Canada’s Top Ten precious metal juniors

With precious metals commanding higher prices, juniors advancing projects with gold and silver deposits are coming into the spotlight. The following companies are the top-10 Canadian-headquartered precious metal juniors that are developing projects but are not yet in production, ranked according to market capitalization as of June 3 and compiled by MiningIntelligence. Royalty and streaming companies are not included in this list.

NovaGold Resources

Market cap: $4.1 billion (US$3.4 billion)

NovaGold Resources (TSX: NG; NYSE-AM: NG) is a pure gold play focused on Alaska’s Donlin gold project in Alaska. NovaGold owns 50% of the joint-venture project and Barrick Gold (TSX: ABX; NYSE: GOLD) owns the other 50%.

The project, one of the highest grade known open-pit gold deposits in the world, currently has a measured and indicated resource of 541 million tonnes grading 2.24 grams gold per tonne for 39 million oz. of contained gold. Inferred resources stand at 92 million tonnes grading 2.02 grams gold per tonne for 6 million ounces.

The resources are contained in the ACMA and Lewis pits, which occupy only 3 km of an 8-km-long mineralized belt, which itself is located on less than 5% of Donlin Gold’s land position, and the company believes there is future exploration potential to expand the resource along strike and at depth. Last year the joint-venture completed an 85-hole, 23,361-metre drill program, the largest since 2008. Highlights included 51.15 metres grading 4.6 grams gold per tonne starting at 149 metres downhole; 47.66 metres grading 4.8 grams gold from a depth of 182 metres; and 22.61 metres of 8.7 grams gold from 162 metres.

As of May 12, NovaGold had $114 million in cash and term deposits, with notes receivable of $100 million, and no short-term debt. The ten largest shareholders represent 63.8% of NovaGold’s issued and outstanding shares, and include Electrum Strategic Resources LP & Affiliates (25.5%); Fidelity Management & Research Company (7.5%); Paulson & Co. Inc. (6.7%); BlackRock Institutional Trust & Affiliates (6.4%); and Saudi Public Investment Fund (4.9%).

New Found Gold

Market cap: $1.9 billion (US$1.6 billion)

New Found Gold (TSXV: NFG; US-OTC: NFGFF) is new to the Top Ten list this year. The junior is advancing its 100%-owned Queensway gold project, 15 km west of Gander, Newfoundland. The 1,500 sq. km project is near the Trans-Canada Highway and New Found Gold has ten drills turning there in a 200,000-metre drill campaign focused on a 7.8 km corridor along the Appleton fault and a 12.4 km corridor along the JBP fault.

The project is divided by Gander Lake into Queensway North and Queensway South. Queensway North, the more advanced of the two, has high-grade gold targets along the Appleton and JBP faults, including the Keats zone, which the company discovered in November 2019 when its drillers intersected 19 metres grading 92.9 grams gold per tonne at a depth of 75 metres.

The company identified a second gold zone at Queensway North in October 2020 called Lotto, about 2 km north of Keats. The Lotto discovery hole intersected 4.75 metres of 41.2 grams gold from 35.3 metres downhole, including 5.15 metres of 25.4 grams gold. Last month the company drilled about 60 metres below the Lotto discovery hole and intersected 224.7 grams gold over 2.45 metres starting 118 metres downhole.

Drill results released in mid-March from Keats included 13.7 metres grading 61.8 grams gold from 211.15 metres downhole, including a one-metre intercept of 565 grams gold.

Queensway lies along what’s called the Dog Bay Line (DBL), a continental scale zone resulting from the ancient collision of the European and North American tectonic plates, which the company says created the “plumbing” that enabled gold-rich magmatic fluids to travel from deep in the earth’s crust to surface and deposit high-grade gold in multiple directions along tens of kilometres of strike on these fault structures.

Seabridge Gold

Market cap: $1.7 billion (US$1.4 billion)

Seabridge Gold (TSX: SEA; NYSE: SEA) is focused on projects in North America and among its 100%-owned assets are KSM, Courageous Lake, Iskut, Snowfield and 3 Aces in Canada, and Snowstorm in the United States.

