside of the combined entity, including its potential for “organic growth”.
A presentation centering on the merger
specifically referenced “Seabee Mineral Resource extensions and Fisher project targets”. The presentation noted that this geology was “highly prospective for greenfield and brownfield discoveries”
This leads back to SKRR.
Any discoveries made on either the Fisher Property or the Irving Property will increase the value of the Irving Property – and SKRR.
Mining activities generally eat up a lot of space. If a significant mineral deposit were to be put into commercial production from the Fisher Property, it may be difficult to do so without acquiring control of the Irving Property.
The new SSR Mining will be a $4 billion intermediate gold producer, with Seabee only a small minority of its overall operations.
SKRR is a junior gold exploration company with a current market cap below CAD$5 million, 1/1,000th the size of SSR Mining. This means it provides more leverage potential with respect to discoveries in this emerging gold district.
Slightly further to the southwest of the Seabee Property (approximately 75 km) is SKRR’s flagship project, the Olson Gold Property
While still early-stage exploration, the Olson Property has actually yielded drilling intercepts similar to the Fisher Property. This is despite much greater exploration expenditures – and drilling – on the Fisher Property (over CAD$10 million by SSR Mining alone).
Any gold discoveries made on the Olson Property would naturally draw a lot of general interest in the mining world. It would be of particular interest to SSR Mining, which has already expressed a strong intention for further gold resource development (or acquisition) in this region.
The gold sector has already been heating up.
Gold exploration in the Saskatchewan portion of the Trans-Hudson Corridor was already heating up.
Now SKRR Exploration has added to its Saskatchewan gold properties. And at precisely the same time, SKRR’s much larger (and very active) neighbor suddenly has much deeper pockets to fund both future project development as well as acquisitions.
DISCLOSURE: SKRR Exploration is a client of Dynamic Wealth Research.