Landore Resources: could this be the next multimillion-ounce gold resource?

Landore Resources ticks all the boxes when it comes to looking for a small-cap gold explorer with ‘bonanza’ potential. 

Multimillion-ounce gold discoveries are few and far between lately, but that’s exactly what Landore Resources (LON:LND) might just have on its hands at its Junior Lake property in Ontario, Canada. On 20 April, the company reported a ‘bonanza’ gold grade as it updated investors on its ongoing 23,000 metre drilling campaign at the BAM gold deposit, aimed at further infilling and extending the defined resource of 1,015,000 ounces of gold and testing the depth potential of the previously delineated mineralisation. 

In the announcement, Landore reported that it had intersected 432g/t gold over 0.32m, a truly remarkable grade. While this is just one intersection, it is of particular interest given that another particularly high-grade intersection was reported just 200 metres away, on another drilling campaign back in May 2017. According to the announcement earlier this week, the presence of visible, bonanza grade gold, combined with the similarity in geology and position, being 200 metres apart, both in a deformation zone, “leads Landore to believe that there is a high possibility of continuity between, and continuing beyond, the above two bonanza occurrences.”

Chief executive Bill Humphries was confident enough to state that, “This significant Bonanza gold discovery in the footwall of the BAM Gold Deposit has further demonstrated its potential to become a multi-million ounce open pit resource with significant underground mining potential.” CEOs don’t make these kinds of claims on a whim, so it appears that Landore could have something quite special on its hands. What’s more, this comes at a time when there have been very few multimillion-ounce gold discoveries in recent years, still fewer in jurisdictions as friendly as Canada, while gold prices are rising and demand is growing. Meanwhile, the major gold miners are looking to replenish their reserves and a company like Landore is bound to come up on their radar if and when it announces a major upgrade to its resource at Junior Lake. 

With tantalising nuggets like the one released earlier this week becoming the order of the day at Landore, a resource upgrade in due course is a done deal – the only question is by how much. Landore drilled 37,540 metres to define its first million ounces and so the current 23,000 metre campaign should go a long way towards increasing this while also upgrading the classification of some of the ounces. Broker Cenkos believes that the prospects for BAM to keep growing are good with possible further upside from additional targets on the structure. “With such a solid growth potential and a significant land holding over 31km of greenstone belt Landore could be in a strong position to attract industry interest in the project and company,” argues the broker. 

Retail investors often come a cropper with small-cap miners, but a quick glance over at the shareholder register provides some reassurance that Landore is the real deal. CEO Bill Humphries is well aligned with shareholders with just over 5% of the equity and he has pedigree when it comes to discovering resources and selling them on, having sold Brancote Holdings after discovering 3.8 million ounces at the Esquel Gold Project in Argentina, which saw the shares go from 14p to 200p. But perhaps the most encouraging presence on the shareholder register is Eric Sprott, the legendary billionaire gold investor, with just under 19% of the equity. 

Timing is everything when it comes to junior gold miners and this time it feels like the stars could be aligning for Landore. The gold price seems to have stabilised and looks ready to resume its secular bull run and the company is fully funded to complete its drilling campaign, of which over 7,000 metres is still yet to complete. With only limited results having thus far been announced and the early signs looking very positive indeed, Landore could be on the cusp of a strong period of share price performance as the significance of the current drilling campaign becomes apparent. The company is certainly one to watch out for in the coming months.