The junior resource sector has bounced back very nicely from a severe 4 year correction with a number of well organized companies set to move into production. Companies with management which worked hard during the downturn have generally been rewarded and we feel that MX Gold is one of those companies. MXL.V (formerly Discovery Ventures Inc.) began trading under it’s new name in June 2016 and has a 52 week range of .115 to .385. MXL is currently trading at .19 cents and appears set to benefit from positive movement in the gold price and commodities in general due to strategic acquisitions.
WILLA GOLD and COPPER PROJECT
-The company’s primary focus in British Columbia is its high-grade Willa Gold and Copper Project located 12 kilometres south of Silverton, B.C. With $18 million dollars of exploration money having been spent by previous operators, this is a situation we are always happy to see.
According to their website, “The property has been explored off and on since 1893 while the deposit has been extensively explored and developed by several operators including Noranda, Rio Algom, BP Minerals, Bethlehem Resources Corp., Northair Mines Ltd. and Hudson Bay Mining & Smelting.“
Bringing events up to the present day, (also from their website)
“The Willa asset is now at the centre of MX Gold Corp’s focus in development and expansion. Survey results indicate that at a cut-off grade of 3.5 g gold/t, current Measured and Indicated mineral resources stand at 758,000 tonnes grading 6.67 g gold/t, 0.85% copper and 12.54 g silver/t. The property has a surface area of approximately 5,329 hectares and consists of twenty-one mineral claims. MX Gold Corp now owns 100% interest in the Willa property, subject to a 2.5% NSR royalty.”
MAX MINE AND MILL
Also located in British Columbia near Revelstoke 135 away from Willa, MXL also has a molybdenum project with a mill nearby that is basically a turnkey situation. It is fully permitted, huge bonus! According to a recent article by Bob Moriarity of 321Gold.com there is 140 million tons of molybdenum ready to be mined, but the price is not economic at current molybdenum prices. He also states that $80 million was spent on building the mine and mill and MXL bought it for a mere $5.7 million in 2013. Now that is smart work on the part of management and shows economic strength even in market downturns, which gives us a lot of confidence.
The company will just need to wait for moly prices to trend back up and we know market prices are cyclical so studying longer term trends in moly prices may give an indication of when this could happen. As director Lorne Warner, former P.Geo of Placer Dome/Detour states in an interview on the Junior Gold Report run by Dr. Kal Kotecha, the property contains over 100 years of molybdenum ore!
The main point to take away from this is that the company is shifting the mill from processing moly to processing gold from their Willa Gold and Copper Project.
BONAPARTE GOLD PROJECT
MXL is spending $650,000.00 to acquire a 5% of the Bonaparte Gold project held by Westkam Gold (WKM.V). This project is located near Kamloops British Columbia and an LOI has been signed to acquire the remaining 95% of the Bonaparte property subject to certain conditions being met – according to the securities exchange and the agreement between the companies. This project has produced high grade gold intersections and former bulk sampling has produced economic grades and recoveries. As any geo knows but may not always tell you, economic recoveries are very important. Stay tuned for updates on this acquisition….
MAGESTRAL DEL ORO PROJECT
MX Gold is also earning a 50-per-cent participating ownership interest and a 45-per-cent net profit participating interest in the Magistral Del Oro project, which is located 392 kilometres southwest of Chihuahua City, Mexico. This is a gold tailings project according to information from the company website.
A $2.6 Million Private Placement which closed Jan 10, 2017 means the company now has their treasury cashed up nicely.
So therefore with great ownership positions in various production scenarios, a healthy looking commodities market with gold set to break out in our opinion, plus a healthy treasury all add up to what we feel is a very positive scenario for MX Gold in the near future!
(Full disclosure, we are shareholders and may buy or sell MX Gold shares at any time in the public markets.)