WALRF Bottom'd Chart Gold Play w/ Huge Upside
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Walcott Resources Ltd. (WALRF)
Alert Price: $0.3328
Technical Analysis
Company Website | Recent News
The Outlook for Gold Stocks Has Never Been Better
If investors were to dream up the perfect scenario for gold stocks, this is it.
Whether you're a new or tenured investor, this has been a challenging year. The coronavirus disease 2019 (COVID-19) pandemic initially clobbered the stock market and sent the broad-based S&P 500 to a 34% loss in just 33 calendar days. But the steepest bear market decline in history was met with the most ferocious rebound of all time. It took less than five months for the widely followed index to regain everything that was lost and push to new highs.
However, big losses and exacerbated downside vacillations haven't been an issue for physical gold and gold stocks, which are among 2020's top performers.
A perfect storm is brewing for substantially higher gold prices
On the one hand, gold is benefiting from historically low global bond yields. Last year, we saw a peak of $17 trillion in global debt price at a negative yield. Even though yields have bounced a tad, income-seeking investors are finding slim pickings when it comes to guaranteed income that'll outpace inflation. To boot, the Federal Reserve has pledged to keep lending rates at historic lows for years to come. An inflation-beating yield is what would drive investors away from gold. But when the opposite is true, we expect to see investors flock to gold and use it as a store of wealth.
On the other hand, the Federal Reserve is also pumping in gigantic amounts of liquidity to shore up financial markets and the housing market. In response to COVID-19, the nation's central bank announced an unlimited quantitative easing program that'll balloon the money supply and pressure the U.S. dollar. Since the dollar and gold have an inverse relationship, we would expect to see sharply higher gold prices as the Fed continues its assault on the dollar.
We've also witnessed supply and demand economics come into play. Since the end of February, there have been periods where gold bullion supply has run short. As with any good or service, we would expect the price to rise until demand wanes, or until supply is sufficient to meet demand.
Finally, don't discount the fear factor. We’re not a huge believers that fear can sustainably drive the price of gold higher. But when taken in conjunction with these other catalysts, and with the understanding that there are big question marks surrounding a coronavirus vaccine, uncertainty and fear could well push physical gold higher.
Gold stocks are in much better shape now than nine years ago
However, physical gold catalysts only tell half the story. We're seeing significant tailwinds from gold stocks, too.
During the last major bull market for gold, which ended in 2011, mining companies were aggressively expanding their operations. Neither they nor the investment community had a clue that gold would peak in 2011. All they knew was that the price of the lustrous yellow metal had been climbing on an annual basis for over a decade, and it had become economically viable to throw lots of money at expanding existing mines and making acquisitions. This knowledge led a lot of gold stocks to drown themselves in debt.
Over the past eight years, we've witnessed incredible progress as gold stocks have worked tirelessly to reduce their net debt, prioritize high-grade ore projects, and streamline operations. Today, the industry is in much better financial shape than it was even five years ago, with a number of gold stocks capable of producing a cash operating margin of more than $1,000 an ounce.
For example, Ontario-based Yamana Gold (NYSE:AUY) looked to have bit off more than it could chew in June 2014 when it and Agnico Eagle Mines partnered up to buy Osisko Mining and its flagship Canadian Malartic mine. By the end of 2015, Yamana was lugging around approximately $1.7 billion in net debt. However, with Yamana selling the Chapada mine in 2019 for a little over $1 billion, and the company focusing on production efficiency, it has whittled its net debt down to $768 million as of its most recent quarter.
Yamana's story is similar to many other gold stocks.
An underground excavator operating in a precious metal mine.
These gold stocks are built to outperform.
Despite physical gold being primed for success, we don't suggest investors buy the physical metal. Gold stocks are a much better choice given that they might pay a dividend and offer leveraged returns relative to the price of gold. Their management teams can also adjust output depending on prevailing market conditions.
That being said, we believe that our latest trade idea, Walcott Resources Ltd. (WALRF) has more upside than any other publicly listed mining stock.
