New Gold Deposit Discovery in Yukon Shows Promising Potential

Snowline Gold Corp. (SGD:CSE;  SNWGF:OTCQB) has unveiled an initial mineral resource estimate for its Valley deposit, marking the first discovery within its wholly-owned 1,110-square-kilometer Rogue project in Canada's Yukon territory. This estimate, prepared in accordance with National Instrument 43-101 standards, underscores the significant potential of this gold deposit.

The initial mineral resource estimate (MRE) for the Valley deposit is based on 27,911 meters of drill data from 68 holes available as of May 15, 2024. The MRE indicates 76 million tonnes at 1.66 grams per tonne gold (g/t Au), translating to 4.05 million ounces (Moz) Au in the indicated category. Additionally, the inferred resources are estimated at 81 million tonnes at 1.25 g/t Au, amounting to 3.26 Moz gold. This estimate uses a 0.4 g/t Au cut-off grade and highlights the deposit's low sensitivity to changes in cut-off grades, which provides resilience against cost increases and decreases in gold prices. Notably, the break-even price for gold at a 0.6 g/t cut-off grade is US$1,350 per ounce.

Further details on the initial MRE, including estimation methods and procedures, will be detailed in a forthcoming National Instrument 43-101 technical report, to be filed on SEDAR+ within 45 days.

The Valley gold deposit belongs to a class of gold systems known as reduced intrusion-related gold systems (RIRGS). These systems are characterized by gold-bearing quartz vein arrays within and near felsic intrusions. The mineralization at Valley is hosted primarily within a polyphase granodiorite stock and surrounding hornfels sedimentary rock. The high density of veins and high bulk tonnage grades make RIRGS attractive for mining. Gold occurs natively within quartz veins, associated with minor amounts of bismuth and tellurium minerals, with an overall low sulfur content. Metallurgical testing indicates that the mineralization is non-refractory and amenable to conventional processing techniques, with average gold recoveries exceeding 94% using various methods.

A True Gold Mine?

The gold mining sector is experiencing a robust resurgence due to global economic shifts and increasing demand for gold. Central banks and sophisticated investors are increasingly viewing gold as a superior store of value, leading to significant purchases at historically high levels.

Matthew Piepenburg of VON GREYERZ, Gold Switzerland, noted on June 19, "Gold, now recognized as a Tier-1 asset, is being bought by central banks and sophisticated investors at objectively rising (historical) levels because it is a measurably superior store of value than any fiat currency or sovereign I.O.U."

"If you look at the map of Snowline's properties and projects, there's a lot more that it can explore." This optimism is coupled with acquisition potential, as he "thinks they are set up for a major to come and buy them," Jeff Clark of The Gold Advisor said.

This trend is amplified by the move away from U.S. Treasuries, with global central banks favoring physical gold. Piepenburg highlights that "more global central banks prefer to save in physical gold rather than U.S. debt obligations," and numerous BRICs+ countries are settling trade surpluses in gold, enhancing its demand and stability.

Stewart Thomson's June 18 report on 321 Gold underscored the bullish outlook for gold, predicting a potential breakout to US$2,600.

He emphasized the significant support zones, describing the US$2,150-US$1,985 area as "arguably the most important support zone in the entire history of the U.S. gold market" and noted strong buying interest from global banks and investors at these levels.

Katusa Research also reinforced this sentiment by noting the substantial increase in gold prices, which have risen 15% this year, pointing to the growing demand from the space industry and highlights the investment opportunity in gold mining stocks, which remain undervalued despite high gold prices.

Company Catalysts

"In just two full exploration seasons, Snowline has advanced its Valley target from greenfield discovery holes to a robust multimillion-ounce gold deposit with continued exploration upside," said Scott Berdahl, CEO and director of Snowline, in a company news release. He highlighted the exceptional continuity of strong, non-refractory gold mineralization beginning at the surface and praised the ongoing efforts of the company's field team.

According to the company, Snowline Gold is actively expanding this initial MRE with its largest drill campaign to date while also exploring multiple greenfield targets within the region. The company views Valley as having excellent potential for growth, supported by broad intervals of gold mineralization from drilling on multiple edges of the system.

"The rapid advancement is a testament both to the quality of the discovery — with exceptional continuity of strong, non-refractory gold mineralization beginning at surface — and to the quality of the ongoing work by our talented and hard-working field team. We believe that Valley has excellent potential for continued growth, as evidenced by broad intervals of 1-2 g/t gold mineralization returned in drilling on multiple edges of the system. We are actively building on this milestone for Valley with our largest drill campaign to date, currently underway, while testing multiple prospective greenfield targets in a region we believe has the potential to become a prolific minerals district," said Berdahl.

An Acquisitions Target

Snowline Gold received positive reviews from industry expert Jeff Clark of The Gold Advisor, highlighting both its current successes and future potential.

In an April report, Clark praised the company, stating, "It's obviously been a big winner for us," indicating the substantial returns on their investment. He further emphasized the future potential by saying, "The thing about Snowline is that there is still a long way to go," and underscoring the significant exploration achievements with, "Snowline has made a clear discovery in the Yukon." Clark also pointed out the substantial resource potential by quoting Agentis Capital, which expects "over 11 million ounces of gold in it. And that's just the Valley deposit." Additionally, he noted the extensive exploration opportunities ahead for Snowline Gold, stating, "If you look at the map of Snowline's properties and projects, there's a lot more that it can explore." This optimism is coupled with acquisition potential, as he "thinks they are set up for a major to come and buy them."

Further reinforcing this positive outlook, a June 17 update from Clark highlighted Snowline's impressive progress and ongoing exploration potential. The report mentioned how CEO Scott Berdahl noted, "In just two full exploration seasons, Snowline has advanced its Valley target from greenfield discovery holes to a robust multi-million-ounce gold deposit with continued exploration upside."

He also expressed confidence in the future growth, stating, "We believe that Valley has excellent potential for continued growth." The report emphasized the broader prospects beyond the initial discovery, stating, "Management believes that combined with Valley, the other 100%-owned projects demonstrate strong potential to host a previously unrecognized gold district." 

The investment community's confidence in Snowline Gold was also evident, as the June 17 report continued, "The stock is up on the news, on a down day for gold. That's because the investment community now has confirmation of what Valley contains. And that there's potential to uncover lots more." This highlights the strong investor confidence and substantial growth potential that Snowline Gold holds.

Ownership and Share Structure

According to Reuters, 10.70% of Snowline Gold is held by management and insiders. 

18526 Yukon Inc. owns 17.49%, with 27.5 million shares as a strategic investor.

16.83% is held by institutions. Crescat Capital LLC owns 6.66%, with 10.47 million shares. 1832 Asset Management LP owns 5.92%, with 9.3 million. Van Eck Associates Corp. has 1.32%, with 2.07 million, and T. Rowe Price Associates Inc. owns 1.19%, with 1.87 million. 

The rest is available for retail investors.

Important Disclosures:

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of [Snowline Gold Corp.
2. James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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