The global pandemic has pushed the gold price ever higher and demand for the precious metal shows no sign of abating amid what is in fact dwindling supply from producing mines.
This means it's a good time for explorers on the hunt for the yellow stuff, especially if they can find the capital and resources to develop projects in decent areas.
Step up a small-cap such as Melkior Resources Inc (CVE:MKR), valued at around C$17 million, which is a gold-focused explorer advancing four projects in mining-friendly Canada.
The flagship asset is the well-situated Carscallen project near Timmins, Ontario, which spans 320 claims over 47 square kilometres (sq km). It lies in the Abitibi Greenstone belt and has played host to impressive drill assays.
This year, 25.7 grams per ton (g/t) of gold over 6 metres (m) was intersected, including 102 g/t over 1.5m. In addition, the firm discovered a new VMS (Volcanogenic Massive Sulphide) setting on the property.
Notably, around 9 kilometres (km) of Carscallen's boundary is with Lake Shore Gold, which was purchased by Tahoe Resources and subsequently taken over by silver giant Pan American Silver (NASDAQ:PAAS).
Significantly, in September this year, Melkior granted mining major Kirkland Lake Gold (TSE:KL) the right to earn-in up to a 75% stake in the project via a landmark C$110 million option and joint venture agreement.
In the first two years alone, Kirkland, as operator, must spend a minimum of C$3 million at Carscallen, which includes C$1.5 million and a minimum of 3,000 meters of drilling to be completed in the first year.
Melkior also has 120 claims and four targets at the wholly-owned Val d'Or gold and base metals project in Quebec and 328 claims at the White Lake asset in Ontario.
The Maseres project at the Urban Barry camp in Quebec hosts seven targets and a till and prospecting program is underway.
Proactive recently caught up with chief executive Jon Deluce to find out more about the company and what the next 12 months could look like.
PROACTIVE; Please can you give a brief description of how Melkior was established?
JD: Melkior Resources was founded in the 1980s and director Norm Farrell was the company's founding CEO. There was a management change four years ago when my group took over to lead the company going forward.
We have been busy these past four years, acquiring two projects and adding onto the other two.
PROACTIVE: What do you consider to be your greatest/main achievement(s) to date?
JD: Our greatest achievement to date was the 2019/2020 drill program at Carscallen that yielded excellent results, including 23.5 g/t gold over 8 meters and 25.7 g/t gold over 6 meters. We also started encountering signs of being in a potential VMS environment with the high-grade silver and copper occurring alongside the gold.
These excellent results attracted Kirkland Lake Gold, and on September 19, we announced a $110 Million Option/JV agreement to earn up to 75% of Carscallen.
They have commenced their maiden 3,800-meter drill program as operator, and we look forward to seeing the results.
PROACTIVE: What are the likely catalysts for the stock over the next 12 months or so?
JD: We are excited about the following catalysts over the next 12 months:
- 3,800 Meters of drilling underway by Kirkland Lake Gold (Operator) at Carscallen
- Maiden drill program at the Val d’Or Project in December and January
- IP/Mag survey underway at Val d’Or Project
- Spring/summer drill program at the White Lake Project
- Further target definition and follow-up at our Maseres Project
- Potential acquisitions
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