Junior Miner Hits Canadian 'Pay Dirt'

Peter Epstein of Epstein Research profiles Portofino Resources, including its two high profile gold projects in Ontario, one with an 18 g/t gold grab sample discovery.

Gold recently blasted through $2,000/ounce (oz). The spot price traded as high as $2,073/oz on Aug. 6, ~$150/oz above its 2011 all-time (nominal) high. Precious metals juniors have responded with big moves. Make no mistake, I realize that the gold price could move lower after such a robust run.

Modest, healthy pullback of 10% in gold price

In fact, it pulled back to ~$1,864/oz on August 11, down 10% from its high. Spot is now sitting at ~$1,946/oz Still, I believe gold (and silver) will remain strong through the first quarter of next year due to U.S. presidential politics and ongoing uncertainties surrounding COVID-19.

I also believe merger and acquisition (M&A) activity will continue to grow. As major and mid-tier producers become more active, earlier-stage juniors will follow. I suspect we will see bidding wars on the best small companies, like Zijin Mining Group Co. Ltd.'s recent acquisition of Guyana Goldfields.

There's also the fact that metals/mining is not well represented across investor classes. As investors expand their horizons to include metals/mining stocks, especially precious metal juniors, we could see a tsunami of investment capital flowing into the sector.

Portofino Resources has two promising gold projects in Ontario

A company I've followed for years finds itself in the right place at the right time, yet has a market cap of just CA$10.3 million (US$7.8 million; morning of 8/12/20, CA$0.19/share). It has two properties in the world-famous Red Lake mining district and three in the nearby, up-and-coming, Atikokan camp.

In Red Lake, Portofino Resources Inc. (POR:TSX.V; POT:FSE) has the South of Otter (SOT) and Bruce Lake properties. In Atikokan, Portofino has three more, Gold Creek, Sapawe West and Melema West. All five properties, covering 12,725 hectares, are in northwestern Ontario. They're controlled by low cost, multiyear options to acquire 100% interests.

The 5,363-hectare SOT project is ~40 km southeast of Red Lake and ~9 km east of Great Bear Resources Ltd. (GBR:TSX.V; GTBDF:OTCQX) (GBR) very high-grade Dixie project. Importantly, the two projects share similar geology and structures.

Historically, SOT has been the subject of large-scale geophysical surveys targeting base metals. However, in 2001 Goldcorp completed a property-wide compilation and interpretation of prior data to assess the potential for gold.

Historical exploration indicates that significant mineralization extends across a 1.6-kilometer (km) long fault zone ~500 meters (~500m) south of previously identified gold soil anomalies and electromagnetic (EM) conductors. Twelve grab samples were collected along this (deformation) zone to test for gold, silver, copper and zinc.

New discovery at South of Otter, 18.0 and 8.2 g/t gold grab samples

Results from the 12 samples are in. Portofino hit pay dirt! Management is excited about this new discovery. Two samples returned 18.0 and 8.2 g/t gold, respectively. The company is currently conducting a trenching program to determine potential strike length and mineralized widths.

CEO David Tafel commented: "This new discovery is extremely exciting news for Portofino. The new gold showings are approximately 400m south of Goldcorp Inc.'s 2001 gold in soil anomalies. Due to overburden and lack of outcrop, limited work has been completed in this area. We have mobilized a crew to follow-up on this noteworthy discovery."

Portofino has obtained an exploration permit for SOT. As part of the permit process, management consulted with, and received support from, all local indigenous groups. The permit is valid for three years and allows trenching, diamond drilling and line cutting.

The crew is exploring the area to determine the extent of mineralization, and will determine the steps required to deliver a drill program later this year.

Less of a focus, but still attractive is the Bruce Lake property. From the new corporate presentation: "The Bruce Lake Property contains gold-in-soil anomalies discovered as part of a reconnaissance soil sampling program completed by Laurentian Goldfields. Portofino has recognized the existence of regional magnetic high anomalies coincident with the gold-in-soils anomalies that it believes are significant. Gold associated with banded iron formations are excellent exploration targets especially when the property has gold in soils associated with a magnetic anomaly."

SOT or not, Gold Creek could also be a company-maker

Management recently staked seven claims, nearly quadrupling the size of its Gold Creek property from 1,024 hectares (ha) to 3,918 ha. The new claims cover structural features that management believes are extensions of known gold-bearing horizons. Gold Creek hosts zones of significant high-grade gold mineralization.

The regional geology is comparable to world-class districts such as the Timmins and Kirkland Lake Camps in northeastern Ontario. Significant gold mineralization has been traced along a 1.5 km strike length.

Grab samples have returned values up to 759 g/t gold (Ontario Geological Survey [OGS] property visit). OGS reported another grab sample of 46.6 g/t. Diamond drilling in 2008 assayed up to 2.3 g/t gold over 8.3m (including visible gold). Other contiguous zones hosted grab samples of 86 g/t and 43 g/t gold.

Portofino commenced ground prospecting, mapping and sampling at Gold Creek on July 13. Several occurrences, both historical and possibly new zones of mineralization, were examined and sampled. Samples have been submitted to the lab, results are expected this month.

CEO David Tafel commented: "We are very pleased to have been able to expand our Gold Creek land package. The historical high-grade gold values, geological analogy to some of the more prominent gold camps in Northeastern Ontario and limited prior exploration equate to a high-potential, value-creating project. We look forward to receiving and reporting the sample results from our initial exploration program."

Two nearby historical resources,