The Company has several bullish catalysts working in its favor.
Received results from recent rock chip sampling on the company's Cobalt Hill Property located near the City of Castlegar, in Southern BC and is encouraged by evidence of low-grade, bulk-tonnage style gold mineralization within intrusive rocks on the property.
Commenced field work at its 60% owned Tyr Silver Project located in north-northeast New South Wales, Australia. The Tyr Silver Project consists of close to 300 square kilometres including two historic silver mines that were last operational between 1920 and 1935. The tenement was granted on the 29th of March 2018, for a period of 6 years. The project is located approximately 20kms southwest of the town of Tenterfield and is accessible via paved road.
Make sure you read our full profile below, start your research, and add WALRF to the top of your watchlist.
About Walcott Resources Ltd.
Walcott is a British Columbia based Company involved in the acquisition and exploration of mineral properties in Canada and Australia. The Company holds an option to acquire a 100% undivided interest, subject to a 1.5% NSR on all base, rare earth elements and precious metals, in the Cobalt Hill copper-gold-cobalt property (the "Property"), consisting of eight mineral claims covering an area of approximately 1,727.43 hectares located in the Trail Creek Mining Division in the Province of British Columbia, Canada.
In addition, the Company has acquired 60% of two silver assets in Australia - the Tyr Silver Project in northern New South Wales and Century South Silver-Zinc Project in north-west Queensland.
Walcott also trades on the Canadian Securities Exchange under the symbol (WAL) and on the Frankfurt Stock Exchange under the symbol (WR2)
Walcott Resources Announces Encouraging Gold Values Confirmed by 2020 Field Program
WALRF has received results from recent rock chip sampling on the company's Cobalt Hill Property located near the City of Castlegar, in Southern BC and is encouraged by evidence of low-grade, bulk-tonnage style gold mineralization within intrusive rocks on the property.
Known gold mineralization on the Cobalt Hill property consists of numerous narrow intrusive-hosted high-grade quartz veins containing visible gold (i.e. Maude S vein: 38.0, 39.0 and 85.6 ppm Au; High Grade vein: 14.4 ppm Au, 38.0 ppm Au, 88.4 ppm Au, 413.0 ppm Au1,2). The 2020 exploration program was directed at assessing the potential for larger zones of low grade gold mineralization on the property, rather than repeat sampling of these known high-grade areas. Geological mapping was completed and a total of 60 rock samples, including field duplicates and independent QA/QC standards of known grade, were submitted for analysis.
The majority of rock samples were from the Meister-Marilyn zone where strong sericite-altered intermediate intrusive, with local silicification and quartz veining, occurs within in a 200 x 100 m heavily forested area. Narrow quartz veins at the Meister/Marilyn zone have returned elevated gold values from historic grab samples, including 37.3 ppm Au.1,2 A grab sample from the Meister zone collected by the company in 2019 returned 8.0 g/t Au. This area is untested by drilling.
Gold correlates strongly with arsenic and silver in rock samples, and moderately with antimony, mercury and sulfur. Induced polarization is being considered for this area. Modern trenching is also being considered to better expose rock in this area for systematic sampling prior to possible diamond drilling.
The second area targeted in the recent work program was a 650 x 250 m coincident magnetic low anomaly and gold-in-soil geochemical anomaly with values to 622 ppb Au, which is located approximately 2 km east of the Meister/Marilyn zone.3 Historic rock samples from within the target area have returned greater than 2 ppm gold from grab samples of float material.3 The target area is underlain by intermediate intrusive and straddles a structural intersection between a prominent northwest trending fault and a north trending fault. Abundant quartz veining occurs in float, outcrop and sub-crop in this area. None of the grab rock samples collected in the 2020 program were significantly elevated in gold, but as at the Meister/Marilyn zone, a correlation is observed between gold and silver and arsenic and suggests a similar mineralization and alteration style.
