Gold: Where is it Going?
I recently had a talk with Albert Lu on what I see as the future of gold and gold mining companies. We also talked about the upcoming Capitalism & Morality seminar (whose ticket price will go up very soon):
Last month, I visited the Omu project of Irving Resources (IRV).
Omu is IRV’s flagship project and is in the northern part of Hokkaido (Japan). It is a large land package containing three key areas: Omu Sinter, Omui Mine and Hokuryu Mine, each with signs of strong mineralization, and a possibility that the system might connect.
IRV has permits in hand to start trial mining at Omui Mine, which will hopefully start within weeks. At Hokuryu Mine, once they have the drilling permits, they expect to start drilling, hopefully later this year. The current focus of the company is on drilling Omu Sinter, which the following is about…
At Omu Sinter, they have so far drilled five holes. Assays of only the lower section of hole-2 have been released. All of this up to the fault has anomalous mineralization. Of particular interest is a high-grade hit of 0.32 m of 135 g/t Au-equivalent, a sign of the existence of high-grade rock in the area. This hit was less than 200 m from surface, and its value lies in pointing at the possibility of mineralization at depth.
IRV believes that the boiling zone is 380 m below surface, which would also be the prospective area for gold. Hole-4 and hole-5 have hit rocks that are visually similar to the high-grade hit from hole-2. See image below from the 7.5 m hit beginning at 334 m from hole-5. Of course, the assays are awaited.
IRV has to drill 800 m long holes to drill through what they think is the boiling zone. This will happen from July, as they need to bring in wider pipes for the rigs to go this deep.
In hole-3, the deepest hole so far (465 m long), they have hit the rock from the Mesozoic period (see image below). The ore of Hishikari, one of the highest grade gold mines in the world, is from the same period. Hole-4 and hole-5 are directed towards the expected Mesozoic basement sedimentary rock.
So what am I expecting from the forthcoming news? As mentioned above, the holes drilled so far have hit only the very top layer of the hypothetical high-grade target area.
In the image below, look at the triangle that starts from ~400 m depth. Hole-3, hole-4 an hole-5 have barely hit that area. So I would pay particular attention to the assays of the bottom part of these holes. I will then be awaiting deeper holes that penetrate the area of the white triangle.
IRV will be releasing results of every hole, even the dud ones. I am not expecting much from hole-1 and the upper layer of hole-2.
(All images have been taken from the website of Irving Resources)
Finally, as a jurisdiction, I can hardly think of a place better than Japan. Linked is a talk I gave at PDAC on why I love Japan, and East Asia in general.
Associate: Rajni Bala
Disclaimer: All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies. The sole purpose of these musings is to show my thinking process when analyzing a stock, not to provide any recommendation. I will not and cannot be held liable for any actions you take as a result of anything you read here. Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise.