Omineca Mining and Metals Ltd. (OMM:TSX.V; OMMSF:OTCMKTS) recently reported that its joint venture partner Hamilton Gold Royalties and mining contractor Fortis Mining Engineering and Manufacturing successfully entered the placer gold-bearing paleochannel at the Wingdam project.
Placer gold is the resource extracted from "placer mining," which is also known as alluvial gold mining or placer gold recovery. For Omineca, this mining method involves extracting alluvial gold trapped underneath the Lightning Creek channel that is located 40 kilometers east of Quesnel, British Columbia. Alluvial gold refers to the gold formed by the separation of gold and quartz ore due to the erosion of rock gold in the mountain toward the river, creek, or stream.
Omineca’s contractor Fortis reported that the placer gold seen in the paleochannel is similar in character and size to the gold they recovered in 2012. Back in 2012, the company did a test bulk sample extracting 5.4 kg of raw placer gold from crosscut tunnel 2.4 meters wide and 24 meters long, cutting across the gold-bearing channel. They have a video detailing their placer gold extraction process. The entire channel spans 2.4 km.
Omineca holds properties in British Columbia and the Yukon for the exploration and development of mineral resources. Other than its flagship Wingdam project in Lightning Creek valley, the company projects also include the Fraser Canyon project, Mouse Mountain project, and Kiwi project.
The Catalyst: Placer Gold Recovery Results to be Announced Soon
The results of the placer gold recovery will be announced soon after tabulation. Omineca added that Fortis will begin another crosscut toward the heart of the gold-bearing channel right after they extended access drift.
Omineca’s stock was rated a speculative Buy by Research Capital Corp.
The company further noted that Fortis has started using drill and blast methods together with mechanical mining methods and road header to "expedite advancement through harder than expected quartzite in bedrock sections." The contractor added an Alpine road header to support mining within the paleochannel.
Instead of ground freezing technology commonly used in placer gold recovery, the contractor utilized spilings, grout, special shotcrete formulations, and steel sets to ensure the stability of the interior of the paleochannel.
Why Gold?
Gold remains to be a go-to safe haven versus the dollar, according to the banks.
Future Trends Digest said that central banks are buying gold because "they know globalization is ending and the petrodollar dynamics are shifting." This stems from the West calling to decouple from China and Russia, leading to fragmentation of the globe in terms of trade.
On the other hand, the National Inflation Association projected conservative growth for gold, saying it would grow from its current price nearing US$2,000.
"It doesn't mean the dollar is about to collapse overnight, but it means that the dollar isn't viewed as risk-free anymore, and that is probably worth a 20% decline," FTD said, pointing to gold as a cushion to the effects of global tensions.
On the other hand, the National Inflation Association projected conservative growth for gold, saying it would grow from its current price nearing US$2,000, but not pierce US$2,670 point this year.
"If you are doubting gold's 2023 rally to US$2,670 per oz, it is a very good sign...that is the way you are supposed to feel! If everybody believed gold was going to US$2,670 per oz this year, it would already be there today," NIA said.
Why Omineca?
With the successful entrance in the placer gold-bearing paleochannel, the company is nearing production, which can positively impact stock price. A week ago, Omineca’s stock was rated a speculative Buy at CA$0.16 per share, with Research Capital setting its target price at CA$0.75 apiece for the stock.
For his part, technical analyst Clive Maund shared that Omineca’s stock chart demonstrated the Bowl pattern coming from a peak, then down to support in November last year, to an uptick this year.
The junior resources explorer recently secured US$2.8 million in brokered financing of Flow-Through Units, which is an indication of "strong investor demand". Investors are buying into the company as it nears production.
For his part, technical analyst Clive Maund shared that Omineca’s stock chart demonstrated the Bowl pattern coming from a peak, then down to support in November last year, to an uptick this year.
The dip in prices last November, he said, paved the way for many bargain hunters to come in and restore upside potential. He believes another upleg will quickly result in a bullish cross of the stock’s moving averages.
"In common with many other better quality juniors, things (for Omineca’s shares) are taking a turn for the better now, and the price is starting to recover, given the unprecedentedly positive outlook for the sector for various currency, inflation, and geopolitical reasons. This improvement is expected to continue and to accelerate," Maund said.
Ownership and Share Structure
Streetwise Ownership Overview*
Omineca Mining and Metals Ltd. (OMM:TSX.V; OMMSF:OTCMKTS)
Based on their March 2023 update presentation, Omineca reported that 42.4% of the company’s shares were held by management and insiders. The balance is owned by retail investors.
According to Reuters, Omineca has a market cap of CA$19.7 million with 145.96 million shares outstanding. It trades in the 52-week range from CA$0.07 and CA$0.20.
