With the backing of a heavyweight gold miner, Canadian juniorNewcastle Minerals (CVE:NCM) is set for a busy year ahead, with a planned reinvention of sorts, including a restructuring and rebranding of the company in a bid to raise funds for its projects in two of the prolific mining belts of Ontario.
Iamgold (TSE:IMG) (NYSE:IAG) is Newcastle's largest shareholder with a 10% holding, and has already expressed an interest in participating in the junior explorer's next financing, which is part of a restructuring plan announced last month .
Along with the financing, the plan includes a share consolidation, a name change, and a trading symbol change - all part of its "clean up" strategy to better position the company for long-term growth.
The share consolidation, which received shareholder approval from a vote held February 18, will exchange one new common share for every five old shares. This will reduce Newcastle's issued and outstanding shares to 20.7 million from 103.6 million.
Shareholders also approved the company changing its name to GoldON Resources, and its trading symbol to "GLD", having waited patiently for the sought-after ticker symbol which became available after Trelawney Mining bought out Augen Gold, says Newcastle's CEO Mike Romanik.
"We're in the gold exploration business in Ontario and feel our new name and trading symbol better reflect our core business," he explains.
The company's focus is on two gold projects with large scale potential that are strategically located in the Swayze and Pickle Lake gold mining belts of Ontario. Newcastle says the properties are in "mining-friendly, politically stable jurisdictions, with excellent access and infrastructure".
Indeed, the 6,640 hectare Swayze gold project adjoins Iamgold's multi-million ounce Cote gold project, where 85 holes were drilled in the fourth quarter. Iamgold's Cote gold project's latest resource stands at 7.61 million gold ounces, with the property expected to go into production sometime in 2017.
In the spring of last year, Iamgold bought Trelawney Mining for $585 million in cash, adding the Côté Lake property to its mining portfolio. The price of the deal came in at just slightly north of $70 per ounce in the ground at the time.
Newcastle is expecting an NI 43-101 technical report on the adjoining Swayze property to be finalized shortly, anticipating that the report will recommend a full scale geological program, diamond drilling and surveying.
So far, the consultants for the report, MPH Consulting, have concluded that the property represents "very good" exploration prospects in an established, formerly producing gold district. The asset has seen just four historic drill holes, so Newcastle will have plenty to explore.
Newcastle's other main focus is its 15,500 hectare Pickle Lake gold project within the Pickle Lake greenstone belt in northwestern Ontario, where more than 2.2 million ounces of gold have been produced. The property ties onto both ends of PC Gold's Pickle Crow mine trend and the past-producing Pickle Crow mine, which produced 1.45 million ounces of gold from 1935 to 1966.
Earlier this month, the company reported it found a mineralized gold horizon at surface on the Fault Creek area of its Pickle Lake property, which it says is consistent with the three past-producing mines in the region, including the 650,000 ounce Central Patricia mine that adjoins the property.
Results from four grab samples and eight channel samples at Fault Creek returned gold values of up to 7.14 grams per tonne (g/t) gold, with the prospecting and channel sampling done to test an iron formation along strike from a historical gold showing that was found earlier last year.
"We are very excited about this new discovery, which we will follow up in the spring when the snow melts with additional channel sampling and diamond drilling," says Romanik.
The company expects to raise up to $2 million from the current financing to fund its exploration plans for the year.
"With the restructuring approved, we now plan to leverage both our significant land positions and our industry relationships to build shareholder value in the year ahead," says Romanik, who has proved his confidence in the company time and again through a series of share acquisitions, with the most recent 75,000 share purchase completed on Friday.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.