To maximize gains in junior mining companies, it’s always advisable to bet on a management team with a track record of success.
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And that’s certainly something the newly formed gold explorer Black Mountain Gold (BMG.V; BMGCF.OTC) has in spades.
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In fact, the team that leads this Arizona-focused gold explorer has just come off a very lucrative exit with Millennial Lithium.
The Millennial team found an underappreciated lithium asset in Argentina...went right to work proving up value previous operators had missed...and just sold the company to Ganfeng Lithium for C$353 million.
It’s a template that Black Mountain plans to follow with its recently acquired Mohave gold project in northwest Arizona.
As you’re about to see, Black Mountain has ambitious plans for Mohave.
Where prior owners had envisioned a “retirement plan” heap leach operation, Black Mountain sees a project with evidence of gold everywhere, one that it believes can easily turn into a million-ounce-plus gold deposit.
With a drum-tight share structure and a ~C$10 million enterprise value, Black Mountain Gold has the team, the project and the plan to deliver outsized gains for shareholders.
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At the heart of that plan is Mohave, which spent the 1990s and most of the 2000s as a “hobby mine” project of its private owners at the time.
Their goal was to develop the project into a small heap leach mining operation that could spin out around 20,000 ounces of gold per year.
The group got so far as to put a mill and equipment on site. As you can see from the aerial photo below, there’s still around $15 million of in-place infrastructure at Moss.
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| Mohave has $15 million of infrastructure left behind by private owners who wanted to make it a small-scale producer before running out of steam in 2007. |
But then age caught up with that ownership group, and they ran out of steam in 2007.
The project then went through a series of owners, including M3 Metals, from whom Black Mountain optioned the project in May 2020.
And while those operators did some more exploration work on the property, they all focused on quick-hit, near-surface oxide ounces close to the infrastructure left behind by those private owners.
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But when the Black Mountain team looked over the past data on Mohave, it was clear from both surface sampling and historic drilling that gold was everywhere.
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Earlier this year, the company followed up on M3’s 2020 surface program with channel sampling, and the results were impressive, including 53.8 g/t gold over 2.8 meters and 0.71 g/t over 24.8 meters.
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As you can see from the map below, Mohave is a target-rich environment, with gold showings all over the property, not just at the planned mining operation.
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| Gold is everywhere at Mohave, a fact made clear by this map of surface samples collected from the property. |
But here’s the best part: Air-track mining generated more than 550 holes on the northern half of the property.
These holes consistently hit mineralization, but because the program was focused solely on outlining the easiest, most heap-leachable ounces, they only went to 100 feet in depth.
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Obvious Potential At Depth
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Yet, as it was studying the data, the Black Mountain team saw that many, if not most, of these holes actually ended in mineralization.
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Even so, the holes weren’t extended to any greater depths. The owners simply weren’t looking for any deeper mineralization to feed into their small planned operation.
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Moreover, surveying the property led to the new team’s discovery of sub-parallel, repeating zones of mineralization on site.
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| Stacked zones of mineralization, outlined in red above, underscore the potential for deeper drilling to outline more heap-leachable gold at depth at Mohave. |
Take those two data points together, and it becomes obvious that deeper drilling could add ounces quickly at Mohave.
With just a modest amount of work, a small-scale production story could turn into a one- or two-million-ounce heap leach deposit.
If so, a resource that size in a jurisdiction this attractive could easily attract a deep-pocketed producer willing to provide a lucrative exit, a la the Black Mountain team’s recent success with Millennial.
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Buy In For Less Than The Smart Money
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It’s a tantalizing prospect, made more so by the fact that current trading levels give you the opportunity to get in on the ground floor of this story…and at prices cheaper than what savvy private investors recently paid to fund initial exploration.
Just consider the potential at Mohave:
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• Based on the historic data, deeper drilling could quickly grow the resource by outlining more areas of stacked mineralization
• The southern portion of the property, which has never been drill-tested, has yielded almost as many surface targets as the northern part
• Many of the small historic mines on the property have never been thoroughly explored
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And then there’s that base of on-site infrastructure.
Assuming the gold’s there — and there’s every indication that it is — that infrastructure should help Black Mountain fast-track Mohave to production.
In a macro-environment that seems ideal for a multi-year gold bull market, Black Mountain Gold could be a lucrative way to play that trend.
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To Learn More about Black Mountain Gold
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