Rarely does a junior mining investment opportunity possess the following combination of factors:
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Multi-million ounce gold resource.
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Prolific mining jurisdiction.
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A combination of brownfield and greenfield exploration/expansion opportunities in a large property package.
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Top notch management team with extensive experience, strong track records, and a wide array of skill sets.
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Strong financial backing and cash position.
Goldshore Resources (TSX-V:GSHR) is one of the more impressive gold juniors to be brought to public markets in recent years. Goldshore checks all of the above boxes and offers investors multiple ways to win, including through resource expansion, new brownfield/greenfield discoveries, and gold price appreciation resulting in a shareholder friendly takeout transaction OR a positive production decision and upward revaluation.
Goldshore’s Moss Lake Project not only boasts four million ounces of gold resources located in a low risk jurisdiction, but a location with a rich mining history and substantial potential for resource expansion and new discoveries. The Moss Lake Project is located near Thunder Bay, Ontario which is one of the most prolific mining districts in Canada, a region that hosts operating mines held by some of the world’s largest gold producers including Barrick IAMGold, Kirkland Lake, and Newmont.
The first generation of prospecting occurred between the late 1800s to 1950s. The discovery of the North Coldstream (copper, silver and gold) Deposit included multiple high-grade gold occurrences: 2.7Mt of production at 1.89% copper, 0.56 grams per ton of gold, and 5.59 grams per ton of silver. In the 1970s, gold exploration intensified with Falconbridge Exploration of the Snodgrass Lake Prospect. From 1986-1990, extensive drilling and 1,000 meters of underground development work, completed by several groups, led to the first resource estimates and metallurgical work.
In the 1990s, Moss Lake Gold Mines completed a 17 hole drilling program, multiple geophysical surveys, and a historic data compilation study. By the 2000s, Moss Lake Gold Mines continued exploration with several modest drill campaigns and further geological and geophysical surface programs. By the 2010s, there was an updated resource estimate and PEA completed by Moss Lake Gold Mines (in 2013). The ownership was amalgamated by Wesdome GoldMines in 2014, and Coldstream and Hamlin properties were acquired in 2016. This led to further exploration and drilling programs in 2016 and 2017 that confirmed extensions of mineralization along strike.
Ultimately, historical estimates of mineral resources on the Moss Lake Project specify total indicated resources of 1,473,700 ounces of gold and inferred resources of 2,514,876 ounces of gold in two deposits located near Thunder Bay, Ontario. Furthermore, a historic preliminary economic assessment (PEA) completed in 2013 yielded an after tax net present value of US$276M at a gold price of C$1,629 per ounce. Using current day metal price and exchange rate assumptions would yield a materially higher after-tax NPV for Moss Lake.
Moss Lake Historical drill highlights below.
Moss Lake Deposit:
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180,000m in 376 holes between 1983 and 2017
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11.3 g/t Au over 70.4 m in hole L-08-01
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2.55 g/t Au over 71.3 m in hole 89-172
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1.19 g/t Au over 163.1 m in hole 87-101
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1.88 g/t Au over 95.1 m in hole 87-100
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East Goldstream Deposit:
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38,000m in 139 holes between 1988 and 2017
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4.86 g/t Au over 27.3 m in hole C-10-15
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1.12 g/t Au over 111.3 m in hole C-10-16
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Hamlin Zone:
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9000m in 126 holes between 2008 and 2011
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0.90 g/t Au and 0.35% Cu over 150.7 m in hole HAM-11-74
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The historical resource areas remain largely open to potential expansion and the project features a 20+ kilometer trend hosting at least four major zones of mineralization on a large land package (14,292 ha), but with major gaps in exploration that require further exploration and drilling.
Goldshore acquired Moss Lake from Wesdome Gold Mines (TSX:WDO) for C$12.5 million in cash and 30,000,000 Goldshore shares. Considering the 2013 PEA for Moss Lake showed a C$276 million after-tax NPV using much less favorable gold price/FX rate assumptions, I’d say Goldshore got a pretty good deal. There are future option payments that amount to C$20 million based upon key milestones. However, if Goldshore advances all the way to completing a feasibility study it would be fair to say that issuing another C$20 million in stock will be a bargain for a multi-million ounce gold resource in a prime mining jurisdiction.
