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RooGold: An Australian precious metals play

2022.07.07
Consistently ranked as one of the world’s top three gold producers, Australia has, by a wide margin, the largest reserves, with nearly 10,000…

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This article was originally published by A Head of the Herd

2022.07.07

Consistently ranked as one of the world’s top three gold producers, Australia has, by a wide margin, the largest reserves, with nearly 10,000 tonnes of gold or 20% of the global total.

New South Wales is the country’s second-largest gold producer behind Western Australia. The state’s gold endowment is said to exceed 100 million ounces, plus about 1 billion ounces of silver.

Compared to other states, NSW is prolifically mineralized with multiple metallogenic belts that are largely unexplored outside of the main camps. Past exploration mostly centered on the Cadia-McPillamys camp, North Parks trend, the Conwall-Giginburg trend and Broken Hill.

The New England Orogen is considered to be a significant mineral province that forms the basement throughout the northeast of NSW. The presence of alluvial gold fields and showings, the large number of historical underground mines, and the variety of terranes (pieces of crust) all indicate that the area is highly prospective for gold and silver.

The Lachlan Orogen, which spans New South Wales, Victoria and eastern Tasmania, comprises a series of prolifically mineralized terranes hosting a variety of deposit types. In NSW, these include porphyry and related skarn Cu-Au, epigenetic and hydrothermal Au and Pb-Zn-Cu, and orogenic Au.

The Peel-Manning Fault System is a crustal scale structure that is strongly gold mineralized along its 350-km strike length. The system hosts ocean floor mafic and ultramafic rocks present as listwanite (quartz-carbonate) altered serpentinites.

Listwanite-associated gold deposits are considered to be highly attractive exploration targets. Multi-million-ounce deposits such as the Californian Motherlode, Bralorne in British Columbia, and numerous large high-grade gold systems throughout the shield area of Saudi Arabia, are hosted in listwanites.

Major gold deposits include Hillgrove in New South Wales, and Mount Morgan (>7Moz) and Gympie (>3Moz) in neighboring Queensland. Significant gold resources have been recently discovered at Gympie, Cracow, Tooloom and Mount Rawdon.

By Australian mining standards, a large part of NSW remains relatively unexplored. Highly prospective ground, most with high-grade historical showings, remains available for further exploration.

RooGold Inc.

Coming off a series of property transactions this year and a name change (formerly JNC Resources), RooGold Inc. (CSE:ROO) (OTC PINK:JNCCF) (Frankfurt:5VHA) is uniquely positioned to be a dominant player in New South Wales through a growth strategy focused on the consolidation and exploration of highly mineralized precious metals properties in this prolific region of Australia.

Properties

RooGold commands a portfolio of 14 gold and silver concessions that span 2,696 square kilometers. The district-scale property is home to 139 historical mines and prospects. Yet despite its massive size, only 28 historical holes have been drilled across the entire land position.

In assembling its portfolio, potential projects had to meet four criteria:

  • Properties with limited historic exploration
  • Deposit types controlled by known regional geological structures
  • Targets had historical mining activity
  • High-grade mineralization

Nine gold properties cover 106 historical gold mines and prospects, all located within the highly mineralized but underexplored New England Orogenic Terrane and prolifically mineralized Lachlan Orogenic Belt.

In addition, ROO has four silver properties and 31 historical gold-silver mines and prospects, within the New England Orogenic Terrane.

The chances of RooGold appreciating in value due to neighboring discoveries, is enhanced by the presence of US major gold miner Newmont, which is exploring 35 km from ROO’s property.

The company’s three targets on the Peel-Manning Fault System are Trilby, Lorne and Gold Belt, see on the right side of the map above. Newmont has also recognized the importance of this structure and has staked a 1,200 km² land package covering a 125-km strike length of a parallel structure 30 kms east of the Peel Manning Fault Zone.

Other major mining operations in the area include Newcrest’s Cadia, Australia’s second largest open-pit gold mine; and Evolution Mining’s large Cowal open pit, with an estimated 3.7Moz of gold reserves.

Team

The ROO technical team collectively brings almost 150 years of global experience, having worked in over 75 countries, on most deposit types and commodities, and at all stages of a project’s life.

The board members and senior management/advisors all have significant and demonstrated public market experience, with a proven track record of adding shareholder value. A notable figure on its advisory board is Dr. Quinton Hennigh, who for over 25 years has led exploration teams for Homestake Mining Company, Newcrest Mining and Newmont.

Hennigh is currently founder, chairman and president of Novo Resources; founder and director of Irving Resources; and director of New Found Gold. He also holds the position of geological and technical director at Crescat Capital LLC, an award-winning global macro asset management firm based in Denver, Colorado.

Crescat recently became a strategic shareholder in the company and will provide expertise regarding RooGold’s exploration and development strategy, along with other geological and technical matters, with the support of Hennigh.

Crescat’s mission is to grow and protect wealth over the long term by deploying tactical investment themes based on proprietary value-driven equity and macro models. Its investment goal is industry-leading absolute and risk-adjusted returns over complete business cycles with low correlation to common benchmarks.

Another familiar name on the ROO advisory board is Dr. Chris Wilson, the world-class geologist behind Ivanhoe Mines’ Mongolian operations for 10 years, who was responsible for an exploration portfolio of 127 licensees covering over 11 million hectares.

