Having been a well rewarded long term Northern Star shareholder I recently started looking for junior miners/explorers to diversify my precious metals portfolio. And this story here, is the best one I found so far. The case for high grade gold hits in the Goodpaster district is much better than for many other exploration plays that I have seen in the last couple of weeks and I researched quite a lot of them.
As they say, the best place to find gold is besides an existing mine and the Pogo mine has seen some major changes since NST took over. They successfully changed the mining method, they announced last year, that they will increase the mill capacity to 130% (for 30 Mio AUD, which will be finalized in 2021) with the future option to increase to 150% for another 17 Mio.AUD. But what is most important for us as RML shareholders, is that NST stepped up exploration substantially, as they always have when they took over existing mines like Jundee or Kanowa Belle for example. And as their share price history shows, Northern Star is probably one of the very best exploration companies on a global scale. They did this once again in Alaska, where they not only increased the resources/reserves directly around the original Pogo mine, but also discovered the new Goodpaster orebody which is so close to our property.
What makes an investment into RML so compelling for me , is that we have got the same geology as Pogo, that we used the exact same method to define our drill targets and that NSTs geologist for Pogo is working as a consultant for RML.All of this combined culminates in a much higher chance of success over here, than for many many other exploration companies IMO. Well of course as with all exploration companies, failure is always an option and until the drill bits hit some high grade gold over a longer stretch of the core, nothing is certain, but the risk/reward ratio looks pretty favorable to me:
RML has all the money for the first drilling campaign this year and I am quite happy, that the Corona crisis delayed the drilling somewhat as I only stumbled recently over this company and thanks to the delay in drilling the share price has come back somewhat giving me the opportunity to buy in at what I consider a very attractive entry level. NSTs management have repeatedly spoken about Pogo in the last couple of months and they think of it as a „world class asset“ that has all the potential to become "the best in their mining portfolio". The phrase that this mining area „could become a camp scale system“ (like Red Lake in Canada, or Kalgoorlie in Australia) originates from Northern Star as far as I know. And Resolution/Millrock have a really large land package completely surrounding NSTs tenements. The probability that we do sit on a large gold orebody is very good IMO and even if we don’t directly hit with the next hole, over time and drilling, the chance that we will eventually find some high grade gold increases with every meter drilled.
A near term drilling hit would make a lot of difference for us RML shareholders, as it would most likely mean a substantial rerating of the company and thus minimize further dilution, as the money for the future years drilling campaigns still needs to be raised.So I am looking forward to the next couple of weeks, maybe the resource/reserve/exploration upgrade from NST which is expected shortly will mean some tailwind for our share price before we will finally see more results from the next 3 drill holes.The second round of drilling (5 holes) was originally scheduled for July/August, does anybody know, if that time schedule has been pushed farther out, due to the Corona crisis ? Because the Echo target, to the north of Pogo is a very exciting one as well, as that area is considered to be the source of Pogos gold.
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