The large gold soil anomaly remains unexplained, is untested by drilling, and is a high priority target for follow-up. Walcott is considering a winter program of induced polarization to provide further definition to the area, prior to drill testing.
Rock samples described in this release were shipped to MS Analytical Labs in Langley, B.C. for preparation and analysis. MS Analytical is an ISO 17025 and ISO 9001 accredited laboratory. Samples were crushed to 70% passing 2mm, then a 250 g split was pulverized to 85% passing 75 µm. Multi-element analysis was by method IMS-132 (ICP-AES/MS following aqua regia digestion of a 40 g sample). Fire assay analyses (method FA-111) were completed on 30 g samples from the intervals in the Meister/Marilyn area that returned elevated gold by IMS-132.
Goldman Sachs Doubles Down On Bullish Gold Price Forecast
Goldman Sachs remains upbeat about gold in 2021.
In a report published Friday, the investment bank said that it is maintaining its 2021 gold price target of $US2,300 an ounce as the global economy returns to balance between positive news of potential vaccines for the COVID-19 virus and the still prevalent risks of further economic damage from more waves of the virus.
Gold prices ended Friday on Comex up around 0.7% at $US1,886.20, down 3.2% for the week as the rotation out of megatechs and similar stocks continued.
Gold investors ignored the rise in US bond yields over the week – although they eased to 0.895% on Friday after touching a high of 0.97% earlier in the wake in the wake of the switch in investing triggered by news about the Pfizer COVID-19 vaccine.
Although Goldman Sachs economists see a strong economic recovery in the US and worldwide next year, commodity analysts Jeffrey Currie and Mikhail Sprogis, the authors of the gold report, said that there is still a “strong strategic case for gold.”
“In our view, the structural bull market for gold is not over and will resume next year as inflation expectations move higher, the U.S. dollar weakens and E.M. (Emerging Markets) retail demand continues to recover,” the analysts said.
Gold “should benefit from continued strong investment demand.”
Silver seems to be still more attractive to smaller investors because it is perceived as being cheaper (which it is) and prices around $US24 an ounce seem easier for investors to grasp than gold above $US1,800 an ounce.
Source:UPON REQUEST
Silver price forecast for 2021 and beyond: more gains ahead
In a report published at the end of October, analysts at Metals Focus said they see silver prices going "well above" $30 per ounce.
They anticipate silver to get an upward momentum after the results of the US election are known: "Almost irrespective of the outcome of the US election, fresh large-scale fiscal and monetary stimuli seems inevitable, given an uncertain economic recovery and still high Covid-19 cases. The same may apply to Europe where record infections and new lockdown measures have also cast doubts about the solidity of the anticipated economic recovery. The case for silver (and gold investment) will therefore remain strong."
"This is the main assumption behind our forecast that the silver price will break through the $30 mark during 2021."
WALRF's Cobalt Hill Project
The Cobalt Hill Property is located 5 kilometres east of Castlegar, BC, and consists of 8 mineral tenures totaling 1727.43 hectares. The Property is owned by Jack Denny of Salmo, BC and is under option to Walcott Resources (“Walcott”) Ltd. of Vancouver, BC, who has the right to earn a 100% interest in the Property, subject to a retained Net Smelter Return.
The Cobalt Hill Property covers a portion of the multi-phase Bonnington pluton, which has intruded sedimentary, volcanic and sub-volcanic rocks of the Jurassic Rossland Group. These older rocks occur as embayments, pendants, and possible fault slices within the pluton, and are typically metamorphosed with relic textures preserved only locally (Caron, 2010).
The property exhibits widespread gold mineralization generally associated with narrow, often wide-spaced quartz veins. This high grade gold mineralization has been found in numerous locations throughout the property and is well described in historic assessment reports filed with the BC Ministry of Energy and Mines.
Numerous old prospect pits, shafts and adits on the Cobalt Hill Property are evidence of the early exploration history in the area, and there is anecdotal evidence of early placer gold mining on McPhee and Champion creeks. The presence of free gold in quartz veins at the Maud S showing has been known since the late 1890s.
