Canary Gold Corp. (BRAZ:CSE; CNYGF:OTC; K5D:FSE) updated shareholders in a February 19 release about ongoing exploration efforts at its expansive Madeira River project in Rondonia, Brazil.
The company recently started a comprehensive drilling initiative across the Madeira River Project with a focus on uncovering gold deposits hidden beneath layers of transported material, necessitating a careful, data-focused approach. This type of exploration is inherently risky but potentially very rewarding, and results should be viewed within the context of an early-stage program, the company said.
“This phase of drilling is focused on testing our geological model and building the data set required to guide future exploration,” said Canary President Mark Tommasi. “While the program remains at an early stage, the information collected to date is consistent with our stated exploration approach and will be used to progressively refine and prioritize targets.”
So far, around 300 meters of drilling have been completed out of a planned 20,000 meters. At this preliminary stage, the company advised caution, noting that it is too soon to determine if economically viable mineralization will be found. The initial drilling phase aims to evaluate the geological model and gather data to refine and prioritize exploration targets.
Encouragingly, the results so far align with the company’s previously disclosed exploration thesis, supporting the geological framework of the Madeira River project. These findings bolster confidence in the company’s targeting strategy, justifying continued systematic drilling.
The Madeira River project is situated in a gold-rich district with historical and ongoing artisanal mining activities, such as those at Zelia and Santo Antonio, located directly north and south of the company’s licenses. These activities highlight the area’s gold potential, reinforcing the project’s promise. However, mineralization on nearby properties does not necessarily indicate similar findings on Canary’s project, and the company has not independently verified results from these adjacent sites.
“The primary objective of the current drilling campaign is to generate a robust geological data set that will allow the company to refine targets and vector toward areas of potential mineralization,” the company said in the release. “Canary expects that the 2026 drilling program, informed by the results and data collected during the current phase, will be critical in focusing exploration on the most prospective parts of the tenement package.”
Details of the Program
Canary said it believes it is still in the early stages of realizing the Madeira River project’s potential. According to the company, key aspects of the drilling program include:
- Conducting regional reconnaissance drilling to explore the wider property and uncover new geological anomalies.
- Drilling approximately 20,000 meters across about 300 drill holes.
- Implementing a reconnaissance grid with wide spacing, measuring roughly 2,000 meters by 1,000 meters.
- Consistently testing the oxide profile to a maximum depth of around 50 meters.
In a favorable gold market, the company said it remains dedicated to executing its exploration strategy with discipline and providing clear updates as work advances.
Riches Originated From Bolivian Andes
1The company finds itself at a favorable juncture with rising gold prices and an improving market in Brazil. On December 5, 2025, Technical Analyst John Newell noted that Brazil is quietly revolutionizing the discovery, tracking, and authorization of gold. Canary is central to these developments, controlling about 163,000 hectares along the Madeira River system, a historically rich placer belt where over 7 million ounces (Moz) of gold were extracted between the 1970s and 1990s.
Canary’s theory is that the gold, which supported decades of artisanal dredging, originated from the Bolivian Andes, traveled into the Madeira Basin, and became trapped in a cemented, iron-rich layer known as Mocururu, as Newell observed.
Canary’s technical team believes this layer forms a preserved paleoplacer surface that spans much of its project area and could be the primary source of the region’s alluvial gold. Over the past three years, Canary has conducted resistivity surveys, radiometrics, sonic drilling, and aircore drilling to map this horizon and confirm its presence beneath shallow cover across an approximately 80-kilometer corridor.
Visible gold has been found in Mocururu sediments and pan concentrates, and high-resistivity bands suggest the duricrust horizon lies 1–30 meters below the surface. Canary is now moving from concept to systematic drill testing.
From a technical standpoint, BRAZ appears to be in its early Point of Recognition (POR) phase, according to Newell. After a period of consolidation, the shares broke out in 2025, reaching initial targets at CA$0.37 and CA$0.45. This movement coincided with increased awareness of the Rio Madeira story and an oversubscribed financing.
If the 2026 program yields encouraging results amid a strong gold market, a move toward the longer-term “big picture” target becomes more feasible, Newell said. The chart suggests the stock is poised rather than broken and could respond quickly to positive news.
“We view Canary Gold Corp. as a Speculative Buy for investors seeking leveraged exposure to an emerging Brazilian gold story with meaningful drill catalysts ahead,” he wrote.
The Catalyst: Gold Once Again on the Rise
Gold prices increased for the fourth consecutive session on Monday, building on last week’s gains, according to a report by Peter Nurse for Investing.com on February 23. This rise was driven by new global tariffs announced by U.S. President Donald Trump and a weakened dollar, which boosted the demand for gold as a safe-haven asset.
At 08:15 a.m. ET, spot gold rose by 1% to US$5,155.44 per ounce, while U.S. Gold Futures climbed 1.9% to US$5,175.76 per ounce. The precious metal had already increased by more than 1% the previous week due to escalating geopolitical tensions between the U.S. and Iran, which fostered a risk-averse sentiment.
Late last week, Trump stated he would implement a 10% tariff, which was then increased to 15%, the maximum permitted, on global imports for 150 days under Section 122 of U.S. trade law, Nurse wrote. This decision came after the U.S. Supreme Court invalidated an earlier, more comprehensive tariff policy. The announcement negatively impacted risk sentiment, leading investors to turn to traditional safe havens like gold and U.S. Treasurys. The uncertainty surrounding the duration and extent of the tariffs, along with potential legal and congressional challenges, contributed to market volatility.
Investors also considered U.S. economic data released the previous week. The U.S. gross domestic product grew at an annualized rate of 1.4% in the fourth quarter, indicating a significant slowdown from the prior quarter. Meanwhile, the Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation measure, showed a year-on-year increase of 2.9% in December, with the core measure around 3.0%, remaining above the central bank’s 2% target.
Global financial markets are currently facing considerable uncertainty, reported Anna Wise for The Independent on February 23. An expert described the situation as an “unholy mess” after Trump announced an increase in the global tariff rate to 15%.
Richard Hunter, head of markets at Interactive Investor, commented: “Tariff developments have turned the situation into an unholy mess, prompting far more questions than answers.”
Hunter continued, “After the Supreme Court ruled against the president’s tariffs, the implications are far from clear. No reference was apparently made in the ruling as to whether the monies raised from tariffs so far would need to be repaid and, even if this is the case, whether the refunds would go to companies or the ultimate customer who will have suffered higher prices.”
Ownership and Share Structure2
Approximately 3.42% of the company is owned by insiders and management, along with a strategic corporation, Earth Sciences Inc., which holds 5.08%. The remainder is held by retail investors.
Other significant shareholders include CEO Andrew Lee Smith with 2.74%, President Mark Tommasi with 0.69%, Hein Poulus with 0.54%, and Al Kanji with 0.14%.
The company’s market capitalization is CA$16.03 million, with 72.88 million shares outstanding. It trades within a 52-week range of CA$0.19 to CA$0.48.
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1. Disclosure for the quote from the John Newell article published on December 5, 2025
As always it is important to note that investing in precious metals like silver carries risks, and market conditions can change violently with shock and awe tactics, that we have seen over the past 20 years. Before making any investment decisions, it’s advisable consult with a financial advisor if needed. Also the practice of conducting thorough research and to consider your investment goals and risk tolerance.
2. Ownership and Share Structure Information
The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.