Junior Finds Placer Gold, Nugget at BC Project

Crews at Omineca Mining and Metals Ltd.'s (OMM:TSX.V; OMMSF:OTCMKTS) flagship Wingdam underground project in British Columbia have recovered placer gold and a 1.13-ounce nugget from waste rock material.

The 11 ounces of gold flakes resembled the placer gold from a 2012 crosscut at the site, the company said.

"The large 1.13 oz gold nugget recovered at the #2 crosscut exhibits size and dimensional characteristics of very low transport distance from source and provided a welcome surprise," Omineca noted in a release. "The nugget is larger than any produced in the 2012 bulk sample and further demonstrates the extremely coarse nature of the Wingdam deposit."

Omineca said option partner Hamilton Gold Royalties had successfully extended the haulage drift and completed the access drift for the third crosscut into the placer gold-bearing paleochannel. Crews drilled several test holes several feet above the channel floor, encountering gravels and clay material with visible placer gold.

The material was being stockpiled and would be processed at the wash plant.

When the company first successfully entered the paleochannel earlier this year, Research Capital Corp. analyst Bill Newman wrote in an update note that "we believe the announcement of the recovery of first gold from the new mining operation could be a near-term catalyst for the stock."

Research Capital Corp. analyst Bill Newman wrote in an update note that "we believe the announcement of the recovery of first gold from the new mining operation could be a near-term catalyst for the stock."

"Although getting to the gold recovery stage has taken longer than expected . . . we expect OMM to report the recovery of placer gold, which we believe could be a major catalyst for the stock," wrote Newman, who rated the stock a Speculative Buy with a CA$0.75 target.

Omineca's stock spiked at CA$0.16 on March 2 on the news of entering the paleochannel but has now settled to CA$0.075 on Wednesday.

Newsletter writer Clive Maund of CliveMaund.com also rated the stock a Speculative Buy when he analyzed it in January, before the Wingdam news.

He said the stock went through a "serious rough patch" over 30 months or so, losing 90% of its value at one point.

"On the latest 6-month chart, we can see that after hitting bottom late last year (2022), Omineca is being shepherded higher by the Bowl pattern shown, which means that the advance should accelerate," he wrote.

The Catalyst: A 'Nascent Comeback'

Prospectors have been panning for gold in Lighting Creek at the site since the late 1800s, and it was a bustling mining hub until World War II.

It sat largely undeveloped until a bulk sample late in mid-2012 was extracted from a 2.4-meter by 2.4-meter by 23-meter crosscut. It yielded 173.4 ounces gold — almost 12 pounds.

The excitement dissipated, however, after the gold market crashed and the project was placed on care and maintenance.

As the company entered the paleochannel earlier this year, Chris Temple, editor of The National Investor newsletter, welcomed what he was seeing as a "nascent comeback."

Newsletter writer Clive Maund of CliveMaund.com also rated the stock a Speculative Buy when he analyzed it in January, before the Wingdam news.

"After taking forever, it seemed, the news underscores the fact that they are hitting the paleochannel hard and on more than one front, now that they are happy with the front-end engineering work that had to come first," Temple wrote.

The about 50 cubic yards of processed waste rock material that yielded the placer gold flakes and nugget was recovered approaching the entrance to the second crosscut, where the drift transitioned from bedrock to fault gouge and into a limited amount of the paleo gravels upon entering the paleochannel, the company noted. Of the 11 ounces recovered, 9.9 ounces were recovered from approximately 20 cubic yards of the material within the first 2 meters of advance into the channel gravels, still above the channel floor.

Operations have been suspended at the mine during the spring runoff season, but it has been kept dewatered, and mining is expected to restart in the coming few weeks.

Miners plan to break through into the channel at both crosscut headings and continue through to the center of the channel.

Nearly 15 Kilometers of Placer Claims

Omineca's Wingdam project is more than 61,000 hectares and about 45 kilometers east of Quesnel, British Columbia. Hamilton Gold Royalties is a 50-50 joint venture partner with the company on the underground placer recovery.

Omineca was spun out from Copper Canyon Resources after its takeover by NOVAGOLD Resources Inc. (NG:TSX; NG:NYSE.MKT) in 2011. The junior initially sought lead-zinc deposits but soon pivoted.

As the company entered the paleochannel earlier this year, Chris Temple, editor of The National Investor newsletter, welcomed what he was seeing as a "nascent comeback."

Wingdam has 15 linear kilometers of placer claims covering a portion of Lightning Creek and the valley around it, where conditions created thick layers of unconsolidated gravel and clays that preserved and buried the paleochannel containing the placer gold.

The company is also exploratory drilling at the site, focusing on two main areas in close proximity to the underground project. The Skopos target is located atop the mountain beside Lightning Creek and the underground placer project, and Mary Creek is on a trend to the north, which shares similar characteristics to Wingdam.

Ownership and Share Structure

About 37% of Omineca is owned by management and insiders, according to the company. Chief Executive Officer Tom MacNeill's 49 North Resources Inc. owns 24.89%, MacNeill directly owns 3.78%, Chief Financial Officer and Director Andrew Davidson owns 1.92%, and Director Sylvain Laberge owns 0.12%.

The rest, 63%, is retail.

Omineca has a market cap of CA$12.46 million, and has about 178 million outstanding shares, including about 123 million of them free-floating. It trades in a 52-week range of CA$0.20 and CA$0.06.

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Important Disclosures:

1. Omineca Mining and Metals Ltd. is a billboard sponsor of Streetwise Reports and has paid SWR a sponsorship fee between US$3,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Omineca Mining and Metals Ltd.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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