VANCOUVER, March 5, 2013 (Financial Press) – When Rasool Mohammad went looking for gold in Saskatchewan he was treading a well-beaten path.
The precious metal was first discovered in the province as long ago as 1859; there was a gold rush in the 1940s and a gold boom in the 1980s.
But, in recent years, the big story has been the province’s rich potash mines, its bountiful oil and gas reserves and its high-grade uranium belt in the Athabasca Basin.
In Saskatchewan, at least, gold had lost some of its lustre.
For Mohammad, president and CEO of Vancouver-based La Ronge Gold Corp. (TSX:V-LAR) the relative lack of interest in gold beckoned as an opportunity.
A professional geologist trained in Pakistan, he had immigrated to Canada to “follow a dream” of exploring for minerals.
He had enough historical data to know there was plenty of gold to be found in Saskatchewan.
And he knew the 1980s boom had petered out because, with the metal fetching only around $350 an ounce, the math just didn’t work.
At today’s gold price, Mohammad figured Saskatchewan was worth a second look.
In June 2011, he had the good fortune to make the acquaintance of members of the legendary Studer family, which own claims going back 70 years in the La Ronge gold belt, about 250 kilometres north of Prince Albert, Sask.
In 1941, family patriarch Adolph Studer — hunter, trapper, prospector, and founder of one of the first mining companies in the province — won a highly publicized case in the Supreme Court of Canada over disputed claims. His lawyer? One J. G. Diefenbaker, later Canada’s 13th Prime Minister.
La Ronge Gold Corp. negotiated options on three Studer claims totaling 50,000 hectares, and has been aggressively defining, expanding and upgrading the gold resources.
Positive drilling results in early 2012 triggered a surge in the price of La Ronge Corp. stock to 88 cents.
And although shares trade today in the 30-cent range, Mohammad is buoyantly optimistic.
In December 2012, an NI 43-101 compliant resource calculation at the company’s flagship Preview SW deposit estimated a combined resource of 395,400 ounces of gold, grading at over two grams per tonne, with a 0.50 g/t cut-off.
“The historical resource (estimate) was 200,000 ounces, so we have already doubled that,” says Mohammad.
“We have only explored 15 per cent of the entire property and we have historical evidence, and our own airborne survey, to suggest there are gold zones extending north and south.”
Results of a winter drilling program continue to add potential ounces. Mohammad expects that, by the end of 2013, metallurgical studies and a preliminary economic assessment will indicate a viable gold mine can be put into production.
We are not just a junior exploration company hoping someone will buy us out,” he says. “We would like to become the next gold producer in the La Ronge gold belt. We have come up with significant resources of high grade ore, open pittable, near all the necessary infrastructure and in a mining-friendly jurisdiction.”
With adequate funds in the bank, and ongoing support of the Saskatchewan authorities and local First Nations leaders, Mohammad is confident he will find what he calls the “hidden treasure” at Preview SW and help put the glitter back in Saskatchewan Gold.
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