(Later this year I’ll be introducing you to a strategically placed junior gold company in the Newfoundland gold play. In advance of that, I asked Daniel Cook–who has been following EVERYBODY in this play–to give us a 2-part overview. Here is Part 1, and Part 2 is tomorrow)
By Daniel T. Cook
Newfoundland is the hottest gold play in the world in 2021 by a country mile, replacing Australia, the 2020 Gold Play Of The Year.
The flagship junior stock, New Found Gold Corp (NFG-TSXv), has run from $1.50 – $13 in the last 12 months, due to some spectacular, off-the-charts drill holes—look at these:
In my 30 years in junior mining, I have never seen consistent results like this. It’s like an old-style area play, which are getting few and far between.
In today’s story I’ll give you some background on how this play got started, and the theory of one famous geologist—Shawn Ryan—on why this play could develop into a big new world class gold camp. Tomorrow I’ll outline some of the players involved.
Before we dig into Newfoundland’s exciting future let’s reflect briefly on its history. One entity (Newfoundland Railway Company) owned all the claims.
They weren’t in the mining business at the time so little or no exploration work was done. Base metals like zinc and lead were known to occur in economic quantities and have been mined since the mid-19th century, at least, but gold exploration didn’t begin in earnest until 1988.
Noranda was the first (largest) mover to get serious about exploring for gold. They sampled and prospected numerous locations. Gold anomalies were found to be widespread.
The widespread nature of gold mineralization was arguably Noranda’s downfall in Newfoundland. They had too many anomalies! This resulted in Noranda jumping from place to place drilling several short shallow holes at each. When they didn’t hit a major gold intersection Noranda moved on (never to return).
Newfoundland’s first gold “rush”, largely carried out by Noranda, fizzled fast. By 1990 super flow-through, a tax advantaged funding tool for Canadian resource investors, was cancelled. Grassroots exploration for Gold in Newfoundland grinded to a halt.
Bre-X, perhaps the largest fraud (scandal) of mining history came crashing down in 1997.
Times were tough enough with gold selling less than $400 per ounce. Then Bre-X crippled an already handicapped exploration industry.
Another exploration push started in 2001 with online map staking, but fizzled.
“Newfoundland has had fits and starts since then but nothing major.” says prospector and famous gold-finder Shawn Ryan.
Does The Great 2021 Gold Rush Have Legs?
Recent excitement for Newfoundland gold stocks, is it warranted? Has the island really caught fire this time?
Yes. The resources rush underway is just getting going. Tons of smoke, and one serious fire is already burning. Almost surely it’ll last for many more years.
And yes, Newfoundland gold stocks have been red hot. Many have doubled and tripled since March. Some have gained even more, hence the excitement!
But will they got hotter right now or cool off for awhile?
I’ll address all of that.
So get your pen handy if it isn’t already.
Today you’re going to learn (almost) everything you need to know. You’ll be off to a swift start. Or advance your understanding if you’re already kind of hip on Newfoundland. After today’s reading you’re going to have a firmer foundation — A firmer understanding — A thesis for investing in Newfoundland gold stocks going forward. Tis’ my promise to you.
You’re not going to get any specific stock picks today.
In our next feature–tomorrow–on Newfoundland you’ll get specific picks. Fair enough?
Seriously, speculating on early stage explorers isn’t a joke. Some people will amass huge fortunes and start getting wealthy during this rush, which is awesome. You want to be one of those people. Unfortunately many others will lose a lot of money. And losing lots of money isn’t funny.
So I’m not joking around. Neither should you. This is serious business.
Here’s what you need to write down and think about. Put simply in a way non-geologists can understand. These are the 3 key reasons, the “big ideas” for why Shawn Ryan, famous gold-finder and most enterprising prospector, spent millions of dollars positioning himself (staking claims) across Newfoundland years ago.
- One big structure. One major event. The entire province was flushed with Gold. This means any and all structures (cracks) have higher than average probability for hosting gold.
- Age dating was the “lightbulb moment” for Ryan. From north to south across Newfoundland known deposits and mines are all hosted in rocks of similar age range (approximately 380 to 430 million years old).
- Gabbros – gabbros – gabbros. Gabbros are a brittle rock. Gabbros crack creating room for gold bearing fluids to flow in. Plus, rich in iron and titanium gabbros cause a chemical reaction allowing gold to dump out of the solution.
Given what’s outlined above, Ryan’s key 3, he believes New Found Gold’s Keats zone (featuring 146 g/t Au over 25 m) won’t be a one hit wonder.
Ryan expects discoveries across the province will continue to be made one by one. Not overnight but many more discoveries will happen.
Beyond geological stuff: Ease of access, gentle terrain, weather that isn’t super harsh, and existing roads make Newfoundland a favorable place for discovery. Government is supportive. Newfoundland ranks top 10 globally for mining investment attractiveness. Mining is possible year round.
Bottom Line: Exciting area play in Newfoundland is underway. I’ve done all the digging. Stay tuned because my next feature–tomorrow–on Newfoundland contains specific stock picks, as promised!
Knowing what you now know, you won’t want to miss this next update.
PS—I’ve been researching and investing in Newfoundland gold stocks since 2017. I was way early recommending Marathon Gold (MOZ, TSX) and Sokoman (SIC, TSX-V), both became 5 and 10-baggers. A chance meeting with Shawn Ryan at Diamond Tooth Gerties (Dawson City, Yukon) actually helped tip me off for what was coming to Newfoundland.
Daniel T. Cook