Four years ago, Banyan Gold (TSX-V:BYN, OTC: BYAGF) was one of hundreds of junior exploration companies toiling in obscurity and receiving little value for its Yukon gold projects. Much has changed since those frigid days in early 2019 with Banyan delivering a 4 million ounce 43-101 compliant resource for its flagship AurMac Project in May of 2022. The company is quickly advancing towards delivering an updated resource that could total 6-7 million ounces at AurMac including a significant upgrading of inferred ounces to the indicated category.
Most junior mining executives would probably agree that the hardest part of the mineral exploration process is making a discovery, then proving it up to be of a globally significant scale can be incredibly challenging. There are a plethora of gold deposits sitting around the globe that will never get beyond the 1,000,000 ounce mark, and most will likely never advance to production because their size constraints do not warrant the permitting risk and capex investment required to move them into production.
The good news is that with the next resource update Banyan will have achieved the hard part: Defining a tier-1 resource that is sure to be on the radar of much larger global mining firms (more than 5,000,000 ounces with more than a 10 year mine life in top tier jurisdiction). However, the market is beginning to value Banyan as if the hardest part is just beginning. If we take Banyan Gold CEO Tara Christie at her word in recent presentations and assume that 6,000,000 ounces is soon to be the number for AurMac then at today’s C$.42 share price Banyan’s gold ounces in the ground are being valued at ~$US/15 per ounce on a fully diluted basis.
The challenge, and opportunity for Banyan appears to be a misconception that Banyan could be moving into the feasibility and permitting stages of the mining life cycle – on the Lassonde Curve this is known as the ‘Orphan Period’:
Yesterday’s news release helps to dispel the notion that Banyan is done making new gold discoveries at AurMac. In fact, it’s not a stretch to assert that 2023 is the most exciting year of exploration in the history of the AurMac Property. Banyan has more information than ever before to help guide its drilling this year, and one of the primary goals of this year’s drilling will be to step-out to both the east and west to continue to look for the edges of the mineralized zones.
Hill-shaded LiDAR map of the AurMac Deposits, Mayo, Yukon showing the lineament interpretations (faults and bedding lines), interpreted gold mineralization trends and projected zone of mineralization.
Banyan has identified two East-West oriented trends that extend through both the Powerline and Aurex Hill Deposits. The Powerline and Aurex Hill gold deposits are contained within a metasedimentary package consisting of predominantly schists, quartzites and limestones of the Late Proterozoic to Cambrian Hyland Group. Gold mineralization at Powerline and Aurex Hill is chiefly associated with low angle quartz-sulfosalt-arsenopyrite veins seen crosscutting all lithologies and is interpreted to be associated with a large intrusion related gold system typical of the Tombstone Gold Belt and Selwyn Basin gold deposits.
At the eastern edge of the yellow shaded area in the above map, 200-meter step-outs will be one of the first objectives of Spring 2023 drilling at AurMac. Perhaps even more exciting is the potential that Banyan could find the intrusive source of the widespread gold mineralization at AurMac. The intrusion could be interpreted to be the heat source for the fluid flows that deposited gold mineralization across the AurMac Property. Finding the intrusion could also result in a higher-grade zone of gold mineralization that could be potentially transformative for the economics of any future mining operation on the property.
The most important takeaways for any potential investor in Banyan today are:
- BYN is fully funded well into 2024 with roughly C$18 million in the treasury.
- Resource Update expected mid-year (6-7 million ounces with significant portion of resource upgraded to indicated).
- Substantial portion of 2023 exploration budget allocated to step-out exploration drilling to further expand mineralized areas, and to potentially find the intrusive source at AurMac.
- Strong management team that continues to get stronger with the recent addition of Brad Thrall as a technical advisor. Brad brings a wealth of experience in metallurgy, permitting and building mines in the Yukon.
It’s unusual to find an investment situation in which the downside risk is well contained due to a large and growing gold resource in an increasingly attractive jurisdiction to build a gold mine . Meanwhile, the upside potential is still substantial (100%+) in the event of additional discoveries through step-out drilling.
Banyan has the scale, the management team, and the right location to build a mine (road access, power lines, gentle topography, and the Yukon’s largest gold mine is less than 40 kilometers away from AurMac). Banyan is committed to advancing AurMac to a maiden PEA in 2024, and in the meantime Banyan’s world class exploration team of geologists might find a way to remind investors just how rich the gold endowment of the Yukon truly is.
Banyan continues to hold an important role in my gold junior mining portfolio and I expect to increase that position as we get closer to the resource update mid-year.
BYN.V (Weekly)
Banyan shares have largely been marking time since surging to near $.40 in August 2020. However, during the last 2 1/2 years the company has made enormous fundamental progress in expanding and de-risking the AurMac Project. I expect 2023 could be the year in which the next upward rerating occurs, and it could happen quickly (similar to mid-2020).
Disclosure: Author owns BYN.V shares at the time of publishing and may choose to buy or sell at any time without notice.
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. Banyan Gold Corp. is a high-risk venture stock and not suitable for most investors. Consult Banyan Gold Corp’s SEDAR profiles for important risk disclosures.
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