As gold bugs well know, the broader market has a hard time assessing opportunity in the exploration end of the sector.
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It makes sense.
Generalist investors accustomed to analyzing a company’s cash flow prospects struggle to assess explorers, which typically have no cash flow they can plug into their investment models.
As a result, gold exploration (and mining exploration generally) offers a wealth of overlooked gems that you can buy at bargain prices, before market and company-specific events make their value glaringly obvious to the rest of the investing herd.
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That scenario looks set to play out with MAS Gold (MAS.V; MSGCF.OTC), a gold-focused explorer with a commanding project portfolio in a sleeper mining district.
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As you’re about to discover, MAS Gold has quietly lined up a timeline of news catalysts that could soon spark a very profitable re-rating.
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The High-Potential Gold District
The Market’s Missing
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Ask a generalist investor to name a gold district in Canada, and likely the Abitibi Greenstone Belt that transects Ontario and Quebec would come most readily to mind.
In that respect, Saskatchewan is definitely underappreciated, in spite of its location along the same geological structure that hosts the famous Homestake gold mine in South Dakota (a mine boasting more than 40 million ounces of historic gold production).
Zoom in on the province itself, and you find the Seabee and Santoy mines, which currently generate 100,000 ounces of gold annually and have been in operation for more than 30 years.
MAS Gold’s Greywacke North and North Lake projects lie within a similar tectonic setting as Seabee and Santoy and lie just 60 kilometers west of those mines.
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MAS Gold’s properties in Saskatchewan’s La Ronge district lie 60 kilometers west of the Seabee/Santoy mines, which have produced gold for more than 30 years. |
Combine this geologic potential with Saskatchewan’s attractiveness as a mining district — it was recently ranked #1 among 111 jurisdictions across 83 countries for exploration and mining — and the La Ronge district that hosts MAS Gold’s portfolio provides a treasure trove of untapped potential.
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High Grades Already Confirmed By Drilling
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The first of two flagship projects within that portfolio is Greywacke Lake.
This property encompasses the high-grade deposit at Greywacke North, which contains an 81,500-ounce indicated gold resource and a 14,100-ounce inferred gold resource.
Granted, that’s not a huge resource, but the average grades are extraordinary (9.9 g/t for the indicated ounces and 7.4 g/t for the inferred ounces.)
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Plus, as you’re about to see, this high-grade resource is key to the company’s goal to stealthily build a million-ounce resource…in an unexpected fashion.
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Greywacke North offers other benefits as well. For one thing, metallurgical tests have generated robust gold recoveries (81.3% using a gravity process and 94% using cyanidation plus gravity) for Greywacke North.
Better still, the indicated resource essentially starts at surface, which means MAS should be able to mine those ounces easily and cost-effectively.
A recently completed winter drill program has added even more fuel to the fire, with more confirmatory high-grade results from the deposit at Greywacke North and on the earlier-stage exploration target at Greywacke South.
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The holes drilled in MAS Gold’s 2021 winter program on Greywacke Lake generated more evidence of high-grade gold on both the deposit at Greywacke North and the earlier-stage Greywacke South target. |
Simply put, this project has all the making of a turnkey gold deposit that has significant growth upside.
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Hub And Spoke Model Puts
Million-Ounce Goal Within Reach
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That’s great, but what really gets the pulse going about MAS Gold’s potential is the close proximity to Greywacke Lake of the company’s Preview North project.
And here’s the key we were talking about: Thanks to the 417,000-ounce (inferred) resource already outlined on its North Lake deposit, Preview North gives MAS an obvious hub project around which it can build a series of spokes in the form of mines to feed a processing facility there.
North Lake is more of a lower grade, bulk tonnage deposit, and that’s perfect for feeding a base level of ore that MAS then hopes to supplement with feed from the spokes, including high-grade material from Greywacke North.
But it’s not the only potential spoke, by far. As you can see from the graphic below, there’s also the possibility of mining Preview North’s Point deposit.
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MAS’s hub-and-spoke model for the La Ronge district could catapult the company, very profitably, past its goal to control a million ounces of gold. |
And there are a handful of other projects in the area that could provide additional spokes to this model.
It’s all in service of getting MAS Gold to its million-ounce goal, a resource level which will likely begin to make the company pop on the broader market’s radar.
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In the interim, key upcoming share-price catalysts loom for MAS.
The big one is a recently announced PEA, due out in early 2022, that will assess the economics of mining Greywacke North and North Lake in tandem.
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That report could well give all those generalist investors the hard numbers they need to begin modeling the cash flow potential of MAS’s Saskatchewan projects.
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Prior to publishing the PEA, the company wants to release new resource estimates for both projects, likely in early fall.
Given the good results both projects have returned from winter drilling programs this year, these estimates could well be catalysts in their own right, both as reminders of the ounces MAS already has on hand and their growth potential going forward.
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With the company’s shares currently trading around C$0.10, MAS Gold looks for all the world like one of those overlooked gems for which this sector is famous.
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But with gold likely to return to its long-running habit of strength in the fall, the time to look at MAS Gold is now, before the first of those news flow catalysts reminds the market what it’s missing here.
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