- Second drilling rig to be deployed at Avoca in the first week of March
- Two drillholes have already been completed at Avoca with the first drilling rig
- Many drilling targets available, with (historical) assays of up to 32 g/t gold
Leviathan Gold (CAN:LVX) is deploying a second drill rig to its (high grade) Avoca gold property starting in March.
The first drill rig is already at work with two holes completed and a third underway. That was the news from Leviathan’s latest press release.
Is Leviathan’s CEO Luke Norman getting impatient here? No.
One thing that mining executives are not is impatient. Norman is a veteran of the gold mining industry and has piloted (and founded) several other gold mining companies. This isn’t his first rodeo.
Mining exploration requires long-term strategic planning. This is because exploration drilling isn’t cheap.
When a mining company chooses to mobilize more than one drilling rig in an exploration program, this says one of two things to investors.
- Management is excited (and confident) about drilling prospects, and so it wants to speed up assay results as quickly as possible.
- The Company has lots of cash in the corporate treasury – and is optimistic it will be able to access additional capital in the future.
In the case of Leviathan and its maiden drilling program on its high-grade Avoca and Timor gold properties, it appears to be some of both. But first, a little background for new investors.
Exciting high-grade gold spin-off
Leviathan Gold is the brand-new spin-off of Fosterville South Exploration (CAN:FSX), commencing trading on February 10, 2021.
Fosterville South is a successful gold exploration junior that has amassed a wealth of highly-prospective gold properties – proximate to Kirkland Lake’s (US:KL / CAN:KL) ultra high-grade Fosterville Gold Mine in Victoria State, Australia.
The Fosterville Mine produces over 600,000 ounces of gold per year, at an incredible average head grade of 39.6 g/t gold (in 2019).
Fosterville South’s gold properties are not greenstone exploration. All these properties had their own high-grade gold mining operations – over 100 years ago.
Spurred on by Kirkland Lake’s success, Fosterville South grabbed several of the largest, most-prospective land packages near the Fosterville Mine. Too much highly prospective gold geology for one (also new) gold junior to explore.
And so Leviathan Gold was born.
Very high (historical) gold grades at Avoca and Timor
Fosterville spun out its two Western land packages to Leviathan: Avoca and Timor. As Dynamic Wealth Research noted in previous coverage of Leviathan, Avoca and Timor also boast some eye-popping historical numbers.
So plenty of reason for CEO Norman to be excited about Leviathan’s drilling prospects. But Leviathan is also very well-capitalized for a junior mining spin-off.
The Company raised CAD$12.9 million in December for its IPO, in an oversubscribed private placement. Very few gold juniors can raise that sort of cash – let alone a brand-new spin-off.
This means that Luke Norman has the luxury of being more aggressive with Leviathan’s exploration strategy, because LVX has the financial strength to support such a strategy.
Currently, Leviathan is focusing its attention on its four “highest priority targets” for investor:
- Pyrenees Reefs: 16,199 tons mined for 16,602 ounces of gold to a depth of 130 meters at an average recovered grade of 32 g/t Au, worked from 1860 to 1912; mineralized shoots per historic underground mine plans.
- Excelsior Reef: 13,200 tons mined for 9,260 ounces of gold to a depth of 100 meters at an average recovered grade of 22 g/t Au, worked from 1909 to 1915; mineralized shoots per historic underground mine plans.
- Vale's Reefs: 1,444 tons mined for 1,388 ounces of gold to a depth of 52 meters at an average recovered grade of 29.4 g/t Au, worked from 1865 to 1883.
- Monte Christo Reefs: 2,795 tons mined for 937 ounces of gold to a depth of 30 meters at an average recovered grade of 10.3 g/t Au, worked from 1872 to 1877.
Lots of high-grade geology to explore here. Avoca is a 106 km2 gold tenement. Timor is even bigger (121 km2).
Near-surface, mining-friendly geology
Even better for investors, this is near-surface gold mineralization. Historical mining was lower-tech, none of these operations were able to work more than 100 meters below surface (the local water table).
Leviathan’s drilling will start with the known geology at <100 meters depth and then go past that looking for additional – untested – gold mineralization. Leviathan’s first two drill holes averaged 135 meters depth. But it’s third hole is going deeper: down to 200 meters.
With mining friendly geology in the region (the Fosterville Mine boasts 98.8% gold recovery), any significant gold deposits identified should be highly lucrative. And now Leviathan is about to double the fun for investors by mobilizing a second drill rig.
In 2020, Fosterville South generated as much as a 5X return for investors. But with the recent headwinds for the gold market, LVX isn’t trading far above its IPO price (CAD$0.50) today.
A truly golden opportunity for investors.
DISCLOSURE: Leviathan Gold is a client of Dynamic Wealth Research. The writer holds shares in Leviathan Gold.
