Could this Be One of the Greatest Gold and Silver Plays of the 21st Century?

October 30, 2020 - Global Investment Daily

198 High-Grade Historic Gold Mines and Gold Showings, Largely Forgotten for 100 Years, May Soon Ignite a 21st Century Australian “Gold Rush” in NSW

On a nearly 1,000-square-kilometer property in New South Wales, a team of top geologists is in the midst of an exploration project.

The project’s goal is to identify and exploit unmined potential gold resources on properties that may contain hundreds of thousands of ounces of gold.

The starting point for this gold exploration is the 198 historic gold mines and showings on the property, many of them high-grade, dating from the 1880's to the 2000's.

All 198 of these abandoned gold mines and showings are on 8 NSW concessions, recently acquired by junior Canadian mining company Sentinel Resources Corp (CSE:SNL; OTC:SNLRF), on 945 square kilometers of land.

Most of these historical mines, all predating the 1970's, are shallow. The reason: Back in the 19th as well as much of the 20th century, miners weren’t capable of going deep. So once the mineral load was exposed and mined at the surface, the mine’s production and useful operating life were at a dead end.

Similarly, in Abitibi and West Africa, open-pit mines were worked for 40 years until the shallow gold was exhausted.

But no longer. Thanks to modern methods, these African miners are drilling down another kilometer and a half, and frequently finding additional gold reserves at these lower depths.

Reactivating historical sites by using the new high-impact, deep-drilling techniques has also proven to be a successful business strategy in Australia.

For instance, in Victoria, Fosterville South (FSX) has 3 projects – Lauriston, Golden Mountain, and Providence -- all of which contain recognized historic gold fields.

Located on 1,300 square kilometers of prime prospective land for gold exploration, FSX is working to identify prime targets for deeper drilling on these 3 gold fields – to enable the properties to once again yield high-grade production.

When the company initiated the Lauriston, Golden Mountain, and Providence projects, Fosterville South’s market cap was $20 million. Within only half a year, FSX’s market cap has already grown sixfold to $120 million.

Sentinel Resources (CSE:SNL; OTC:SNLRF) with a $15 million market cap, is where FSX was only 6 months ago. When ore bodies of economic scale are located and developed by Sentinel’s exploration team, the most promising will be reopened and then mined at far greater depths than they were previously —targeting untapped veins with significant potential gold reserves.

Sentinel CEO Rob Gamley says, “Now Sentinel Resources can apply what has been learned in Abitibi, West Africa, and Victoria. With this huge knowledge base, and the benefit of the evolution of mining methods, we can look to rejuvenate dozens of the older mines on our NSW package, so they could potentially produce millions of ounces of gold once more.”

As to how deep gold miners can go, at Newmont Mining’s Northern Territory Project, the company is building a supporting infrastructure to enable ore recovery at depths of 2 kilometers.

Millions saved in exploration costs

Sentinel is in the process of amalgamating the extensive historic geological data already obtained from Australian surveys.

These valuable government records contain about 3,000 data points and have an estimated replacement value of over $30 million. But given the sheer bulk of data, they are not easy to research without the right, experienced geological team.

One important finding is the regional structures tend to have big fluid pathways, which is positive news for Sentinel Resources. That’s because high-end deposits need fluid pathways. Without the pathways, you don’t get the metal into the deposit.

A top Sentinel geologist says, “We understand the type of rocks and deposits. Once we have the regional structures, then we start to hone in.”

“The government records at our disposal have reference scans of underground historic mining deposits and grades, including their locations,” he adds. “All this data is invaluable, saving us enormous cost and time in prospecting and exploration.”

For example, one review of the extensive data has helped locate a potential resource on the Sentinel package. It’s a historic deposit where 50,000 to 100,000 ounces of gold have already been reported. The company estimates they will have as many as 20 or more high-value targets to follow-up on. One license in their package is located just 2 ½ kilometers west of the historic Broken Hill mine, which has produced over 60 million ounces of silver.

Mines getting a “second life”

While in operation, many of the dozens and dozens of historic mines on Sentinel’s concessions were modest in size, with production ranging from 100's to 1,000's of ounces to multiple 10,000's of ounces.

NSW has already produced 40 million ounces of gold. Total in-ground gold endowment in the state is estimated between 70 million ounces to over 100 million ounces, with much of the area unexplored.

For decades, New South Wales has been attracting some of the industry’s premier mining companies--including Newcrest Mining, Saracen Mineral Holdings, Silver Lake Resources, and Northern Star Resources-- with no signs of slowing down.

In addition, Sentinel has acquired, by staking, 7 silver exploration concessions in NSW.

These silver concessions will be 100% owned by Sentinel, with no royalties or back rights owed after completion of the acquisition.

