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RNC Minerals catches two major gold discoveries, but the yellow metal is only part of the miner's story

The company's Beta Hunt gold mine housed bonanza gold nuggets unlike anything most miners have seen in their lifetime, but it's RNC's nickel asset that could be the real game-changer
beta hunt stone
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Visible gold on one of the specimen stones recovered from Beta Hunt mine
  • Transformational discoveries at Beta Hunt gold mine in Western Australia sent shares skyrocketing

  • New operational acquisition and upcoming resource estimate at Beta Hunt mine

  • Enormous blue sky potential at Dumont nickel cobalt project in Quebec, one of the world’s largest undeveloped deposits of the two base metals


RNC Minerals Corp (TSE:RNX) made international headlines last September when it revealed one of the largest gold discoveries in recent memory at its Beta Hunt mine in Western Australia.

The Canadian junior miner pulled out two nuggets containing 4,000 ounces of gold as part of a discovery that totaled 9,250 oz.

Given that RNC was originally looking for nickel at Beta Hunt, to say it was transformational is an understatement. CEO Mark Selby was in fact looking to sell the mine prior to the big find due to the lack of available finance to advance the project.

Most mining companies are lucky to make a discovery of any magnitude, but amazingly there was more to be found at Beta Hunt. In June, RNC announced they had uncovered more high-grade gold from the Father’s Day Vein, the site of the original discovery.

The new discovery of coarse gold in quartz veins just beneath the Father's Day Vein amounted to 987 oz of the precious metal that was recovered in 238 kilograms of rock, according to early estimates.

The Toronto-based company has two high-value assets that will help to propel it into mid-tier miner ranking. The story so far has been Beta Hunt, but its second project Dumont may hold significant potential to supply the oncoming electric vehicle revolution.

Inflection points

RNC is heading into the coming months with a new acquisition, higher gold grades and encouraging exploration results.

The gold company exercised the previously announced option to buy the Higginsville mill from Westgold Resources Limited, a move that will significantly reduce costs at the miner's gold operations in Western Australia.

Higginsville will transform RNC's gold operations in Western Australia into a multi-mine operation anchored by the 1.3 Mtpa HGO Mill, the exciting high grade and resource potential at Beta Hunt, and a large land position in the Kalgoorlie gold region, Selby said recently.

RNC is also planning to put out an updated resource estimate from its Australian operations by the end of 2Q.

Outlook

Not surprisingly, Beta Hunt is the main focus, but RNC has huge upside with the Dumont nickel project in Canada.

One of the world’s largest undeveloped nickel cobalt projects, Dumont is scheduled to come on stream exactly at the time electric vehicles are tipped to become a mass market product.

The company recently released new results from an updated feasibility study at Dumont that indicate a large-scale, low-cost operation with a long mine life.

The Dumont project, a joint venture with Arpent Inc, a subsidiary of private equity firm Waterton, is located in the western portion of the Abitibi region of Quebec. RNC has a 28% interest in the project.

Dumont hosts the second largest nickel reserve in the world of 2.8 million tons of contained nickel and the ninth-largest cobalt reserve of 110,000 tons of cobalt.

Highlights of the feasibility study include production of approximately 1.2 million tons of nickel over a 30-year mine life, with an initial capital expenditure of US$1 billion.

The feasibility study points to significant earnings and free cash flow generation, including US$920 million of after-tax net present value and a 15.4% internal rate of return after tax.

Once in production, Dumont will be one of the largest base metal mines in Canada, one of the top five sulphide nickel producers globally, and one of the only large scale fully permitted nickel-cobalt projects to satisfy the significant growth in nickel and cobalt demand driven by the electric vehicle sector, according to RNC.

“Fundamentally, our stock right now is valued off Beta Hunt,” CEO Selby said in a recent interview with Proactive, “but our investors also get exposure to the largest undeveloped nickel and cobalt asset in the world as option value.

“We’ll look to unlock that value for shareholders.”

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

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