MetalNRG (LSE:MNRG) posted highly encouraging news on Wednesday, with evidence of an underlying structural gold system pointing to exciting times ahead at its Gold Ridge project.
A site visit and competent persons report from SRK Exploration Services found that the mapping and sampling so far at Arizona-based Gold Ridge support the possible discovery of additional “minable gold mineralisation”.
Speaking with Mining Maven, chief executive Rolf Gerritsen explained the significance of this update.
He noted that ore had already been found in waste dumps and pillars from the three historical mines at Gold Ridge, but work so far now suggests the presence of a larger structural system that connects these.
The three historic mines at the project are Gold Ridge, Gold Prince and Dives, and they are located on the southern slopes of the Dos Cabezas Mountains. Mining in the district began in the mid-1800s, with gold coming mostly from the three mines. At Gold Prince alone, a total of 22,000 ounces of gold is thought to have been extracted.
Gerritsen noted that SRK has “identified a number of opportunities” sitting between and adjacent to the three mines. These remain so far unexplored but are “very prospective for gold”. He said SRK “believes there is connectivity and a larger structural system that connects these three mines and that it is worth exploring more extensively”.
Ultimately, SRK has recommended an initial two-stage follow-up work programme to look into this possibility.
Already, a recent site visit found that each of the major tectonic blocks at Gold Ridge contains significant differences between quartz vein geometries and orientation. Additional structural mapping will now take place, at surface and underground, to help define the area’s structural history and build a picture of how this controls gold mineralisation.
This information will then be used to expand grid soil geochemical surveys as well as ground geophysics. These will target potential orebodies alongside the major fault structure and may lead to larger disseminated zones of mineralisation.
Additionally, SRK considers it essential to conduct an initial data compilation programme to assimilate a large number of maps from Gold Ridge, as well as large quantities of digital paper and files, to create a usable archive.
Such an archive will make it easier to integrate historic sampling and drill results with future mapping and analysis.
SRK is not the only company with faith in Gold Ridge’s potential. As Gerritsen highlighted to us, the exploration services business is also working with US geologist Bart Stryhas, who will “lead the projects” and “will be taking 50% of his fees in shares”.
This is a clear indicator that “he believes in the project”, said Gerritsen, adding that this an excellent sign given Stryhas’ decades of mining experience. Indeed, it was Stryhas himself that completed the initial structural review of Gold Ridge and recommended the recently-announced work plan.
Given the current strength of gold, belief in Gold Ridge could well pay off. After all, 2020 delivered a historic all-time record for the yellow metal, with prices breaking well clear of the critical $2,000 per ounce mark. After a dip at the start of the year, 2021 is also looking strong, with the price climbing sharply and already ahead of the same point last year.
Gerritsen commented that “gold is in many ways an economic hedge”, noting that “governments have been piling up on gold” in the wake of the Covid-19 pandemic.
Those governments are seeking to “secure their economics”, he said, as a counter against inflation after the economic disaster that was 2020. This makes the safe-haven metal all the more valuable, with buyers in abundance.
“In terms of the financial dynamics, gold is in a very interesting place at this point in time,” Gerritsen said.
The chief executive expects “inflationary pressures” to have a positive impact on gold, too. He noted that “interest rates will have to come up, and there will be an impact on currency exchange”, with the dollar already beginning to appreciate versus the pound. That, too, will have “a positive impact on gold”.
“I think that over the next two, three years, we're heading towards a peak in gold,” Gerritsen declared.
On top of an excellent outlook for gold, MetalNRG also benefits from a “mining-friendly environment” in Arizona, as Gerritsen put it. Laws in the US state “are very favourable for mining” and help protect investors as well.
Gerritsen said that working in the mining-friendly Arizona makes it easy to get hold of skilled miners, tools, machinery, and even laboratories for testing. This keeps transportation costs low, too, making it an all-around excellent location to mine.
With all of that in place, for the company as a whole, Gerritsen said MetalNRG is “on a growth trajectory”. The chief executive expects the firm to become self-sustainable “in a relatively short period of time”, generating enough cash and revenue to avoid fundraising through markets.
Ultimately, he aims to be able to deliver dividends to the company’s shareholders.
With such compelling possibilities, the support of industry veteran Stryhas, an excellent location, and a strong gold price, everything is in place for MetalNRG to push forward to success at Gold Ridge.
Author: Anna Farley
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