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Co. Finds Placer Gold At BC Project

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Omineca Mining and Metals Ltd. announced it has intercepted 8 meters of 25.41 grams per meter-cubed (g/m3) placer gold at its flagship Wingdam placer gold project. Upcoming results could be a near-term catalyst for the stock.

Omineca Mining and Metals Ltd. (OMM:TSX.V; OMMSF:OTCMKTS) released the results of two drill holes from its flagship Wingdam placer gold project, including one intercepting 8 meters of 25.41 grams per meter-cubed (g/m3) placer gold.

The two holes were targeting a seismically defined depression within the Wingdam underground paleochannel.

"This result compares favorably to the 2012 bulks sample test that extracted 173.5 ounces of gold from an enriched zone of gold-bearing gravels averaging only 1.20 meters of pay thickness over the crosscutting channel," wrote analyst Bill Newman of Research Capital Corp. in an updated note Thursday.

The results "confirm a high gold grade comparable to the 2012 Bulk Sample, but over a larger vertical thickness," wrote Newman, who rated the stock a Speculative Buy with a target price of CA$0.55 per share. "We are hopeful that the gold recovery phase will commence within the coming weeks/months."

Gold From Ancient Streambeds

The Saskatoon, Saskatchewan-based junior exploration company is pursuing underground placer gold mining at Wingdam, which is in British Columbia's historic Cariboo mining district.

"The Wingdam project encompasses 2.4 kilometers of a rich, placer gold-bearing channel buried 50 meters underneath Lightning Creek," the company noted.

Analyst Bill Newman of Research Capital Corp. rated the stock a Speculative Buy with a target price of CA$0.55 per share.

Geologist Stephen Kocsis described the channel as "containing some of the highest placer gold concentrations historically reported in all of the Cariboo mining district and perhaps British Columbia that remains unmined."

How did the gold get there?

"Paleochannel depressions have the potential to host significantly enriched gold-bearing gravels through the natural sorting of heavy material to the lowest point in ancient stream beds," the company noted in a release. "This tendency was reflected in the 2012 bulk sample crosscut as the highest grades were encountered near the middle, lowest point in the paleochannel. In this regard, gold grades increased as the crosscut approached the enriched lower center then decreased as the cut headed across into higher elevations near the north channel rim."

Upcoming Catalyst: Operator Working Toward Crosscut

The two new geotechnical holes drilled are being used with a comprehensive underground survey to "confirm seismic data and further define the underground placer gold-bearing paleochannel."

Hole 23-01 intercepted a shallower north rim of the paleochannel but still produced 3 meters of gold-enriched gravels. Hole 23-02 targeted a lower point in the depression and intersected the 8 meters of gold-bearing gravels, the company said.

The holes were drilled with diameters of 6 inches. An assessed placer gold purity of 90.9% was used to calculate pure gold in the grams recovered, Omineca noted.

Technical Analyst Clive Maund also recommended the mining company as a Speculative Buy in August 2023.

"A total of five depressions within the first 300 meters of the paleochannel have been identified," wrote Newman. "Paleochannel depressions have the potential to host enriched gold-bearing gravels due to natural sorting of heavier material to the lowest point in the stream beds."

Newman noted project operator D&L Mining Corp. "is currently advancing the access drift along the paleochannel, which will be followed by a 3.5-meter by 3.5-meter crosscut to be completed directly through a portion of the first depression drilled by the new holes."

"Results of this first crosscut could be a near-term catalyst for the stock," he wrote.

Technical Analyst Clive Maund also recommended the mining company as a Speculative Buy in August 2023.

Why Gold?

Geopolitical instability and market uncertainty, such as the world has seen in recent years, can boost gold as a "safe haven" asset, but the Fed does not appear to be in a hurry to cut interest rates until inflation settles more.

In a research note reported by CNBC, UBS noted that when it comes, the "power of the [Federal Reserve's] policy pivot should not be underestimated."

Still, UBS forecasted a rise to US$2,250 per ounce for gold by the end of the year. It was US$2.045.10 on Thursday morning.

According to the World Gold Council's Gold Outlook 2024, there could be a "soft landing" for the economy in the U.S. this year — traditionally not attractive for gold.

"That said, every cycle is different," the Council wrote. "The likelihood of the Fed steering the U.S. economy to a safe landing with interest rates above 5% is by no means certain. And a global recession is still on the cards. This should encourage many investors to hold effective hedges, such as gold, in their portfolios."

According to Katusa Research, if a hard landing for the economy leads to a recession, "heightened uncertainty and decreased appetite for risk could drive investors to flock to gold. In addition, a hard landing would justify additional Fed rate cuts, fanning the flames for higher gold prices."

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Omineca Mining and Metals Ltd. (OMM:TSX.V; OMMSF:OTCMKTS)

*Share Structure as of 2/8/2024

The site said, "You need to be prepared. If a roaring bull market sends the gold price above (US)$2,200 for any period of time, look out." 

In the longer term, a model by Incrementum assigning probabilities to future gold prices "currently shows a 75% chance of (US)$3,000+ by 2030," John Rubino of John Rubino's Substack noted.

Ownership and Share Structure

The company said 31% is owned by insiders and management and others, including President/Chief Executive Officer Thomas MacNeill with 3.77%, and Chief Financial Officer/Director Andrew Davidson with 2.02%. The rest, 69%, is retail.

Omineca has 178 million shares outstanding and 122 million free float shares.

The company's market cap is CA$7.96M, and its 52-week price range is CA$0.05−0.20 per share.

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Important Disclosures:

  1. Omineca Mining and Metals Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
  2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Omineca Mining and Metals Ltd.
  3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
  4.  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. 

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