Is It Time to Invest in Gold Exploration?
Sep 12, 2023
Sep 12, 2023
In September 2018, gold prices hovered around $1,200/ounce. Five years later, gold prices are in the neighborhood of $1,940/ounce. This represents an approximate 62% increase, pointing the way to opportunities to capitalize on the trend. An investor could buy gold itself and look to profit that way. One could also look at public companies with emerging mining projects that benefit from the economics of rising gold prices. These companies can be a riskier bet but can also provide greater returns should the project advance or be acquired by a major company looking to develop proven resources.
There are a few characteristics to look for in a mining exploration project that may help to de-risk the investment to some extent. Location in a productive geologic zone and in a mining-friendly jurisdiction is one. Having accessible, existing infrastructure (power, roads, etc.) nearby is another. Having a team with the experience to develop a project is also helpful.
Stallion Discoveries Corp. (TSX-V: STUD) (OTCQB: STLNF) is an interesting exploration company that is checking all of these boxes and more. Stallion is mineral-agnostic in its approach, with gold, antimony, and uranium all in its mix of promising properties. Today we’ll focus on its largest and most immediate gold project, the Richmond Mountain property in Nevada.
Stallion Discoveries’ CEO Drew Zimmerman discusses the company’s Richmond Mountain Project in Nevada's prolific Battle Mountain/Eureka Trend.
Location, Jurisdiction, Infrastructure
As mentioned in the interview segment above, the Richmond Mountain project is located just across the road from the Ruby Hill mine recently acquired by i-80 Gold Corp. Situated just outside the town of Eureka, Nevada, the properties sit at the southern end of the prolific Battle Mountain-Eureka Trend. Richmond Mountain displays very similar geology to the adjacent Ruby Hill property. Both feature areas where various alluvial and volcanic rocks have covered deeper poly-metallic formations, including gold, silver, lead, and zinc. I-80 Gold is currently in the midst of an extensive drilling program to define resources on their property beyond the historic Archimedes open pit gold mine there.
The company’s recent drilling results are especially interesting when considering Stallion’s prospects. I-80 announced the discovery of very high grade gold and silver deposits, assaying 45.4 g/t Au & 50.2 g/t Ag over 17.5 m including 95.9 g/t Au & 65.6 g/t Ag over 7.6 m. The deposit was discovered in the Graveyard Flats intrusion (see map below), an area also covered in part by Stallion’s claims. Part of Stallion’s theory of the mineralization of its claims is that the Graveyard Flats intrusion was an unexplored but key piece of the geologic puzzle, and i-80’s findings seem to bear that out.
Source: Stallion Discoveries (blue border represents extent of Stallion claims)
Stallion’s property has had two previous holes drilled on it which did not go deep enough to intersect the mineralized rock below the cover. The company plans to rectify that, and has initiated a comprehensive geophysical survey to define, with modern techniques, the intrusion and mineralization structure. This data will inform Stallion’s drilling program on the site to further define the resources there.
Across the street, Ruby Hill has over 7.6 million ounces of gold measured, indicated, and inferred to date, with a history of 1.5 million ounces of gold production from the Archimedes Pit.
The Richmond Mountain and i-80 projects basically surround the town of Eureka, and the Archimedes Pit is currently producing. Infrastructure is not a hurdle in the further development of Stallion’s project. And the jurisdiction is very friendly, with Nevada in general and the Battle Mountain/Eureka area in particular having encouraged and hosted many mining operations that are critical to the local economies.
Stallion Discoveries’ CEO Drew Zimmerman talks about key members of the team and how their experience drives development of the company’s various projects.
Stallion’s President and VP of U.S. Exploration is Bill Breen, a veteran of a broad range of projects ranging from exploration to some of the largest operations in the world. He’s the mayor of Hope, Idaho and knows basically everyone in the mining industry from his 41 years of experience working in pretty much every corner of North America. He came on board to help shepherd two gold properties (Richmond Mountain and Horse Heaven in Idaho) toward production. Stallion views his combination of geology expertise and deep rolodex as a major asset going forward.
On the uranium side, Stallion Discoveries has a very large land package located in the Athabasca Basin in Canada, home to the world’s richest uranium deposits. The company’s VP of Exploration Canada is Darren Slugoski. He has over a decade of uranium exploration experience in the Athabasca Basin and played a central role in the discovery and development of the Spitfire deposit in the region. Stallion has completed an extensive magnetic survey of 195,000 acres of its holdings in the area and is pleased with the initial results. The company is awaiting final interpretation of the data which will guide its approach to drilling the most promising areas.
Another name to consider - Stephen Stanley is a major investor in Stallion Discoveries and is an Advisor to the Board of Directors. Mr. Stanley was the President and CEO of Hathor Exploration which bought and developed the Roughrider Deposit in the Basin between 2006 and 2011, identifying an NI 43-101 compliant resource (indicated and inferred) of 57.94 million pounds of uranium. At the time, it was hailed as the third-highest graded uranium deposit in the world behind the McArthur River and Cigar Lake deposits.
In 2011, Hathor was acquired by Rio Tinto for about $550 million following a bidding war with Cameco. The project has not yet been developed, and Uranium Energy Corp. is now the owner with the intent to resurrect the project.
This is the likeliest roadmap Stallion Discoveries is following for all of its projects. Acquire land with mineral potential, explore and define the resource, sell to a major capable of further developing the project. Having people on the team who have been critical players in every step of this process bodes well for the company.
At Richmond Mountain, Stallion Discoveries will be planning a drill program that will be informed by its current geophysical survey of the property. In Canada, development is at a similar stage as the company interprets the magnetic survey results and hones in on the best drilling targets. Meanwhile, Stallion is aggressively accumulating more holdings in the Athabasca Basin, announcing a definitive agreement to increase its land package to more than 700,000 acres there.
Stallion Discoveries was created with the idea of developing world class assets of key minerals. Its focus is on location, jurisdiction, updating historical exploration with modern techniques, and building a team with the expertise and experience to shepherd projects through the development process. Keep an eye out as the company moves forward on many fronts.