Since hitting $1,167 per ounce in August 2018, spot gold has been a beast, rising 39% to $1,622 per ounce early-Friday morning. The drivers are well identified as the Fed (easy monetary policy), fear (coronavirus, stocks stretched, presidential election) and maybe even a little FOMO (fear of missing out) that has gold looking to top $1,700 per ounce for the first time since December 18, 2012.
Technical traders are eyeballing the chart for spot gold to complete the cup portion of a “cup-and-handle” pattern that could be forming over the last 8 years. The bigger the pattern and longer it takes to form the more reliable it should be. The handle could take a year to form should the price complete the cup part by finding resistance between $1,800-$1,900 per ounce. The upside, though, is a pattern target in the neighborhood of $2,700-$2,800 per ounce.
Again, it will take years to play out, but it is one more piece of evidence for gold bugs to hang their hats on.
Rising gold prices should provide lift for explorers of all sizes, particularly those with highly prospective properties in mining friendly jurisdictions. Stratabound Minerals Corp. (TSX-Venture:SB) is in this mix, developing its flagship Golden Culvert Project in Yukon Territory and its new McIntyre Brook Project, New Brunswick, Canada. At McIntyre Brook, there are two known gold occurrences located 1.5 kilometers apart.
In October, results from a phase 1 trenching program at the 84-square-acre Golden Culvert Project showed gold-bearing veins, including an intersect of 95.0 grams per tonne (g/t) gold over 1.5 meters within an interval of 24.41 g/t gold over 5.0 meters.
Further, the Toronto-based company also holds a large land position hosting three base metal deposits in the New Brunswick’s Bathurst base metals camps in close proximity to three world-class mines, including Brunswick No. 12, which for many years was the world’s largest underground zinc mine. The property is highlighted by the Captain Copper-Cobalt Deposit that hosts an NI 43-101 Measured and Indicated Resource estimate reflecting mineralization defined by 30 holes drilled by Stratabound.
The projects have earned the attention of famed resource investor Eric Sprott. Jerritt Canyon Canada Ltd., a private company controlled by Sprott, acquired 9.08% of Stratabound (on a non-diluted basis) as part of a private placement raising $200,000 for the company in December.
Stratabound has most recently been active at McIntyre Brook as it works to define the resource by testing previously identified mineralization. Drill results from the first drill program confirmed significant gold mineralization in surface trenches along 300 meters of strike. Results from 40 trench samples graded as high as 41.57 g/t gold.
The two new drill holes showed that the gold extends 80 meters below surface and remains open in all directions. Hole MB019-04 intercepted 5.73 g/t gold between 68.0 meters and 70.0 meters as part of a larger intercept grading 1.20 g/t gold over 20 meters (57m-77m).
Hole MB019-03 also hit gold, cutting 5.08 g/t gold from 73.0 meters and 74.0 meters as part of a larger, low-grade interval of 0.84 g/t gold from 68 meters to 81 meters below surface.
While early in the project, management is optimistic that the type and style of the mineralization are indicative of iron oxide-copper-gold (IOCG) type deposit. In mining circles, this carries a lot of weight because IOCG ore bodies, such as Olympic Dam in Australia and Candelaria in Chile, range from around 10 million to 4 billion tonnes of contained ore grading between 0.2%-5% copper, with gold contents ranging from 0.1 to over 3.0 g/t.
The property is essentially unexplored across the 1.2 kilometers to the east to the other known gold occurrence, called the Big Pit. Here, trench samples returned 9.53 g/t gold and 1.44% copper.
Knowing that a soil sample at the Moose Brook Showing grading 1.6 g/t gold and 6.5% copper 10 kilometers to the west has to conjure up ideas of a major discovery in the overlooked part of New Brunswick as the company looks to start filling in the gaps. Investors should be looking for every piece of drill data that supports Stratabound. The company, with a market capitalization of just C$3.1 million, sitting on an IOCG deposit in its portfolio along with already surging gold prices could be just the trade setup investors were looking for.