Canada's Largest Untapped Gold Deposit Now Open to Investors By Matt Badiali, editor, S&A Resource Report
Saturday, April 3, 2010
Mining investors are going to start hearing the words "Golden Triangle" soon.
They're going to start hearing them a lot.
I flew up to this remote corner of Canada – a section of northwestern British Columbia that's roughly the size of Connecticut – in the summer of 2007... to visit the largest gold deposit ever found in the country at that time.
The Golden Triangle isn't just home to the gold deposit I visited. It turns out, another deposit, located practically right next door, contains even more gold, according to the Vancouver Sun.
One of the deposits in the Golden Triangle is so rich, one geologist called it "the highest grade gold I've seen in my career… and I've been in the business since 1976." And its size grew with every hole the company drilled. Since its initial discovery, the resource has increased by almost 500%.
And Pierre Gratton, CEO of the Mining Association of British Columbia, calls yet another find simply "too large to ignore."
Altogether, this tiny area holds an estimated 15 world-class gold deposits... all virtually untapped.
But the Canadian government is going to change all that…
You see, the Golden Triangle has been mostly impossible to mine for the past 150 years because of its remote location and lack of power infrastructure (I had to visit by helicopter). While many folks get excited about big gold discoveries, they often forget that roads and power lines are as important to a mine as ore grades.
Well, roads and power lines are on their way to the Golden Triangle...
The British Columbia provincial government – in conjunction with the federal government of Canada – has approved the construction of a 200-mile power line. The new high-voltage Northwest Transmission Line is scheduled to cut right through the heart of the Golden Triangle... and it's going to bring a mining boom along with it.
You see, British Columbia is great place to build a gold mine. It's mine-friendly – five mines have opened there in the last three years. Another 50 projects are in the engineering stage, and 100 more projects show encouraging exploration results.
Canadian politicians believe the new electrical line will spur the development of 11 new mines that, in turn, will generate $15 billion in private investment, create as many as 11,000 jobs, and produce $300 million in annual tax revenues. It will also send the shares of companies that own prospective stakes in these potential mines soaring.
Right now, a group of small mining companies control the majority of the land in the Golden Triangle. A few years ago, this unique group of companies began buying up all the land in the region, in anticipation of this development. These small companies knew that if a power grid were ever built in the Golden Triangle, the land there would be worth an absolute fortune.
Here's a short list of companies that stand to benefit:
Mine
Company
Symbol
Market Value
Red Chris
Imperial Metals
TSX: III
$555 million
Galore Creek
NovaGold
AMEX: NG
$1.4 billion
Schaft Creek
Copper Fox Metals
TSX V: CUU
$40 million
Turnagain
Hard Creek Nickel
TSX: HNC
$57 million
Mount Klappan
Fortune Minerals
TSX: FT
$95 million
Kutcho
Capstone Mining
TSX: CS
$591 million
GJ/Kinaskan
NGEx
TSX: NGQ
$147 million
Snowfields
Silver Standard
Nasdaq: SSRI
$1.4 billion
KSM
Seabridge Gold
AMEX: SA
$823 million
Bronson Slope
Skyline Gold
TSX V: SK
$8.6 million
Storie
Columbia Yukon
TSX V: CYU
$10.4 million
I believe the new line will send some of these mining stocks up hundreds of percent.
You see, because of their remote location and the lack of infrastructure, the market discounts giant gold deposits in British Columbia's Golden Triangle by about 87% compared to the average resources in the gold industry. Despite the sizeable markets caps in some of the companies above, they could get much larger.
By buying shares in some of the companies above, you get enormous gold projects for less than $20 per ounce that will become mines in the next 10 years. Other investors are spending $150 an ounce to buy gold deposits that may never become mines and sit in far dicier political climates – places like Romania, for example. Well, the companies listed above own huge deposits in an extremely mining friendly – and safe – country.
As I mentioned, I had to take a helicopter to visit the Golden Triangle… it's a frontier kind of place. The largest "city" has just 12,000 people. Given its remoteness, the companies that control some of the most valuable and important parts of the Golden Triangle today have virtually zero analyst coverage. I love this sort of speculation.
If you're like me, and believe the price of gold is going to go much higher soon, then use this list as a jumping off point to find "Golden Triangle" plays. These companies are going to see a whole lot more investor interest in the next few years… and they're going to go much higher in value.
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