Gold Mining

Is This Junior the Best Risk/Reward Stock of 2019

With continued bullish price action in underlying commodity prices, our team has identified one of the more promising Au-Cu exploration projects in Canada. The company is currently conducting an extensive Phase I drill program on their 100% owned Big Kidd project. This project has the potential to become a large bulk tonnage open pit Gold-Copper mine.

The highest-grade ore bodies in the world

It’s no secret that British Columbia is home to some of the largest ore bodies in the world. Novagold’s Galore Creek, and Seabridge Gold’s Kerr-Sulphurets-Mitchell (KSM) are two standout deposits with roughly 8Moz’s and 38.8Moz’s of gold, and 9Blbs and 10.2Blbs of copper respectively. While these deposits host incredible mineral wealth, combined they have seen over a billion dollars of investor money poured in while not a single ounce of gold has been extracted from the ground.

In contrast, New Gold Inc’s New Afton Mine, Taseko Mines Limited Gibraltar Mine, and Copper Mountain Mining Corporation’s Copper Mountain Mine host much smaller endowments of Gold and Copper but have provided their respective shareholders with robust returns for years. What is the main difference between these deposits?

Location, location, location

Companies in the remote northwest BC and require extreme CapEx and OpEx in order to develop/operate. New Gold, Copper Mountain, and Juilian Resource are located in southern BC near existing towns and close to road and power infrastructure. This is an important consideration that should always be explored.

Jiulian Resources’ Big Kidd Project boasts excellent infrastructure and has unearthed strong gold and copper mineralization that appear to be part of a widespread alkalic Au-Cu porphyry system. The main target on their property is what they are calling the Big Kidd Breccia. Company maps show that a high-voltage power-line actually runs directly over the zone. This is also coupled with a major regional highway (HWY 97C) less than 3km from the drill that is currently on site. Most notably, Nicola Mining Inc’s Craigmont toll mill lies less than 31km from the property along paved highway.

The company recently released their first batch of results from their Phase I drill program which included 541m of 0.41g/t AuEq in only their second drill hole to date, with several more holes remaining. This is a company to keep your eye on as the properties infrastructure is second to none, and initial results indicate a sizeable system exists at depth.

Jiulian Resources Inc.

TSX-V: JLR

Shares Issued: 31,286,667

Market Cap: $3,442,000

Year High: $ 0.18

Year Low: $ 0.02

 

Jiulian Resources Inc. is a mineral exploration company based out of Kelowna, BC. The company is advancing its wholly-owned 4,056-hectare Big Kidd Property located roughly 20km from the town of Merritt, BC, and only 9km northeast of Westhaven Venture’s Shovelnose Gold Property.

JLR has contracted Ridgeline Exploration Services Inc., an exploration services company that is well-regarded and has significant experience in this region, to manage this year’s drill program. The company is most recently known for their work on Golden Ridge Resources (TSXV:GLDN) Hank Property which had a highly successful exploration program in 2018. Results from that program impressed the market and the company watched their share price go from $0.10 to over $0.55 on over 200M shares traded last Summer.

The company initiated its Phase I drill program in early February and the first results from the program, including the first two holes, were released today. The highlight intercept from BK-19-002 returned 541m of 0.41g/t AuEq (222 gram-meter/tonne) from only 6m downhole. This significantly exceeds the grade x width of the best historic intercept on the property (116.0m of 0.96g/t AuEq for a total of 111 gram-meter/tonne from hole DDH97-05).

The goal of this year’s program was to drill deep to tests zones never explored by previous operators. Based on todays news release, it seems that deep is the way to go. The company has many more holes to release from Phase I including a hole drilled into their newly discovered Big Brother geophysical target. Positive drill results should catapult their stock higher in the near term.

 

4 Reasons This Stock Is Primed For Growth

  1. Prime Location/Infrastructure – Open pit mines too close to big cities are hard to permit. Mines that are too remote face high capital costs which often ruin project economics. This company’s flagship property is in the “sweet spot”. Juilian is located about 20km from the nearest town, and less than 31km from Nicola Mining’s Craigmont toll-mill. A large high-voltage powerline runs over the main Big Kidd Breccia target.
  2. Underlying Geology – Ideally located within the fertile Central Volcanic Facies of the Nicola Group. This narrow belt of alkaline volcanic and subvolcanic intrusive rocks has produced over 90M lbs of copper in 2018. This area has major nearby mining operations including New Gold’s New Afton mine, and Copper Mountain Mining Corporation’s Copper Mountain Mine.
  3. Rising Gold Prices– The New York Federal Reserve recession probability indicator spiked to 10-year highs on February 7, 2019. Gold has outperformed the S&P in the 12 months post warning 6 out of 8 times this has happened historically. Gold exploration companies offer excellent upside during times of rising precious metal prices.
  4. Multi-bagger Potential – This company has a small market cap of ~$3,400,000 (04-12-2019 close). JLR also has a tight share-structure (~31M shares) with the majority of shares owned by insiders of the company. Initial results from their Phase I programme promising and additional news has the potential to propel the stock much higher.

Bottom Line

In conclusion, the company is trading close to shell value, offering minimal downside but enormous upside potential. If they can demonstrate further positive drill results from its 2019 drill program this stock will surge. Based on all of this, Jiulian Resources is one of the best risk/reward stocks we have identified this year. We are excited to see what this company has in store for the future….