With gold prices still elevated and investors slowly moving their attention from the major gold miners back into the junior gold sector, we see another differentiator emerging among stories versus setups. With many junior gold explorers having to compete for investor attention, those that have high grade potential, clearly defined ownership and a logical exploration plan will stand out, particularly if they have a tightly held share structure.
It is within this backdrop that Golden Rapture Mining (CSE:GLDR) has put together an exploration plan to position themselves as a high-risk, high reward junior gold explorer with a focus on making new gold discoveries.
The Current Market Environment: Why High Grade Remains King
High grade continues to be the primary consideration in a rising gold market. High grade discoveries offer several advantages over lower grade discoveries:
- Reduces the amount of capital required to develop a project.
- Offers better protection from market downturns.
- Provides greater leverage to rising gold prices as higher grades provide higher margins.
Golden Rapture’s Exploration Plan: A Focused Approach
Unlike other companies that may spread their capital thinly across multiple projects, Golden Rapture Mining (CSE:GLDR) is using a focused exploration approach that focuses on areas of high grade potential where there has been prior positive work.
The company’s strategy includes:
- Drilling concentrated on identified high grade areas.
- Clearly defined technical milestones.
- Using a tight capital structure to maintain leverage.
While the company understands that the early stages of exploration carry a great deal of risk, it believes that by focusing on high grade areas, it will maximize the upside potential of each drill hole.
Project Overview: What the Company is Working On
Golden Rapture Mining (CSE:GLDR)‘s main focus is on two properties in mining friendly jurisdictions with established access to infrastructure and permitting processes. The company’s exploration thesis is based on the idea that structurally-controlled gold systems offer the potential for significant high-grade gold deposits.
Specifically, the company is looking for:
- High-grade gold mineralization.
- The potential to demonstrate continuity through systematic drilling.
The company’s success will depend on demonstrating that the gold mineralization that was discovered in the first phase of drilling is continuous and will extend beyond the area that was drilled in the first phase.
Market Update: What the Market is Valuing
At its current size, Golden Rapture Mining (CSE:GLDR) is a microcap junior explorer. Junior explorers like Golden Rapture are often subject to significant volatility in terms of share price movements when the results of the company’s drilling program are released.
- Share Price: The company’s shares have traded in the low single digit cent range ($0.04-$0.06) recently.
- Market Value: The company’s market value is approximately $8-$12 million depending on the company’s share price on a given day.
- Share Structure: The company has a relatively tight share structure for a junior explorer. This means that every dollar of good news for the company has the ability to move the share price significantly, and every dollar of bad news also has the potential to move the share price significantly.
Some of the key characteristics of a company of this size and type include:
- Extreme Sensitivity to Drill Results: The company’s share price will react rapidly to the results of the company’s drilling program.
- Dependence on Capital Markets: The company will need to continue raising money from the public markets to fund future exploration efforts.
- Extreme Leverage to Gold Prices: The company’s share price will move significantly in response to changes in gold prices.
Therefore, the company’s shares are best suited for aggressive investors who are willing to take on the risk associated with investing in a micro cap junior explorer.
Recent Financing: Funding the Next Round of Exploration
On December 20th, Golden Rapture Mining (CSE:GLDR) announced a private placement financing of up to C$500,000 under the private placement exemption available to the company under applicable securities legislation. The private placement financing included a combination of flow-through and non-flow-through units.
- Closed First Tranche: The company completed the first tranche of the financing for gross proceeds of C$185,000.
- Price of Flow Through Units: The flow-through units were sold at C$0.04 per unit.
- Use of Proceeds: The net proceeds of the financing will be used to fund exploration activities on the company’s core properties and for general working capital purposes.
The recent financing provides Golden Rapture with the necessary funds to complete the next round of exploration on its core properties and demonstrates the company’s continued commitment to maintaining a tight capital structure.
What to Watch
For those watching Golden Rapture, the next few weeks are expected to be busy, with:
- Drilling Updates: The company will announce upcoming drilling programs and timelines.
- New Drilling Results: When drilling results become available, the company will release them to shareholders.
- Capital Management: The company will be managing its capital carefully to minimize dilution to shareholders.
- Juniors/Explorers: As always, it’s important to watch how sentiment shifts in the broader junior/exploration space.
Conclusion
Golden Rapture Mining (CSE:GLDR) offers a classic junior exploration setup: small market value, high grade ambitions and substantial upside if the company achieves success in its exploration efforts.
Ultimately, the opportunity with Golden Rapture is simple: a successful discovery could lead to a rapid increase in the company’s share price. The risks are equally clear: unless the company achieves success through its drilling program, the company’s valuation is purely speculative.
Within the current gold market environment, Golden Rapture sits firmly in the optionality bucket: it is not a guarantee, but rather a leveraged bet on the company achieving success in its geological efforts.
Marc has been involved in the Stock Market Media Industry for the last +5 years. After obtaining a college degree in engineering in France, he moved to Canada, where he created Money,eh?, a personal finance website.
