Macro

Omineca Hits Gold in B.C., Targets 323% Stock Jump

Omineca recovers 10.25 ounces of high-purity gold, sparking market optimism with a 323% potential return target.

By Bill Bullington

5/15, 12:54 EDT
S&P 500
iShares 20+ Year Treasury Bond ETF
iShares 7-10 Year Treasury Bond ETF
article-main-img

Key Takeaway

  • Omineca Mining and Metals Ltd. recovers 10.25 oz of gold at 90.9% purity from its B.C. project, signaling strong project potential.
  • Research Capital Corp sets a target price for Omineca at CA$0.55 per share, implying a 323% return, maintaining a Speculative Buy rating.
  • With gold prices at US$2,340 per ounce and fixed costs for Omineca at CA$850 per ounce, the economics of the Wingdam project are highly attractive.

Gold Recovery Sparks Interest

Omineca Mining and Metals Ltd., a junior mining company, has begun the recovery of gold-bearing gravels from its flagship Wingdam placer gold project in British Columbia's historic Cariboo mining district. The company reported recovering 10.25 ounces of placer gold with a 90.9% purity from the first 2.5 meters of advance into the paleochannel in Crosscut #3. This development is seen as a positive step towards accessing the central portion of the paleochannel, where higher gold grades are expected. Analyst Bill Newman from Research Capital Corp. highlighted the coarse, nuggety nature of the gold, suggesting a very low transport distance from the lode source, which is positive news for the project.

Market Optimism and Analyst Ratings

The recovery of high-purity gold has led to optimism in the market, with Research Capital Corp. setting a target price for Omineca at CA$0.55 per share, implying a potential return of 323%. The firm remains a speculative buy, according to Newman. This optimism is bolstered by the current gold price of about US$2,340 per ounce, making Wingdam's project economics attractive. Omineca's strategy involves continuing exploration through Crosscuts 3 and 4, aiming to reach the central portion of the paleochannel for higher gold grades.

Strategic Exploration and Economic Viability

Omineca's exploration strategy involves advancing deeper into the paleochannel, with plans to provide regular updates. The company pays a fixed price of CA$850 per ounce of gold for its 50% share of the Wingdam, with its partner responsible for all equipment, labor, and services needed for the initial 300-meter bulk sample. This arrangement, coupled with the high gold prices, positions the Wingdam project as economically viable and attractive for investment.

Street Views

  • Bill Newman, Research Capital Corp. (Bullish on Omineca Mining and Metals Ltd.):

    "Positive news... The gold is coarse (nuggety), exhibiting characteristics of a very low transport distance from the lode source." "We expect additional gold recovery results could be a near-term catalyst for the stock."