Unique “Black-Shale” Geology in Northern Newfoundland, White Metal (WHM, TSX-V) Could Really Have Something!
Dec 20
Unique Geology In Northern Newfoundland!
“This could really be something” – that was our lead into a brief overview on White Metal Resources (WHM, TSX-V) November 24, but it was buried within Friday Footnotes so I’m concerned you might have missed it. And I’d hate for you to miss out on what could become a big story stock between now and PDAC (early March).
The story behind the story!
Prospecting and mining roots run deep in the Keats-Stares family.
Michael Stares, White Metal’s CEO, and his brothers Sandy (who runs Metals Creek) and Stephen (Benton Resources) have been spending time in the bush looking at rocks ever since their pre-teen years. Their father, grandfather and great-grandfather were prospectors before them. The line of prospectors stretches back for more than a century!
In 2007 the family received the PDAC Bill Dennis Prospector of The Year award, recognizing their many contributions made to the industry.
So it’s kind of funny to think that one of Michael’s childhood friends, who isn’t a prospector, would be largely credited with the discovery of Gunners Cove. As the story goes, Michael’s friend was doing maintenance on cellular towers (or some type of communications equipment) north of St. Anthony, Newfoundland, earlier this year. I’m not sure if he makes a habit of picking up interesting looking rocks everywhere he goes, but in this case he did.
Michael swung by the guy’s house, looked at the rocks, and decided to pay to have them assayed (that investment of a few hundred dollars could ultimately be worth tens of millions, or more). Many geologists and prospectors wouldn’t have tested these particular rocks because they were predominately “black shale”.
It’s rare to find black shales that have been enriched with Gold. You have to look outside of Canada for the best examples (they’re almost always big – below are two of particular note);
- Kalgoorlie, once Australia’s largest open-pit mine, has produced 50 million ounces
- Sukhoi Log, located in Russia, has an estimated 540 million tonnes at +2 g/t Au
While doing my due diligence I learned that Gold in black shales has become one of the most important deposit types for Gold exploration in northern China.
The Mystery of Black Shale!
Although Gold deposits in black shales have been studied for several decades, their genesis and mineralization mechanism are still a matter of controversy.
According to this article, “Black Shale May Provide Unfathomed Mineral Wealth”.
The article goes on to say: “It may appear paradoxical, and surprising that many professionals engaged in mineral development do not appreciate the great potential of black shale with respect to hosting very valuable mineral resources. In some cases, this may be due to the fact that several minerals being exploited around the globe were discovered by chance or by traditional prospecting. Genetic models in such cases may thus become irrelevant.
Also, some geologists regard black shales merely as indicators of changes in the environment of deposition of sedimentary sequences. The result is that substantial mineral resources associated with black shales are yet to be discovered and possibly exploited.”
Are you intrigued yet? (you should be, because it’s believed that Hazelton black shales at Nickel Mountain have been hugely important in the whole process leading to massive sulphide mineralization there).
The Stares Brothers Stake It All!
According to one geologist, an expert on Newfoundland who talks with the Stares brothers regularly, they’ve already staked all the ground worth staking. You’ll notice Benton to the west and Metals Creek is south of Gunners Cove.
While Michael beat them to the punch, it may be telling that both of his brothers followed him on this play (fully understanding the uniqueness of this property and closeology).
Here’s a comment from that unnamed geologist, borrowed from a message board by the way, so take it with a pinch of salt – They have a good shot at finding something based on the already discovered Gold showings and the fact that those shales have been intruded by many ultramafic rock shoots. He said it is those ultramafics that bring the Gold into the black shales.
Since the original due diligence and sampling discovery, White Metal has expanded the Gold mineralization to the north by approximately 3.75 km, to the east-northeast by approximately 3.2 km, and to the south by about 1.3 km. Approximately 50% of the grab samples collected in the Gunners Cove area assayed 100 ppb Au (0.1 g/t Au) or greater, with a maximum of 2.14 g/t Au. Silver assay results are also elevated, ranging from less than 5 ppb Ag to a maximum of 9.1 g/t Ag.
Notice how all the samples to date are taken at or near the roadside (this Gold system probably doesn’t only follow the roadways).
To summarize, White Metal has honed in on a large area of anomalous Gold values and expanded the discovery area significantly. Amazingly enough, given the location and infrastructure (roads and power, check!), Newfoundland’s records show that Gunners Cove has never been explored or drilled – adding to the importance of this very recent prospecting discovery. Although too early in exploration to be sure of analogous deposit models for Gold-bearing pyrite nodules in black shales, there are global examples (such as Kalgoorlie and Sukhoi Log).
Michael Stares, President and CEO of the company, stated: “Gold mineralization at the Gunners Cove Property is hosted by sedimentary rocks of the Goose Tickle and Hare Bay geological groups, and from the limited mapping we have completed to date, the unit strikes approximately north-south. The style of mineralization at the Gunners Gove Property is very unique and is quite possibly the only project of its kind in Canada, with anomalous Gold, Silver and base metals, in this geological environment.”
It’s quite possible Gunners Cove could be about much more than even Gold given the geology BMR is seeing – how about a VMS system as a potential target (this is an island arc environment)?
In my view, Gunners Cove dishes up the THREE things Mr. Market is hungry for right now:
- Grassroots exploration “discovery” story
- Unique geology in a safe jurisdiction
- BIG potential!
If you’re in agreement with me, the obvious choice is to buy WHM. However, be sure to use limit orders.
White Metal is currently flying geophysical surveys over the property, which should help firm up some targets. Following that their aim is to be drilling sometime in early 2018, with a goal of having some juicy core samples on display in time for PDAC. Oh! About the drilling, these aren’t quartz veins or shear zones White Metal is going after, so if the Gold is there it should be harder to miss.
I’d like to think there’s still time to accumulate some stock below or near 10 cents, but don’t procrastinate. The market cap is only $3.5 million, so we’re thinking if the company plays its cards right White Metal (WHM, TSX-V) has the potential to turn into a multi-bagger on speculation leading up to drilling. The stock closed down a penny today at 9 cents but is up smartly for the week on increased volume.
*Article first published December 13 at BullMarketRun
**Daniel has a long position in WHM
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