Soil sample results from previous soil surveys show significant gold, copper and cobalt anomalies trending through the Property, expanding outward from the areas with known workings. Gold and copper-cobalt associations seen in the soil geochemistry anomalies are also present in rock sample results.
WALRF Closes Big Time Acquisition Of Silver Mines
WALRF Acquires Two Australian Projects With Historic Mines
The Company announce that it has closed the acquisition (the "Transaction") of 60% of the issued and outstanding shares of 1256714 B.C. Ltd. ("TargetCo") pursuant to a share exchange agreement dated effective August 13, 2020 among the Company, TargetCo and the shareholders of TargetCo (the "Definitive Agreement"). Targetco owns a 100% interest (subject to a 2% NSR) in two prospective silver-zinc projects in Australia, being the Tyr Silver Project and the Century South Silver-Zinc Project.
The Silver Projects
Tyr Silver Project in northern New South Wales has two historic silver mines - Burra and Torny - with potential for high-grade silver zinc-lead-tin mineralization.
The Tyr Silver Project covers an area of approximately 300 km2 in Northern New South Wales comprised of minimal use, hilly pastoral land, mostly cleared and lightly forested.
The tenement was granted in March 2018 and is due for renewal in March 2024.
The Tyr Silver Project delivers upside potential with mineral occurrences apparent along a north-west trend with numerous old workings both along this trend and possibly others.
Notably, the north-west trend is part of a large-scale mineralized system that includes the historic silver mines, which materially boosts exploration upside.
Century South Silver-Zinc Project in the Mt Isa Basin, north-west Queensland, which is under-explored but in a highly prospective region and is along strike from one of the world's largest silver-zinc mines.
Century South lies approximately 8 km south east of the New Century Zinc Mine and is around 250 km2 in size, comprised of hilly, open savannah country.
The tenement was granted in October 2018 and is due for renewal in October 2023.
Both projects are located near established mining infrastructure & accessible port, whilst Australia is a stable, well-regulated, mining jurisdiction.
Read the full article here.
Recently, the company followed up with major updates from the Tyr Silver Project and the Century South Silver-Zinc Project ("CSSZP").
Tyr Silver Project Update
Highlights
Subsequent to the August 13, 2020 news release announcing the acquisition of two Australian silver projects, Walcott has commissioned its Australian technical team to expedite exploration work on the prospective Tyr Silver Project.
Building on previous work, the technical team is fast-tracking plans for a site visit to review previously determined prospective silver targets in order to formulate an inaugural drilling campaign.
Within the Tyr Silver Project are the two historic silver mines (Burra and Torny) which both produced silver, zinc and lead between 1920-35: Adjacent to both historic mines are priority areas earmarked for extensive surface sampling and geophysical surveys to reconcile historic data sets and geological reports.
A distinctive quality of the Tyr Silver Project is numerous mineral occurrences along a north-west trend that is 20 km in length and 4 km wide.
The proximity, geology and mineralization patterns indicate that the north-west trend could potentially be part of a mineralized system - including the historic silver mines.
CEO David Thornley-Hall remarked: "The fact there are two historic silver mines and numerous reported mineral occurrences, potentially within a 20 km by 4 km potentially mineralized system, suggests that a considerable future pipeline of work is warranted. Leveraging earlier work, we aim to rapidly deploy field teams to the Tyr Silver Project to commence reviewing preliminary targets and accelerate the formulation of our inaugural drilling campaign."
Century South Silver-Zinc Project ("CSSZP") Update
Highlights
Walcott's CSSZP consists of approximately 277 square kms and is located in a highly prospective region - the Mt Isa Basin which hosts several world-class silver-zinc-lead and copper deposits, yet much of the region remains under-explored.
