Rising Yields, Inflation Concerns Buoy Gold Value; Explorers Primed for Surge

March 03, 2021 - Baystreet.ca

The recent jump in US treasury yields was no hurdle for gold. Prices rose over the week on fears of rising inflation, moving investors into the safe haven metal.

“We are seeing investment flows into gold as market participants grow more anxious about rising real rates that can impact equity valuations,” commented TD Securities commodity strategist Daniel Ghali.

Rising real yields and inflation concerns are making equity valuations look stretched in comparison, prompting investors’ divestments into the sector.

“The dollar … is low and that is supporting. Also, the real reason for the gold prices to increase in the longer term is the chances of inflation picking up,” Commerzbank’s Eugen Weinberg added.

Companies boasting major prospects and promising exploration programs in early 2021 could ride the effects of this landscape to new heights. Two companies fitting that bill are Marathon Gold Corp (TSX: MOZ) and JNC Resources Inc. (CSE: JNC).

Contrasting opportunities

Toronto’s Marathon is a growth-oriented gold company developing its property in Newfoundland and Labrador – the fully-owned Valentine Gold Project. Newfoundland and Labrador is one of the world’s top mining regions. The property hosts a 20-kilometre system with four separate mineralized deposits.

The company closed 2020 with some strong drilling results and kicks 2021 off set to continue that path with a very active drilling program. Last year’s final set of assay results returned readings as high as 111.62 g/t Au over 1 metre.

Matt Manson, President & CEO commented: “These results represent the final batch of drill holes completed prior to our seasonal shutdown at the end of November. Our 2020 Exploration Program, including the Berry Infill Drill Program added mid-year, has been successful in delineating an important new area of gold mineralization at the Valentine Gold Project.”

Vancouver’s JNC Resources is an exploration company aiming to develop under-explored properties to bring value to shareholders. Their efforts rely on the strategic partnerships and growth opportunities identified and secured by its tenured team.

JNC has been operating exclusively in North America to date, with its 100%-optioned Triple 9 project in South Central British Columbia, just by Sicamous. However, at the end of 2020, they announced an expansion into Australian territory.

The company boasts a sturdy and tenured management team, with COO Chris Wilson recently hitting the newswires as part of the Zacatecas Silver Corp. (TSXV: ZAC) megaproject. ZAC made its TSX debut on March 2nd, 2021 at $0.50 and rose up to an impressive $1.70 –for good reasons.

ZAC’s project is located in the Zacatecas Mining District, Mexico – origin of 21% of the country’s gold and 53% of their silver. The team has assembled a contiguous exploration stage property of 149 mining concessions over 7,286 hectares, going all-in on resource expansion and exploration. The concession includes previously overlooked sections and an existing inferred silver resource – one that ZAC aims to confirm, expand, and grow.

Wilson is helming the revamp of the concession’s mineralization models, which he believes will showcase the likelihood of vertical precious metals intervals that are significantly larger than any on record for the area.

Looking Ahead: Busy Global Plans for 2021

Marathon is wasting no time after the discovery – the 2021 Exploration Program will comprise 52,000 metres of drilling with a budget of CAS $10.5 million. Up to 44,000 metres will be targeted over 3 zones, aiming to increase drill density of previous results, resource expansion and new possible discoveries.

CEO Manson expanded: “Whereas our 2020 exploration work was discovery oriented, our 2021 Exploration Program is designed to add ounces, with up to 30,000 metres of additional in-fill drilling planned for the Berry Zone over its full 1.5 kilometre length. We also plan to return to the Victory and Sprite Deposits, with up to 8,000 metres of drilling in each area. Modest quantities of mineral resources have been previously estimated at each of Victory and Sprite based on limited drilling completed prior to 2015. The new drill program will be designed to test for the tightly concentrated “Main Zone” type mineralization located immediately proximal to the Valentine Lake Shear Zone in the style seen at the Leprechaun Deposit, and now also at Berry, and which may have been missed by previous drilling patterns.”

Back in December 2020, JNC signed a Letter of Intent (LOI) with Ontario-based Southern Precious Minerals Limited for development of the latter’s New South Wales properties in Australia. The deal has moved into its latter stages, as parties finalize a definitive agreement.

New South Wales is a historically prolific exploration region that hosts high-potential deposits to this day. The area has produced mineral since the 1850s. It’s the #2 gold-producing territory in the country, with an endowment of 3160+ tonnes.

"I firmly believe we are executing the necessary steps required for JNC Resources to become a successful and global exploration company. I am very excited to put the difficult working conditions of 2020 behind us and move forward with great strides to explore and develop the world class holdings we have acquired through 2020. I look forward to executing the vision we have planned for 2021," said CEO Mike Mulberry.

Being a mining hotspot since the 1800s, the NSW region has a highly skilled workforce and is notorious for its safety-first and innovation-driven approach to exploration.

Besides the favorable logistics, there are also geophysical ones: the area that hosts the project has logged historical grades as high as 132 g/t Au and 1648 g/t Ag.

Preparing to Explore

As the SPML/JNC partnership comes to fruition, the former has continued to provide valuable information regarding the impending project. A recent press release revealed that SPML has been engaged in the compilation and reinterpretation of legacy geochemical and geological data with new surveying technology. The aim: to identify the most robust targets for field-based exploration.

Once everything is finalized, JNC will have access to two properties:

- Malebo, which spans 40km. over the Lachlan Orogenic belt. The Lachlan Orogen region of New South Wales Victoria and eastern Tasmania is comprised of a series of prolifically mineralized terranes with several mineralized deposits.

- Solomons – located right in the New England Orogenic Terrane region. The NEOT hosts extensive alluvial gold fields and economically important gold deposits, including 12 historic gold mines. Historical grades range a high as 132 g/t Au and 1648 g/t Ag.

Two properties with the makings of an exciting exploration season.

As the deal approaches completion and operations get set to begin, all signs point to an auspicious 2021 for Mulberry and his team.

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