Saturday, October 23, 2010

The Next Big Gold Rush!!!!

The Shining Tree Mining District

The Shining Tree Mining District is a relatively new mining district that was opened up to exploration after a 20 year ban in 1996. Shining Tree lies between the Timmins and Sudburyregions of Ontario and is located along the westernmost extension of the Larder Lake-Cadillac Fault that plays host to world class deposits such as Malartic in Quebec and Kirkland Lake Gold in Ontario.

Gold was first discovered in the area in 1911 and led to massive gold rush to Shining Tree, the likes that North America hadn’t seen since the 1896 Klondike rush and the California 49’ers. By 1933, Shining Tree had 3 mines in operation and Shining Tree’s largest mine, The Rhonda Mine opened in 1939 with $6M invested. Most of the mines were shut down in 1942 due to the war and were never reopened. Today Shining Tree is mostly supported by tourism and forestry products.

Shining Tree Mining District was opened up to exploration in 1996 after 20 years of inactivity due to the Temagami Land Caution. This land caution was a 2 decade old land dispute between local native bands and the government. The ban had prevented systematic exploration in the area since 1976 which meant that Shining Tree missed the gold exploration booms in late 70’s on through to 90’s. The area has potential to host Kirkland Lake and Timmins Porcupine West type deposits.

Shining tree has such a rich history of vastly underexplored gold potential that when it was opened up to staking, more than 600 prospectors raced to stake land. On the day the government opened it up to exploration mining companies used every advantage they could, including recruiting local Timmins high school track athletes to run and stake claims and ferrying runners by boat and whatever means necessary to get the most prospective land available.

Shining Tree still remains vastly underexplored as excitement for gold waned into the late 90’s and early 00's until the last 5 years. It doesn’t mean companies haven’t been doing work over that time, but little money was spent on systematically exploring the area, paying attention to only the most prospective targets and being frugal on exploration dollars. Until last year, no one had heard of Shining Tree, but that all changed with Creso’s discovery on Minto.

Creso Exploration’s discovery is still relatively unkown, but over the last 5 months since Creso has been public, excitement has been growing in leaps and bounds and I believe that there is widespread gold throughout the district. Besides Creso’s high grade discovery, a major gold bearing shear zone lies across the extent of Goldeye’s property that extends east onto Creso’s Indian Lake option onto Temex’s 1.2M oz Juby deposit grading 1.25 g/t au and beyond.

When investing in a new area that could potentially spark a massive exploration rush… ALWAYS BUY THE DISCOVERY! That doesn’t mean others won’t find gold and that there won’t be an investing or trading opportunity with other explorers in the area, but it is always wise to stick with what drew you to the area. For me, it wasn’t Temex or Goldeye. It is Creso, on top of that, no other company’s results compare with CXT. I have watched enough discoveries to know to stick with the discovery until fairly valued or one knows the extent of the gold mineralization and then look to invest in the surrounding juniors. Many companies have just started new drill programs to capitalize on the interest generated by Creso’s discovery and are drilling right now including Platinex who is drilling 11,500 meters, Mineral Mountain who is drilling their 60% jv with Golden Harp and Goldeye and Temex are drilling close to Creso’s Minto border so any gold results from these holes will make Minto that much more prospective. Prominerals is another that will be drilling shortly, although they do not have a large land position to the others, although that doesn't mean they won't find gold.

Creso’s recent discovery of an entirely new high grade gold zone below the existing zone capped off a huge rally in Creso from .28 cent low in July to a high of a $1 in August. Creso intersected 82.5 meters grading 13.3 g/t in a hole that they extended at depth. This represents a very rich zone starting at 500 meters of depth on top of 65.7 m grading 18.2 g/t and 79.6 meters grading 4.61 g/t au between surface and 200 meters. This may not be it for hole #1 either as they drilled to 900+ meters at depth and are awaiting assays of the rest of the hole. Creso also reported recently that they hit 280 meters of mineralization in the 3rd hole of the project that targeted the new discovery at depth. 280 meters is a very extensive interval, even if it doesn’t represent the true width, the continuity of this zone will suggest that this deposit is much bigger than originally thought. Much, much bigger. When assays come back from this hole, Creso will be trading much higher than current price.

Gold is associated with pyrite at Minto and Creso announced the interval averaged between 1% and 2% pyrite so I would expect at least a 5 g/t average over the entire interval length. They also announced that they have intervals as high as 10% pyrite which would indicate some sections of bonanza gold within the interval. I am expecting good things from CXT and when the result hits the market... all the gold explorer investors are going to be comparing the interval to ARU. Could there be 14M oz's at Minto? I really have no clue because they keep needing to extend the deposit as well is define the irregular shape. What matters is that they keep hitting gold on Minto and keep growing the deposit in leaps and bounds. What is interesting is that Temex and Goldeye are drilling a jv property just metres away from the Creso property boundary. So you guys need to watch this drilling area to give hints as to the extent of the mineralization surrounding Minto. If Goldeye and Temex hit economical intervals on their side of Minto... It will be off to the races for all 3 companies and most likely will end up merging if there are multiple million ounce deposits in the area. Another clue that these guys are going to come up with the goods this winter and not just Creso... Is that some of these companies are already implementing shareholders rights plans to protect themselves from hostile takeovers.

