The price for an ounce of gold has risen by 33 per cent from its all-time-high in 2011, and about 100 per cent since 2020, driven primarily by demand for its hedging properties against recessions and higher interest rates as COVID-induced inflationary forces spread across the world.
Now that interest rates are expected to drop this year, with estimates as early as this summer in Canada and this winter in the United States, the non-yielding metal will likely look even more attractive as bonds and deposit payouts shrink, supported by strong central bank buying, the metal’s unique role in maintaining investors’ purchasing power above cash, and the uncertainty surrounding a multitude of conflicts around the world including the Russia-Ukraine War and the Israel-Hamas War.
Thanks to operational leverage to their target commodity, gold producers and junior/development-stage miners offer a chance for returns above and beyond fluctuations in the price of gold, often of the multi-bagger variety, contingent on exploration results and a company’s ability to grow margins on the ore it extracts. According to multiple well-respected sources across the mining stock space, including Sprott and Mining.com, gold stocks are significantly undervalued and due for a rebound, making it an opportune time for investors to build positions in lesser-known names, whose high-quality operations deserve wider market recognition.
Delta Resources
Delta Resources (TSXV:DLTA) is a mineral explorer on a mission to grow shareholder value by advancing a pair of high-potential gold and base-metal projects in Canada.
The company’s flagship 152-square-kilometre Delta-1 property, 50 km west of Thunder Bay, Ontario, houses gold mineralization over a strike length of 2 km from surface to a vertical depth of 250 m. Standout intercepts include 5.92 grams per tonne (g/t) of gold over 31 m and 1.79 g/t gold over 128.5 m, each on strike with a 5-km-long corridor of intense alteration and deformation that merits further exploration.
Its 205-square-km Delta-2 property in Quebec’s Chibougamau District offers demonstrated potential for gold-rich polymetallic volcanogenic massive sulphide (VMS) deposits, as well as hydrothermal-gold deposits, including previous drilling and known mineral occurrences.
Management, well aware of its projects’ prospectivity, recently optioned the adjacent Band-Ore gold property, only 2 km west of Delta-1, which hosts two historic high-grade gold resources to be made NI 43-101 compliant, adding additional leverage for shareholders looking to outperform gold on the back of more high-grade results.
Despite the upside implied by Delta’s eponymous high-grade properties, the stock has given back 67.44 per cent year-over-year, perhaps masking its commendable 75 per cent return since 2019 compared with the generalized carnage among junior mining stocks over the period.
Tectonic Metals
Our next junior gold miner worth your due diligence is Tectonic Metals (TSXV:TECT), a company that emphasizes disciplined capital allocation and development marked by a focus on tier-1 opportunities and immediate de-risking.
The company’s approach is evident in its partnership with Doyon, one of Alaska’s largest Native Regional corporations, and the largest private landholder in the state with 12.5 million acres selected mostly for mineral prospectivity, which sets it up to benefit from the corporation’s more than 20 years of history of mineral and oil and gas exploration agreements with junior and senior companies. The partners have signed numerous discovery-to-production and lease agreements to date.
Tectonic’s flagship Flat gold project, on Doyon land, spans almost 100,000 acres and features six district-scale intrusion targets, including the drill-tested Chicken Mountain target, which yielded 954,000 ounces of gold in historical placer production from drainages in the immediate vicinity.
Its Tibbs gold project, 175 km southeast of Fairbanks, Alaska, is host to three new Tectonic drill discoveries highlighted by high-grade gold mineralization at surface, in trenches and in drilling, including a RAB drill intercept of 6.03 g/t gold over 28.95 m at the Michigan prospect.
Tectonic’s management team has built a successful track record of identifying and monetizing significant gold discoveries throughout North America, and is well-equipped to parlay its mining expertise into more value-accretive exploration, making the stock’s almost 75 per cent drop since 2019 against gold’s all-time-highs a fire-sale buying opportunity.
Northstar Gold
Our final junior gold miner worth a deeper look is Northstar Gold (CSE:NSG), whose 1,100-ha Miller copper-gold property in Ontario has painted an increasingly prospective picture since exploration began almost a decade ago, as highlighted by:
- Intercepts up to 6.6 g/t gold over 117 m in 2021 drilling at Miller’s near-surface bulk tonnage Allied Gold Zone.
- The 1-km-deep SM-01 anomaly discovered in April 2023 to be partially underplating the Allied Zone.
- 19 high-grade copper samples averaging 14 per cent at the Cam Copper Mine, only 2.4 km southwest of Allied, in July 2023, adding a key critical mineral to Northstar’s portfolio.
- Drilling at Cam in fall 2023 intersecting copper-rich VMSs as high as 21.7 per cent copper and 16.47 g/t silver, substantiating an untapped high-grade copper VMS system.
- Ownership of three other exploration projects with demonstrated prospects for economical deposits.
With further drilling at Cam scheduled for later this summer, and recent letters of intent on May 16 and May 28 to expand and explore Miller’s highly mineralized land package, Northstar has its sights set on continuing to tease out the full potential of its portfolio, turning further high-grade results into more leverage to gold and copper’s recent rise, and strengthening the case for Northstar stock to re-rate from an 89 per cent loss since 2020.
Join the discussion: Find out what everybody’s saying about these junior gold stocks on the Delta Resources Ltd., Tectonic Metals Inc. and Northstar Gold Corp. Bullboards, and check out Stockhouse’s stock forums and message boards.
This is sponsored content issued on behalf of Delta Resources Ltd., Tectonic Metals Inc. and Northstar Gold Corp., please see full disclaimer here.
(Top photo of visible gold on the Delta-1 property in Thunder Bay, Ontario: Delta Resources.)