With the price of gold holding steady since April near its all-time-high at more than US$3,000 per ounce, maintaining about an 85 per cent return since 2020 – comfortably ahead of the Vanguard all-stock ETF VEQT’s 70 per cent effort – major miners are collecting record cash flow and increasingly turning their attention to growing resources through junior acquisitions.
This content has been prepared as part of a partnership with Ascot Resources Ltd., New Found Gold Corp. and Sirios Resources Inc., and is intended for informational purposes only.
Recent examples include Dundee Precious Metals’ US$1.3 billion purchase of Adriatic Metals in June, Royal Gold’s intended purchase of Sandstorm Gold earlier this month, as well as Loncor Gold‘s establishment of a special committee to explore an unsolicited offer announced on Monday.
There is also an increase in major miners taking starter positions in junior miners, signing contracts to pave the path to increased ownership, should the market allow for it. Take a look at Agnico Eagle Mine‘s last few years of press releases for a notable example.
These transactions are a few among many capitalizing on strong gold prices, all of them coinciding with a widespread slump among junior stocks driven by investors’ reluctance to build positions in their often volatile underlying companies, shaken by:
- Pre-revenue operations, placing these companies at the mercy of capital markets and inflation, and investors at risk of shareholder dilution.
- Over 10-year project development timelines from exploration to production, requiring a long-term perspective that may be tested by fluctuating gold demand.
- The need for technical knowledge to assess project quality and management skill and build long-term conviciton.
Consequently, investors with sturdy stomachs have an opening to align their portfolios with established gold resources, tied to stocks in unjustified declines, to potentially ride towards valuation re-ratings catalyzed by continued project development and gold price strength.
To this end, here are three junior gold stocks in Canada worth considering, each of which boasts a significant deposit backed by economical studies, falls comfortably within the small-cap or micro-cap categories – leaving room for future growth – but is nevertheless nursing a pessimistic share price suggestive of market inefficiency, making them attractive candidates for major miners to expand existing resources and extend production life.
Ascot Resources
Our first prospective junior gold stock in Canada is Ascot Resources, market capitalization C$126.35 million, whose flagship Premier mine in British Columbia’s Golden Triangle poured its first gold in April 2024 and houses a gold resource estimated at 1.06 million ounces indicated, 1.18 million ounces inferred and a more than 9-million-ounce silver kicker, combining into about US$4 billion in the ground at prices as of July 14. This doesn’t count more than 800,000 ounces of gold and 2 million ounces of silver at the company’s Red Mountain project, also in B.C.
Premier keeps exploration and production costs low thanks to easy access to a highway and a deep-water port, as well as a concentrate load facility and extensive hydro power facilities. This is evident in a 2020 feasibility study detailing an after-tax net present value of C$341 million and a payback period of 1.8 years at base cases of only US$1,400 per ounce of gold and US$17 per ounce of silver, requiring initial capital expenditures of only C$147 million.
Development of the cost-effective, multi-million-ounce deposit is currently under stress, given price increases at Procon Mining, the mining services provider for the project, and the companies’ failure to negotiate a mutually beneficial new contract. This has prompted Ascot to initiate a strategic review process and delay a mill restart initially planned for August.
The abrupt halt to development momentum reported in April has pushed Ascot Resources stock (TSX:AOT) down by more than 80 per cent year-over-year, representing a potential bargain-bin addition for a major miner with operations that don’t need to nickel-and-dime their way through the mining lifecycle.
New Found Gold
The second name on our list of junior gold stocks in Canada, New Found Gold, market capitalization C$505.42 million, is equipped to take a major into the next phase of productive life thanks to its 175,600-hectare Queensway project in Newfoundland and Labrador. The project yielded an initial 2025 resource estimate of 610,000 ounces of gold inferred and 1.39 million ounces indicated, amounting to more than US$6.6 billion in the ground.
The miner has completed more than 600,000 metres of drilling at Queensway to date, discovering and delineating 20 zones of significant gold mineralization, and has continued to post high-grade results, painting an optimistic picture about future shareholder value creation. Recent highlights include:
- 55 grams per ton (g/t) of gold over 35.05 metres at the Keats West zone announced on July 9.
- 42.8 g/t gold over 14.95 metres at the Dropkick zone announced on May 21.
New Found’s leadership team, stacked with mining heavyweights, has promised a preliminary economic assessment by early Q3, which will provide initial insight into Queensway’s path to value creation, as the ongoing 2025 exploration program sets its sights on discovering additional deposits across an estimated 110 kilometres in strike extent rich with evidence for expansion.
Undeterred by an abundance of upside catalysts, the broader market has proceeded to cut New Found Gold stock (TSXV:NFG) by 54.41 per cent year-over-year, running irrationally counter to gold’s 38 per cent gain over the period.
Sirios Resources
Last in our trio of junior gold stocks in Canada is Sirios Resources, market capitalization C$25.82 million, a miner actively exploring a portfolio in Quebec with strong data in support of considerable untapped upside.
Sirios’ flagship 15,700-hectare Cheechoo gold project, located less than 15 kilometres from the Éléonore gold mine, is estimated to contain 1.3 million ounces indicated and 1.7 million ounces inferred – as per a July resource update – representing more than US$10 billion in the ground. These ounces are supported by reliable infrastructure and high-grade drill intercepts substantiating widespread expansion and development potential under both open-pit and underground scenarios.
Sirios’ secondary 7,100-hectare Aquilon project features 32 gold showings marked by some of the highest-grade intercepts in Quebec mining history, including 12,906.5 g/t gold over 0.2 metres, 3,527.4 g/t gold over 0.4 metres and 133.67 g/t gold over 0.8 metres. The project’s singular mineralization attracted the interest of Sumitomo Metal Mining, which made a C$14.8 million investment and signed an option agreement in 2022.
Despite ongoing drilling at Aquilon investigating numerous gold-in-soil anomalies from 2023 and 2024, planning underway to expand the Cheechoo resource and expedite its path to production, and management keen to add to a more than 10-year track record of successful exploration and development, Sirios stock (TSXV:SOI) is down by 55.17 per cent since becoming Cheechoo’s sole owner in 2016.
Given gold’s richly valued state, Sirios’ robust ounce-count and its results-driven operations, it’s hard to see how you could argue against an investment putting you on the right side of the probability for an outsized outcome.
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