I am telling you, Shining Tree is the next big thing in Ontario. It has the potential to be a large scale gold camp similar to other gold camps in the Timmins area. Obviously a lot of drilling needs to be done between now and then to prove up several multi-million oz deposits... But creso is on track for the first big discovery in Shining Tree since the gold rushes of the 1920's and 30's.

These are the companies in Shining Tree that I think are worth a look...

Goldeye Exploration GGY
Creso Exploration CXT
Temex TME
ProMinerals PRM
Golden Harp Resources GHR
Mineral Mountain Resources MMR
Benton Resources BTC
Platinex PTX

Below is a map of the Minto area... (They just might have to move the highway.)

Mintoandsurroundignarea.jpg picture by WesternRookie

Christopher Skidmore

aka WesternRookie

Friday, October 8, 2010

Gold Exploration Dollars Focusing on Ontario in a Big Way

If you haven't been able to guess it yet, my exploration theme has moved to Ontario. Yukon White Gold was a success again this summer, but like I have been saying for weeks, the northern stocks, especially the Yukon stocks which have made incredible runs this summer are overvalued and going into a slow season as the last results of the season trickle in. Yukon explorers need to be seriously looked at again starting late winter. ATC, NTR, and KAM have all made huge gains on discovery this year and the latest results that come in should be seen as a profit opportunity.

So I always say follow the money!!! And the money is going into Ontario exploration in a serious way this coming winter.

The LSG discovery has certainly heated up exploration in the Timmins region, but also across the whole province. On a daily basis I see drill programs announced and accelerated, it started with LSG, but now gold fever has spread across the province. Any company announcing a 10,000 meter drill program or better is worth taking a look at as that's a lot of exploration dollars going into a project.

After researching hard over the last month for new projects I have found some very prospective high quality plays. It is clear that a lot of the money is going into Ontario which is a safe place to park the speculative capital. There are several exciting regions that are going on.

1) The emerging
Rainy River Gold Camp with latest results continuing to impress from RR and BYV. I have posted about these 2 since they announced their concurrent drill programs. Rainy River has 5M oz’s and growing and Bayfield hit very high grade results extending the ODM zone well onto Bayfield’s property. BYV.V will be taken out. It is clear that Rainy River has well over 5 million oz’s and the hole area is rich in gold.

If there is one micro cap explorer in the area, the play has to be Soldi Ventures (SOV) they have staked claims on either side of Rainy River as well as along a fault nwn of the Cameron Lake Deposit. I wouldn’t play Soldi as a takeout by RR, but more as a grassroots discovery in what I see as an emerging gold camp that will host another major discovery.

The Shining Tree District where Creso’s (CXT) discovery is starting to attract serious attention. I am a firn believer that his is another emerging gold camp in Ontario. There are has received little exploration as it was only opened up to staking opportunities in 1996. The area has received little modern day exploration, but over the past 2 years initial results point to a major discovery in the area.

Creso is well on track to a major high grade discovery with this lower zone which is still open and a 280 meter mineralized interval, are going to start to create a stir if they continue successful drilling. If they continue to do well it bodes well for the whole area as there are several extremely cheap companies that could be sitting on land as rich as Minto.

There are several micro caps drilling right now, Platinex (PTX) $4M capex, Goldeye (GGY) $20M capex, Pro Minerals (PRM) $3M just finished doing groundwork and drilling has been recommended.

Mineral Mountain (MMV) announced that they are drilling their 60% interest Shining Tree property with Golden Harp Resources (GHR). If Nelson Baker is in the area sniffing around, you know the whole area must show promise. I am sure success of any of these explorers will drive interest $$$ in the area, but if Creso defines a significant high grade zone which it looks like they are doing. All of these explorers will run as exploration dollars rushes into the area trying to catch the next big thing.

) Hemlo... Hemlo is running out of gold and the search is on for the next +20M oz deposit... If there is another... Hart Gold (HRT) is on to what I think is a serious find at their Sugar Property 60km east of Hemlo with the latest samples continuing to validate their ip theory. Samples have ranged up to 82 g/t and the ip map is displaying a very large gold zone. With all trenches so far returning high grade assays in disseminated style of mineralization, it gives credence to their theory and could be on to something big on the Sugar Zone property. On top of this large and intense zone, The Sugar Property has gold showings over the entire property.