According to a corporate presentation in June, Seabridge ranks first based on gold reserves and resources per share among North American listed gold companies, and holds the same ranking based on copper reserves and resources per share among major listed copper and gold companies.

Its Kerr-Sulphurets-Mitchell project (KSM) is in British Columbia and Seabridge says it is the “world’s largest undeveloped gold/copper project” with proven and probable reserves of 38.8 million oz. gold and 10.2 billion lb. copper. A 2016 prefeasibility study outlined a 53-year mine plan with all-in sustaining costs, inclusive of capital, of US$673 per ounce. About 20 km by air to the east is its 294-sq-km Iskut project, where the company is testing for a gold-copper porphyry similar to those discovered at KSM.

Courageous Lake, about 240 km northeast of Yellowknife in the Northwest Territories, is one of Canada’s largest undeveloped projects with reserves of 6.5 million oz. of gold in the open-pit FAT deposit. The 503-sq-km project covers 85% of the 53-km-long Mathews Lake Greenstone Belt, which hosted two historic gold mines.

Last year Seabridge acquired from Golden Predator Mining the 3 Aces gold project in southeastern Yukon from. Three Aces is a district-scale, orogenic gold project with high-grade showings over the entire 35 km length of the property. Seabridge also acquired the Snowfield property last year from Pretium Resources. Snowfield is adjacent to KSM’s Mitchell deposit and work has started on an updated PFS to incorporate Snowfield into KSM’s mine plan.

In the U.S., its 100%-owned, 103-sq-km Snowstorm project is situated at the intersection of three major Nevada gold belts (Getchell, Carlin and the Northern Nevada Rift zone) and is contiguous and on strike with several large gold mines (6 km north of Nevada Gold Mines’ Twin Creeks mine and 15 km northwest of the Turquoise Ridge mine).

SilverCrest Metals

Market cap: $1.2 billion (US$1.0 billion)

SilverCrest Metals (TSX: SIL; NYSE-AM: SILV) is focused on its Las Chispas silver-gold project in Mexico’s Sonora state, about 180 km northeast of Hermosillo.

The company approved construction of the project in February when it released the results of a feasibility study, which outlined an underground mine with a mine life of 8.5 years at a nameplate capacity of 1,250 tonnes per day. Las Chispas would produce an average of 5.2 million oz. of silver and 56,000 oz. gold a year (10 million oz. of silver-equivalent) over its mine life and an average of 12.4 million silver-equivalent oz. a year between 2023 and 2029.

The study estimated all-in sustaining costs will average US$7.07 per oz. of silver-equivalent over the life of the mine (life of mine operating costs of US$118.5 per tonne milled). Initial capital costs are forecast to run to US$137.7 million. The study estimated an after-tax net present value using a 5% discount rate of US$486.3 million and internal rate of return of 52%, based on metal prices of US$19 per oz. silver and US$1,500 per oz. gold.

Underground development and mining are expected to ramp up through 2022 and 2023 and net free cash flow is expected to start in 2023.

The 1,400-hectare property consists of 28 concessions. Currently only 21 of 45 known veins have been put towards the company’s proven and probable reserve estimate, which stands at 3.4 million tonnes grading 461 grams silver per tonne and 4.81 grams gold per tonne (879 grams silver-equivalent per tonne) for a total of 94.7 million silver-equivalent ounces.

Among SilverCrest’s other projects are El Picacho, 85 km northeast of Las Chispas, and Cruz de Mayo, 163 km northeast of Hermosillo. Initial drill results from El Picacho released in February included 7.25 metres grading 40.49 grams gold per tonne and 260.4 grams silver per tonne (3,297 grams silver-equivalent) from 162 metres downhole and 16.4 metres grading 8.50 grams gold and 51.3 grams silver, (689 grams silver-equivalent),  from 121 metres.