Hennigh, a high-profile geologist himself, knows the Australian mining scene inside and out. His biggest success was also in Australia, in the Victoria region, when billionaire junior mining financier Eric Sprott flew him in to analyze the New Market land package.

And the rest was history. Hennigh’s due diligence and strong endorsement resulted in Sprott’s Kirkland Lake acquiring the asset, and on the strength of the high-grade Swan-Zone discovery at Fosterville, KL went from under $2 to a high of $76/share.

Sprott still credits Hennigh for KL’s success, especially because the other principals of KL were hesitant to proceed with the transaction.

The fact that Hennigh and Crescat are also early backers in ROO and the NSW land package, with Hennigh being a director of New Found Gold, a current high flier in the space, bodes well for ROO’s future prospects.

Exploration strategy

ROO’s initial exploration focus will be on the Peel-Manning Trilby and Lorne gold properties and the Castle Rag silver project. The remaining properties will be evaluated and developed according to a five-stage exploration plan, described below:

  1. Historical data compilation and modernization. RooGold will compile and digitize the historical data, and where possible, model the past-producing mines and deposits into 3D. 
  1. Remote data acquisition and target generation. The company will acquire high-resolution satellite imagery, Digital Terrain Mapping (DTM) and geophysical datasets to assist in geological and structural mapping, to better define and delineate the size and scope of the historical properties and perhaps discover new prospective anomalies. 
  2. Field -based target delineation and development. RooGold plans to conduct extensive mapping to delineate areas of interest that are identified during the data evaluation phase. Surface sampling will help to confirm historical assays, test mineralized exposures, deposit extensions and any newly identified targets.
  3. Drilling strategy and planning. To optimize its drill targets, 3D modeling will help to rank drill targets according to the highest priority and best risk/reward determinations to enable the highest probability of success. 
  4. Execution of targeted drill programs.  RC (reverse circulation) drill programs will be completed at the highest-priority targets highlighted by previous exploration activities. 

The initial exploration plan requires a total expenditure of CAD$2.5 million, with a large chunk of that ($2 million) going towards RC drilling and ongoing project review/development. The remaining $500,000 will be allocated to the first four stages.

To fund its exploration activities, RooGold successfully secured last October a first tranche financing of $2.63 million. The net proceeds will be used for Phase 1 exploration of its Australian properties. The company is also looking to spend at least another $1.6M during Phase 2 exploration, which could bring the financing total up to $5M.

In June RooGold announced the completion of a preliminary rock chip sampling program at Arthurs Seat, that yielded robust assay results up to 4 ppm (grams per tonne) Ag (silver).

A total of 274 rock chip samples were collected at historical prospects and along structural and geological contacts, from which 159 samples were sent to the lab for analysis. The samples feature significant hydrothermal alteration with multiple quartz veins visible. According to ROO, the assay results received to date indicate widespread, low-level mineralization along greisen-altered granite-metasediment contacts and confirms the presence of a large hydrothermal mineral system.

Conclusion

The case for investing in RooGold rests on a few key arguments. The first is the fact that ROO is exploring for gold and silver in what looks to me, as the early stages of a bull market in precious metals. (in today’s highly inflationary environment, gold and silver are considered excellent hedges). Also, if gold remains above $1,800/oz, there will likely be an influx of capital coming into the juniors.

The second factor is the location of RooGold’s properties. Australia is one of the world’s most mining-friendly jurisdictions, with plenty of infrastructure limiting the capex of building new mines. Compared to other states, New South Wales is prolifically mineralized with multiple metallogenic belts that are largely unexplored outside of the main camps.

The New England Orogen is considered to be a significant mineral province that forms the basement throughout the northeast of NSW. The Lachlan Orogen, which spans New South Wales, Victoria and eastern Tasmania, comprises a series of prolifically mineralized accretionary terranes hosting a variety of deposit types. The Peel-Manning Fault System is a crustal scale structure that is strongly gold mineralized along its 350-km strike length. Newmont Mining has also recognized the importance of this structure and has staked a 1,200 km² land package covering a 125-km strike length of a parallel structure 30 kms east of the Peel Manning Fault Zone.

ROO’s management team has extensive experience in New South Wales, giving them “street cred” to attract opportunities for acquiring additional projects, potentially even a buy-out from a larger company looking to solidify its position in the area. Two world-renowned exploration geologists are technical advisors, Dr. Chris Wilson and Dr. Quinton Hennigh.

The company has a well-funded treasury of over $3 million and a relatively tight share structure of 72.5 million o/s.

In sum, RooGold ticks all of my boxes and at just CAD$0.07/sh, it is extremely cheap. Catalysts for share price appreciation include an increase in the prices of gold and silver; a deterioration in the broader economic picture, which looks increasingly likely; and a discovery hole at any of the 14 projects within its extensive gold and silver portfolio.

RooGold Inc.
(CSE: ROO) (OTC PINK: JNCCF) (Frankfurt: 5VHA)
Cdn$0.07, 2022.07.06
Shares Outstanding 72.5m
Market cap Cdn$5.4m
RooGold Inc

Richard (Rick) Mills
aheadoftheherd.com
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