MegumaGold Corp (CSE:NSAU) (OTCMKTS:NSAUF) and Canada's Nova Scotia province are in focus following news last month of Australian miner St Barbara buying Atlantic Gold Corp (CVE:AGB) for C$722 million (US$536 million).
St Barbara offered C$2.90 a share for the Canadian resource group, representing an impressive 39% premium to Atlantic Gold's previous closing price. Atlantic's board backed the bid.
Atlantic Gold's license area lies near the extensive exploration ground of junior MegumaGold.
Atlantic's 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. It is currently a mining permit for a nearby project and is also exploring other areas of its footprint.
MegumaGold has acquired 11,205 claims totaling more than 170,000 hectares, many of which are adjacent and along trend from the Touquoy deposit.
Last month, MegumaGold revealed promising results from ongoing exploration at its Ecum Secum property, including one sample in waste rock piles associated with previous mining, that graded as high as 49.8 grams per ton gold. Also found were grades of 49.8 g/t gold, 9.5 g/t, 7 g/t and 5/2 g/t.
MegumaGold is now preparing at Ecum Secum to support an upcoming 2,000 meter drill program, part of a 10,000 meter regional drilling campaign. The junior also recently released promising drill results from its Killag project, 40 kilometers northwest of Ecum Secum, which included results such as 1 meter at 54.2 g/t gold
Earlier this year, Meguma's chief executive officer, Regan Isenor, outlined to Proactive the reasons behind the resurgence of interest in Nova Scotia.
"Typically in Nova Scotia, everyone was always after the high-grade nuggety style quartz-hosted gold, which is quite expensive to extract and it's hard to build models off of that type of mineralization. Atlantic Gold, here in the province, has shown that the disseminated model of low-grade, bulk tonnage is really where the projects that are economically viable are going to be found."
The province has a rich gold mining heritage, but modern exploration technologies are re-awakening interest in the jurisdiction’s huge potential.
And according to MegumaGold's president Theo van der Linde last month, the Atlantic deal shows that Nova Scotia is in a “new golden era” as the province has now received international recognition as an emerging gold district.
“(It) validates the bulk tonnage model Atlantic Gold first recognized and has since perfected with the industry's lowest costs per ounce,” he said.
MegumaGold shares in Toronto are unchanged at $0.13.
Contact the author at [email protected]