Source: Matt Badiali for Streetwise Reports 11/02/2020
Independent financial analyst Matt Badiali homes in on the company’s Yukon project.
“Hey, can you keep watch for me while I fix the Garmin?”
I watched uncomfortably as the pilot fiddled with a hand-held GPS in his lap. He looked over at me, briefly.
“The cranes are migrating right now, and we really don’t want to hit one…“
I shifted uncomfortably on the tiny seat. We were a couple thousand feet up somewhere over the Yukon territory. As he looked down at the uncooperative GPS, I went from mildly concerned to acute fear. I spent the rest of the trip gripping the airframe and scanning the skies for giant, plane-wrecking birds.
I still don’t know if he was kidding.
That was back in 2010, in the middle of the last gold bull market. I caught a tiny little plane out of Whitehorse to go up to see Kaminak Gold’s Coffee Project. It was my first trip up to the Yukon and I learned a ton about the rich history of the region.
Giant gold miner Goldcorp ultimately bought Kaminak for half a billion dollars.
Back then, the Yukon was a hot spot. Agnico Eagle, Goldcorp, Newmont and Kinross all invested heavily in the region. So much money went into the ground up there that the New York Times Magazine wrote an article titled “Gold Mania in the Yukon” in May 2011.
Just before the wheels came off the gold price. After that, several companies bowed out. Low gold prices and tough working conditions pared the number of companies down to a handful.
Fast forward to today and there’s another project in the Yukon that I need to go visit, called Klaza. It’s one of the few projects that remained active throughout the down years.
It’s a high-grade gold project run by some great geologists. They worked steadily on this project through the down years. They own it 100% and it has no royalty.
Even better, I can drive to it from Whitehorse…no fear of cranes or balky GPS units.
The Klaza project sits on the Dawson Gold Belt, just south of Coffee, Casino, Minto, Freegold Mountain and Carmacks Copper. It’s less than 50 kilometers by road from the town of Carmacks.
The town of Carmack is named for a famous gold explorer. He discovered Bonanza Creek, which kicked off the Klondike Gold Rush. Since 1896, miners took over 20 million ounces of gold out of the sand and placer deposits in the territory.
That’s why I went to see the area back in 2010. While the prospectors found a lot of gold in sediments, the sources of that gold went relatively unknown. I get excited about that kind of potential. Because it means that some smart, enterprising geologists could still strike it rich.
And make no mistake, I want to go see this one. It looks attractive on paper, for sure.
The company just issued a preliminary economic assessment in 2020. The average grade of its indicated resource is 4.8 grams per ton gold and 98 grams per ton silver. The net present value (at $1,740 per ounce gold) comes in at C$540 million—more than fifteen times the current market cap.
That kind of multiple means I’m interested.
The reason the opportunity exists is because it’s a bunch of geologists working on a real gold deposit…but no loud-mouthed promoter hawking it to the unsuspecting public.
It’s just sitting there, under the radar. Every time the gold price goes up, it gets a little bit richer.
The company still has a lot of work to do. Only three of eleven known zones are in the resource estimate. And there’s still room to find more gold. They haven’t hit the end of the mineralized rock yet. And they have more prospecting to do nearby.
So, if you are looking for a gold deposit that hasn’t moved with the gold price yet, check out Rockhaven Resources Ltd. (RK:TSX.V). It is a C$31 million junior in the Yukon’s historical Dawson Gold Belt, sitting on a great looking gold deposit.
–Matt Badiali
Matt Badiali is a geologist and independent financial analyst. He spent fifteen years researching and writing about great investments inside the natural resources sectors. He can be reached at www.mattbadiali.net.
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( Companies Mentioned: RK:TSX.V,
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