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Triumph: In Search of Yukon Gold
09/01/2017 2:50 am EST
Junior gold mining expert Brien Lundin—editor of Gold Newsletter—looks to a small cap Canadian miner as his latest recommendation. We caution that this idea is suitable only for those comfortable with the high risks associated with a low-priced, development stage exploration firm.
Triumph Gold (Vancouver: TIG) is a Yukon explorer with drilling results expected in September that I strongly suspect will be market-moving.
Created from the former Northern Freegold, a past Gold Newsletter recommendation, Triumph Gold was generated from a one-for-10 rollback of the stock. Management completely cleaned house, reorganized and recapitalized the company.
The Northern Freegold project in the Yukon has over five million ounces of gold-equivalent resources, and the potential for much, much more. It’s a district-sized property position, with gold showings all over, including some high-grade gold intersections from years past that, if announced today, would send the stock soaring.
The two deposits that account for the lion’s share of that five-million-ounce gold-equivalent total are the adjacent Nucleus and Revenue deposits.
Using a 0.3 g/t gold-equivalent cutoff, Nucleus has an indicated resource of 1.59 million gold-equivalent ounces (74.7 million tonnes of 0.544 g/t gold, 0.907 g/t silver and 0.06% copper). And it has an inferred resource of 1.02 million gold-equivalent ounces (63.8 million tonnes of 0.39 g/t gold, 1.54 g/t silver and 0.05% copper).
The Revenue deposit hosts 2.52 million inferred, gold-equivalent ounces (80.8 million tonnes of 0.39 g/t gold, 3.45 g/t silver, 0.14% copper and 0.05% moly). To these totals you can also add the Tinta Hill inferred resource (2.16 million tonnes of 1.89 g/t gold, 54.9 g/t silver, 0.27% copper, 0.99% lead and 1.41% zinc).
None of those grades look spectacular, but it’s important to note that these resources include individual holes and zones with some exceptional high-grade hits.
The company’s in the midst of a 13,000-meter drill program, with results expected in second half of September. The work is focusing on three areas of potential porphyry-style mineralization, one at Revenue, one at Nucleus and one on the newly identified Generation zone.
This last target includes historical grab samples grading between 60 and 2,980 parts per million (ppm) copper and 5 to 212 parts per billion (ppb) gold. Triumph is plying this area with 2,000 meters of drilling.
At Revenue, drilling is targeting mineralization identified by previous drilling on the margin of a larger diatreme that hosts the deposit. Mineralization is open to the north, south and east on this target.
The nearby Blue-Sky zone — a 2.3-square-kilometer area of coincident copper and moly soil anomalies and four chargeability anomalies — will see and additional 5,000 meters of drilling.
The Nucleus zone is being targeted with 4,000 meters of drilling, and the soil and geophysical anomaly that spans the strike between Nucleus and Revenue will see another 2,000 meters of drilling.
Taking a step back, what’s the overall potential here? Simply put, Goldcorp (GG) paid about $100/ounce of indicated resource for Kaminak (Vancouver: KAM). A similar price for Triumph, even at just its current resource, would imply a 10-bagger from the company’s current market cap.
Granted, Kaminak had a feasibility study on its resource, and it’s doubtful that Triumph will have such detailed economics on its resource anytime in the foreseeable future, if ever.
But the key with Triumph is its geography: Not only would Goldcorp gain all of Triumph’s resource in a purchase, they’d also get a direct route — and road — to the Coffee project they purchased from Kaminak.
Those logistics alone would be worth a considerable portion of the price they’d pay for Triumph at $100/ounce of its resource. So is there any wonder why Goldcorp already owns 19.9% of Triumph Gold?
My advice, follow the smart money on this one and buy Triumph in advance of the upcoming drilling results. (Note that I personally hold a small position in the company from years ago.)
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