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There are signs that in 2016 gold will reverse its losing streak.
In China, physical delivery from the Shanghai Gold Exchange reached a
record 2,596 tonnes, or a whopping 80 percent of total global output for
2015.
 
click to enlarge
In addition, the People’s Bank of China reported adding 19 more tonnes in
December, bringing the total amount to over 1,762 tonnes.
Meanwhile, U.S. demand is just as electric. In the third quarter of 2015
U.S. buyers bought far more coins and bars than they did in any other quarter
over the past five years - U.S. Mint Eagle sales reached their highest level
since the second quarter of 2010.
“Global investment demandsaw a significant increase this quarter, up
27% to 230t. Bar and coin purchases were up by a third on Q3 2014 with
Western markets in particular showing a surge. In the US, bar and coin demand
reached its highest total in five years, up 207% to 33t.
Europe also saw strong levels of demand in the investment sector as
ongoing concerns surrounding the Greek debt crisis and c uncertainty in
Eastern Europe, the result of a number of factors including continuing
tensions between Russia and Ukraine and saw demand climb by 35% to 61t.
In China, investment demand grew by 70% to 52t, as demand was
initially stimulated by the gold price weakness in July, which was further
fuelled by the mid-August foreign exchange reform. In India, the investment
sector saw its first increase since Q3 2014, up 6% year-on-year to 57t.
Central banksremained a significant source of demand, and were net
buyersfor the 19th consecutive quarter. Purchases by official sector
institutions reached 175t, a level almost matching the record highs in Q3
2014, as the net widened to include new reports from countries such as China
and the UAE.” World Gold Council
Gold demand and supply statistics for Q3 2015
- Overall demand increasedby 8% year-on-year to
1,121t.
- Total consumer demand– made up of jewellery demand
and coin and bar demand – totalled 928t, up 14%.
- Global investment demandsaw a significant rise of
27% to 230t, up from 181t in Q3 2014. This was led by the US which saw a
surge in bar and coin demand, up 207% to 33t from 11t on the same period
last year, with
support from China, up 70% to 52t and Europe up 35% to 61t.
- Global jewellery demandfor Q3 2015 was up 6%
year-on-year to 632t compared to 594t in Q3 2014. In India, demand was
up 15% to 211t and China was up 4% to 188t. The US and the Middle East
also saw gains, up
2% to 26t and 8% to 56t respectively.
- Central bank demandreached 175t, the 19th
consecutive quarter of net purchases.
- Demand in the technology sectordeclined 4% to 84t as
the sector continued to endure pressure, with the industry choosing to
shift towards alternative, cheaper materials in technological
applications.
- Total supplywas 1,100t in Q3, up 1% year-on-year.
Total mine supply
(mine production + net producer hedging) remained relatively
flat up 3% year-on-year to 848t compared to
814t in the same period last year. Year- on-year quarterly mine
production shrank by 1% to 828t in Q3 2015
against 836t in Q3 2014. Recycling levels were down 6% year-on-year
to 252t compared to 268t in Q3 last year.” World Gold Council
The gold coin buying frenzy continued into the new year. On January 1,
Americans gobbled up unprecedented amounts of gold and silver coins from the
U.S. Mint. For the month of January, the U.S. Mint sold 124,000 ounces of
American Eagle gold bullion coins, up 53 percent from a year ago.
As for precious metal pricing in Canadian dollars let’s check out current
pricing:
Gold - US$1,117.80 = CDN$1,573.86
Silver – US$14.24 = Cdn$20.05
It might be time to add a gold stock or two to your radar screen.
Fort Hope and Fort Yale
From its headquarters at York Factory on Hudson Bay, the Hudson's Bay
Company (HBC) had controlled the fur trade throughout much of North America
for several centuries. In 1848, Hudson’s Bay Company (HBC) built Fort Hope
and Fort Yale.
