As small mining-cos this summer and hopefully into autumn benefit from rising metals prices, I offer a few thoughts about closeology.
Textbook definition:
“Closeology” benefits companies that are near discoveries, or smelters, working mills and excellent roads.
Theoretically, nearness to known resources increases the likelihood of finding more resources.
(This holds for energy as well — case in point, Calgary based gas and oil explorers and producers across parts of Alberta. But my interest is mostly metals.)
A gold discovery five or so years ago by New Found Gold, Newfoundland and Labrador, set investors chasing at least a half-dozen other companies’ shares.
A Toronto stockbroker and financier (and subscriber to these reports) sums up closeology logic: “When you want to find a new mine, look where there is or was one.It‘s one of the mining 10 commandments and it‘s often overlooked.“
I havemy favorites in this category; although I do not own some of them.
The ones that spark the closeology theme for me, among those I do not own but for which I can see the closeology logic, include Maple Gold Mines MGM and Radisson Mines in Québec’s Abitibi Greenstone Belt.
There is Val-d’Or Mining VZZ, which I do own and which has numerous exploration partnerships at sites across Québec and Ontario. (But whose stock thus far gets little benefit from its swath of properties.
In central Yukon, I point to Banyan Gold BYN. Banyan’s flagship lies in the Mayo Mining District, adjacent to Keno Hill Silver District. I own Banyan Gold shares.
Speaking of Yukon, I own Honey Badger Silver TUF, which has a sub-$30 million market value. That one, quoting the boilerplate here, calls the Plata Projectits flagship. This is a once-producing, high-grade potentialsilver deposit that might feature gold targets resembling those of nearby investor favorite Snowline Gold SGD.
Honey Badger also has holdings elsewhere in Yukon, in NWT and in Nunavut.
A newsletter writer, Robert Sinn at Goldfinger Capital in Florida, comments:
“First things that come to mind are companies like Mogotes Metals in Vicuña.” Mogotes is active in Argentina and Chile.
The company’s literature screams closeology: “ON THE SAME BELT AS THREE COPPER DISCOVERIES.” See Mogotes.
Mogotes Metals’ Filo Sur Project is just south of Filo Mining’s flagship Filo del Sol project and on strike with its world class new sulphide discovery, in the Vicuña Copper District of Chile and Argentina. That description comes straight from Mogotes’ investor presentation.
Robert Sinn adds, “There is some closeology happening in the Yukon now due to the success of SnowlineGoldand Fireweed Metals. In Idaho, early–stage explorer IDEX Metals IDEX is playing closeology to Hercules Metals BIG.” [More from Robert Sinn via video.]
Onyx Gold ONYX is one I do not own but that deserves a mention. It explores in the mineralized region of Timmins, Ontario; and in Yukon.
One hole earlier this year at Onyx’s Munro-Croesus project, which is close by a corridor of gold deposits called Pipestone Fault, is considered a “discovery hole.” It returned 69.6 m grading 3.4 g/t Au, with higher grade intersections within that hit.
Kiran Patankar, who heads up Maple Gold Mines and has a board seat at Onyx, tells me, “Both companies I’m associated with (MGM and ONYX) are undervalued, but MGM is stupid cheap with +3Moz on the books at reasonable grade with infrastructure and a past-producing mine at which Agnico-Eagle AEM produced 1Moz @ 6.5 g/t Au.”
In the uranium fields of the prolific Athabasca Basin, I have to point to CanAlaska Uranium CVV and to F3 Uranium FUU, among several names. I own both.
Closeology sometimes gets a bad rap or is flat-out ignored by investors, but it need not be. The nearness factor for trained geologists is a golden rule of sorts.
More boilerplate of the best known Canada regions tagged with successful closeology:
Sudbury Basin, Ontario: This region is a prime example of closeology in Canada. It is a nickel-copper mining district “with a long history of production.”
Abitibi Greenstone Belt, Quebec/Ontario: gold and base metal deposits.
Island Gold District, Ontario: Alamos Gold’s project in the Island Gold District combine the Island Gold and Magino mines, which AGI asserts will create one of the largest and lowest-cost gold mines in Canada.
We can do this exercise for two or three dozen regions outside Canada — for example, much of Nevada(Carlin Trend, Comstock Lode) for gold and silver; parts of Arizona for copper; expansive tracts of Alaska.
Alaska case in point: producer-developer Contango Ore CTGO.
“This is essentially what our business model focuses on: grade and quality of deposit than can be transported to an existing mill,” says Rick Van Nieuwenhuyse, CEO and founder of Contango. “Manh Choh (producing gold in a partnership with Kinross Gold), Lucky Shot and Johnson Tract– all three fit the DSO model.”
DSO being Direct Shipping Ore: high-grade ore that requires minimal processing before being shipped and exported. I own a small number of Contango shares.
There is no roster shortage of mineralized pockets, some of them vast geographically, around the world. Parts of Mexico‘s Sierra Madrefor silver, Colombia’s Antioquia Gold Belt. (I am citing based on firsthand visits to these places.)
Specific trends and corridors of western Australia, west Africa, the Congo Copper Belt, areas of Serbia, Sweden, Finland, far eastern Russia, Indonesia, Mongolia and elsewhere — you get the idea — add dozens more to the closeology roster.
I’d ask our audience: what might be an appropriate example of closeology that is NOT reflecting the nearness premium? There are loads right now, even with the off-again, on-again summer 2025 metals ascent.
Let’s hope that when (or as) mining stocks start setting cyclical highs, investors will begin searching for experienced miners‘ projects that have yet to enjoy that premium.
Nov. 2 to 5 New Orleans
— Thom Calandra
Thom Calandra is a writer and an investor. Research and material are meant as editorial opinion. He is not a professional investment adviser. Please do not consider his reporting as a recommendation to buy or sell securities. The Calandra Report, in its 13th year, offers a one-price, $139 yearly fee for all newcomers. Earlier subscribers keep their original cost. Sob stories listened to. No refunds after three weeks of service. Exceptions: groceries, mistaken ambitions.