Osisko Mining

Market cap: $1.2 billion (US$1.0 billion)

Osisko Mining’s (TSX: OSK) flagship asset is its 100%-owned Windfall property, one of the highest-grade resource-stage gold projects in Canada, located between Val-d’Or and Chibougamau in the Abitibi greenstone belt, about 700 km northwest of Montreal and 200 km northeast of Val-d’Or, in Quebec.

A preliminary economic assessment update released in April, envisioned an underground dual ramp-access mine with an 18-year mine life producing an average of 238,000 oz. gold a year (300,000 oz. per year in the first seven years of full production with peak recovery in year six of 328,000 oz.). The study assumed a 3,100 tonne-per-day milling operation, all-in sustaining costs of US$610 per oz., and capital expenditure of $544 million (including power line construction and a $55 million contingency). The PEA estimated an after-tax net present value of $1.5 billion, after-tax internal rate of return of 39.3%, and after-tax payback period of 2.2 years. In the first seven years of production, Windfall would generate average annual after-tax free cash flow of $253 million, and a cumulative life-of-mine after-tax free cash flow of $2.6 billion. The project is expected to generate more than $8.2 billion in gross revenue and $1.7 billion in taxes.

Currently Windfall has measured and indicated resources of 6.02 million tonnes grading 9.6 grams gold per tonne and 5.9 grams silver per tonne for 1.86 million oz. of gold and 1.15 million oz. of silver. Inferred resources stand at 16.40 million tonnes grading 8 grams gold per tonne and 2.7 grams silver per tonne for 4.24 million oz. of gold and 1.45 million oz. of silver. The resource used a cut-off grade of 3.50 grams gold per tonne.

Osisko is now working on a resource update and a feasibility study.

Mineralization occurs in three principal zones: Lynx, Main and Underdog, and is generally comprised of sub-vertical zones following intrusive porphyry contacts plunging to the northeast. The resources are defined from surface to a depth of 1,600 metres including the Triple 8 (T8) zone, and the deposit remains open along strike and at depth. The company notes that mineralization has been identified at surface in some parts and as deep as 2,625 metres in others.

In mid-June, Osisko announced a significant new high-grade gold discovery (Golden Bear) less than 1 km north of Windfall and located along a sub-parallel splay of the Windfall Bank Fault. The discovery hole intersected 6.7 metres grading 27.4 grams gold per tonne (uncut) starting from 503 metres downhole, including 2.7 metres of 63.6 grams gold per tonne (uncut).

In addition to Windfall and also in the Eeyou-Itschee James Bay region of Quebec, Osisko Mining holds the 1,000 sq. km Urban Barry properties, which have the same geological setting and rock age as Windfall; and the Quevillon property, located at the boundary between Eeyou Istchee James Bay territory and the Abitibi-Temiscamingue administrative region.

Great Bear Resources

Market cap: $924 million (US$765 million)

Great Bear Resources (TSXV: GBR; US-OTC: GTBAF) is focused on northwestern Ontario’s Red Lake district and its flagship asset is its 100%-owned Dixie project, 25 km southeast of the town of Red Lake. The project is made up of 9,140 hectares of contiguous claims extending over 22 km, and is accessible year-round via a paved highway.

Dixie hosts two principal styles of mineralization: high-grade gold in quartz veins and silica-sulphide replacement zones (Dixie Limb, Hinge and Arrow) and high-grade disseminated gold with broad moderate to lower grade envelopes (LP Fault). Great Bear describes the LP Fault as a “significant gold-hosting structure which has been seismically imaged to extend to 14 km depth.”

In April, the junior added a sixth drill rig at Dixie, after expanding its 2021 drill program in March from a budget of $25 million to $45 million. The company plans to complete at least 200 drill holes at Dixie this year (for a total of 600 at the project so far), and drill about 175,000 metres (for a total of 400,000 metres). About 80% of its drill program planned for this year is targeting the LP Fault and the remaining 15% the Hinge and Dixie Limb zones.

