Golden Sky Minerals: Yukon Explorer Surrounded by Gold

With precious metals in a bull market, the sector presents investors with opportunities to make outsized gains that few other sectors have the ability to reproduce.

In March this year, I initiated coverage of Galane Gold, a deeply undervalued gold producer. Since then, the stock has been up as much as 88%. The company is advancing the expansion of its Galaxy project in South Africa and still offers tremendous upside.

In this piece I want to focus on a company on a different rung of the mining ladder – an exploration company. The company in focus is Golden Sky Minerals Corp. (AUEN.V).

Source: Company Presentation (click to enlarge)

Management Team

The Company is led by John Newell, who is the President, CEO and Director. Mr. Newell has 38 years’ experience in the investment industry acting as an officer, director, portfolio manager and investment advisor in some of the largest investment firms in Canada including Scotia McLeod, CIBC Wood Gundy and Richardson Greenshields (RBC Dominion Securities).

John has raised over $500 Million in capital for exploration teams and producers. He is a Portfolio Manager at Fieldhouse Capital Management, specialising in precious metals equities. His broad network of retail and institutional investors has ensured that the Company is able to raise funds on a timely basis to advance its projects.

Rein Turna serves as Geologist and Director, with over 40 years of experience in mineral exploration in Canada. He is a registered professional geologist with the Association of Professional Engineers and Geoscientists of British Columbia since 1993.

Mr. Turna has held staff and consulting roles with major and medium companies including Placer Dome, Falconbridge Ltd. and Lac Minerals. He has extensive experience in property assessment as well as supervision of drill projects.

Operating Jurisdiction

Golden Sky Minerals is a gold-focused Yukon explorer. The Yukon has a storied history of gold prospecting with gold first discovered in 1896, launching the Klondike Gold Rush of 1896 – 1899 when an estimated 100,000 prospectors stampeded to the region.

The Yukon is a mining friendly jurisdiction that is highly prospective for mineral exploration. Its largest gold mine was put into production last year. Other projects are in the feasibility and permitting stages, with numerous exploration companies operating in the Territory.

Construction work is expected to begin this year on at least 2 major components of the Yukon Resource Gateway Project, a C$469 Million venture that is taking place over several years to upgrade existing road infrastructure and provide more reliable access to mineral-rich areas.

Golden Sky has 3 core assets in the Yukon, all 100% owned with no underlying royalties or property payments.

Source: Company Presentation (click to enlarge)

Lucky Strike Property

The Lucky Strike property is the most advanced of the 3 properties. It is located in the heart of the prolific White Gold District where mining giants have heavily invested in recent years through acquisitions, earn-in deals or acquiring stakes in exploration companies operating in the area.

The 150km2 property boasts 5 gold zones over a 10km gold trend. The discovery drill hole was drilled in 2017 in the Monte Carlo Zone and returned 5.36 g/t Au over 22m. Follow-up drilling in 2018 was encouraging and included an intercept of 4.55 g/t over 7.6m.

Future drilling on the property will focus on the Monte Carlo Zone, which is the only drill-tested zone to date. Strong potential for new discoveries remain on the other zones.

Source: Company Presentation (click to enlarge)

Hot Spot Property

This is a newly discovered gold occurrence located in an under-explored part of the Yukon. It is located 25km south of the Tanacross Copper, Molybdenum and Gold porphyry deposit (360,000 oz Au) in Eastern Alaska right against the Yukon Border. Tanacross is being explored by a joint venture between Kenorland Minerals and Freeport McMoran.

The property hosts a 1.7km-long mineralised structure with gold-in-soil values of up to 4.1 g/t Au with its geology and geochemistry indicating a strong potential to host low-sulphidation gold at surface and buried porphyry deposits.

Hot Spot is under-explored and drill ready.

Source: Company Presentation (click to enlarge)

Bulls Eye Property

This is the earliest stage property in Golden Sky’s portfolio. It is contiguous to K2 Gold’s Wels Project 50km south of the Coffee Gold deposit.

Drilling conducted by K2 in 2015 and 2017 yielded notable drill intercepts of 0.76 g/t over 97.5m and 2.37 g/t over 28.5m respectively.

During field work in 2017, Golden Sky identified the Gold Crest Zone, a 200m by 250m gold-in-soil anomaly that remains open.

Source: Company Presentation (click to enlarge)

Upcoming Exploration Program

Initial work plans for the 2020 season include a bedrock trenching program at Bull’s Eye. Golden Sky is hoping to quickly outline new target areas in preparation for drilling.

The company will also conduct an exploratory drill program at Hot Spot to test shallow low-sulphidation gold mineralisation. A follow-up drill program will be executed to test the extent of this mineralisation as well as for potential buried porphyry systems.

  

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Cashed Up

With C$2 Million in the till, Golden Sky is fully funded for its exploration program. In addition, the Company recently announced that it is conducting an evaluation process for new acquisitions outside the Yukon Territory.

Summing up, Golden Sky Minerals is exploring for gold in a highly prospective region that is inhabited by majors and boasts of several multi-million-ounce gold deposits. Its upcoming exploration program, as well as the potential acquisition of new properties present the company with near term price catalysts.

The Company closed trading at the TSX Venture Exchange on Friday 6th June at C$ 0.29, valuing it at C$2.8 Million. With producers, royalty and streaming companies as well as advanced-stage explorers all having had quite a run up in the past few months, investors will naturally move down the food chain towards prospective junior exploration companies as the bull market progresses.  

In that kind of environment, Golden Sky is the sort of speculative play that can return multiples of one’s investment.

ALL THE BEST

Disclaimer: I have a position in Golden Sky Minerals. This article solely expresses my opinion. I have not received any compensation for this article.