The first major placer gold find in southern British Columbia was in the
late 1850s at Hill's Bar. Prospectors discovered a rich gold-bearing placer
bar just 15 kilometers south of Fort Yale on the Fraser river. The Hills Bar,
named after one of the prospectors, became one of the richest gold producing
bars ever discovered in B.C.
From 1858 to 1863, tens of thousands of miners and others (mostly American
gold seekers from the California gold fields), all infected with ‘gold
fever’, invaded the interior of B.C. During its heyday Yale was the largest
town north of San Francisco and west of Chicago, hitting a peak population of
roughly 16,000.
Sto:lo First Nations people, who have been in the area upwards of 10,000
years, called the newcomers the Xwelitems, or Hungry People.
Coquihalla serpentine belt
In 1868 the first Crown granted claim in mainland British Columbia was
awarded - this covered silver discoveries located south of Hope.
In the early 1890s, lode gold deposits were discovered on Siwash Creek by
placer miners washing gravel. Several fold-bearing quartz veins had been
discovered adjacent to the eastern edge of what was later called the Coquihalla
serpentine belt.
The Ward Mine was operated in 1905 and produced about 135 ounces of gold.
Following the construction of the Kettle Valley railway in 1910,
exploration activity increased along the Coquihalla serpentine belt.
In 1913 Mike Merrick discovered lode gold in a large quartz vein near the
contact of sediments and serpentinite. In 1916, the Emancipation mine
(located 2.5 kilometers southeast of the Carolin/Idaho) was the first major
gold producer in the Coquihalla gold belt. In the 1920's a mill was
constructed near the Kettle Valley railway and connected to the mine via
aerial tram. The mine was shuttered prior to WW2.
The Idaho zone (the Carolin mine) was discovered in 1915 by Tony
DeAngelis.
The Montana showing was located in 1915 by Alex McLean and produced
approximately 30 oz gold from two tons in 1925. This showing was
re-discovered in September 2011.
Minor gold production totaling 30 oz gold was reported from the Georgia
No. 2 showing in 1925. This showing was located by Green Hicks in 1919.
The Pipestem Mine, found in 1922, was located approximately 2.5 km north
of the Carolin Mine.
In 1926, a silicified zone was found by trenching along the serpentinite
contact. As this trenching was extended in 1928 free gold in a talcose shear
zone was revealed. Aurum Mines Limited was formed to mine the zone.
In 1945 and 1946, eight shallow holes were diamond drilled in the Idaho
Zone averaging 5.4 grams per tonne gold over 5.4 meters.
In 1966 Summit Mining Ltd. extended the strike length of the Idaho surface
exposure to 75 meters. In the early 1970s, Aquarius Resources followed by
Carolin Gold Mines Ltd. conducted further development work.
The government controlled price of gold was allowed to rise in 1973.
Ensuing exploration led to the discovery of the Carolin gold mine.The
Carolin Mine produced over 43,500 ounces of gold during 27 months of
operation. The mill, with a design capacity of 1,360 tonnes per day, was
commissioned in early 1982.Construction coincided with the high gold prices in
1980, but the first gold wasn’t produced until 1982 when gold had retreated
back to near US$300 per ounce. The Carolin Mine operated from 1982 to 1984
and closed at the end of 1984 due to poor gold recoveries, low grades due
primarily to dilution, and low gold prices.
Anglo Swiss Mining Corporation conducted surface exploration and drilling
on the McMaster Zone from 1984 until 1990.
From 1995 through to 1997 Athabaska Gold Resources conducted underground
exploration drifting and drilling coupled with bulk sampling for
metallurgical work,part of the tailings impoundment was drilled and
exploration drilling was done on the McMaster Zone.
Athabaska Gold Resources eventually went into receivership and filed for
bankruptcy in 2001. The property and claims were purchased in October 2002
from the receiver by Tamerlane Ventures Inc.
In 2004, Century Mining Corporation optioned the claims from Tamerlane and
subsequently optioned the property and claims to Module Resources Inc.
Century and Module subsequently signed a purchase and sale agreement on June
20, 2011.
