And if anyone knows the value of a potential mine, it’s Hutton.
As one of the most prominent figures in Canada’s resource industry, Hutton has completed $1.4 billion in financing deals throughout his career.
But even he could not believe his eyes last year when Dale Wallster, Southern Empire’s CEO and President, handed him the slide below (please click here to see in full size).
This slide might not immediately mean much to the untrained eye, but to gold exploration experts it represents a golden opportunity.
It shows a vertical slice of the earth with the results from historical drilling into the Oro Cruz gold deposit projected onto it. Located in California, Oro Cruz produced gold up until 1996, when it closed due to declining gold prices. Since then, despite huge growth in the price of gold, it has been largely overlooked and forgotten.
The data from Oro Cruz went unnoticed until Wallster recognized its incredible potential.
Each vertical line represents an exploration drill hole and the colour bars reveal gold mineralized intervals from the drill hole (yellow: 0.2-0.5 grams gold/tonne (“g Au/t”); orange: 0.5 – 1.0 g Au/t; and red: greater than 1.0 g Au/t).
As you can clearly see, there is an exciting concentration of red spots, which denote higher-grade gold intercepts. Although it is unknown if these are true widths, highlights of the historical drill results include:
6.9 metres of 23.1 g Au/t (hole OC-428)
19.8 metres of 7.9 g Au/t (hole OC-157)
13.7 metres of 11.1 g Au/t (hole OC-280)
10.7 metres of 12.5 g Au/t (hole OC-382)
4.6 meters of 13.6 g Au/t (hole OC-258)
4.6 meters of 11.7 g Au/t (hole OC-168)
3.0 meters of 12.8 g Au/t (hole OC-159)
6.1 meters of 9.3 g Au/t (hole OC-07)
These gold grades and drill intercepts point toward the exciting exploration potential at Oro Cruz.
Yet they have never been followed up.
And that’s despite being primed for new underground drill exploration, with more than 2.5 kilometres of modern-day mine workings below the surface.
Hutton tells us he made his mind up immediately:
“I took one look at those drill holes and said: ‘You have got to be kidding me’. You are very rarely going to find long dormant projects with open-ended high-grade drill intersections.
This is one of the best opportunities I had ever seen at this stage of development.”
Alongside Wallster and Bryan Slusarchuk (K92 Mining’s co-founder and former President), Hutton’s capital pool company, Owl Capital, optioned a 100% stake in Oro Cruz.
Oro Cruz – a high-grade gold opportunity
Oro Cruz sits a mere 22.5 kilometers away from the Mesquite Gold Mine – an open-pit, heap-leach project owned and operated by the $2.8 billion firm Equinox Gold (TSE:EQX).
Mesquite is currently firing on all cylinders, with production expected to hit 120,000-130,000 ounces of gold this year.
With Mesquite down the road, Oro Cruz is no doubt in a great neighbourhood.
Oro Cruz already boasts a heap-leach amenable historical inferred resource estimate of 341,800 ounces of gold from 4.4 million tonnes of ore having an average grade of 2.4 grams gold per tonne.
Now, Southern Empire is looking to confirm and expand this historical resource and demonstrate Oro Cruz’s true upside potential.
The firm has set out a clear, initial development strategy as part of a fully-funded US$1.6 million work program.
The Oro Cruz historical open pit (Source: Southern Empire Resources)
First, it will begin drilling and metallurgical testing to add to the existing historical database of more than 400 holes drilled at Oro Cruz.
This will then lead to identifying new drill targets.
Following this, Southern Empire will look to establish a new, industry-compliant measured and indicated resource.
Once this is complete (and assuming it shows good potential for economic gold extraction), Southern Empire will proceed with other studies to create a detailed mine plan of operations based on the new mineral resource estimate.
Passing these milestones is precisely what will strengthen interest in Oro Cruz. It will also put Southern Empire on the radar of institutional investors and potential financing partners.
The opportune time to consider Southern Empire Resources (TSX-V:SMP│Frankfurt:5RE)
Now, if this might all sound a little speculative to you, here is one other less-known fact to be aware of.
Jim Currie, one of Southern Empire’s (TSX-V:SMP│Frankfurt:5RE) directors, is a professional mining engineer. As former COO of Equinox, Currie also happened to have previously worked at Mesquite and knows the regional setting intimately.
With his influence in the background, a powerful picture starts to emerge as to what is starting to come together here in terms of the potential of Oro Cruz to develop into something special.
