Alaska Project Could Be Next 'Fort Knox' Co. Says
Tectonic Metals Inc. (TECT:TSX.V; TETOF:OTCQB) extends its private placement as it works to advance its flagship Flat Gold Project in Alaska. Read why one analyst rates the stock as an Immediate Strong Buy.
Tectonic Metals Inc. (TECT:TSX.V; TETOF:OTCQB) announced it has closed the first tranche of its extended CA$1 million non-brokered private placement to advance its flagship Flat Gold Project and provide general working capital.
The company issued 9,780,334 units at a price of CA$0.06 per unit for proceeds of CA$586,820. Combined with the original offering, the company has closed on CA$3.66 million in gross proceeds.
Tectonic said it planned to close a second tranche of the extended offering within the next 30 days.
Last month, the company announced results from its inaugural scoping metallurgical heap leach column tests which achieved gold recoveries of 96% and 91%, confirming the project's heap leach potential and setting the stage for advancing toward run-of-mine heap leach processing.
"The tests, conducted on a combination of oxidized and non-oxidized fresh mineralized rock, mark a pivotal step in evaluating the project's potential for cost-effective heap leach processing," wrote Jeff Valks, senior analyst for The Gold Advisor, on September 19.
The results show strong geological similarities to Kinross' Fort Knox Mine, which is in the same Tintina Gold Province running through Alaska and into the Yukon. Technical Analyst Clive Maund wrote in a piece on Tectonic that "Kinross' Fort Knox Project probably contains more gold than the real Fort Knox."*
According to Tectonic's investor presentation, the Fort Knox project, which has a production history of 9 Moz, has a recovery rate of 81-83%.
Technical Analyst Clive Maund wrote in a piece on Tectonic that "Kinross' Fort Knox Project probably contains more gold than the real Fort Knox.""In just two years of exploration at Flat, we have performed an extensive range of metallurgical tests including heap leach column, conventional bottle roll, gravity separation, combined gravity and bottle roll, and flotation," said Tectonic President and Chief Executive Officer Tony Reda. "These tests are crucial for evaluating and optimizing mining processing methods and de-risking the project as we advance it towards a viable economic mining opportunity. Our results clearly demonstrate that the gold mineralization at Flat is not grind-sensitive, extremely low in sulfur, non-preg-robbing, and well-suited to various gold extraction techniques."
Valks noted that it was only eight days before the announcement of the heap leach column tests that Tectonic launched its 2024 drilling program at Flat, "an expansive 99,000-acre district-scale gold system that has yielded 1.4 (Moz) of placer gold."
"Given the project's geological similarities to Fort Knox and the efficiency of the heap leaching process, Tectonic now appears poised to pursue a low-cost mining approach that could yield significant returns," Valks wrote.
Focused on Tier-1 Opportunities, 'Not Drill Plays'
According to the company, Tectonic was founded by key executives who transformed Kaminak Gold from being worth CA$3 million to CA$520 million. Between them, the company's team has more than 30 million ounces (Moz) of gold discoveries, 18 feasibility studies, 20 permitted projects, and more than CA$3 billion in M&A transactions and more than CA$2 billion in capital raising.
Its mission statement is "to be the number one mineral exploration company in the world." The company said it applies an up-front de-risking strategy to address the economics, community benefits, and sustainability of its projects, which it calls "Shift in the Game."
"The Tectonic team is focused on demonstrating tier-1 mining opportunities, not drill plays," Tectonic says on its releases.
Maund noted that within the Flat project, the Chicken Mountain Intrusion is the most important target and has "multi-million-ounce open-pit potential."
"The name Chicken Mountain is a misnomer because it is not a mountain but a plateau with favorable topography for mining, and it is probably a double misnomer as it is very unlikely, given the latitude, that chickens are to be found there," Maund wrote.
The company's investor presentation notes a 100% drill success rate at Chicken Mountain, with all 74 holes drilled there intersecting mineralization, and that "every stream draining out of Chicken Mountain carries placer gold." A total of 1.4 Moz of placer gold has been found at Flat.
It also counts among its supporters the local indigenous population, with native regional corporation Doyon Ltd. holding about 9% of Tectonic's stock.
Analyst: Indications Are Bullish
Maund said the stock has formed a "giant Double Bottom base pattern."
"It is just starting to rally out of these lows with the exceptionally positive volume pattern of recent weeks and strong Accumulation line that is already at new highs, suggesting that it won't tarry long at these low levels," the analyst noted.
The marked buildup in upside volume in recent months has driven the Accumulation line strongly higher, which are both strongly bullish indications, he wrote, and "a breakout looks likely very soon."
The ballooning Accumulation line is "a sign that somebody or something 'knows something' and is accumulating the stock in an increasingly aggressive manner," he said. "Clearly, it is a very bullish indication."
Maund said that at the current level, the stock was at a good point to take positions, and he rated it as an Immediate Strong Buy.
The Catalyst: Gold's Best Quarter in Four Years?
It's a good time for gold, as well. While prices slipped Friday after a stronger-than-expected U.S. jobs report, it touched a record high of US$2,685.42 in September, and most experts agree that its bull market has not yet ended.
Goldman Sachs on raised its forecast for gold in early 2025 to US$2,900 from the previous US$2,700, Investing.com reported.
Streetwise Ownership Overview*
Tectonic Metals Inc. (TECT:TSX.V; TETOF:OTCQB)
*Share Structureas of 10/8/2024Source: Refinitiv"Firstly, they anticipate faster declines in short-term interest rates in Western countries and China, adding that the gold market 'doesn't fully price in the rates boost to Western ETF holdings backed by physical gold yet, which tends to be gradual,'" Goldman Sachs noted, according to Investing.com's Vahid Karaahmetovic. "Secondly, ongoing robust purchases by emerging market (EM) central banks in the London over-the-counter (OTC) market are expected to continue fueling the gold rally that began in 2022. Strategists believe 'that these purchases will remain structurally elevated.'"
According to Reuters, gold is on-track for its best quarter in four years. The recent rise was "fueled by the U.S. Federal Reserve's half-percentage-point cut and flare-ups in the Middle East," author Sherin Elizabeth Varghese wrote.
Ownership and Share Structure
About 7% of the company is owned by management and insiders, strategic investors own 8.55%, institutions own 30%, and retail owns 54.45%, according to the company.
Top shareholders include Crescat Capital LLC with 18.81%, Doyon Ltd. with 8.55%, Konwave AG with 2.45%, Mackenzie Financial Corporation with 1.31%, and the CEO Reda with 1.26%.
Tectonic has 381.88 million shares outstanding and a market cap of CA$21.08 million. It trades in a 52-week range of CA$0.05 and CA$0.17.
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Important Disclosures:
Tectonic Metals Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee 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 household) own securities of Tectonic Metals Inc. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.For additional disclosures, please click here.
* Disclosures for the quotes from the Clive Maund article published on October 4, 2024
For the quoted article (published on October 4, 2024), the Company has paid Street Smart, an affiliate of Streetwise Reports, US$2,500.Author Certification and Compensation: [Clive Maund of clivemaund.com] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing the article quoted. Maund received his UK Technical Analysts' Diploma in 1989. The recommendations and opinions expressed in the article accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressedClivemaund.com Disclosures
The quoted article represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be only be construed as a recommendation or solicitation to buy and sell securities.