Sentinel’s “secret sauce”

All told, Sentinel Resources ( CSE:SNL; OTC:SNLRF) has:

- 15 gold and silver licenses.

- Concessions on 198 historic gold and 23 historic silver mines and exploration prospects which were generally high-grade.

- Extensive regional geological database—acquired at little cost.

- Strong management.

- Almost 1,000 square kilometers of land in resource-laden NSW.

But most important of all is Sentinel’s “secret sauce”—the company’s Technical Team of top geologists. This experienced exploration and development team has an impressive track record, to rival any other mining experts in Australia.

Technical Team members include:

>> Dr. Peter Pollard PhD, B.Sc., B. App. Sci., MAusIMM(CP) – Chief Geologist, Director. With more than 3 decades of global research and mineral exploration consulting experience, Dr. Pollard is a recognized expert in intrusion-related mineralized systems. He has presented courses on ore geology to the industry for more than 25 years.

>> Danny Marcos B.Sc., MAIG, MSEG – Exploration Manager. A field-oriented exploration geologist with 30 years of experience including review and prioritization of precious and base metals projects for both major and junior companies. His responsibilities have included design and management of field mapping and geochemical, data compilation, review, and target generation.

>> Greg Bronson, Professional Geologist—Director. Greg has more than 29 years of experience as a geologist. He has worked with companies including Noranda Explorations, Rockgate Capital Corp., and Zanzibar Gold. Mr. Bronson is an expert in mineral exploration project management and property acquisition. In addition, he has written property assessment reports and been a qualified person for National Instrument 43-101-compliant reports.

>> Dr. Chris Wilson B.Sc. (Hons), PhD, FAusIMM (CP), FSEG – Senior Advisor.
A commercially-driven and innovative exploration geologist, Dr. Wilson has over 30 years of experience in area selection, prospect generation, target generation, definition drilling, and pre-feasibility programs. He has worked in over 75 countries on most commodities and deposit styles, including sourcing multiple mines in Victoria.

Dr. Wilson’s experience includes working in partnership with Mining Hall of Fame member Robert Friedland on asset selection and geological risking for Ivanhoe Mines. As Exploration Manager for Ivanhoe Mines Mongolia, Chris was responsible for an Exploration Portfolio of over 11 million hectares. Today, Ivanhoe Mines has a market cap of $5.5 billion.

Sentinel Resources’ (CSE:SNL; OTC:SNLRF) 3-phase profit plan

With over 10 years in corporate financing and consulting, and extensive capital markets experience, CEO Rob Gamley, along with the company’s aforementioned distinguished technical team, has formulated a 3-phase strategy for maximizing ROI from Sentinel’s gold and silver packages:

>> PHASE ONE: EVALUATION -- of all 198 historic mines and prospects via multi-criteria analysis of the expansive regional database.

>> PHASE TWO: EXPLORATION – extensive field exploration of the top 50% of projects including mineralization expression, deposit types, resource bracket estimates -- as well as constraints such as maximum depths and strike continuity.

Project evaluation will be conducted using mapping; underground and surface rock, chip, and regolith sampling; verification of historic production; sample grades; and delineated mineralized surface footprints.

>> PHASE THREE: GEOLOGY -- geochemical surface sampling, geophysical surveys, and mapping to develop and consolidate linear trend outlines by historical mines and prospects.

Phase 3 identifies laterally extensive gold systems and anomalies. Sentinel’s technical team will then review the historic data. The objective is to fast-track recon follow-up and rapidly pinpoint the locations of high-grade drill-ready targets.

Peel Manning: Sentinel’s crown jewel

The news flow will be press releases for each of the historic mines and prospects identified, verified, and targeted for drilling.

After that, the company plans to explore, evaluate, and announce results at Peel Manning, which a senior geologist on Sentinel’s Technical Team says is “one of the best conceptual targets of the last 30 years.”

How it formed: The Peel Manning represents as a suture between two continental blocks. Imagine the plates of the west coast of South America subducted beneath the Peel Manning.

The ocean closes, and another continent crosses it together. This event took place between two continental plates. When these plates sutured together, a piece of sea floor was caught between them in deep water, trapping extremely gold-rich deposits.

“But what really attracted me to this formation,” says Sentinel’s senior geologist, “was when I was working in Saudi Arabia, they were stacking millions of ounces together quickly. Yet when you looked at the surface, there was just 10 or 20- meters-deep scratching, because they don’t have the big thick quartz.

“That’s not to say Peel Manning is going to be supremely mineralized, but parts of it have shed half a million ounces of minerals. In 2 areas, we think we can account for more than a million ounces of gold coming out of the Peel Manning.”

What drives these systems and the source of the gold is the sea floor slither, which on the Peel Manning, looks more gold-rich than most. Peel Manning is a colossal structure, with mineralization possibly beginning right at the surface. This may give rise to incredibly robust targets.

