Some of the most exciting and geophysically refined targets are now being drill tested across the vast 665km2 at Manhattan Gold Corporation’s (ASX: MHC) Hook Lake project in Canada, with 4,000m of RC drilling set to target gold extensions at Jaws, copper and polymetal extensions at Spectre, as well as new gold and silver discoveries from Quantum, Lotus and Omega. The approach to Jaws will be multifaceted, with the program to test 3.3km of strike that will begin with targeting extensions at the 285koz at 2.38g/t Au historical resource contained within a 940m section – which includes venturing below 190m depth and drilling at a different angle. This main area includes assays such as 52.78m at 3.38g/t Au from 89.22m, 16m at 5.04g/t Au from 52m, 15.2m at 4.50g/t Au from 14.7m. The program will then move toward drilling the 543m gap between the main area and the SW mineralised section, before moving to test strike extensions to the NW.
We are particularly excited about the potential for another major Canadian copper project, after our recent pick Gladiator Metals (TSX: GLAD) hit 180% above our entry price just 4 months after initiation. MHC will be testing continuity of shallow existing mineralised lenses at Spectre, which contain assays such as 10.51m at 2.91% Cu, 6.70% Zn, 95.67 g/t Ag, 1.04 g/t Au and 0.48% Pb from 41.76m, as well as 13.71m at 1.51% Cu, 2.06% Zn, 47.23g/t Ag, 0.56g/t Au and 0.09% Pb from 70.26m. VMS deposits are prolific in Canada and they typically form in clusters, so once the continuity of these lenses are confirmed – MHC will take drilling along strike and down dip to test more of this 1km mineralised footprint as well as the 7km corridor it sits in.
The at-surface exposed quartz veins that reached 16.75g/t Au and 1,485g/t Ag at Quantum and 8.01g/t Au and 2,660g/t Ag at Lotus are also going to be drilled, with the 2025 rock chip sampling project generating these targets that could be some very high value low hanging fruit. MHC is also aiming to gather critical data to understand the BIF domains at Omega, by drilling the structural and lithology contacts at the 7km long and 1km wide prospect which has IP and EM anomalies remarkably similar to the 8.34Moz Meliadine deposit under 200km away. The Nunavut government funded a C$250k for this round of drilling at Hook Lake, adding to MHC’s $4 million cash balance.
With MHC priced at just $39/oz on an EV/Resource basis before any extensions, in the same greenstone belt as 8.34Moz Meliadine Mine and the 2.44Moz Vickers deposit, while its gold explorer peer group trades at a median of $104/oz and an average of $178/oz – there is a clear disconnect between the market and the potential upside from this exploration campaign, as well as what the deposit likely contains right now.
MHC has two planes in the air right now conducting high resolution magnetics surveys at between 50-100m line spacing across all the main prospects at Hook lake, which is a crucial tool for drill targeting that is being used in real time. MHC has also launched a widespread till sampling program that is targeting gold mineralisation underneath glacial cover throughout the trend that stretches across Vesper, Jaws and Omega. The 81km2 of gold-endowed greenstone belt that MHC recently acquired will be subject to an extensive channel and rock chip sampling campaign which will be following up on historical channel samples including a main discovery zone of 7.7 that included 1.5m at 5.75g/t Au and 0.3m at 17.14g/t Au – and rock chips up to 16.6g/t Au that were found over 650m away. There is also a 42 x 26m cluster of historic samples 120m SW of the main zone that have sample results between 0.1g/t and 3.6g/t Au.
No substantial drilling has taken place at Jaws since 1988, during which time the drillholes were largely directed towards the northwest, despite mineralisation trending in a NE/SW direction and steeply dipping to the NW – which left substantial amounts of ground untested while also missing the hanging wall of the main mineralised zone. MHC will drill the first hole through the core of the gold system in this same direction, to assess the styles of mineralisation and alteration while also confirming historical grades – before then switching to the opposite orientation. Going below 190m depth and targeting down dip targets that are right below heavily mineralised ore zones could be a high impact exercise that adds considerable ounces to Jaws’ historical resource, second only to the 543m gap that has been well correlated with geophysics at the main zone. IP at Jaws has shown strong chargeability from disseminated pyrite and arsenopyrite, and resistivity from quartz veining – which has been well correlated to high-grade gold mineralisation at the prospect.
We previously highlighted the market funding an enormous scale exploration program through a CAD$30 million capital raise for AuMEGA Metals (ASX: AAM), a relevant peer comparison due to its moderate Canadian resource of 610koz at 1.96g/t Au resource on a 680km2 tenement package in Newfoundland. MHC has positioned itself with an exploration campaign that has material upside and optionality through its respective prospects, and there are numerous other ASX-listed peers in comparable positions that are valued significantly higher than MHC. Having a small deposit but with potentially large expansion opportunities over a considerable landholding is something that can price ASX-listed explorers at the upper end of the scale, in many different jurisdictions and at a relatively early stage. Another example of this is Skylark Minerals (ASX: SKM) and its 364.6koz at 1.8g/t Au resource in Cote d’Ivoire, which is held on a 287km2 tenement and has the company currently valued at $83/oz.
At a $15.16 million market cap and $11.16 million enterprise value after accounting for the $4 million in cash, MHC is highly leveraged to any material extensions at Jaws and Spectre, as well as new discoveries at Quantum, Lotus and Omega. Even in the event of minor extensions and upgrading of the 285koz resource at Jaws, MHC should still be trading much higher than the $39/oz it is currently priced at – which would drop to $22.32/oz at 500koz. This could be considered a feasible outcome at the current gold price with some moderate down dip extensions and intersection of mineralisation in the hanging wall, with the strike extension areas providing significantly more upside.
Gold, silver and copper prices remain at attractive levels that are conducive of big valuation uplifts when explorers make material discoveries – and the discount on an EV/Resource basis present in MHC should not last once there is modern confirmation of the historical drill data and proof of extensions of mineralisation at Jaws and Spectre. Any discovery at either Quantum, Lotus or Omega would obviously be a game changer.
The plan map below shows the full 3.3km strike length of Jaws along with the main 940m section where the historical resource lies, as well as the gap between the centre and southwestern mineralised area that will be infilled, and the northeastern strike extension that will also be drilled. The locations of drill holes are pinpointed, and the whole map is overlaid with IP anomalies that are guiding drilling:
Source: MHC
The cross section below shows a key area of the historical resource at Jaws, and the planned drillhole that will go straight through the high grade shoot in the opposite direction of historical drilling:
Source: MHC
Another key section of the Jaws main mineralised zone can be seen below along with historical intercepts – and the three planned holes that will test the core and down dip extensions to around double the depth of previous drilling:
Source: MHC
There are in total 12 prospects that sit within the meticulously compiled tenement package that makes up Hook Lake, a project located in the highly prospective Rankin-Ennadai greenstone belt that hosts monster deposits surrounded by vast amounts of geologically attractive land that is significantly underexplored. This maiden drilling campaign is full of multiple key catalysts that have a very real chance of unlocking value in the region – making now an opportune time to own MHC.
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Disclaimer: This article is for informational and marketing purposes only, and does not constitute financial advice or a recommendation to invest. All opinions expressed are our own. We may receive fees or other forms of compensation in connection with the publication of this content, and may own shares in any of the mentioned companies. Please do your own research and seek professional advice before making any investment decisions.