Omineca Mining and Metals Ltd. says recovery of gold-bearing gravels from its flagship Wingdam placer gold project has begun. Find out why one analyst sees a substantial return on the company's stock.
Omineca Mining and Metals Ltd. (OMM: TSX.V; OMMSF: OTCMKTS) announced the recovery of gold-bearing gravels from its flagship Wingdam gold site project, in the historic Cariboo mining district, British Columbia began.
The company said 10.25 ounces of placer gold (Au) with a purity of 90.9% Au was recovered from the first 2.5 meters of advance into the Crosscut #3 paleochannel.
Once Crosscut #3 and Crosscut #4 “reach the center of the paleochannel, mining will begin from the top to the bottom of each crosscut in the channel,” noted Research Capital Corp. analyst Bill Newman in an updated research note Friday..
“Excavation between Crosscut #3 and Crosscut #4 will target the center of the portion of the paleochannel where the highest concentration of gold is expected to be found,” wrote Newman, who rated the stock a Buy speculative with a target price of CA. $0.55 per share, an increase of almost 360% from the price per share of CA$0.12 as of Friday morning. “We expect additional gold recovery results could be a near-term catalyst for the stock.”
Newman also noted that the condition of the recovered gold was “positive news.”
“The gold is coarse (nugget), exhibiting the characteristics of a very short transport distance from the lode source,” he wrote. “OMM plans to provide regular updates as the company moves deeper into the paleochannel, targeting the higher gold grades expected near the central portion.”
Technical analyst Clive Maund also recommended the mining company as a speculative buy in August 2023.
The small exploration company based in Saskatoon, Saskatchewan, is exploring 2.4 kilometers of a rich placer gold channel buried 50 meters below Lightning Creek in Cariboo.
Geologist Stephen Kocsis described the channel as “containing some of the highest concentrations of placer gold historically reported in the entire Cariboo mining district and possibly British Columbia, which remain unmined.”
The catalyst: the ideal moment
In its statement on the gold recovery, Omineca said it could not be happier with the timing. Prices for the yellow metal were still above US$2,300 an ounce after
According to Reutersgold prices climbed on Friday “en route to their best week in five.”
Omineca noted that “although the project has experienced substantial delays, the price of gold is now significantly higher than when operations resumed at Wingdam. The immediacy of recovery and processing of gold from the paleochannel led the company to deliver ounces of gold at an extraordinarily high market price. “.
Spot gold rose 0.71% to $2,362.49 an ounce on Friday, while U.S. gold futures for June delivery rose 1.26% to 2,369.60 dollars per ounce, Reuters reported.
Research Capital Corp. analyst Bill Newman also noted that the condition of the recovered gold was “positive news.”
“Investors are now eagerly awaiting US Producer Price Index and Consumer Price Index data due next week, both of which could have a significant impact on gold “, noted Reuters.
Some analysts are predicting a bull market for gold. Seasoned investor Jim Rogers predicts that it will “go very high” due to buying pressure from retail investors, institutional funds and central banks in developing countries.
“Gold prices have been declining for many years. In recent months they have started to move,” Rogers said. Business Today TV. “Whenever a commodity, which has been static for a long period of time, starts to move, it gains momentum. That's what's happening with gold right now. The momentum is building, and who knows how high gold prices will go.”
Recoveries comparable to previous bulk sample
The initial thickness of the gravels exposed in the face overlying the bedrock where the recovery was carried out was approximately 0.5 to 1 meter, “which is expected to increase in thickness as the edge of the bedrock dips towards the center of the canal flooding,” Omineca said.
“These initial recoveries are still largely at the bedrock interface and are comparable to recoveries in the similar peripheral area of the channel at the location of the 2012 bulk sample (“Crosscut #1”),” noted the company.
Reaching the center of the paleochannel, the company will work upstream and downstream of each channel crossing.
“In this type of paleochannel, the greatest amount of placer gold tends to be found in the lower points of the central part of the paleochannel where, through natural waterborne gravity sorting, the highest concentrations of material heavier ones, like gold, are deposited,” Omineca said. . “This feature was noted in the crosscut of the bulk sample where, of the 173 ounces recovered in a 23.5 meter crosscut, approximately 75% of this quantity was produced from one section 5.5 meters in the middle of the canal.”
Shareholding and sharing structure
The company said 31% was owned by insiders, officers and others, including Chairman/CEO Thomas MacNeill with 4.11% and CFO/Director Andrew Davidson with 1.92%. The rest, 69%, is intended for retail.
Omineca has 178 million shares outstanding and 167 million shares floating.
The company's market capitalization is CA$22.25 million and its 52-week price range is CA$0.05 to CA$0.15 per share.
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Important Disclosures:
- Omineca Mines and Metals Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee of between US$4,000 and US$5,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their households) own securities of Omineca Mining and Metals Ltd.
- Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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