Century Mining Corporation did not carry out any exploration or
development on the property. Module conducted limited surface exploration
work predominantly at the McMaster Zone consisting of 1,600 meters of
drilling in 2009 and 2010.
Module changed its name to New Carolin Gold Corp. TSX.V – LAD
on October 11, 2011.
A small diamond drill program totaling 1400 meters was completed in
November, 2012 at the Idaho Zone to confirm earlier mineralization via
trenching conducted in 1996.
Hozameen Fault
The regional geological setting is identified by a prominent
northwest-southeast trending structure known as the Hozameen Fault. This
geological break can be traced for at least 100 kilometers in southwestern
B.C. and extends into northern Washington State.
The Hozameen fault system played an important role as a conduit for
ore-forming fluids; most of the occurrences are hosted by the Ladner Group
and lie close to the Hozameen fault. However some gold mineralization is
hosted in greenstone volcanics, the Spider Peak Formation, (e.g. Emancipation
mine) or is associated with a suite of small sodic felsic
porphyry intrusions (e.g. Siwash Creek forks - Ward mine).
Gold-quartz Vein Systems
Host lithology suggests there are two main types of gold-quartz vein
systems:
Ophiolite hosted - represented by gold camps such as Bralorne-Pioneer
and Atlin in B.C., along with Grass Valley and Allegheny in the U.S.
Mixed mafic igneous-sedimentary hosted gold-quartz vein systems include
well known gold camps such as the Mother Lode area in California and the
Juneau Gold Belt in Alaska.
The deposits of the Coquihalla Gold Camp, including the Carolin Mine,
are believed to fit into this category (mixed mafic igneous-sedimentary
hosted gold-quartz vein systems) which is characterized by close
proximity to deep crustal, right lateral, northwest trending fault systems
with serpentine emplacement. Gold deposits have been found at depth in these
fault systems, suggesting exploration potential at depth within the Carolin
Mine.” Clifford A. Pearson, Professional Geoscientist and consulting
geologist, Technical Report titled “Technical Report on the New Carolin Gold
Corporation Ladner Gold Project” dated May 29, 2015
New
Carolin’s Ladner Gold Property (Coquihalla Gold Camp) follows the
north/northwest-trending Hozameen Fault structure for approximately 28 km and
exceeds 144 square kilometers in size covering substantially all of the
accessible, yet still very underexplored, Coquihalla Gold Belt.
Underground Mining Potential
There is no doubt of the underground mining potential of New Carolin’s
Ladner Gold Project. The Carolin Mine property is a past producing mine with
considerable unexplored potential to add additional resources as the
mineralized zone is open in all directions.
Significant mineral resources remain within the mine area and the
underground development is in place to quickly resume activities The
underground Carolin workings have remained in good condition. In the diagram
below the grey areas are mined out.
It’s very interesting that a mine development map dated May 1981 shows the
800 level being extended north for 1.2 km to the McMaster zone with proposed
cross cuts for drilling.
From Jay Taylor’s ‘New Carolin
Gold multi-million oz potential 150 km East of Vancouver’ we get the
following…
“The $3.5 million worth of work carried out by Athabasca Gold from
1994 to 1996 has provided considerable value for New Carolin. That work,
which was intended to allow Athabasca to re-start production at the Carolin
Mine, was comprised of the following:
• 110 meters of new drift to extend the workings on the 875 level
• 1,630 meters of underground drilling in 19 holes
• 7,101 meters of underground diamond drilling in 92 diamond holes
• 564 meters of surface drilling in 6 holes
• 50 meters of trenching and 280 meters of tunneling
• A very detailed metallurgical report that suggests gold recoveries in
the high 90% range, contrasted with recoveries of around 50% by Carolin Mines
in the early 1980s
New Carolin has the data from the entire Athabasca work program, which
revealed the following:
• Mineralization continued to the north
• Discovery of a new type of higher-grade mineralization west of old
workings and alongside the Hozameen faults
• Expansion of the McMaster Zone, open in all directions
• Successful metallurgy not only from underground workings, but high
recoveries from the tailings pond, which is blessed with the reciprocal of
low recoveries from operations in the early 1980s
• Modified mining techniques to maintain acceptable dilution rates, which
was another problem that afflicted the operation of the early 1980s
A total of 728,429 historical ounces were outlined by Athabasca. They
intended to put the mine into production at a cost of $8.1 million in 1996,
but a sub-$300 gold price at the time resulted in the project being shelved.