Against a backdrop of soaring gold prices, it is no surprise that Southern Empire has started to grab the market’s attention.
As with its peers, Southern Empire’s stock is moving higher, but with so much exploration and development work planned for Oro Cruz in the second half of 2020, there is every chance this momentum will accelerate.
IMPORTANT NOTICE AND DISCLAIMER PAID ADVERTISEMENT.
This communication is a paid advertisement. ValueTheMarkets is a trading name of Digitonic Ltd, and its owners, directors, officers, employees, affiliates, agents and assigns (collectively the “Publisher”) is often paid by one or more of the profiled companies or a third party to disseminate these types of communications. In this case, the Publisher has been compensated by Southern Empire Resources to conduct investor awareness advertising and marketing and has paid the Publisher the equivalent of eighty thousand USD to produce and disseminate this and other similar articles and certain related banner advertisements. This compensation should be viewed as a major conflict with the Publisher’s ability to provide unbiased information or opinion.
Changes in Share Trading and Price
Readers should beware that third parties, profiled companies, and/or their affiliates may liquidate shares of the profiled companies at any time, including at or near the time you receive this communication, which has the potential to adversely affect share prices. Frequently companies profiled in our articles experience a large increase in share trading volume and share price during the course of investor awareness marketing, which often ends as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in share trading volume and share price may likely occur.
No Offer to Sell or Buy Securities
This communication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security.
Neither this communication nor the Publisher purport to provide a complete analysis of any company or its financial position.
This communication is based on information generally available to the public and on an interview conducted with the company’s CEO, and does not contain any material, non-public information. The information on which it is based is believed to be reliable. Nevertheless, the Publisher does not guarantee the accuracy or completeness of the information. Further, the information in this communication is not updated after publication and may become inaccurate or outdated. No reliance should be placed on the price or statistics information and no responsibility or liability is accepted for any error or inaccuracy.
No Financial Advice
The Publisher is not, and does not purport to be, a broker-dealer or registered investment adviser or a financial adviser. The Publisher has no access to non-public information about publicly traded companies. The information provided is general and impersonal, and is not tailored to any particular individual’s financial situation or investment objective(s) and this communication is not, and should not be construed to be, personalized investment advice directed to or appropriate for any particular investor or a personal recommendation to deal or invest in any particular company or product. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Further, readers are advised to read and carefully consider the Risk Factors identified and discussed in the advertised company’s SEC, SEDAR and/or other government filings. Investing in securities, particularly microcap securities, is speculative and carries a high degree of risk. Past performance does not guarantee future results.
Forward Looking Statements
This communication contains forward-looking statements, including statements regarding expected continual growth of the featured companies and/or industry. Statements in this communication that look forward in time, which include everything other than historical information, are based on assumptions and estimates by our content providers and involve risks and uncertainties that may affect the profiled company’s actual results of operations. These statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results and performance to differ materially from any future results or performance expressed or implied in the forward-looking statements. These risks, uncertainties and other factors include, among others: the success of the profiled company’s operations; the size and growth of the market for the company’s products and services; the company’s ability to fund its capital requirements in the near term and long term; pricing pressures; changes in business strategy, practices or customer relationships; general worldwide economic and business conditions; currency exchange and interest rate fluctuations; government, statutory, regulatory or administrative initiatives affecting the company’s business.
Indemnification/Release of Liability
By reading this communication, you acknowledge that you have read and understand this disclaimer in full, and agree and accept that the Publisher provides no warranty in respect of the communication or the profiled company and accepts no liability whatsoever. You acknowledge and accept this disclaimer and that, to the greatest extent permitted under applicable law, you release and hold harmless the Publisher from any and all liability, damages, injury and adverse consequences arising from your use of this communication. You further agree that you are solely responsible for any financial outcome related to or arising from your investment decisions.
All trademarks used in this communication are the property of their respective trademark holders. Other than Valuethemarkets.com, the Publisher is not affiliated, connected, or associated with, and the communication is not sponsored, approved, or originated by, the trademark holders unless otherwise stated. No claim is made by the Publisher to any rights in any third-party trademarks other than Valuethemarkets.com.
Valuethemarkets.com and Digitonic Ltd and our affiliates are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above.
This article does not provide any financial advice and is not a recommendation to deal in any securities or product. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.
Ben Turney does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above piece. Ben Turney has been paid to produce this piece by the company or companies mentioned above. Digitonic Ltd, the owner of ValueTheMarkets.com, has been paid for the production this piece by the company or companies mentioned above.