Since the beginning of the year, gold has risen 15.75% from $1741.09 USD to where it currently sits at $2015.35. This positive trend was driven by rising interest rates, stock market instability, banking sector woes and a decline in cryptocurrency demand.
Market consensus suggests that gold will remain supported in 2023, especially if economic conditions deteriorate. However, a possible mild contraction in the U.S. and slow growth in developed markets might lead to more neutral market conditions for gold in the next six months. Factors such as economic expansion, risk, opportunity cost, and momentum are key drivers of gold’s performance. Knowing this, the inherent uncertainty in predicting the global macroeconomic outcome makes gold a potentially valuable component in investors’ asset allocation toolkit, due to its asymmetrical performance in various economic scenarios. This is a favorable environment for junior explorers and the market is bound to take notice soon, raising SP relative to commodity demand.
American Eagle Gold Corp. (AE.V) is one such miner that could be buoyed by gold’s rising tide. This Canadian junior explorer is focused on its flagship NAK project located 85 kilometres from Smithers, in the Babine copper-gold porphyry district of west-central British Columbia. The Babine district has a long history of mineral exploration beginning in 1898 when prospectors began swinging hammers in the area. These efforts eventually brought about both the Bell and Granisle copper mine in the 50s and 60s, which remained in operation up to 1982 when low copper prices forced their closure.
Today, AE’s work at NAK has revealed multiple indications that the porphyry copper-gold target could be a robust and large-scale system. Past exploration drilling, while shallow, exposed a near-surface copper-gold system with a footprint greater than 1.5km x 1.5km. Drill campaigns in 2022 at NAK revealed significant deep potential which remains largely untested at depth. Also, near-surface mineralization potential was considerably larger than historical work showed.
Here’s what we think:
In Conclusion:
An expertly managed gold project located in a mining friendly jurisdiction in a prolific district with excellent infrastructure close to past-producing mines (Bell, Granisle), paints a positive picture for those investors interested in significant growth opportunities. Combine this with Teck Resources hands-on participation, American Eagle Gold Corp almost seems a no-brainer. However, this is junior exploration and the risk is commensurate. Before any consideration, investors should complete extensive due diligence and speak with an accredited investment professional. Protect your neck.