The mineralised footprint at Jaws has been materially expanded by 290m northeast, outside of historic mineralised estimates, and to a vertical depth of 223m, while further higher grade sections continue to be discovered as Manhattan Gold Corporation (ASX: MHC) advances the first drilling campaign at its flagship 665km2 Hook Lake project since 1988. This round of assays hit 74.67m at 1.61g/t Au from 21.34m, including 15.24m at 5.35g/t Au from 35.05m, and a second hole returned 51.82m at 1.88g/t Au from 47.24m, including 7.62m at 7.05g/t Au from 82.3m, which then continued down to intersect further mineralisation beneath the historical drilling to extend the known system to 223m vertical depth. There were previously two main gold bearing zones at Jaws over 1,600m of strike, one of which had a historically defined foreign resource of 3.4Mt at 2.38g/t Au across 940m and to a maximum of 190m depth, while a 543m gap in drilling separates the resource from the second southwestern zone. The drill rig is about to test this high priority target, and there are 14 more assays pending between Jaws, Spectre and Lotus – while modern metallurgical testing is underway to validate the historical 94.6% gold recovery that utilised flotation, pressure oxidation and cyanidation. While gold trades at US$4,500/oz, miners are producing more free cash flow now than any other time in history – but have progressively fewer options for deploying it. Agnico Eagle, which operates the 8.34Moz at 4.52g/t Au Meliadine Mine and is developing the 8.86Moz at 5.74g/t Au Hope Bay Project – the former being located in the same Archean Greenstone Belt in Canada as Hook Lake – generated US$4.4 billion in FCF during 2025, almost 8 times the US$558 million it finished with in 2022 and double the US$2.143 billion from 2024.
MHC’s sub-$20 million market cap doesn’t come close to factoring in the upside now being seen at the prospects currently under investigation, let alone the rest of Hook Lake. Our initial investment thesis is on track, including the comparison to CAD$60 million AuMEGA Metals (ASX: AAM) (TSXV: AUM), which executed a CAD$30 million capital raise backed by B2Gold to explore its prospective but underdone 680km2 Canadian tenement package. You can read our previous coverage here.
There are now assays from 14 drillholes pending from the lab, including 3 from the Spectre VMS prospect and 1 from Lotus, the latter of which is an orogenic gold quartz vein system like Jaws, and where MHC conducted a sampling program that yielded impressive results up to 8.01g/t Au and 2660g/t Ag across a distance of 66m, which also included samples of 3.8g/t Au and 761g/t Ag. This is the first hole ever drilled at Lotus and MHC considers the vein systems as having strong upside for discovery potential. Spectre is an extremely exciting polymetallic prospect with 3 stacked lenses that are up to 20m thick, which have incredible assays of 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. Until now, no drilling has taken place at Spectre since 1974 – which didn’t go below 60m vertical depth – and it has exciting similarities to the CAD$3.8 billion McIlvenna Bay project’s 38.6Mt at 2.02% CuEq VMS resource, which is comprised of 5 main lenses, some of which are stacked.
These latest results build on the assays from two weeks ago that hit 41.15m at 4.66g/t Au from 83.82m, including 7.62m at 18.67g/t Au from 85.34m – which was drilled through the main shear zone in an area that had previously returned 22m at 2.41g/t Au from 100m. MHC was also able to make a new discovery of near-surface mineralisation with an intercept of 9.15m at 1.73g/t Au from 35.05m, including 1.52m at 4.13g/t Au. The down-dip continuity at a historic footwall vein that intercepted 9.15m at 1.99g/t Au from 153.92m was at the northeastern margin of the deposit, and MHC collared a hole 370m away in the same direction which intersected 7.62m at 0.72g/t Au from 38.10m and additional mineralised intervals including 4.57m at 0.65g/t Au from 124.97m. While modest in grade, they confirm gold in a similar northeast-trending structure carrying quartz veining, iron-carbonate alteration and silicification – and add 290m of untouched strike that is extremely high priority, while also validating As-Sb-W pathfinder signatures as a vectoring tool for drill targeting.
There was a solid foundation of highly encouraging data at Jaws when MHC acquired Hook Lake, including a best historical assay of 52.78m at 3.38g/t Au from 89.22m, along with many other fantastic hits such as 16m at 5.04g/t Au from 52m, 27.58m at 3.33g/t Au from 44.35m and 45m at 2.46g/t Au from 138.5m, including 10.5m at 5.45g/t Au from 138.5m. There are untested geophysical anomalies, quartz veins with rock chips of 14.55g/t Au and 14.35g/t Au that extend off zones of historical drilling, and pathfinder elements that now firmly correlate to below ground mineralisation, and the company’s maiden drilling campaign is building on the parameters and grade of the deposit with modern exploration techniques that are consistently delivering significant results.
The map of Jaws below highlights the assays released so far from MHC’s maiden drilling campaign, overlaid with geophysics, historical assays and the currently known mineralised area. The extension of strike outside of this area is noted, as is the southwestern gap that stands between the foreign resource and second mineralised zone:
Source: MHC
The long section of Jaws below shows three of the most critical assays from this campaign – today’s high grade shallow intercept along with the depth extension, and the standout assay from two weeks ago – all of which are open along strike and at depth. It also highlights the step out hole 290m away from this area, creating a new gap which has no previous drilling and an excellent setup to potentially contain similar mineralisation:
Source: MHC
Gold’s price rose 65% in 2025, but gold exploration budgets increased just 11% to US$6.15 billion, with junior allocations rising by only 2%. Across all commodities, grassroots spending fell 8% to US$2.57 billion, representing a record-low 21% of exploration budgets, while minesite work absorbed 45%. S&P’s 2025 discovery study identified only six major gold discoveries from 2020-2024, and of 213 initial resource announcements over that period, only 93 represented greenfield assets. Most of the extra spending that is being stimulated by higher prices is concentrated in existing operations, with investment in new discoveries severely lacking while producers continue depleting their reserves and grades decline.
The square area visuals below show changes in each exploration stage’s share of global budgets relative to 1997-2000, with red outlines representing 2021-2025 averages. Grassroots exploration’s share fell from 49% to 24%, while mine site work rose from 18% to 40%, illustrating the industry’s increasing preference for expanding existing operations over finding new deposits – marking a long term trend that has not been bucked by commodity prices:
Source: S&P Global Market Intelligence
Free cash flow margins have exploded in gold miners recently, with the chart below showing the FCF per share of the Philadelphia Gold and Silver Index – a great barometer for tracking major producers – and how drastically favourable it is now compared to both a decade ago and even the last couple of years:
Source: Tavi Costa, Azuria Capital
MHC’s maiden drilling campaign has so far revealed exactly what was intended – width and scale coming together across Jaws, and a very fertile system that remains open at depth and along strike which is continuing to be drilled. With assays from Spectre due shortly and a wildcard for a major discovery at Lotus also pending, along with many more assays from Jaws imminent – there are plenty more catalysts for revaluation over the next couple of months.
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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.