Former journalist James Kwantes, editor of Resource Opportunities, provides a tour of promising junior mining opportunities, from the extremes of northern Canada to the tropics of French Guiana.
The Gold Report: The U.S. stock market has been in a bull run for a number of years. What are your thoughts on the market and what it means for precious metals?
James Kwantes: Since Donald Trump was elected president, but also for years before that, large-cap U.S. stocks have been a “can’t miss” for investors, who have been rewarded for chasing returns. It seems very toppy to me, but that doesn’t mean it couldn’t go on for a while still. In 2000, in the big tech boom, the market caps of the two or three largest technology companies equaled the market cap of something like every mining company in the world.
We’re at that level again. We’re starting to see weakness in the U.S. dollar, and that’s positive for gold. These things are cyclical. Gold looks like it’s ready for the next longer-term breakout and we’re heading into a period of seasonal strength. We’re starting to see signs of strength in the junior market as well.
TGR: Would you talk about a couple of companies that you like in the precious metals area?
JK: Let’s start with the Yukon, where I recently did some site visits. When you fly into the Yukon, you see placer mining operations, where miners pull gold out of the rivers and the gravels. They look like big gravel pits from the air, and some of the operations are very large. Placer mining is a big industry in the Yukon—about 20 million ounces (20 Moz) of placer gold has been pulled out since the Klondike Gold Rush days in the late 1890s—but the Yukon has never really had a large bedrock gold mine. So the hard-rock source for all that gold is a kind of holy grail in the Klondike.
Last year, Goldcorp Inc. (G:TSX; GG:NYSE) bought Kaminak Gold Corp. and its Coffee project for $520 million. That sparked another gold rush, an exploration rush, that is seeing many of the world’s largest gold mining companies do joint venture deals with companies that have Yukon projects.
TGR: What are some of the companies you are excited about in the Yukon?
JK: There’s an interesting company called Klondike Gold Corp. (KG:TSX.V). It owns a large land position around Dawson, the epicenter of the Klondike Gold Rush, that includes some of the most productive placer mining creeks where a lot of gold is still being pulled out. Klondike Gold owns the claims above many of the best creeks.
Klondike is systematically exploring an area called Lone Star, which was the site of one of the only historical bedrock gold mines that produced high-grade gold. Klondike has hit about 2 kilometers (2 km) of gold mineralization along a structure that CEO Peter Tallman thinks may continue for as long as 7 km.
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