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

Snapshot

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: 0.32 CAD

TSX-V:JG
Market: TSX-V
Market Cap: $56.28 m
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  • 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:

In June this year, the firm reported it had raised over C$7.5 million as it closed a second and final tranche of an oversubscribed placing for C$5 million to be used for exploration.

It said it would mean it could start drilling on its wholly owned Ikutahara project in Hokkaido and the Ohra-Takamine project in southern Kyushu concurrently with the country wide evaluation under the Barrick alliance.

A month earlier, it revealed it had expanded its ground by a further 7,711 hectares surrounding its Sanru project (now 31,822 hectares) on the island of Hokkaido. The new ground covers prospective geology along the eastern side of Sanru, as well as Irving Resources’ Omu project to the north, it had said. In August, Barrick kicked off a sampling program at Sanru.

And in late September, Japan Gold posted encouraging surface sampling results from the alliance work program covering the Mizobe project in the Southern Kyushu gold region.

The firm reported that 84 rock float samples were collected with 54 of them assaying gold greater than 0.5 grams per tonne (g/t), including 22 assaying greater than 4 g/t gold with a peak value of 18.9 g/t.

On October 21, in an extensive release, the group told investors of the work progress of  the Barrick alliance, saying that in the last two months, the bulk of the work (as well as ongoing geophysical surveys in Kyushu) had focused on the Kitami region of northeast Hokkaido,.

Here, the firm has ten projects with applications and prospecting rights covering over 86,000 hectares of prospective ground within the region, nine of which are included in the Barrick alliance.

Key highlights of the progress in the alliance were put as:

  • Geochemical sampling has been completed on 12 out of 29 Barrick Alliance projects, including four of nine alliance projects in the Kitami metallogenic Province, namely: Sanru, Aibetsu, Tenryu and Numanoue
  • Geochemical sampling activity has now shifted to the eastern Kitami Region Projects -  Hakuryu, Onne, Fujimi and Harutomi
  • Geophysical gravity surveying has been completed on four out of 14 Barrick Alliance Projects in the Southern Kyushu Epithermal Gold Province -  Mizobe, Mizobe 1st Extension, Mizobe-Onoyama and Onoyama-Yamagano
  • Geophysical gravity surveying is currently underway at the Gumyo and Isa projects

Inflection points:

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

What the boss says:

CEO John Proust spoke to Proactive's Steve Darling in July this year and updated on exploration under the Barrick Alliance at the Hokusatsu region of southern Kyushu.

"We've managed to accomplish an awful lot in quite a short period of time and in the midst of a pandemic so I'm really pleased with the efforts of our team in-country," he said.

Looking further ahead to the next few months of exploration, the company boss said "We will have a very steady stream of results coming now," adding that this would provide the firm with a "very strong picture of highest prospective areas in the country".

Contact the author at giles@proactiveinvestors.com

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Japan Gold provides update on their Barrick Alliance and the search for gold...

Japan Gold (CVE: JG-OTCQB: JGLDF) Chairman and CEO John Proust joined Steve Darling from Proactive Vancouver with an update on the exploration work under the Barrick Alliance looking at the Hokusatsu region of the southern Kyushu. Proust telling Proactive what work has been started over this...

on 9/7/20

5 min read