On March 13, 2018 we told you that “TomaGold (LOT.V) is one junior worth looking at”.
LOT is partnering with major mining companies to develop high-grade gold mineral properties. It has strong joint venture agreements (JVs) with Goldcorp (GG.NYSE) and New Gold (NGD.TSX).
From TomaGold’s sprawling portfolio of assets (six gold properties in northern Quebec and a couple more in Ontario) we believe the Monster Lake project JV’d with IAMGOLD (IAG.NYSE) contains the most powerful stock price catalyst.
Bad guys zero.
Crystal ball one.
On June 14, 2018 TomaGold announced that IAMGOLD released assay results from the 2018 winter drilling program completed at its Monster Lake JV project (50% – IAMGOLD; 45% -TomaGold; 5% Quinto Resources.)
The project is located 50 kilometres southwest of Chibougamau, Quebec, Canada. IAMGOLD is reporting the final assay results from all 26 drill holes, totaling 8,282 metres, completed as part of the initial 2018 program.
The results are – what would the kids say? Sick?
325 – Megane Zone and Main Shear Zone:
- Drill hole ML18-212: 3.83 metres grading 23.96 g/t gold
- Includes: 1.30 metres grading 67.22 g/t gold
- Drill hole ML18-213: 3.84 metres grading 39.24 g/t gold
- Includes: 1.09 metres grading 127.4 g/t gold
- Drill hole ML18-217: 5.32 metres grading 40.94 g/t gold
- Includes: .70 metres grading 251.0 g/t gold
- Drill hole ML18-225: 2.62 metres grading 72.17 g/t gold
- Includes: 1.75 metres grading 107.3 g/t gold
Lower Shear Zone:
- Drill hole ML18-224: 4.32 metres grading 32.07 g/t gold
- Includes: .74 metres grading 134.0 g/t gold
- Drill hole ML16-176B Ext : .70 metres grading 14.10 g/t gold
By mid morning the stock had jumped .015 to .06 (up 33%) on about 4 million shares traded.
According to the press release, “The Monster Lake JV project hosts an NI 43-101 compliant resource, effective as at February 26, 2018, comprising 1,109,700 tonnes of inferred resources averaging 12.14 grams of gold per tonne for 433,300 ounces of contained gold.”
The 2018 winter drilling program was designed “to improve confidence” in the continuity of the mineralization.
Hopefully, everybody’s confidence is improved.
If not, you may have an endemic confidence problem.
IAMGOLD is not your typical JV partner for a company like TomaGold, trading at .06.
IAMGOLD is a $2.4 billion gold miner with large stakes in the Rosebel gold mine (South America); Essakane gold mine (Burkina Faso), Westwood gold mine (Canada) and the Sadiola Gold Mine (Mali).
IAMGOLD generates over $1 billion a year in revenue and has an “operating margin” of 53%.
Operating margins measure the financial horse-power of the core business – stripping out factors like asset sales or interest payments.
By way of comparison, Apple (AAPL.NYSE) has an operating margin of 27%, while General Electric (GE. NYSE) has an operating margin of – 1.8%.
“We continue to be impressed with both the continuity and the high grades demonstrated by infill drilling of the 325-Megane Zone,” Stated Craig MacDougall, Senior VP, Exploration for IAMGOLD, “We believe the structural setting suggests favourable potential for the occurrence of additional mineralized shoots along the Monster Lake structural corridor and we continue to evaluate this setting for additional zones of mineralization.”
The latest results will be folded into “the deposit model” – used to update the mineral resources – and inform the strategy of the next drilling programs.
A further round of drilling is being planned to test specific structural targets which are accessible in the summer season.
If you think the TomaGold boat has left without you, it hasn’t. It may be drifting away from the dock, but you can still jump the gap and go for a cruise.
Last summer, IAMGOLD purchased 27.7 million shares of TomaGold (19.98% of the company) for C$0.09 per common share.
i.e. You can buy TomaGold now for less than IAMGOLD paid.
According to the terms of the JV agreement, IAMGOLD must incur $10 million in exploration work over 7 years to earn an additional 25% interest.
July 14, 2018 mid-morning – LOT continues to surge.
Full Disclosure: We have no commercial relationship with TomaGold, but we do own stock.