Mine2Capital has started coverage on Spanish Mountain Gold (CVE:SPA) with a "Buy" rating and $0.90 price target.
Spanish Mountain Gold is a Vancouver-based junior resource development-stage company, solely engaged in the acquisition, exploration and development of mineral properties in central British Columbia, Canada.
One of Spanish Mountain's board members is investment legend Jim Rogers, co-founder of the Soros Quantum Fund. Spanish Mountain is the only junior mining company with Jim Rogers on its board.
It is currently focused on the development of its flagship, Spanish Mountain gold project, one of the first recognized occurrences of a sediment-hosted bulk tonnage gold system in British Columbia.
The project consists of a total 161 mineral claims (covering an aggregate land package of about 40 square kilometers and 2 placer claims. It is strategically located within the gold-copper rich Cariboo region of central southern British Columbia, close to Imperial Metal Corp.’s (TSE:III) Mount Polley copper-gold producing mine.
The company has outlined 216 million tonnes at a gold grade of 0.46 grams per tonne (g/t) for a total of 3.18 million ounces in the Measured and Indicated category. Giroux Consultants completed the PEA and established an economic cut-off of 0.2 g/t gold based on assumptions of operating costs for a potential open pit operation.
The project hosts another 3.7 million ounces gold in the Inferred Category.
In a research note, Mine2Capital said that most of the drilling focused on the Main Zone, which hosts the current defined mineral resources. The past exploration programs have identified a gold bearing trend which remains open to the north.
The trend offers potential for further expansion of the current defined mineral resource to the north, south and at depth, Mine2Capital said.
Spanish Mountain has signed a cooperation agreement with the Williams Lake Indian Band, Soda Creek Indian Band and the Lhtako Dene Nation. The agreements will help the project in the permitting process. The partnerships will also
provide support to the project by involving the communities in the environmental assessment and permitting review process as well as training, employment, and other opportunities.