A penny mining stock to buy

Ximen Mining Corp.’s ambitions begin with re-examining the historic Kenville Gold Mine near Nelson, BC, a funky town more recently known for its ability to mine tourist dollars.

Ambitious junior exploration stocks have achieved several promising high-grade discoveries in British Columbia in recent years. This has ignited a mini bull market and contributed to some impressive gains for the companies involved, although the seasonal window for accumulation at more attractive share prices is currently in play.

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The Kenville Gold Mine is the first recorded underground mine in British Columbia, having started production in 1890 and mined into the 1950s.

One of the more interesting stories I have been following is Ximen Mining Corp. (TSXV—XIM). This junior exploration stock has become a specialist in acquiring and advancing discovery prospects in established mining districts of BC. Several of these properties are currently under active exploration programs, operated by Ximen or through joint venture partners.

Plans to re-establish Kenville Gold Mine

In April, Ximen announced a significant deal to acquire majority ownership of the historic Kenville Gold Mine property with a purchase option for control of a private company (Target) that held a majority stake in the project. Smaller deals to secure additional ownership and repurchase an outstanding gross metals royalty followed. With these options in hand, the company has the ambition to join the ranks of precious metals producers by re-establishing mining operations at the historic Kenville Gold Mine.

The property is located just eight kilometres from the town of Nelson, BC and is well-served, with local road and power access plus extensive mining infrastructure in place. The area is an established mining district that is well-known for its diversity of mineral deposit types.

Once the largest gold producer in the prolific Nelson gold camp, the Kenville mine ceased operations in 1954. A historic resource estimate for the project documented more than 360,000 ounces of gold in the remaining deposit areas.

Combined with exceptional potential for the discovery of new resource zones, Ximen expects that a newly refurbished mine at Kenville may once again yield significant long-term production.

Historical records review underway

Ximen plans to review the large database of historical records available for the project area. A previous operator continued exploration work along with extensive confirmation drilling of historic resource zones through to 2012.

The company intends to open underground access along known vein extensions in the early phases of its mine plan.

Working towards its objective of achieving production at this historic property, Ximen has tentatively prepared for a resumption of mining at Kenville in the first half of 2020 depending on several unknowns that await resolution, including securing various permits and raising additional funding.

Ximen also reviewing Brett Epithermal Gold Project

Another promising asset in Ximen’s portfolio of BC properties is the Brett Epithermal Gold Project, an advanced exploration prospect that also includes small-scale previous mining activity. Comprising more than 20,000 hectares in size, Ximen holds 100 per cent ownership of this project, in the midst of another high-profile mining district near Vernon, BC.

The Brett project assets came with a historical exploration database for 157 drill holes that have been completed since 1986. Recent drilling programs by Ximen successfully outlined two high-grade gold discoveries in addition to several bulk tonnage sections of lower-grade gold.

A small surface pit was excavated in 1995 by a previous operator of the Brett project, and a bulk sample was extracted with an average grade above 27 grams of gold per tonne of ore plus 63 grams of silver per tonne.

In another zone, an exploration adit (that is, a mine entrance) was driven into a hillside to access deeper levels of the resource and a small stockpile of mineralization remains at surface from this work. Although no significant mining was completed in this section, Ximen plans to reopen the underground workings to enable more intensive exploration of this zone.

The company has filed a permit application to rehabilitate the old workings and enable underground drilling stations to more efficiently target resource zones further to depth. Four primary gold zones have been established over a strike length of more than 650 metres, and additional target areas offer the potential for further discovery.

A mining scenario for the property is under consideration, supported by the presence of numerous nearby operating mills in the district that would enable toll-milling as a less expensive option during development. Additional resource discovery may advance the project status once the underground drilling work commences.

Gold Drop property optioned to CGX Gold Corp.

Ximen has optioned out two other promising properties in BC. The Gold Drop property was optioned to GGX Gold Corp. (TSXV—GGX) for staged cash and share payments plus a work commitment.

GGX is currently involved in drilling work to follow up on exciting gold and silver vein discoveries that include extremely high-grade sections across attractive intervals. In 2018, one drill hole encountered a section at a grade of 129 grams of gold per tonne of ore plus 1,154 grams of silver over more than seven metres of core length.

As GGX continues with exploration, Ximen stepped up to acquire additional property holdings adjacent to Gold Drop. The company recently secured ownership of its Providence mineral claim, comprising 12,900 hectares of land acquired through direct purchase and additional staking. Preliminary exploration of the area has already identified historical pit excavations, and high-grade samples believed to have originated from the previously operating Providence gold mine.

Additional activity in in the district

To the south of the Providence mineral claims, Kinross Gold Corporation (TSX—K; NYSE—KGC) is actively drilling another exploration project. With its current property holdings, Ximen is well-positioned to benefit from news related to exploration activity underway throughout the district.

Further to the west, the Treasure Mountain Silver Property is also undergoing exploration work by an option partner, New Destiny Mining Corp. (TSXV—NED). A variety of different mineral showings have been identified on the property area, including high-grade gold, silver and base metal zones. New Destiny is doing fieldwork with a program of trenching and sampling underway.

With a posture towards aggressive exploration activity, a track record of successful resource discoveries in hand, and several active projects in the pipeline, Ximen is an excellent candidate for investors seeking leverage to the high-grade gold discovery rush happening in British Columbia.

The prospect of resuming operations at the Kenville Gold Mine will build further speculative appeal to shareholders in 2020. With the price of gold currently near all-time highs in Canadian dollars, Ximen is in a great place to deliver results.

Mike Kachanovsky is a freelance writer who specializes in junior mining stocks and also covers technology companies.

This is an edited version of an article that was originally published for subscribers in the June 21, 2019, issue of Investor’s Digest of Canada. You can profit from the award-winning advice subscribers receive regularly in Investor’s Digest of Canada.

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