With viable gold deposits becoming more and more difficult to find, intermediate and senior mining companies are having to pay larger premiums for promising assets, especially those in mining-friendly jurisdictions.
Canadian resource explorer and developer MAS Gold Corp (TSX-V:MAS, OTCQB:MSGCF) is therefore fast becoming an attractive takeover target with its portfolio of 100%-owned, gold-focused projects in Saskatchewan’s La Ronge Greenstone Belt, about 60 kilometres west of the producing Seabee and Santoy gold mines operated by SSR Mining Inc.
MAS Gold’s Greywacke North deposit, for example, has an established resource with an average gold grade in excess of 4 grams per tonne (g/t), while the company’s newly-acquired Contact Lake property has historic production of more than 188,000 ounces of gold at an average head grade of 6.2 g/t and potential exists for the identification of unmined, historically-defined resources.
As well, MAS recently signed a definitive agreement to acquire 100% of Comstock’s Preview SW Gold project and property in the La Ronge Gold Belt, which is contiguous with MAS Gold's Preview-North property.
All in all, the company’s properties total more than 34,700 hectares, with mid-to-near-term production horizons along with access to milling facilities and related infrastructure. And, MAS is targeting the completion of a consolidated resource report as well as a Preliminary Economic Assessment (PEA) during 2022.
MAS Gold CEO Jim Engdahl, a former vice president of Barclays Bank of Canada, has held senior leadership positions with resource companies such as Great Western Mineral Group Ltd, Shore Gold Inc, and Claude Resources Inc. In an interview, Engdahl told Proactive why he believes the company can develop a gold resource large enough to make MAS an attractive takeover target.
Proactive: MAS Gold has a stated goal of developing and consolidating a more than one million ounce gold resource. What is the significance of that number? Wouldn’t five million ounces plus be the minimum to be considered as a takeover target?
Jim Engdahl: I think a one-million-ounce gold resource will get the attention of other gold producers and as the resource escalates up to five million ounces it will attract the attention of larger producers. So I think we have crossed that ‘starting gate’ and there will be ‘tire kickers’ very soon if not already watching.
What is a ‘Hub and Spoke’ mining model and why is your company pursuing it?
A ‘Hub and Spoke’ model is using one primary deposit as the ‘Hub’, or lead deposit, and complementing it with other deposits of similar or higher grade in the economic and geographic area and distance from the ‘Hub’. The LaRonge Greenstone Belt is a perfect example of that with several mines having gone into production before the year 2000.
What attributes do MAS Gold’s projects have that would indicate a future mining operation?
The key ones would be that we owned a historical former producing gold mine when the price of the precious metal was less than US$300 per ounce; and we have also passed a milestone number of a one million ounce gold resource, which under normal economic conditions and today’s gold price should be viable for a future mining operation. That combined with the fact that we are operating in one of the most-friendly jurisdictions in the world for permitting a mine. These are just a few attributes.
What are the next steps to take these projects to production?
Our next steps to take these projects to production would be to further define our key deposits of the ‘Hub and Spoke’ model, such as Contact Lake and the recent acquisition (pending completion) of the Comstock assets.
A drill program would then upgrade those deposits to the required resource category, all while we are completing our environmental impact assessment (EIA) work. Once that is done we would then proceed to a feasibility study. In the meantime, we are always looking out for other synergistic deposits that may be for sale in this area.
What do your shareholders have to look forward to in the next 12 to 24 months?
Over the next 12 to 24 months our shareholders can see all of the above in the previous question plus setting our milestones for 2022. That being said, with what we are doing plus looking for other acquisitions, I believe we can increase our gold resource to two million ounces, or perhaps more, within the next 12 to 24 months.
If we are successful at this we will have a decision to make in that we will have suitors. So, do we partner or sell to one of them or go it alone. That will be our biggest decision items over the next 24 months.
Contact Sean at sean@proactiveinvestors.com