The co-founder and CEO of Underworld Resources, which was acquired by Kinross Gold in a deal worth C$139.2 million in 2010, is the President of our new Featured Gold Company.
Before we introduce our Featured Gold Company of 2013, it is important we quickly explain the historic achievement of Underworld.
Underworld was a Canadian exploration company that began hunting for hard rock gold deposits in the Yukon around 2007. The company's CEO and co-founder was Adrian Fleming, regarded as one of the best explorers in the business, and for good reason.
Fleming gained fame as a member of the team that discovered the Porgera Gold Mine in Papua New Guinea, which is regarded as one of the world's top ten producing gold mines. He was the regional exploration manager for Placer Dome in Sydney, Australia, and was instrumental in the discovery and/or development of major discoveries such as Australia's Big Bell Mine, Gross Rosebel Mine in Suriname, and the Hope Bay Gold Project in northern Canada.
In 2007, Fleming and his team at Underworld believed a specific parcel of land in the Yukon, known as the White Gold Property, had massive potential, so they acquired it. Given their convictions, Underworld went to work in the White Gold District of the Yukon long before it was one of the hottest gold camps in North America.
Adrian Fleming was the co-founder and CEO of Underworld Resources
Fleming was nothing short of a mining trailblazer and Underworld's success created a staking frenzy. The company's rise to fame in the Yukon was so prominent, CBC, Canada's largest broadcasting corporation, ran an exclusive on Underworld and the global notoriety it had brought the remote region.
It was the second drilling season, 2009, in the Yukon that really 'blew the top off' for Underworld as the gold resource began to emerge and with it came interest from majors. This is an important point as the second drilling season for a junior mining company is pivotal in the early stages.
Within two years of beginning drilling in the Yukon, Underworld Resources, led by Fleming, had discovered the White Gold Property containing a combined resource of nearly 1.5 million ounces of inferred and indicated gold right from the surface. The average grade of the resource was nearly 3 grams per tonne at the Golden Saddle deposit. That is very high grade in comparison to most open pit gold deposits of that size anywhere in the world. To give you an idea, typical gold grades being extracted from open-pit mines these days are somewhere in the 1.2. to 1.7 grams per tonne range.
It was roughly two months after Fleming and his team announced the size and grade of its gold resource (in 2010), when they hit the junior mining sector's equivalent of a jackpot; Kinross Gold, one of the largest gold producers in the world, agreed to acquire Underworld Resources in a deal worth C$139.2 million. Needless to say, Underworld Resources' shareholders walked away wealthier, and Adrian Fleming added another significant mining accomplishment to his long and impressive resume.
Anyone who knows Adrian understands that he is an incredibly motivated geologist and his passion for making discoveries is intense. He is the first to admit that he is addicted to the hunt for large, high grade, mineral deposits. It was no surprise that after his success with Underworld he got right back to work.
Adrian Fleming is the President of our new Featured Company, Prosperity Goldfields (PPG:TSXV).
As the President of Prosperity Goldfields, Adrian has brought with him many of the same members of his Underworld team - that even includes the same sampling team he used with Underworld. Top to bottom, Fleming is trying to replicate the system he used with Underworld.
Adrian Fleming is at the helm of Prosperity Goldfields, which:
- has already made 4 new, drill-tested, gold discoveries on its flagship asset
- is cashed-up, with roughly $4 million in its treasury (as of December 31, 2012)
- has seen its shares recently bounce off their all-time low
These are the main reasons we are introducing you to Prosperity at this moment. As we all know, timing is everything in the junior resource space.
- is scheduled to begin a vigorous second season drill program in early March
Prosperity Goldfields' 100% owned flagship asset is the company's sole focus and is located in southern Nunavut, roughly 100 kilometers from the Manitoba border. This gold property is located in one of the most stable mining jurisdictions in the world. It is known as the Kiyuk Lake Property and is arguably the best new gold discovery in Northern Canada in recent years.
Within the Kiyuk Lake Gold Property there have already been four separate discoveries made since 2011.
| Prosperity's Work Camp at Kiyuk Lake Gold Property in the Winter |
Highlights from drill results returned in 2011 and 2012:
* Rusty Discovery: 37.8 metres at 4.2 g/t gold
* Rusty follow-up drilling: 61.5 metres at 3.34 g/t gold
* Cobalt Discovery: 21.3 metres at 2.2 g/t gold
* Amundsen Discovery: 42.4 metres at 1.0 g/t gold
* Gold Point Discovery: 26.5 metres at 3.17 g/t gold
These are company making drill results.
Of further significance was that the Rusty discovery hole, which intersected 37.8 metres at 4.2 g/t gold began at a depth of just 5 metres. To follow up the 2011 Rusty discovery, Fleming decided to push-on further within the zone in 2012; so he conducted a step-out drill hole about 230 meters south of the original discovery hole.
This is where things get interesting:
It was that step-out hole which returned arguably even better results than the original discovery: 61.5 metres at 3.34 g/t gold. In addition, further work completed on the Rusty zone returned abundant gold grains (926) in a sample 400m down-ice from the original Rusty discovery. This may indicate the bedrock gold source is very near and suggests a significant south-ward extension of known Rusty mineralization. It is also important to note that the Rusty zone is open to the north, south and at depth. The true potential of this particular zone has yet to be determined. However, Fleming and his team intend to aggressively drill the Rusty zone this winter.