They are so excited about the project to date with the new ip survey and trench results, they are drilling next week starting with 1500 meters on the first 2 trenches. They are clearing multiple sites to drill test the extent of the mineralization.

Jiminex (JIM) is drilling their 50% optioned property from Beaufield (BFD) 15km west of Hemlo on the theory that Hemlo style mineralization exists at depth. A clue to if they do hit this coming winter is if they announce that they hit disseminated sulphides in drill cores. It doesn’t mean there will be gold in the cores but it will indicate that Hemlo style mineralization is there. This property has seen very little drilling below 500 meters where 90% of Hemlo's mineralization is. Teck has a property 2.5 km to the sw that has had impressive shallow results. Teck's mineralization to the west is shallow which would model after Hemlo as the mineralization modeled after Hemlo would be shallower to the west. Jim is a long shot here, finding 2 deposits that are identical in the way they were deposited is a long shot, but being so close to Hemlo in the same belt, it could happen. There are others what you might consider twin deposits in the world.

Red Lake continues to be a hot bed of exploration and Gold Canyon (GCU) is situated on some very nice assets. Since the exploration model changed from high grade to low grade, they are discovering huge potential on the Springpole property. They have increased the depth of the deposit from 160 meters to 375 meters and is open at depth and to the west. Currently drilling indicates in excess of 2M ounces with 6km of prospective rocks to follow to the south. Springpole’s Portage Zone is turning into a massive low grade deposit. With GCU stepping out this winter, it could be a very exciting winter as they add more ounces to Springpole.

5) The Pickle Lake Region is heating up as PC Gold (PKL) advances Pickle Crow and continue to discover new veins. Pickle Crow is in the UCHI Gold Belt that is famous for hosting major deposits such as Red Lake and Rice Lake. PKL looks like a great buy at current levels. If there is another Red Lake or Rice Lake type deposit close to being found, Pickle Lake has the best chance, and others are seeing this as properties get snapped up and exploration programs get announced surrounding PKL's Pickle Crow Mine. At under $1 today... PKL is a no brainer. Technically it has broken out of a flag consolidation pattern and looks ripe for a run. The latest high grade results are very encouraging. JIM is also drilling in this area as well. Still a long shot.

6) Then there is
The Timmins and Sudbury regions within the prolific Abitibi Greenstone Belt. Explorers like Explor Resources(EXS) in the Destor Porcupine Region and Northern Gold Mining (NGM) in the same prolific belt with their Garrison property are showing real promise. EXS is drilling deep for LSG type mineralization and NGM is expanding a wide low grade zone at the Garrison property and has now broken out over the 200MA, so has lots of room to run this winter to previous highs of well over $1. In these conditions a company breaking out over the 200MA is a great place to buy. With 10,000 meters of drilling, lots of anticipation for EXS as they have the premiere land package next to LSG. (PX) Pelangio has a nice property 250 meters from Thunder Creek and is obviously going to be apart of Thunder Creek deposit one day. I have written up PX for their Ghana discovery that looks potentially massive in scale, this little property, just makes Pelangio a sweetener. If Pelangio continues to discover gold in Ghana, PX may be potential takeout target… only if LSG wants to go international though.

Another in the area that looks great is VG. This is a McEwen company and looks to be consolidating the area outside of Goldcorp’s Dome Mine. VG is coming out with an initial resource estimate for Paymaster and with latest results looks very promising. The next company on VG’s list might be Plato Gold (PGC), as they have strategic claims surrounding G and SAS in the east side of the region. A Lexam director joined the Plato board and with a tiny $5M capex, could really move this winter. Saint Andrew’s Gold Fields (SAS) is a near term producer, don’t let the limited reserves fool you as this area is rich in gold with plenty more to be discovered

The NGM Garrison Property is a Teck castoff because of a limited high grade resource. The low grade resource is open to the east along strike for an undetermined distance. It is also open at depth as well, but NGM is concentrating on discovering the extent of the near surface mineralization to the east to fast track a possible open pit mine. After a nice consolidation below .40... NGM could be a sleeper pick. 1M oz's and growing with a capex of $20M looks like great value for potential. Even after such a large spike. NGM remains a buy on weakness. The results of the ongoing drill program are just too good to ignore.

) The Beardmore Geraldton Gold Camp is starting to see renewed interest with Premiere Gold’s (PG) discovery, recent results of 5.49 g/t over 53 meters at Hardrock are very encouraging. Hardrock has a historical resource of 1.735M oz. Goldstone Resources (GRC) has a 30% interest in this project and has been hitting results at Key Lake and looks like a great way to get exposure to Hardrock project.