The CSSZP is approximately 8km along strike from New Century Resources' (ASX: NCZ) world-class Century Mine that recommenced mining operations in 2018:
The two projects are on the same regional fault line which is known to control and constrain silver-zinc mineralization in the district;
Both CSSZP and Century Mine are hosted in the same Lawn Hill Platform which is within the Western Fold Belt; and
There are similarities between the magnetic / density geophysical characteristics apparent at CSSZP and Century Mine, indicating that the underlying geology might be comparable.
CSSZP is located in a well-established mining district with reliable infrastructure and access to nearby ports. In terms of power infrastructure; 90% the tenement lies within the 10km transmission network corridor as powerlines run through the centre of the EPM26713. The remaining 10% on the easternmost perimeter lies within the 30km transmission network corridor.
Walcott's technical team plans to undertake a site visit and commence a wide-spread surface sampling campaign, focused along the prospective regional fault.
CEO David Thornley-Hall remarked: "We are excited by the strong fundamentals linked to our Century South Silver-Zinc Project, and we anticipate committing to a significant work program on this property. Accordingly, our Australian technical team have set an ambitious agenda to swiftly and effectively advance towards drillable targets within the tenure."
WALRF Provides Update On Cobalt Hill Property
Vancouver, British Columbia--(Newsfile Corp. - September 11, 2020) - Walcott Resources Ltd. (CSE: WAL) (the "Company" or "Walcott") is pleased to provide and update on exploration activities on the Cobalt Hill Property located near Castlegar in Southern BC.
This 2020 exploration program has been designed to follow-up on zones of known high grade gold mineralization which occur at numerous locations on the property and are well described in historic assessment reports filed with the BC Ministry of Energy and Mines. It will also assess the potential for larger zones of lower grade gold mineralization on the property.
Activities will include compiling historic geochemical, geological and geophysical data along with ground truthing, mapping and sampling to follow-up areas of interest.
One high priority target which has been identified for work in 2020 is a 650 x 100-250 m coincident gold-in-soil geochemical anomaly and magnetic low anomaly located in an area of minimal rock exposure approximately 500 m west of the High Grade zone. Visible gold occurs in a narrow intrusive-hosted quartz vein at the High Grade zone. Numerous historic rock samples collected from the vein have returned high gold assays, including 14.4 ppm Au, 38.0 ppm Au, 88.4 ppm Au and 413.0 ppm Au1,2. The target area west of the High Grade zone which is slated for work in 2020 includes values to 622 ppb gold-in-soil and is untested by previous drilling3. Historic rock samples from within the target area have returned greater than 2 ppm gold from float samples.
A second target for this exploration program is the Meister/Marilyn zone, located 2 km to the west, where historic prospect pits and trenches expose strong sericite alteration with local silicification and quartz veining occurring within a 200 x 100 m area. This zone is located 350 m northeast of the Maud S occurrence, another narrow intrusive-hosted quartz vein on the property which has visible gold and has returned high gold values from historic rock sampling (including 6.4, 7.9, 38.0, 39.0 and 85.6 ppm Au) 1,2. Narrow quartz veins at the Meister/Marilyn zone have also returned elevated gold values from historic samples, including 8.0 and 37.3 ppm Au. A coincident gold-in-soil geochemical anomaly and magnetic low anomaly occurs 200 m to the northeast of the historic Meister pits, in an area of limited rock exposure. Neither the Meister/Marilyn zone nor the geochemical anomaly to the northeast have been tested by drilling.
Technical Analysis
Bullish Indicators:
RSI Up-trending + crossed mid-point
MACD Bullish cross over complete
Momentum reversed bullishly
Volume declined (seller exhaustion)
The Bottom Line
Follow the Smart Money
An August filing showed that Warren Buffett's Berkshire Hathaway (BRKB) loaded up on shares of gold miner Barrick Gold in the second quarter. If Buffett sees value in gold mining, does buying gold stocks or betting on a rising gold price make sense for individual investors now?
WALRF is currently trading near the bottom of its 52-week price channel.
Those looking for a gold mining stock with triple-digit gain potential need not look any further!
This is one potential gold bull run that you do not want to be watching from the sidelines!
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