Now New Carolin inherits that work, which would no doubt cost
considerably more today than it cost 20 years ago.”
Sampling and Mapping
Below is taken from a news release New Carolin Gold put out October 26,
2015…
Sampling and Mapping Program Underway at McMaster Zone
“New Carolin Gold Corp. (the "Company" or "New
Carolin") (TSXV: LAD) announces that it has engaged Mr. Dan Cardinal
P.Geo, to undertake a detailed geological mapping and sampling program along
the McMaster gold-bearing zone, beginning northwest of the zone and
stretching for 1.5-2.0 kilometres southeasterly. Historical mapping and
exploratory drilling (1985 & 1994-95) along the McMaster Zone have
tentatively outlined 2 structurally related mineralized systems.
The project will take approximately two weeks. Object of the mapping
program is to better define and geologically constrain the McMaster Zone,
with the purpose of developing an exploration model in front of a planned
drilling program to define extensions of the mineralized zones.
Mr. Cardinal, in the 1980s, was an Exploration Manager for Aquarius
Resources Ltd. then one of the joint venture partners of the Carolin
Mine/Ladner Creek gold project. Mr. Cardinal, who currently resides in Hope,
BC has since conducted numerous exploration and mapping projects along the 28
km length of the Coquihalla Gold Belt including, supervision of 1994-95
exploratory drilling projects on the McMaster Zone. He has extensive
experience working in orogenic style gold-related environments in central and
southwestern BC.”
New Carolin’s sampling program ran for a week (weather related constraints
- Rick) in the late fall 2015 and focused on the area south south-east from
the McMaster Zone towards the Montana Zone. Sample assay results and the
completed exploration model are pending.
McMaster Zone
The McMaster Zone, a surface occurrence some 1.2 km (1,200 meters), along
trend from the Carolin Mine workings has been explored with six campaigns of
surface drilling, from 1975 to 2010. The more recent drilling expanded the
zone and highlighted its open pit potential.
Inferred Mineral Resources
McMaster Zone Inferred Mineral Resources Estimate of 3,375,000 tonnes,
grading 0.69 gpt, for a contained gold ounces estimate of 79,540 oz.
The McMaster Zone is reported in the Inferred category due to sparse drill
hole density and a relatively wide drill hole spacing.
A Whittle pit optimization exercise demonstrated that the McMaster Zone
resources had a reasonable expectation of economic extraction through open
pit methods.
Montana showing
The Montana showing has gold mineralization similar to that at the Carolin
mine and McMaster zone.
Carolin Mine
Carolin Mine Inferred Mineral Resources Estimate, at 0.5 gpt cutoff, of
12,352,000 tonnes, grading 1.53 gpt for a contained gold ounces estimate of
607,000 ounces.
The Carolin mine resource is reported in the Inferred category due to the
lack of drill core for verification, and the wider (50m) spacing of drill
holes in the mineralized zones discovered after the mine shut down.
A Whittle pit optimization exercise was done at a 0.5 gpt gold grade
cutoff to test the potential for open pit mining.
Open Pit mining Input parameters:
- Pit slopes of 45 degrees
- 95% mining recovery
- 10% mining dilution
- Mining costs of $2.50/tonne
- A 1.0 million tonne/year mining rate
Milling input parameters:
- A 90% mill recovery
- Overall processing costs of $25.00/tonne
The price of gold used was $1,500/oz, reasonable considering the current
gold price and Cdn/US $ exchange rate.
Using these parameters a significant portion (from surface down to the 875
meter elevation) of the Carolin Mine inferred resources has the potential to
be economically open pit mined.