Kodiak Exploration (KXL) has been getting some interesting results as well. Compiled with the recent discovery near Hardrock that is open to the west towards Hardrock make the whole area in prospective. KXL.V looks like a good buy at current levels for a run. Kodiak has a huge land position in the area and has been hitting gold this summer on their other projects. If PG continues to develop the old Hardrock mine into a world class deposit. KXL and GRC both will do well this winter. KXL recently drilled 24.9 m @ 9.31 g/t au at West Geraldton and and 35m @ 2.21 g/t au at milestone. Kodiak also has acquired the grade 1.6M oz Migno Mine in Wawa. Total inventory of 1.83M oz’s.

Both really look ripe for a run next week as PG continues to breakout.

Like I have been saying for the last 2 weeks now, gold being at $1300 is a psychological level for these low grade projects and at current costs, the market will on mass start re-evaluating these low grade properties. At current gold levels, these junior explorers will rise now matter what POG does in the short term. It’s just that time of year and gold clearly above $1250 makes pretty much everything look profitable. I have a good mix of high grade opportunity as well low grade development projects. The low grade projects were much ignored in the past but have great potential to be very large gold deposits.

The Osisko model at Malartic works, and now the smaller low grade projects are coming into vogue. Real opportunity for discovery and growth lies with these properties because they were not extensively explored because of the low grade nature.

When looking for growth or discovery, you now have to go to these low grade deposits, find old mines or find areas that have very little outcropping and lots of overburden, but show potential. Less and less discovery is happening all over the world, so the best chance is where explorers ignored before because traditional methods could not be used or mining was just not economical at a lower price. Not saying gold in soil anomalies or gold in till anomaly exploration is new... but is much more intensive work to define and explore for than chipping a sample out of an exposed rock.

Areas that have heavy overburden that have seen little exploration within prospective mineral belts offer the best chance at a major grassroots discovery.

Another popular method of growth is to develop old mines and the resources. Especially the explorers in Ontario drilling old mines 1000 to 2000 meters deep following the LSG pattern for success by drilling deep.

I hope you see that Ontario is the place to be for gold exploration and development projects this winter.

Lithium Producer IPO Takes Market By Silent Storm

Talison Lithium – TLH.TO

IPO @ $3.50
Oct. 7/10 SP - $4.93
Fully diluted – 102M shares
Capex - $502 million

Subscribers were alerted to Talison Oct. 7th 2010... Up 10% since Thursday alert.

Talison Lithium IPO took the market by silent storm over the last 2 weeks trading just above the IPO mark of $3.50, but after releasing strong year-end production results on Tuesday, the market has taken TLH to $4.93, a $1.15 run since Tuesday. Will things cool off for TLH or are they just heating up? Considering TLH hasn’t traded over 500k volume and is moving up, I would suggest that the market hasn’t caught wind of TLH. Being the world’s largest pure play lithium producer, TLH is certainly going to be the focus of a lot of funds as many see a perfect storm brewing in lithium.

With the electric car just around the corner, lithium is a commodity that will be in rising demand going forward. Lithium powers everything that we find necessary today such as the majority of our electronics including mobile phones and computers. It is definitely a commodity that will continue to see rising consumer demand, and if the electric car does indeed become mainstream and affordable to the general public, it will certainly put in place the perfect storm for a dramatic rise in lithium prices.

What is the best way to profit from this coming wave of increasing demand for lithium? By taking advantage of a cheap IPO and getting into the biggest pure lithium producer on the planet…!!!!

Peter Oliver, CEO of Talison says…“I can see the lithium market doubling, tripling, quadrupling, I guess the biggest issue is timing… and I don’t think anyone can predict that”

Well I think I can… Just look at how many electric cars are being produced, the rate of increase, and of course, planned production. Currently, electric vehicles only drive a negligible portion of the lithium industry, but that is seen to change soon as countries like China lead the charge in pushing towards alternative energy vehicles. China’s demand for lithium increased by 10% last year while the rest of the world’s fell off. Once you add North American and European demand to increasing popularity in electric vehicles, you will have your perfect storm as demand will then outpace supply.

  • Biggest pure lithium producer in the world
  • Produced about a third of the world’s Lithium last year
  • Goldman Sachs owns 13%
  • Fully financed for 50% capacity upgrade
  • Largest supplier to China
  • Well financed, raised $40M in a recent ipo
  • Bought Salares to get control of highly prospective early stage brine project in Chile where it plans to accelerate exploration and development
  • Increasing production at Greenbrushes 20% by early 2011 – 49,000 tonnes of LCE 2011 to support Chinese demand
  • At current production rates, Greenbushes have 138 years worth of resources and reserves

Talison is cheap with a very low capex for producing 25% of the world’s Lithium and planning on increasing capacity by 50% at Greenbushes and fast tracking a brine operation in South America. TLH is well positioned to take advantage of this brewing perfect storm. Of course, it will only happen if and when electric car production goes mainstream.