HEMLO SOUTH PROPERTY
MARKET LETTER
Why Hemlo
Projects > Why Hemlo
The Hemlo complex is a world-class gold mining area in Northern Ontario, situated near the town of Marathon, a quiet little town on the northern shores of Lake Superior. For centuries the Hemlo area in Northern Ontario has been considered the land of riches. In 1896 a native prospector named Moses PeKong-Gay found gold nuggets in the Hemlo area. But gold goes further back to the 1585 era when the French explorer Jacques Cartier heard about “gleaming metal” from the native North Americans.
While the Hemlo area continued to draw prospectors, geologists and others looking for that “pot of gold”, commercial success remained elusive until the 1980’s era, when Murray Pezzim, the “Pez” finally hit pay dirt at “Hole 76”. This led to a series of spectacular lawsuits and discoveries, the first discovery occurring in mid-1982, when Golden Sceptre and Goliath Gold discovered the Golden Giant deposit in the Hemlo area. Gold prices rallied that summer, setting off a mini bull market that lasted until the following May.
This became known as the Hemlo Rally which lasted from 1981 until 1983, and while gold producers, on average, returned over 70% on investors’ money during this period; juniors such as Corona Resources went from $1.10 to $66 (+5445.5%), Golden Sceptre from $0.30 to $31 (+7650%) and Goliath Gold $0.45 to $32 (7011.1%) – all within 18 months, and then everything went back to normal.
This tells us that a big discovery can lead to enormous gains, even if the industry as a whole is flat (gold actual dropped from $513 to $413 during this period). In other words, we have historical precedence that humongous returns are possible withouta mania, by owning stocks with direct exposure to a discovery area.
While there are no guarantees in exploring for gold, Hemlo has historically proven it can happen and Barrick Gold’s latest announcements and discoveries at Hemlo, once again may prove that there is much more potential in the camp to be discovered.
Since Hemlo’s discovery, no additional gold deposits have been found and for a greenstone belt with a large deposit (>25 M/oz), this is a statistical anomaly.
HEMLO TODAY
The Hemlo Gold Camp has once again regained focus for exploration with claim staking and an acquisition rush by juniors. Back in May of 2012 Barrick announced that their exploration efforts managed to identify an additional one million ounces gold reserve that would extend open pit mine life by up to seven years.
Fast forward to 2015 - Barrick acquires additional mining rights in Hemlo from Newmont Mines, suggesting a further extension of mine life. Finally, during 2015 Barrick in its most recent NI 43-101 Technical Report filed on SEDAR stated that its Hemlo Mine had: Proven and Probable reserves of 1.588 million oz. Au; Measured and Indicated Resources of 1.72 million oz. Au; and Inferred Resources of 0.484 million oz. Au. As a result, there is renewed activity in the Camp with claim staking by several junior companies, including TRI. Management of TGI anticipates continued positive news from Barrick Gold’s operations at Hemlo during 2017 and onward, given Barrick’s most recent announcements.
HEMLO SOUTH
– TGI has acquired a 50% working interest in the 3,400+ acre property, known as Hemlo South from Tashota Resources Inc. (TRI).
The Hemlo South property is located 33 kilometres east of the town of Marathon, Ontario and adjacent to, and within 1,100 metres south, of the Williams Mine operated by Barrick Gold Corporation.
Barrick Gold commenced a major exploration expansion during 2015 on their Hemlo property resulting in increased reserves, which extends the mine life to 2025-35. As a result, there has been a major rush by junior mining companies to acquire claims in the immediate area. Tashota Resources Inc., TGI’s J/V partner in Hemlo South had previously acquired over 22,500 acres in the historic Hemlo Gold Camp during 2014-2016, having acquired a first mover advantage resulting in the acquisition of strategically positioned properties.
A recent TRI helicopter-borne magnetic-TDEM-spectrometric survey (2014) of the Hemlo South property has outlined a number of potential drill targets on the property.
TGI has commenced a drill program on the South property in order to provide needed geological information to improve our knowledge of the immediate area.
The 2017 summer-fall field program will include further soil sample anomaly testing based on previous soil sampling back in the 1980’s conducted by Esso Minerals in the central portion of the claims, which produced results varying from 200 – 590 ppm gold in the soil. Field work will be followed up during 2017-18 with deep targeted diamond drilling on the property.