At the end of March Great Bear announced that deep drilling had doubled the vertical extent of the LP Fault gold zone, which begins at bedrock surface, to about 800 vertical metres. Drilling intersected 15.57 grams gold per tonne over 3.05 metres at 942 metres downhole, within a broader interval of 1.08 grams gold over 70.25 metres from 906.12 metres. Other drill results released this year included: 400 grams gold over 0.50 metres from 176 metres downhole; 29.17 grams gold over 15.50 metres from 41.8 metres; and 18.08 grams gold over 15.80 metres from 23.85 metres (bedrock surface).

Great Bear controls over 330 sq. km in the Red Lake gold district, and is earning 100% interests in four other projects: Pakwash, Dedee, Sobel, and Red Lake North, all of which are accessible by existing roads year-round.

Artemis Gold

Market cap: $831.4 million (US$688.1 million)

Artemis Gold (TSXV: ARTG) is new to the top ten list this year, and is focused on advancing to construction of its 100%-owned Blackwater gold project in central British Columbia, 160 km southwest of Prince George and 446 km northeast of Vancouver.

A prefeasibility study of the project released in August 2020 outlined a staged development starting with a $592 million, 5 million tonne-per-year open-pit mine producing an average of 248,000 oz. of gold per year for the first five years of a 23-year mine life. Phase two and phase three expansions to 12 million tonnes per year ($426 million expansion capital cost) then 20 million tonnes per year ($398 million) would follow, with production rising to 420,000 oz. per year for five years (years six to 10), then falling to 316,000 oz. annually for 13 years (years 11 to 23). All-in sustaining costs would be US$668 per oz. in phase one; US$696 million in phase two; and US$911 per oz. in phase three. The project has an after tax net present value, at a 5% discount rate, of $2.25 billion and a levered after-tax internal rate of return of 50%.

Blackwater has proven and probable reserves of 334 million tonnes grading 0.75 grams gold per tonne and 5.8 grams silver per tonne for 8 million oz. of contained gold and 62.1 million oz. of silver.

In March, Artemis awarded a $236 million EPC contract to Ausenco for the project, and in April it received a credit approved mandate letter and term sheet from Macquarie Bank and National Bank of Canada to arrange a $360 million project loan facility to fund some of the construction costs for Blackwater.

The company is planning to complete a definitive feasibility study on Blackwater this year.

Artemis acquired Blackwater from New Gold in August 2020. The junior was spun out of Atlantic Gold before it was acquired in 2019 by Australian miner St. Barbara.

Discovery Silver

Market cap: $810 million (US$670.2 million)

Discovery Silver (TSXV: DSV; US-OTC: DSVSF) is also new to the top ten list this year and is focused on its flagship Cordero open-pit project in the northern part of the Central Mexican Silver Belt in Chihuahua state.

Discovery Silver, which changed its name from Discovery Metals in April, acquired Cordero in August 2019, and describes the project as a Tier 1 silver asset and “one of the world’s largest undeveloped silver resources.”

The company is planning to complete a revamped preliminary economic assessment in the fourth quarter of 2021 that will focus on mining high grade early in Cordero’s mine life. The PEA will be focused on a bulk-tonnage domain and will be supported by more than 350 drill holes and 180,000 metres of drilling, along with two programs of metallurgical work.

The company concluded the first phase drill program in April, and data from the 75,000 metres of new drilling (178 holes) completed in this program, along with 133,000 metres of historic drilling (292 holes), will be used to update the resource in the third quarter of the year. The company has also completed 11,000 metres of drilling (31 holes) so far in its phase 2 drill program.

Drill results released in June from the first phase included 65.9 metres grading 69 grams silver per tonne, 0.11 gram gold per tonne, 0.7% lead and 3.7% zinc (258 grams silver-equivalent) from 309.4 metres; 59.5 metres averaging 54 grams silver, 0.08 gram gold, 0.9% lead and 1.5% zinc (153 grams silver-equivalent) from 443.3 metres; and 82.3 metres grading 44 grams silver, 0.06 grams gold, 0.7% lead, and 1.5% zinc ( 136 grams silver-equivalent) from 268 metres.

