As Gold Prices Pull Back, Investor Attention Should Ramp Up
Worried about inflation earlier this year, investors turned to gold, a long-held store of wealth and inflation hedge, driving prices in May up near the precious metal’s all-time high encroaching on $2,100 per ounce. A pullback has followed, accelerated recently on hope that the U.S. Federal Reserve will tap on the brakes on raising interest rates, creating a value opportunity to take a look at gold at a depressed level.
Gold stocks fall into the same kettle of opportunity. Majors like Barrick Gold Corp. (NYSE: GOLD)(TSX: ABX), B2Gold Corp. (NYSE: BTG)(TSX: BTO), and Eldorado Gold (NYSE: EGO)(TSX: ELD) have slid from highs over the last 4-5 months. The effect has dropped the value of ancillary plays, such as Osisko Gold Royalties (TSX: OR) and junior explorers, including Gander Gold Corp. (CSE: GAND) (OTCQB: GANDF).
While the aforementioned blue chips will remain the talk of analysts about value plays, a smaller play like Gander Gold may be where the upward price action can really get intriguing with its inherently higher beta.
Gander Gold is one of Newfoundland’s largest claimholders, controlling about 2,260 square kilometers of highly prospective gold property. The company is in one of Canada’s hotbeds of gold exploration activity, rubbing shoulders with companies like New Found Gold and its Keats Zone discovery that got investors buzzing with a discovery of 25.6 meters grading a stunning 146.2 grams per tonne gold.
New Found Gold’s land position and discoveries catapult the company from a microcap to a valuation over $1 billion.
With that, investors will want to learn names like Lizard Pond and Thwart Island, two of the targets of Gander Gold that have now undergone their first RAB (rotary air blast) drill programs. In a September 21, 2023 news release, the company announced that it had completed its maiden Summer 2023 drill program, with more than 30 holes completed, and investors are now waiting with bated breath for assay results and Phase 2 planning to start defining the possible resources in the ground.
The RAB drilling is part of a systematic approach of gold-finding by legend Shawn Ryan, a key technical advisor to Gander Gold. The company is following Ryan’s playbook that has been responsible for finding multi-millions of ounces of gold on the western side of Canada. Ryan doesn’t believe in drilling the earth into Swiss cheese wildly hunting for resources, he takes a highly technical (e.g., LiDAR and fixed-wing MAG/VLF surveys, ground VLF surveys) and methodical approach before a drill bit (first RAB, then diamond) ever penetrates the ground that has proven remarkably successful and extremely responsible both financially and environmentally.
The Lizard Pond property is approximately 13 kilometers west of Newfound Gold's Queensway South Project. Newfound Gold has previously reported the presence of visible gold and several significant gold intercepts from diamond drilling in the nearby Eastern Pond area. Sampling and testing by Gander Gold this summer identified a gold-in-soil anomaly at Lizard Pond spanning about one kilometer in potential strike.
The anomaly contained strong Arsenic (As) and Antimony (Sb) association. As and Sb are critical pathfinder elements for gold in Newfoundland. To put it in layman terms, if Gander were a detective looking for a criminal, it found some foot and fingerprints. The anomaly data dovetails with rock geochemistry results in 2022 that returned numerous anomalous gold-in-rock values greater than 0.5 g/t gold (Au) and up to 1.04 g/t Au.
Not one to sit back and wait, Gander Gold’s team is constantly moving forward. With drill results pending from Lizard Pond and Thwart Island, part of its bigger Gander South and BLT projects, respectively, along with pending results from the Gander North Project, Gander Gold is preparing for first-ever drilling at the Goldenrod and Golden Horseshoe zones within its nearby Mount Peyton Project, more exploration work that could lead to Newfoundland’s next big gold find.
Gander Gold Corp. (CSE: GAND) (OTCQB: GANDF) Full Corporate Write-Up: Click Here.
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