People keep asking me why I love Titan Mining (TSX:TI) so much, so I will try to shed some light on that in this post...
Titan Mining saw a nice bump last week, up from $0.70 to $0.81, and I expect this upward momentum will continue into the coming weeks as the company rolls out its exploration program at Mineral Ridge.
AugustaGroup recently purchased Mineral Ridge for over $100/ounce from Scorpio Gold (TSXV:SGN). This is the same exit multiple that Eric Sprott is targeting for multi-million ounce, shovel-ready gold projects. Considering that Mineral Ridge is only 350k ounces @ 1.1 g/t, one could say there was quite a big premium on Mineral Ridge. But, if you look closely, you can see why AugustaGroup paid such a high premium.
The Mineral Ridge site is fully permitted for mining and exploration. AugustaGroup knows the difficulties that the permitting process entails and this will not be a factor at Mineral Ridge. This is beneficial right from the get-go, as they can start extracting some of the 175k of low-grade material which is already sitting on a heap leach pad.
Now all of this is great, but do you really think AugustaGroup is going after this asset for a few hundred thousand low-grade ounces? Well I sure don’t. The real reason for their desire to purchase MR is in the blue sky multi-million ounce potential.
Scorpio Gold barely even scratched the surface of Mineral Ridge. Although, they did have some phenomenal high-grade drill results which hinted at this multi-million ounce potential. Examples of some of those drill intercepts are as follows: 40.1 g/t gold over 7.6m, 18.9 g/t gold over 9.1m, 10.6 g/t gold over 12.2m, 11.7 g/t gold over 9.1m, and 9.6 g/t gold over 12.2m.
Unfortunately for Scorpio, the company ran out of money and was not able to follow up on these results.
Although the current NI 43-101 compliant resource for Mineral Ridge shows 350k ounces at an average grade of 1.16 g/t gold, these high-grade intercepts are hints that there is a much larger, deeper resource in the ground.
Now let’s fast-forward to 2020… we have a rip-roaring gold market, but Scorpio President Chris Zerga knows that his company is in a pickle.
“It’s an exciting point for the property with where we are with the gold price. I think we have a good story to tell. We would love to start mining. We just need the dollars to do it," says Chris.
He knows that they have an incredible project under their feet but unfortunately do not have the adequate sources of capital required to restart operations at the mine as well as to follow up on those highly encouraging past drill results.
... and along comes the AugustaGroup.
The AugustaGroup has not done a gold deal since the highly successful Equinox Gold (TSX:EQX). They saw this highly prospective, fully permitted gold-asset in a safe jurisdiction and paid over $100/ounce for it without hesitation. It is quite apparent that they don’t mind paying a high premium so they must expect great things from the asset. Remember, AugustaGroup is metals-agnostic and does not make investments solely based on the flow of commodity prices. They look for assets which will bring in cash-flow and generate positive, long-term returns for stakeholders. Given that AugustaGroup insiders own about ~70% of the $TI float, this makes sense, as they themselves are the majority shareholders. Now, if you look at past AugustaGroup deals, you will see that insiders never sell stock on the open market, but, they will purchase stock on the open market. AugustaGroup company insiders only sell once and that is, if the company gets bought-out. Luckily, there is a small portion of the Titan Mining float which is publicly available for purchase, although it is not the most liquid stock out there, as it is so tightly held.
Below is a map highlighting areas of previous mining, planned mining and exploration target areas at Mineral Ridge.
Seven additional targets, outside the production areas, have been identified for immediate exploration drilling.
For a better understanding of the Mineral Ridge story and the AugustaGroup of Companies, check out these articles:
Solaris Latest Highlight for Richard Warke’s AugustaGroup - https://t.co/EaCsGJtfU5
Scorpio Gold Hopes to Mine Again - https://t.co/Us7oQFjc4s
- SmallCapInvestor
DISCLOSURE: Author owns shares of Titan Mining Corporation and may choose to buy or sell at any time without notice. Author did not receive any compensation for publishing this article.
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