viewJapan Gold

Japan Gold has first mover advantage in Japan and an exploration alliance with titan Barrick on 29 projects


The firm holds 31 gold projects within the major epithermal gold provinces of Japan across the country's three largest islands

Japan Gold -

Quick facts: Japan Gold

Price: 0.39 CAD

Market: TSX-V
Market Cap: $68.59 m
  • Well financed and has management know-how to rapidly advance projects
  • Japan considered one of the most stable and corruption-free jurisdictions
  • First foreign exploration company to apply for and be granted prospecting rights in Japan

What Japan Gold Corp does:

Japan Gold Corp (CVE:JG) (OTCMKTS:JGLDF) is the first foreign mineral explorer to focus solely on the east Asian island country.

The Vancouver-headquartered group, with a market cap of around C$62 million, holds 31 gold projects within the major epithermal gold provinces of Japan across the country's three largest islands - Hokkaido, Honshu and Kyushu.

These three islands have at least six distinct epithermal gold provinces, which historically hosted 70 producing gold mines, including five with over 1 million ounce deposits. The firm's exploration licenses and applications cover at least 42 historically producing mines and workings.

Almost all Japan's gold mines were closed during WW2 to focus on base metals and very few resumed production after the conflict, which has resulting in a hiatus in exploration.

Notably, the still-producing Hishikari mine on southern Kyushu in the Hokusatsu region is one of the world’s highest-grade gold mines and has churned out over 7.6 million ounces of gold between 1985-2018 at average gold grades of 30-40 grams per ton (g/t).

The firm holds around 77% of the prospective ground in the Hokusatsu region and notably, major miner Newmont Goldcorp (NYSE:NEM), which owns a 13% stake in Japan Gold, in conjunction with junior Irving Resources have also entered this area. 

Significantly, February this year, it struck an extensive tie-up with mining behemoth Barrick Gold Corp (NYSE:GOLD) (TSE:ABX) to jointly explore, develop and mine properties, covering 29  of the firm's 31 projects.

Barrick will sole fund a two-year initial evaluation of each project and potentially a three-year second phase if they meet the mining titan's criteria. There is a minimum total spend of US$3 million for each of the first two years of the Barrick alliance; and US$4 million for each of the third, fourth and fifth years, subject to some exceptions.

The alliance does not include the firm's Ikutahara project on the island of Hokkaido and the Ohra-Takamine project on the island of Kyushu and Japan Gold will continue to advance these two projects independently.

As revealed earlier, Newmont Goldcorp Inc (NYSE:NEM) holds 13% of Japan Gold, while institutional investors hold 34% of stock. The public float is 30%.

The company also holds five lithocap projects targeting copper-gold mineralization, as part of an strategic alliance with First Quantum Minerals Ltd (TSE:FM).

Japan Gold says it is operating in a stable and corrupt-free jurisdiction with an established regulatory framework. The firm says its leadership team represent decades of resource industry and business experience.

How is it doing:

On December 10, Japan Gold updated investors on the progress of its alliance with Barrick Gold, which has seen significant work done and is expected to lead to the identification of new prospective gold areas in the country.

Much of the alliance’s regional assessment work over the last six weeks has focused on projects in the Kitami region in the northeast of the island of Hokkaido, the Sapporo-Iwanai District of southwest Hokkaido, and the Togi project in Central Honshu.

Japan Gold gave the following highlights of recent activity.

  • On December 2 the company announced the acquisition of three mining rights collectively called the Kowa Project and now included in the Barrick Alliance
  • Geochemical sampling has been completed on 20 out of 30 Barrick Alliance Projects throughout Japan
  • Since the last update on October 21, geochemical sampling has been completed on 10 of 11 Barrick Alliance Hokkaido Projects including: Sanru, Aibetsu, Tenryu, Numanoue, Hakuryu, Onne, Fujimi, Harutomi, Buho, Minamikayabe, and 50% of the new Kanehana Alliance project
  • Geochemical sampling is now also complete on the Togi Project in central Honshu
  • Geophysical gravity surveying has been completed on 8 out of 15 Barrick Alliance Projects in Southern Kyushu: Mizobe, Mizobe 1st Extension, Mizobe-Onoyama, Onoyama-Yamagano, Onoyama, Kurino, Gumyo and Isa
  • Geophysical gravity surveying will be completed at the Togi Project in December

The company said its personnel will spend the first two weeks of December in Southern Kyushu sampling the Ebino and Tobaru-Fuke Extension Projects before taking a break over the New Year period

Earlier in December, looking at its other projects, Japan Gold updated investors on drilling at its Ohra-Takamine project, a site of previous production, on the island of Kyushu, where one hole has been completed and a second was started this month.

The two holes have been sited along an open-ended, 3.5 kilometre corridor of alteration and epithermal mineralization defined by the Ohra, Takamine and Urushi historic mines, where mining was halted in 1943 by the government-imposed moratorium.

An initial batch of samples from the upper part of the hole were dispatched in mid-October and the remaining samples have now been sent. Final lab results are not expected until early 2021.

The same month, Japan Gold also announced that it had signed a joint venture agreement with Koatsu Kogyo Corporation for three mining rights licenses. 

The three mining rights, collectively called the Kowa Project, comprises 389 hectares and will be included in the Barrick Alliance. The project adjoins the Japan Gold’s Ohra-Takamine Project, and the Barrick Alliance Mizobe-Onoyama Project in Southern Kyushu.

With the signing of the joint venture, Japan Gold said it has complete coverage over strike extensions to the Ohra-Takamine mineralization corridor, along with the numerous under-explored veins contained within the properties.

In the boardroom, in November, Japan Gold said that geologist Paul Harbidge, who has a track record of discovering world-class gold deposits, had been added to the explorer's board of directors. 

Harbidge is currently the president and CEO of GT Gold Corp (CVE:GTT) (OTCMKTS:GTGDF) (FRA:1JZ), where he is advancing a new gold-rich copper porphyry project in northern British Columbia. Before that, he was senior vice-president of exploration at Goldcorp Inc from 2016 until its acquisition by Newmont Mining Corp in April 2019.

Meanwhile, Japan Gold added that founding director Dr Sally Eyre had stepped down from the board to focus on other business endeavours.

Inflection points:

  • Assays from geochemical and geophysical surveys
  • More exploration results
  • Gold price moves

What the boss says:

In the group's recent update, Japan Gold's chief executive CEO John Proust said: "The successful Barrick Alliance activities to date are a testament to the dedication and commitment of the Japan Gold personnel and subcontractors over the past nine months.

"This has led to the significant amount of work that has been completed to date on the Barrick Alliance expanded project portfolio. As results of the geophysical and geochemical programs are received we expect to identify new highly prospective areas in the major gold provinces of Japan."

Contact the author at jon.hopkins@proactiveinvestors.com

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