Nova Scotia was once a prolific region of gold production, (over one million ounces of gold have been produced since mining began in the 1860s) but sometime around the late 1950s gold mining in Nova Scotia went largely dormant. That is until this year with Atlantic Gold’s first gold pour from its open pit Moose River Consolidated Gold Project (MRC) last week. Even after recent profit taking Atlantic Gold shares (TSX-V:AGB) are up more than 60% year-to-date:
AGB.V (Year-To-Date)
While Atlantic Gold is the most recent gold company to begin producing gold again in Nova Scotia, Osprey Gold Development (TSX-V:OS, OTCQB:OSSPF), another upstart gold explorer is hot on Atlantic’s trail. Osprey already has an inferred resource of 447,000 ounces grading 4.96 g/t Au at its flagship Goldenville Project and Osprey is committed to expanding and upgrading its gold resources across its asset portfolio including Goldenville, Caribou, Lower Seal Harbour, Gold Lake, etc.:
As Eric Coffin of HRA Advisories recently wrote:
“Atlantic Gold began taking a closer look at the wall rock between the veins in 2015 and determined that they carried significant disseminated gold in amounts that, coupled with the high-grade units, could be amenable to open-pit mining.”
It is this idea of disseminated gold present between the high-grade quartz gold veins that makes Nova Scotia a particular region of interest for gold mining after decades of dormancy.
Osprey’s Caribou and Gold Lake Projects perfectly straddle Atlantic Gold’s Touquoy Mine and Moose River Consolidated mill site which certainly supports the robust infrastructure already in place in the area. In addition, Atlantic Gold’s Cochrane Hill Project is in close proximity to Osprey’s flagship Goldenville Project which helps to create a potential future synergy as Atlantic invests in mill infrastructure.
Osprey completed a 3000+ meter drill program at Goldenville during the summer which consisted of 18 drill holes . Drilling was targeted to expand the existing high grade resource at Goldenville with infill and drilling along strike, as well as to test argillite targets generated via geophysics; these argillites are the preferred host for vein mineralization as well as disseminated gold. Mitchell Lake, an earlier stage target 3.5 kilometers to the west of the main Goldenville resource, was the target of three drill holes this year. If the company is able to demonstrate that there could be significant mineralization at Mitchell Lake, another zone of mineralization on the Goldenville Project could mean a larger overall resource for Osprey down the road and they’ve got 4 other properties as well – and they’re all historic producers.
Drill results are expected imminently and are likely to be released in batches starting in the next 2-3 weeks. Meanwhile, Osprey continues to conduct surface work, having just completed a program at Lower Seal Harbour: another project in its portfolio with past high grade production, and the potential for disseminated mineralization. The opportunity to work year round exists in Nova Scotia, so once the company has the Goldenville assays in hand a decision will be made regarding a winter drill program.
An enticing risk/reward proposition currently exists with OS shares resting at support near C$.17 with drill results imminent. With a market cap currently less than C$5M the market isn’t pricing in much exploration success.
OS.V (Year-To-Date)
With expectations having been wrung out of the stock during the last couple of months (as drill results have been delayed due to slow lab turnaround) it wouldn’t take much in terms of drilling success to see a rally in OS shares given the company’s still relatively modest ~C$4.6 million market cap.
Disclaimer
The article is for informational purposes only and is neither a solicitation for the purchase of securities nor an offer of securities. Readers of the article are expressly cautioned to seek the advice of a registered investment advisor and other professional advisors, as applicable, regarding the appropriateness of investing in any securities or any investment strategies, including those discussed above. Osprey Gold Development is a high-risk venture stock and not suitable for most investors. Consult Osprey Gold Development’s SEDAR profile for important risk disclosures.
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