At a 15 gram per tonne silver-equivalent cut-off grade, the project currently hosts 990 million indicated tonnes grading 13 grams silver per tonne, 0.4% zinc, 0.2% lead and 0.04 gram gold per tonne (32 grams silver-equivalent per tonne) and 282 million inferred tonnes grading 21 grams silver per tonne, 0.8% zinc, 0.3% lead and 0.04 gram gold per tonne (56 grams per tonne silver-equivalent).

An April 2018 updated preliminary economic study showed the project could support 29 years of open-pit production, which at 40,000 tonnes per day, would produce an average of 8 million oz. silver, 99 million lb. zinc in concentrate, 69 million lb. lead in concentrate, and 11,900 oz. gold, annually. Initial capital costs were pegged at $570 million and sustaining capital at $271 million.

Marathon Gold

Market cap: $665 million (US$550.3 million)

Marathon Gold (TSX: MOZ) is new to the top ten list this year, and is advancing its 100%-owned Valentine open-pit gold project in the central region of Newfoundland and Labrador.

A feasibility study released in March outlined a mine life of 13 years producing an average of 173,000 oz. gold a year and $119 million of annual average free cash flow between 2024 and 2033 from the processing of high-grade mill feed, and 56,000 oz. gold a year and $31 million free cash flow annually between 2034 and 2036 from the processing of low-grade stockpiled ore.

Initial capital costs for the two-pit and centralized mill operation were estimated at $305 million that could be paid back after-tax in just under two years. The study forecast life-of-mine cash costs of US$704 per oz. and all-in sustaining costs of US$833 per ounce. At a gold price of US$1,500 per oz., Valentine’s after-tax net present value at a 5% discount rate is estimated at $600 million and its after-tax internal rate of return at 31.5%.At US$1,750 per oz. gold, the NPV rises to $868 million and its IRR to 42.2%.

The feasibility study contemplated open pit mining from the Marathon and Leprechaun deposits only, and excluded mineral resources contained within the Sprite or Victory deposits, or any potential resources from the Berry Zone. The study also envisioned ground-breaking for site construction in January 2022, followed by a 22-month construction period and first gold pour by October 2023.

The project has proven and probable reserves of 47.06 million tonnes grading 1.36 grams gold per tonne for 2.05 million oz. contained gold.  Measured and indicated resources, inclusive of reserves, stand at 56.66 million tonnes grading 1.72 grams gold per tonne for 3.14 million oz. gold. Inferred resources add 18.25 million tonnes at 1.70 grams gold per tonne for 1 million ounces.

Sabina Gold & Silver

Market cap: $637 million (US$527 million)

Sabina Gold & Silver (TSX: SBB; US-OTC: SGSVF) is advancing its 100%-owned Back River gold project in Nunavut, Canada.

In February, the company reported an updated feasibility study on the Goose project, the first planned mine on its Back River property. The study outlined production of about 223,000 oz. of gold a year over a 15 year mine life. In the first five years, production would average 287,000 oz. annually, with peak production of 312,000 oz. in year three. The mine would generate an after-tax net present value (at a 5% discount rate) of $1.1 billion and post-tax internal rate of return of about 28%. The study assumed a gold price of US$1,600 per ounce and was based on an initial processing rate of 3,000 tonnes per day, with an expansion to 4,000 tonnes per day at the end of year two. Cash costs are forecast to run to US$679 per oz. and all-in sustaining costs to US$775 per ounce. Initial capex is pegged at $610 million, with a payback of 2.3 years, and sustaining capital and closure costs are expected to total $419 million.

The project received its final major authorization in June 2020, and now has all major permits and authorizations for construction and operations.

As the company focuses on pre-development work at Goose this year, it is also returning to its George property for the first time since 2013. George is Back River’s second most-advanced property, and sits about 50 km north of Goose. George currently has 1.2 million oz. gold at 5.34 grams gold per tonne in the indicated category and another 1.1 million oz. gold at 6.12 grams gold per tonne in the inferred category.

In addition to Back River, Sabina owns a silver royalty on Glencore’s Hackett River project. The royalty on silver production is comprised of 22.5% of the first 190 million ounces produced and 12.5% of all silver produced thereafter.

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