- A fresh approach in Nova Scotia
- Province is enjoying a resurgence of gold mining
- Well financed to expand the resource potential
What MegumaGold Corp does:
MegumaGold Corp (CSE:NSAU) is pursuing a new approach to gold exploration in Nova Scotia, Canada, which already has a rich history of mining. Between 1862 and 1927 almost a million ounces of the precious metal were extracted from the province.
The company has put together a land package of over 127,000 hectares consisting of nearly 8,000 claims and is one of Nova Scotia’s single largest mineral claim holders.
Previously, mining and exploration was focused on high-grade nuggety style quartz-hosted gold, which is comparatively expensive to extract but the firm is interested in exploiting the disseminated, widespread, mineralization which also characterizes the area.
This is exciting because it’s simple to extract the gold via an open pit, while cheap processing methods can also be used.
Within its land package, MegumaGold holds the Killag project, the Dufferin gold project (218 claims), the Goldboro Isaacs Harbour claims (174 claims), the Mooseland area project (243 claims), the Greater Goldenville area (233 claims) and the Greater Beaverdam project (114 claims), the Fifteen Mile Stream regional project (177 claims), the Cochrane Hill regional project (556 claims), and the Moose River area project (282 claims).
The group aims to develop a “fingerprint” model for identifying new deposits and targets, and reckons it could have a district-scale opportunity.
Atlantic Gold Corp. was a first mover in the region. Its Touquoy gold mine began production last year and generated and sold around 90,000 ounces of the yellow metal in 2018 at the extremely low all-in-sustaining cost of C$731 per ounce. Notably, the Torquoy mine lies near the extensive exploration ground of MegumaGold.
How is it doing:
In September 2020, MegumaGold completed its amalgamation with Nova Scotia-focused Osprey Gold Development Ltd (CVE:OS) in an all-paper deal.
The deal consolidated highly prospective ground in Nova Scotia by combining Osprey’s historically producing projects with the underground exploration ground owned by Meguma and created a leading precious metals explorer in the Canadian province.
Meguma acquired all of Osprey’s shares at an exchange ratio of one Meguma share for every two Osprey shares owned. In addition, Meguma assumed Osprey’s obligations under outstanding share purchase warrants so that Osprey warrant holders now hold warrants entitling them to acquire 11,158,378 Meguma shares, and issued replacement stock options under which former Osprey stock option holders now hold options to acquire an aggregate of 2,382,500 shares of Meguma.
A month earlier in August 2020, MegumaGold had told investors that it planned to kick off a multi-phase drilling campaign to test numerous targets once the Osprey combination was finalized.
The initial focus of the combined firm will be on developing target areas close to St Barbara Limited’s operating Touquoy Mine in the Moose River Gold Mines area, which includes Osprey’s Caribou project and MegumaGold’s Killag and Touqouy West properties, Meguma said.
The Touquoy open-pit mine, acquired by St Barbara for C$802 million in 2019, lies around 10 kilometres (km) south of Osprey’s Caribou project and 4 km west of MegumaGold’s Touquoy West asset. The ultimate goal is to advance existing early-stage exploration targets for maiden resource estimates for the combined entity’s resource portfolio.
According to its Phase 2 exploration plan for 2021 in its presentation, the company aims to drill 2,000 metres (m) in each of the Caribou, Touquoy West, Killag and Goldenville/Mitchell Lake assets.
And in January 2021, MegumaGold said it was set to buy all of Canadian GoldCamps Corp (CSE:CAMP) (OTCMKTS:SMATF) (FRA:A681) assets in a deal replacing the previously announced share exchange merger agreement announced in late 2020, which had been terminated.
The pair struck an asset purchase agreement, which sees gold explorer Canadian GoldCamps sell to MegumaGold all of its Canadian assets and associated working capital in exchange for MegumaGold shares.
- Gold price moves
- Exploration results
- Further M&A activity in Nova Scotia
What the boss says:
In a statement when the company completed its acquisition of Osprey Gold, MegumaGold CEO Theo Van der Linde said the company was executing on its plan of consolidating assets in an “up and coming” gold district.
“The natural synergies between the Osprey and Meguma assets align with our vision and provide shareholders with exposure to advanced-stage resource projects and district-scale exploration upside potential,” he said.
Afding: “We welcome the Osprey shareholders to Meguma as we continue to build value in Nova Scotia.”
Contact the author: [email protected]
Story by ProactiveInvestors
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