Canada is no stranger to gold rushes, with names like Cariboo, Klondike and Fraser River chiseled into the rich mining history of the country. While a gold rush in the traditional sense may never happen again, that doesn’t mean modern day rushes are out of the question. In this case, the hundreds of thousands of people flocking a site with visions of grandeur are replaced by a staking rush of companies building large land positions for exploration with modern equipment and droves of investors backing them, hoping they’re in the right spot.
The right spot may very well be the Spences Bridge Gold Belt (SBGB) in southern British Columbia about 250 kilometers east of Vancouver. This is a region that, as it happens, is not far from the first major Canadian gold rush, Fraser River in the 1850’s. Back then, the discovery of placer gold (surface deposits of gold in sand or fine gravel mined by panning or dredging) drew some 20,000 prospectors to the confluence of the Fraser and Thompson Rivers.
Now, the area is heating up for gold rush 2.0, with new discoveries pointing not to placer gold, but high-grade lode gold, not to mention copper-laden rock, that represent British Columbia’s newest epithermal and porphyry deposits.
The virgin gold belt has already led to a jump in valuations for early entrants, including Westhaven Gold (TSX-V: WHN), Talisker Resources (TSX: TSK), Kodiak Copper (TSX-V: KDK) and others, which is exactly what upstart Golcap Resources (CSE:GCP)(OTC: GCRCF) hopes is going to happen as it explores and expands its Redcap property in SBGB.
Redcap in Good Company
Golcap is new to the public domain, completing an initial public offering on December 22. The company owns the Redcap and SBGB mineral tenures totaling 1738.27 hectares, located 1 kilometer northwest from the mining friendly town of Tulameen in the southern portion of the SBGB.
The highly prospective Redcap property is surrounded by historic mining sites, emerging exploration projects and the Copper Mountain (TSX: CMMC) open pit mine 25 kilometers south that produced 23.8 million pounds of copper equivalent (and $33.2 million in net profit) during Q3 2020.
In addition to Copper Mountain, there is reason to be optimistic about the Redcap prospect considering the other company it keeps. Only 10 kilometers to the north is Westhaven’s Shovelnose project, with Talisker’s property in between Redcap and Shovelnose. Other past-producing gold mines in the area include Headley to the south and Elk and Brenda to the northeast.
Golcap recently spent $130,000 on exploration at Redcap, the majority used for 518 soil samples and duplicates, with matching samples sent to different labs for analysis. Results indicate potential for discovery of porphyry-style copper, copper-gold and copper-molybdenum deposits, which makes sense given the nearby Copper Mountain mine.
An NI 43-101 report completed in September proposes a two-phase exploration plan for this year consisting of: 1) additional soil samples stepping out existing grids and locations backstopped by historical survey data; and 2) ground magnetics and/or VLF geophysical surveys, data compilation, mapping, prospecting and potentially trenching and drilling.
Historical data is also being analyzed in combination with samples collected in 2020 to better understand similarities in mineralization to those at Westhaven’s Shovelnose project, the most developed gold/silver property in the SBGB today.
At this point, the mineralization opportunities are wide open for Golcap. Historic workings adjacent to Redcap targeted concordant Besshi-type massive sulfides, and disconcordant quartz-sulfide veins. In layman’s speak, this means that a third potential target type is epithermal gold and silver in Spences Bridge Group volcanic rocks.
“Participating in the discovery and development of a new gold trend is a once-in-a-lifetime opportunity for most,” said Gordon Lam, CEO and President at Golcap, in a phone conversation with Baystreet.ca. “We really like what we see with our initial work and intend to take a measured approach to aggressively amass a large land package that we believe will attract potential deep-pocketed partners for us to quickly scale development and grow shareholder value.”
Spences Bridge Polishes Market Cap
In addition to what is shaping up to be widespread mineralization within the trend, the location of SBGB couldn’t be much better. The local cities are built on mining, with all the necessary infrastructure from paved roads to electricity to skilled labor nearby. Being in the south-central part of B.C. means that expenses other explorers face to ship materials to remote northern locations are greatly minimized. Plus, there is the added perk of less severe winters, meaning work can be conducted year-round.
It’s no wonder that investors from small retail to institutions are taking positions in companies that are early movers in SBGB.
Westhaven Gold put SBGB on the map in October 2018 when its stock soared following news that it had drilled 17.77 meters of 24.5 grams per tonne (g/t) gold at its Shovelnose project within SBGB, only weeks after announcing cutting 1.65 meters averaging 175 g/t gold and 245 g/t silver. Investors sopped up the news and stock, which had been creeping up from around in dime in Q1 until is erupted to a high of $1.43 in December. Westhaven continues its exploration at Shovelnose and has now identified three mineralized zones, work that was aided in 2020 by a C$5.2 million “bought deal” financing and a newly announced upsized C$13.0 million (from an original C$10.0 million) bought deal in January.
In a bought deal, a financial institution agrees to buy the complete block of stock being offered by a company. This generally speaks to the confidence that an institution has in the upside opportunity at hand.
Westhaven is still holding around 75 cents per share with a market capitalization around C$80 million.
Talisker Resources, which is actively exploring its flagship Bralorne Gold Complex in B.C., has a dominant position in the SBGB, consisting of a 194,038-hectare land package covering that represents one of the single largest staking exercises in the province’s history. The greenfield project has been subject to a large geochemical sampling program in 2019 and other exploration work that has identified numerous multi-element targets, including 8 defined drill targets. Talisker has a strategic alliance with Westhaven (whose Shovelnose project is just 5 kilometers away), under which Talisker has committed to pay a 2.5% net smelter royalty on any ground staked within five kilometers of Westhaven’s existing projects.
As with Westhaven, institutional funding has provided substantial working capital, including Talisker closing two bought deals in 2020 for a total of C$36 million. Trading around 35 cents per share, Westhaven has a market capitalization of approximately C$75 million.
While these juniors are exploring epithermal veins, Kodiak Copper joined the staking rush in 2018, gathering land on the outskirts of its peers. Kodiak’s MPD copper-gold porphyry project located in the Quesnel Trough in south-central B.C. has gained considerable interest since the discovery last year of high-grade mineralization within a wide mineralized envelope.
In October and November, the company released significant drill results showing 282 meters of 0.70% copper, 0.49 g/t gold and 2.65 g/t silver and 192 meters of 0.74% copper, 0.48 g/t gold and 2.75 g/t silver. In October, Kodiak closed a C$12.7 million non-brokered private placement, which included Teck Resources (NYSE: TECK)(TSX: TECK.A, TECK.B) building a 9.9% ownership stake in Kodiak. These events sparked another round of staking in the area.
After trading as low as 19 cents last April, shares of KDK rose as high as $3.37 in September and are holding around C$1.55 for a market capitalization of roughly C$70 million.
Golcap is a “Get-to-Know” Name
Public for only about 8 weeks, Golcap trading is becoming regular as investors learn more about the company and the emerging secret of SBGB. Trading at 46 cents per share with a market cap of only about C$8 million, the company has plenty of room to grow long legs with its assets, including a team with a strong track record of success. Teck has already shown the major miners are paying attention and with more drilling proving out resources, it seems highly likely that more majors will arrive on the scene to capitalize on a near-perfect environment and what could be the next hot Canadian mining market.
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