Full deal terms including a 1% NSR held by Wesdome can be found here.
Wesdome is focused on ramping up production of high-grade gold at its Eagle River Mine Complex and restarting the Kiena Mine Complex in Quebec. Moss Lake had become a #3 non-core asset for Wesdome, so it made sense for Wesdome to option it out to a skilled management team that would be able to focus on Moss River as a flagship asset, a title that it fully deserves.
With extensive historical exploration work already completed on the property, plans for accelerated development hold great potential. In addition to other exploration programs, Goldshore’s project is positioned to move quickly with 100,000 meters of drilling planned in 2021/2022. Goldshore is targeting an updated multi-million ounce gold resource with significant growth potential.
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20+ kilometers of Moss Lake Trend remains highly prospective
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8 kilometers zone of IP anomalies marks the prospective trend around Moss Lake Deposit
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7 kilometers of the trend between Moss Lake and East Coldstream is significantly underexplored.
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Multiple gold occurrences ready for follow-up work
The Moss Lake Deposit is open for significant resource expansion at depth, in addition to step-out drilling at the South Prospect:
Goldshore has a star-studded management team with deep mining industry experience and strong track records of value creation, major discoveries, project execution and M&A transactions. CEO Brett Richards has over 34 years of experience in mining and metals, including mine financing, developing, and senior-level operations at M&A. Richards was also CEO of Roxgold and Senior Executive of Kotanga Mining, Kinross Gold and Co-Steel.
VIDEO OF GOLDSHORE CEO Brent Richards
Goldshore’s VP Exploration Peter Flindell has 35 years of experience in mineral exploration and feasibility studies, in addition to base metal and iron ore projects. Flindell led teams to discover, develop and expand gold and copper mines around the world. Plinell spent 12 years with Newmont Mining, 11 years with Avocet MIning and 8 years with Signal Delta.
With 25 years in the mineral resource sector, Director Doug Ramshaw is an experienced mining executive with a focus on mineral project evaluation, M&A, capital markets, and business development strategies. Ramshaw is President and Director of Mineral Alamos and Director of Great Bear Resources.
Specializing in the resource and high tech sectors, Director Victor Cantore has over 25 years of leadership and advisory experience. Cantore is currently the President and CEO of Amex Resources.
Another Director with an impressive resume is Brandon Macdonald, the CEO of Fireweed Zinc. Macdonald is a professional geologist that also holds a MBA with distinction from Oxford University in the UK. He is focused on exploration and development of resource opportunities both as a principal and consultant to various junior mining companies.
Wesdome holds a 30% position in Goldshore and WDO stands to be an even larger shareholder over the next few years as Goldshore advances to meet key milestones. Management, insiders, and close associates hold another 28% of Goldshore.
A total of an additional C$20 million of Goldshore shares will be earned by Wesdome upon completion of key milestones including a PEA, PFS, and feasibility study.
Goldshore will be busy drilling for the next couple of years as the company advances to several key milestones including an updated resource estimate, PEA, and pre-feasibility study (PFS).
Goldshore is already in the midst of extensive data compilation, drill permitting, and drill program preparation at Moss Lake. The company is set to begin 25,000-50,000 meters of drilling beginning in June. Drilling will be virtually continuous for the next 18 months as Goldshore aggressively advances to producing an updated resource estimate and maiden PFS.
Goldshore’s share price is built on a strong resource foundation and strong management/financial backing. Goldshore offers substantial upside leverage to a rising gold price along with significant potential for an upward revaluation as the company meets key milestones and de-risks Moss Lake. I would also not underestimate the discovery/expansion potential across the 20+ kilometer Moss Lake trend hosting at least four major zones of mineralization on a 14,292 hectare land package.
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. Goldshore Resources Inc. is a high-risk venture stock and not suitable for most investors. Consult Goldshore Resources Inc.’s SEDAR profile for important risk disclosures.
EnergyandGold has been compensated for marketing & promotional services by Goldshore Resources Inc. so some of EnergyandGold.com’s coverage could be biased. EnergyandGold.com, EnergyandGold Publishing LTD, its writers and principals are not registered investment advisors and advice you to do your own due diligence with a licensed investment advisor prior to making any investment decisions.
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