Gold was one of the MVPs of a raucous 2020.
In an uncertain a year as one may experience only once in a lifetime, if ever, growth assets took the spotlight.
The Covid-19 pandemic took investors into panic mode, and led them to flock towards safe-haven, risk-averse plays.
Add to that a wild US election that unfolded with every bit of intrigue as the year it happened on offered, and one can consider the trend understandable.
As lockdowns begin to return across the US and the globe at large, one can feel the Fear and Greed index slowly – and once again for the umpteenth time in a – creep towards Fear.
And just like that, when everyone thought the novel Coronavirus was a thing of the past, it comes back with a vengeance. And economies begin another slow, screeching halt.
Hard to know for how long.
We’ve seen the trend at the beginning of the pandemic – when uncertainty begins to loom, it’s time to unload onto gold.
Sure, spot gold investments are always solid and safe. But some investors prefer to keep the possibility of explosive growth open – even as they enter the precious metals market.
Exploration companies always hold that gambit as a promotional tool. But few actually have the financials and logistics to make their ventures profitable.
And the few that do, get quickly priced out in the current market. Save for some exceptions.
Enter Gold Terra Resource Corp. (TSX-V: YGT; OTC: YGTFF)
The elevator pitch?
- Impressive district-scale position in Yellowknife with outstanding infrastructure and logistics
- Helmed by Detour Lake CEO, who raised $2.89 billion and led the company to a $4.89 billion buyout.
- Partnered with Newmont Corporation (NYSE: NEM) – the largest gold company in the world – in October 2020.
And it’s far from priced out.
Now we have to dive in. Let’s take a closer look.
A CANADIAN SMALL CAP WITH A HUGE UPSIDE
This Canadian junior gold explorer holds a massive district-scale position just by the city of Yellowknife. The Yellowknife Gold Project (YCG for short) is right adjacent to the legendary Con and Giant mines. Combined, these two behemoths produced over 14M ounces of gold over their lifetimes.
Its superb location, which allows for year-long access, and its resource estimate of 735,000 oz as of
November 2019, could easily serve as headlines to this feature. But the first highlight that needs to be made falls on its human element. Namely, Gerald Panneton – the Executive Chairman.
LEADERSHIP
Panneton holds an exceedingly superb resume for the industry. He co-founded Detour Gold and, during his time, managed to raise 2.89 billion in capital.
In the end, the company was sold for $4.89 billion to Kirkland Lake.
After the buyout, he brought his team, and his reputation, over to YGT.
Which opened the door to the Newmont partnership – but we’ll return to that further ahead.
Trading an unbelievable price.
LOCATION, LOCATION, LOCATION
The YCG encompasses the southern extension of the famed Campbell Shear. Over the years, the Shear has produced over 13 million ounces of gold between the Giant and Con mines.
Gold Terra recently added a 3-kilometer extension to their land package, which connects the YCG to the Con mine’s adjacent claims – the trigger that made Newmont decide to jump in on the action.
Having connected both land packages, Gold Terra has started to test the underexplored portion of the shear zone, south of the Con mine.
THE NEM CONNECTION
It was all part of Gerald Panneton’s long game: get a promising resource estimate, connect to the established bonanza-grade mine’s adjacency, and partner up to find the system’s continuation.
YGT pitched. And Newmont listened.
We can read how the deal came about, along with some other project-related gems, straight from the man himself:
“They (NEM) said, “Well, if Gerard is looking after that, we want a back-in right just in case.” And then so they did. But the back-end right is five million ounces. And of that is very important, so we earn our 30%, we finish a feasibility study.
Are we going to find two, three or five or six? Drilling will tell. It’s not going to be taking three or
seven years like the deal is. The deal is over seven years. But in reality, we can accomplish that over the
next two to three years. And we have the money so we can do so. And the back-in right, if we find five
million ounces, it’s a bonus for both. It’s a win win situation.”
(You can read more about the partnership here.)
Yes. The man projects a potential five million ounces. And if NEM listens, investors will want to do so too.
A fully-funded project with astonishing potential, extremely solid financial backing and a laser-focused and experienced board of directors.
RUNNING THE NUMBERS
When there’s possibility for as much as five million ounces, the YCG suddenly becomes a much loftier endeavor. Extracting that much gold requires solid financial planning.
Which is why the YGT-NEM partnership came to be this past September.
The two-phase exploration agreement allows Gold Terra to explore the adjacent claims held by Newmont, due to their ownership of the now-defunct Con mine.
In the first phase, Gold Terra can earn a 30% stake in the grounds by spending $3 million on exploration over a three-year period. Which Panneton believes “is a very small feat. It’s roughly 12,000 meters, 13,000 meters of drilling. If we drill the area every 100 meters spacing for example, down to five, 600 meters, we will go through this expense very quickly. We have the money in the bank so it’s not a question like, do we need to raise the money? No, we don’t. We just raised money in June, July and we have money in the bank.”
Concise.
Once this is accomplished, both companies will enter a joint venture.
The second phase allows YGT to earn another 30% by covering all expenses and a prefeasibility study with at least 750,000 oz Au on Newmont grounds, and a total 1.5 million oz. in the combined land package.
Bringing us to a total of 60% for Gold Terra.
Newmont has a final buy-in trigger – the 5-million+ ounce discovery, within all resource categories. If exploration were to result in a find of that magnitude, NEM would earn an additional 20% stake in the JV. In that case, YGT would get paid in cash reimbursements and payments.
Just like Gerald said, it’s a win/win for everyone.
“Newmont feels good about being protected and we feel good because if we find five million ounces, we end up with two, Newmont end up with three, we get all our expense reimbursed. We get a bonus on a per gold basis found. It’s a good deal.”
-Gérald Panneton, Executive Chair, Gold Terra Resource Corp
Gold Terra has all the tools to turn 2021 and beyond into a bonanza. The numbers back it.
Will you?
Gold Terra trades on the TSX-V under YGT; and can be found in OTCs as YGTFF.
About Goldterra
Gold Terra Resource Corp. (TSX-V: YGT; OTC: YGTFF) is a junior gold exploration company that has assembled a highly prospective district scale land position on the doorstep of the City of Yellowknife in the Northwest Territories. The company is currently focused on expanding and delineating gold resources at the company’s Yellowknife City Gold Project. With ready access to infrastructure and multiple new high-grade gold discoveries Gold Terra is on track to re-establishing Yellowknife as one of the premier gold mining districts in Canada.