Adrian Fleming stated, in respect to initial results at Prosperity's Kiyuk Lake Gold Property that "These initial assays remind me of the early success we had at Underworld in 2008."
Drill Shack at Kiyuk Lake Gold Property
Given the potential at Kiyuk and its grand size (590 sq kilometres), Fleming decided not to drill this past summer; rather, he chose to get a more comprehensive understanding of the scope of the Kiyuk Lake Gold Property. With that in mind, he led a strategic exploration program in the summer of 2012, which covered the entire property.
Adrian Fleming examines results at Kiyuk Lake Gold Property Core Shack
This is where Fleming's expertise comes in to play.
The summer program consisted of sampling across the entire property, doing a till geochemical sample every square kilometer. That's about 500 samples. With these samples, Prosperity is now ready to execute a vigorous drill program this winter - a key reason for our introduction at this time. Drilling is set to start around the beginning of March.
Fleming has now put together a much more comprehensive geological, geochemical structural and geophysical picture than the company had prior. His reasoning behind this bold strategy, in his words, was, "because it's not necessarily the case that the four targets which Prosperity has drilled already are the best zones. A total of nine targets have been found, with 4 drilled, but there may actually be some that haven't been picked up yet."
Samples ready for shipment
This is the kind of thorough and methodical geological work Adrian Fleming is known for. And this is the kind of potential upside the Kiyuk Lake Gold Property has.
Fleming's strategy, having already discovered or worked on several world class assets, is a big picture approach; quite frankly, this is another reason why he is in a different league than most geologists out there.
Adrian knows very well what a major needs to see in an asset and how the information needs to come across to attract interest and respect from the largest gold companies in the world.
Prosperity Goldfields will be conducting a two-drill program at its Kiyuk Lake Gold Property this winter. One drill will be assigned to the Rusty zone, as Fleming has stated that he quickly wants to show the market they've got the possibility of more than one million ounces at that one target. The second drill will likely be used for wildcat drilling based on how Fleming has ranked targets from the company's extensive summer work program. So the goal of this winter's drill program will be a combination of starting to block out resources and making some more discoveries, or building on some of the other great intersections from the 2011 drilling at Kiyuk.
Members of Prosperity's Technical Team Examine Core Samples
Fleming told the Northern Miner recently that,
The Kiyuk Lake Gold Property has the hallmarks of a new gold camp. Obviously, the Rusty zone has discovery results which speak for themselves, as do the three other discoveries already made within the property; however, there are a total of nine targets identified at this property so far. A new drill target found during the summer work program, which returned grab samples of 25 g/t gold at the Rasmussen target, leaves much to speculate.
"What gets my blood pumping is that forty-metre interval at around four grams gold per tonne that we hit at Rusty from surface. That's something to chase after. I started at Rusty because I love things at surface, and we came away with some promising grades."
While many junior mining companies are cash-strapped, Prosperity Goldfields was sitting on just over $4 million as of December 31, 2012. This is a well-financed junior who hasn't had trouble raising capital for its flagship asset. If the company wasn't financed as well as it is, we wouldn't be introducing it to you. In 2013 we are only focused on junior mining companies who are on the verge of conducting major work programs. If we are going to hold a stock, we want to know that we are doing so in anticipation of near-term results. With the objective of defining a gold resource, Prosperity has a very busy Q1 and Q2 planned for 2013.
click on map above to enlarge
Prosperity Exploration/ News Schedule Below (2012/2013):
Prosperity Goldfields and the Story of Its Stock
Prosperity closed on Friday at $0.225 per share. Like many juniors, 2012 wasn't kind to this stock, as you can see from the chart below, but that's another reason why we have selected it as our Featured Gold Company of 2013.
52 Week High: $0.78
52 Week Low (also the all-time low): $0.145
Market cap: $16.95 million
52 Week Stock Chart for Prosperity Goldfields
Major shareholders, management and funds own a good chunk of Prosperity Goldfields. Combined, they own roughly 50% of the outstanding shares. Major shareholders include;
Evolving Gold Corp.
Marquest Asset Management
Red Lion Management
Needless to say, Prosperity has a vast following and millions of shares in the company traded in 2012 between $0.30 and $0.60.
Prosperity Goldfields is a client of ours, we are shareholders in the company and plan on buying more shares this coming week. For obvious reasons, we are biased and proudly so. This is one junior gold company we don't mind putting our reputation on the line for.
As we have said for years, management is the most valuable asset a junior mining company has. With the track record of Adrian Fleming well documented, the company's shares having recently bounced off their all-time low, the outstanding results returned to date on its flagship gold property, aggressive drill program planned and strong cash balance, we are proud to name Prosperity Goldfields (PPG:TSXV) our first Featured Company of 2013. Introducing this company to our members at this time makes sense to us from a risk/reward standpoint.
Given the company's plans for its upcoming drill program, you can expect further updates from us in the coming weeks. Always practice thorough and independent due diligence.
All the best with your investments,