Historical trenching above the top mine adit (1000 level) at the Carolin
Mine found considerable widths of good grade gold mineralization on surface.
This occurrence was tested by a small 12-hole surface diamond drilling
program in late 2012. Significant mineralization was encountered in all the
holes, helping to further define the potential for a starter open pit.
The Carolin Mine mineralization has not been systematically explored
toward the McMaster zone. We can see from the above diagram the Montana Zone
is a “jewelry box” type gold showing – very high grade @ 30oz ton gold.
Small past producing mines (Emancipation, Pipestem) and surface showings
(Montana and Lorrainne) occur along the mineralized trend, within several km
of the Carolin Mine. All have seen only piecemeal and sporadic exploration
and have significant exploration potential.
3.5 km of contiguous gold
anomalies from Carolin Mine north to Pipestem Mine
Conclusion
Assays from Cardinal’s surface sampling program from the McMaster zone
towards the south south east are due in a few weeks. Is there gold up there?
Well there is at the McMaster Zone and at the Montana showing. Is there gold
between the two, does it carry to depth?
Look at the trenching results from the surface of the New Carolin Mine,
i.e. 34m of 5.75 g/t gold. Does the surface mineralization continue to the
north? Only a comprehensive sampling program will tell us. If we’ve got
surface gold then a drilling program to see if it continues to depth will be
done, and that will give us a 43-101 compliant gold resource.
Remember:
- A significant portion (from surface down to the 875
meter elevation) of the Carolin Mine inferred resources has the
potential to be economically open pit mined.
- A mine development map dated May 1981 shows the 800
level being extended north for 1.2 km to the McMaster zone, past miners
obviously thought mineralization extended underground for a considerable
distance.
LAD is one of a tiny handful of juniors with the credibility to actually
be able to raise money. It’s your author’s opinion New Carolin is going to be
doing a fair size drill program in the spring of 2016 to test the hopes for
open pittable mineralization between two already modeled Whittle Pits, the
McMaster and the New Carolin Mine with a high grade gold showing - the
Montana, in between, and having the same mineralization as found at either
end of the trend.
Hungry people with golden hopes. Are you one of them? I know I am. New
Carolin is definitely a company, with a potentially explosive drill program,
that’s on my radar screen. Is it on yours?
If not, maybe it should be.
Richard lives with his family on a 160 acre ranch in northern British
Columbia. He invests in the resource and biotechnology/pharmaceutical sectors
and is the owner of Aheadoftheherd.com. His articles have been published on
over 400 websites, including:
WallStreetJournal, USAToday, NationalPost, Lewrockwell, MontrealGazette,
VancouverSun, CBSnews, HuffingtonPost, Beforeitsnews, Londonthenews,
Wealthwire, CalgaryHerald, Forbes, Dallasnews, SGTreport, Vantagewire,
Indiatimes, Ninemsn, Ibtimes, Businessweek, HongKongHerald, Moneytalks,
SeekingAlpha, BusinessInsider, Investing.com, MSN.com and the Association of
Mining Analysts.
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Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or
the solicitation of an offer to purchase or subscribe for any investment.
Richard Mills has based this document on information obtained from sources
he believes to be reliable but which has not been independently verified.
Richard Mills makes no guarantee, representation or warranty and accepts
no responsibility or liability as to its accuracy or completeness.
Expressions of opinion are those of Richard Mills only and are subject to
change without notice. Richard Mills assumes no warranty, liability or
guarantee for the current relevance, correctness or completeness of any
information provided within this Report and will not be held liable for the
consequence of reliance upon any opinion or statement contained herein or any
omission.
Furthermore, I, Richard Mills, assume no liability for any direct or
indirect loss or damage or, in particular, for lost profit, which you may incur
as a result of the use and existence of the information provided within this
Report.
Richard owns shares of New Carolin Gold Corp. TSX.V - LAD
New Carolin Gold Corp. is a sponsor of Richards site aheadoftheherd.com
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