- First foreign explorer to apply for and be granted prospecting rights in Japan
- Country is considered one of the most stable and corruption-free jurisdictions
- Significant institutional and industry shareholders
What Japan Gold Corp does:
Japan Gold Corp (CVE:JG) (OTCMKTS:JGLDF) is the first foreign mineral explorer to focus solely on the east Asian island country.
The Vancouver-headquartered group, with a market cap of around C$65 million, holds 31 gold projects covering over 200,000 hectares, within the major epithermal gold provinces of Japan across the country's three largest islands - Hokkaido, Honshu and Kyushu.
These three islands have at least six distinct epithermal gold provinces, which historically hosted 70 producing gold mines, including five with over 1 million ounce deposits. The company's exploration licenses and applications cover at least 42 historically producing mines and workings.
Despite being a first-world country with a rich history of gold mining, there has been very little exploration for the yellow metal as almost all Japan's gold mines were closed during WW2 to focus on base metals. Very few resumed production after the conflict, which resulted in a hiatus in exploration. But when the Japan Mining Act was amended in 2012 to allow foreign firms to hold exploration and mining permits, Japan Gold was the first to grab the opportunity.
Notably, the still-producing Hishikari mine on southern Kyushu in the Hokusatsu region is one of the world’s highest-grade gold mines and churned out over 7.6 million ounces of gold between 1985-2018 at average gold grades of 30-40 grams per ton (g/t).
The firm holds around 77% of the prospective ground in the Hokusatsu region and, notably, major miner Newmont Goldcorp (NYSE:NEM), which owns a 13% stake in Japan Gold, in conjunction with junior Irving Resources has also entered this area.
Significantly, in early 2020, the company struck an extensive tie-up with mining behemoth Barrick Gold Corp (NYSE:NYSE:GOLD) (TSE:ABX) to jointly explore, develop and mine properties, now covering 29 of Japan Gold's 31 projects.
It means Barrick sole funds a two-year initial evaluation of each project and potentially a three-year second phase if they meet the mining titan's criteria. There is a minimum total spend of US$3 million for each of the first two years of the Barrick alliance; and US$4 million for each of the third, fourth and fifth years, subject to some exceptions.
The alliance does not include the firm's Ikutahara project on the island of Hokkaido and the Ohra-Takamine project on the island of Kyushu and Japan Gold will continue to advance these two projects independently.
As revealed above, Newmont holds 13% of Japan Gold, while institutional investors hold 40% of the stock. The public float is 38%. Japan Gold says it is operating in a stable and corrupt-free jurisdiction with an established regulatory framework. The company notes that its leadership team represents decades of resource industry and business experience.
How is it doing:
Following on from a considerable amount of exploration carried out in 2020, in February 2021, Japan Gold announced that its partner Barrick Gold had approved a budget of US$4 million (to be solely funded by Barrick) to complete planned exploration programs for the current year across alliance's extensive land package.
It said the work will focus on identifying new gold prospects through sampling of stream sediments for bulk leach extractable gold (BLEG) and gold and multi-element analysis of rock samples. Results from last year's programs, which were completed on eight projects on the island of Kyushu and three on Hokkaido, identified 19 distinct gold in BLEG anomalies with supporting geochemistry, Japan noted.
In other significant news, also in February, the Barrick alliance expanded the footprint at the Sanru project on the island of Hokkaido (already Japan Gold's largest project) to over 41,000 hectares to cover prospective areas north and south of the Sanru mine.
The Sanru mine sits in the Kitami metallogenic province of northeast Hokkaido - home to more than 40 historic mines and prospects, and boasts historic production of 225,000 ounces (oz) gold at an average grade of 7.4 grams per ton (g/t) of the yellow metal.
The news came a month after the firm said the Japanese government had accepted 18 new prospecting rights applications covering extensions to Mizobe and Onoyama-Yamagano projects under the alliance in the Hokusatsu Region of the Southern Kyushu Epithermal Gold Province. That brought the group's total coverage in the Hokusatsu Region to 100,452.8 hectares - about 84% of prospective and explorable ground within the region.
On March 16, the company reported results from three scout drill holes at its Ohra-Takamine project on the island of Kyushu, which underscored the exploration potential of the property.
The holes hit arrow high-grade gold vein intercepts below the Urushi mine and multiple gold-anomalous quartz vein zones below the Ohra mine workings. One hole, which was targeting the down-dip extension of the Urushi mine, hit seven narrow, gold-anomalous quartz veins. A highlight intercept included 0.35m at a grade of 21.7 g/t gold and 13 g/t silver from 233.95m.
And on April 22, 2021, the company reported high-grade exploration results from the Togi project, on Honshu Island - one of the projects under its alliance with Barrick. Of 412 rock samples collected, 235 samples assayed gold greater than 0.5 g/t gold, with 91 assaying greater than 5 g/t of the yellow metal, the company said.
Meanwhile, stream sediment sampling defined a continuous northeast-trending 8 kilometre (km) corridor of gold anomalous drainages within the project, with BLEG samples assaying greater than 15 parts per billion (ppb) gold, with a peak result from the Urugami prospect at the project returning an assay of 2,152 ppb gold.
Inflection points:
- More exploration results from the Barrick alliance and company's own projects
- Gold and precious metals price moves
- Increased property portfolio
What the boss says:
Speaking to Proactive in February 2021 following news of the US$4M Barrick alliance budget approval, Japan Gold CEO John Proust said: "We hope to have all the geochemistry and geophysics completed across all projects (in the alliance) by July of this year and what's more important is that today we have results now coming back from those programs, and as we analyze those results, we've now already on ... eleven of the 29 projects, we've now identified 19 significant gold anomalies with pathfinder elements."
Contact the author at giles@proactiveinvestors.com