“The geography of the Peel-Manning is conceptual,” says CEO Gamley. “Not many people understand or therefore chase these zones. But our team has the experience.”

The promise of Sentinel’s NSW gold play

As the world’s second-biggest gold-producing country—right behind China, which is the planet’s leading gold producer—Australia has the largest gold reserves on Earth.

Specialized geologies make much of Australia’s ore easy and affordable to extract, helping the nation’s gold mining industry operate at enviably high margins.

With its handsome profit margins, and gold prices climbing above $1,900 an ounce, Australia’s explorers can economically develop new mines – or, as is the mission of Sentinel’s NSW project, wring more production out of high-grade historic mines.

When it comes to identifying targets for drilling, Sentinel enjoys a dual advantage. One is a huge pre-existing exploration database, available courtesy of the Australian government.

Even more important, Sentinel has assembled an unsurpassed technical team possessing the experience and skills to accurately identify the prime drilling targets in the company’s nearly 1,000 square kilometers of concessions.

“Sentinel’s property portfolio may turn out to be NSW’s next big treasure,” says Gamley. “And our Technical Team is the key to unlocking it.”

Other companies set to win big on gold’s massive 2020 rally:

Yamana Gold (TSX:YRI)

Yamana, has recently completed its Cerro Moro project in Argentina, giving its investors something major to look out for. The company ramped up its gold production by 20% through 2019 and its silver production by a whopping 200%. Investors can expect a serious increase in free cash flow if precious metal prices remain stable.

Recently, Yamana signed an agreement with Glencore and Goldcorp to develop and operate another Argentinian project, the Agua Rica.  Initial analysis suggests the potential for a mine life in excess of 25 years at average annual production of approximately 236,000 tonnes (520 million pounds) of copper-equivalent metal, including the contributions of gold, molybdenum, and silver, for the first 10 years of operation.

Eldorado Gold Corp. (TSX:ELD) is a mid-cap miner with assets in Europe and Brazil. It has managed to cut cost per ounce significantly in recent years. Though its share price isn’t as high as it once was, Eldorado is well positioned to make significant advancements in the near-term.

Eldorado’s President and CEO, George Burns, stated: “As a result of the team’s hard work in 2018, we are well positioned to grow annual gold production to over 500,000 ounces in 2020.  We expect this will allow us to generate significant free cash flow and provide us with the opportunity to consider debt retirement later this year.“

First Majestic Silver (TSX:FR)

Though First Majestic recently took a significant blow, as a strong coronavirus weighed on markets resulting in a poor quarterly earnings report, there’s still a lot of bullishness surrounding the stock. Adding to the negative numbers, however, was a string of highly valuable acquisitions which are likely to turn around for the metals giant in the mid-to-long-term.

While it’s primary focus remains on silver mining, it does hold a number of gold assets, as well. Additionally, silver tends to follow gold’s lead when wider markets begin to look shaky. And with analysts sounding the alarms of a global economic slowdown, both metals are likely to regain popularity among investors.

Wheaton Precious Metals Corp. (TSX:WPM)

Wheaton is a company with its hands in operations all around the world. As one of the largest ‘streaming’ companies on the planet, Wheaton has agreements with 19 operating mines and 9 projects still in development. Its unique business model allows it to leverage price increases in the precious metals sector, as well as provide a quality dividend yield for its investors.

Recently, Wheaton sealed a deal with Hudbay Minerals Inc. relating to its Rosemont project. For an initial payment of $230 million, Wheaton is entitled to 100 percent of payable gold and silver at a price of $450 per ounce and $3.90 per ounce respectively.

Randy Smallwood, Wheaton's President and Chief Executive Officer explained, "With their most recent successful construction of the Constancia mine in Peru, the Hudbay team has proven themselves to be strong and responsible mine developers, and we are excited about the same team moving this project into production. Rosemont is an ideal fit for Wheaton's portfolio of high-quality assets, and when it is in production, should add well over fifty thousand gold equivalent ounces to our already growing production profile."

Pan American Silver (TSX:PAAS)

Pan American is a world-class mining operation with active projects in Mexico, Peru, Canada, Bolivia and Argentina. Though silver has seen better days, it is still a favorite among investors stocking up on safe haven assets.

Recently, Pan American made a major acquisition of Tahoe Resources, absorbing the company’s issued and outstanding shares.

Michael Steinmann, President and Chief Executive Officer of Pan American Silver, said: "The completion of the Arrangement establishes the world's premier silver mining company with an industry-leading portfolio of assets, a robust growth profile and attractive operating margins. We are also now the largest publicly traded silver mining company by free float, offering silver mining investors enhanced scale and liquidity."

By. Chris Louverius


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