Galway Metals Wants an Instant Replay in Gold
I did an interview with Goldfinger of Energy and Gold on February 19th. He posted it on the 21st of February. In it we said:
I have no doubt a lot of people believe I am goofy because I keep hammering away at the importance of sentiment. But gold made the highest price in the last ten months on the 19th. Since a DSI of 90 is hardly gut wrenching, it tells me we are in a perfectly normal correction. Once it is over, the bull will resume. The DSI will signal the bottom and resumption of the trend.
OK, I am goofy but for a whole bunch of different reasons.
Robert Hinchcliffe sold Galway Resources to AUX Acquisition in late 2012 for some cash and shares in two spin off companies. His shareholders in Galway Resources got a 47% premium for their shares and better yet, got to sit out the ongoing crash in the price of precious metals and shares that went on from late 2011 until early 2016.
Galway Resources had some nice gold projects in Colombia. But like all the other minerally endowed countries in South America, Colombia gets stupid on a regular basis and craps all over the mining business. The Spanish tradition of keeping most people poor and a few well-connected families rich has continued as a tradition in South America. Few investors know that but if you flipped both continents over at the equator, North America and South America would have about the same quantity of minerals.
And fewer yet realize that most of the gold the Spanish mined came from Colombia. Panama was a providence of Colombia until the US sponsored a revolution in the early 20th century. Due to the disparity of wealth and income, on a regular basis most of the countries in South America schedule a revolution only to turn the government over to a whole new group of thieves.
Don’t laugh, the US is doing the same thing and those in the 1% should avoid short ropes and tall oak trees for the foreseeable future.
In any case, when Hinchcliffe sold off Galway Resources, he took with him $12 million in a new company named Galway Metals. He has ended up with two world-class projects in Canada where the politicians are just as stupid but the income spread is not as bad as Colombia.
Galway Metals first district scale project is called the Clarence Stream property. Optioned in 2016 for a total price of $3.5 million effectively GWM was paying $6.23 USD per ounce of gold. The gold/antimony project has a strike length of 65 km along the Sawyer Brook fault system in New Brunswick. Clarence Stream had a 43-101 resource done on it by SRK in August of 2017 showing a gold resource of 667,000 ounces and an antimony resource of an additional 73.4 gold equivalent ounces for a total of 740,000 ounces.
Galway has had a drill working on the project at Clarence Stream for over two years and has continued to delivery one news release after another of great intercepts.
I’m a bit reminded of when I was a kid and Mickey Mantle and Roger Maris both playing for the Yankees were vying for who could hit the most home runs in baseball. But as any baseball coach will tell you, home runs, while flashy, don’t win ball games, base hits do.
If Galway were playing baseball for the Yankees, they would be the base hit kings. There are two numbers important in assay results; one is grade and the other length of intercept. Galway hits both and does it with a consistency that is almost scary.
How about 4.6 g/t Au over 30 meters? Or 10.0 g/t Au over 31 meters? And 56.2 g/t Au over 0.6 meters? Or 14.6 g/t over 10.2 meters? Or 11.8 g/t over 12.8 meters? Or 14.5 g/t over 3.5 meters? And then there is the home run 807 g/t Au over 1.25 meters.
None of those results are part of the 2017 43-101. There will be another 43-101 completed at some point and it will be a lot higher. Those sorts of drill holes are what make mines. Few of them are marginal. Each adds ounces. Historically there have been 54,000 meters of drilling and 10,000 soil samples. Galway has contributed an additional 20,000 meters of drilling and 20,000 soil samples. Their technical team is right on top of this.
Their 2018-2019 program calls for 13,000 meters of drilling and an additional 10,000 soil samples. You could safely call Clarence Stream a target rich environment.
But Robert Hinchcliffe wanted to cover all the bases. He not only wants to bet on the red in roulette, he wanted to bet on the black as well. The company has a 2nd world-class potential project in Quebec named the Estrades Polymetallic project. Galway bought the project and related properties for $1.35 million in August of 2016. When GWM completed the deal with a variety of companies and individuals they also announced a 300% increase in Estrades resources and then increased the indicated by an additional 15% in September of 2016 and an increase of 80% in the inferred category.
Prior to Galway picking up the Estrades properties, there had been 180,000 meters of drilling. Galway did an additional 20,000 meters of infill drilling for the 2018 resource expansion. Plans for 2018-2019 call for one drill doing 13,000 meters of drilling and a gravity survey over the entire 20,000 ha land package. A PEA is scheduled for early 2019.
As with Clarence Stream, the Estrades projects are target rich. A hole released in November of 2018 showed 1.2% copper over 7.1 meters at Newiska and 9.4 meters of 1.1% copper along with 41.5 g/t Ag. In July of 2018 the company reported 4.3 g/t Au, 115.2 g/t Ag. 11.0% Zn and 0.8% Cu.
With $7 million in the bank and a market cap of about $40 million CAD clearly the market doesn’t get it just yet. But the market is waking up to the real riches in both projects. The company has gone up 200% since the end of January and 20% in the last week. Galway’s only real issue was communication and clearly they are seriously working on that.
I believe Galway has two company making projects and investors would be better served by spinning off one of the projects and I have mentioned that in a long conversation held recently with Robert Hinchcliffe. But he gets paid the big bucks for making those decisions and one day he will probably get around to it. The company is exceptionally conservative. Other companies with a similar treasury would be running multiple drill rigs on both properties. But the last half dozen years have buried a lot of companies who took chances they shouldn’t have.
I believe both projects will be mines and profitable at that. One day soon a major or bigger mid-tier will realize what Galway has and will throw some money their way in a JV. Anyone buying into Galway at today’s prices is getting gold well under $10 an ounce and that’s really hard to beat.
The company has done an excellent presentation that covers both projects and any potential investor should read it. It is a bit technical but it is obvious that these are excellent and potentially world class projects.
Galway is an advertiser and I am biased. I didn’t buy shares when I was told the story and dumb me didn’t. I hate chasing stocks up so for now I don’t own shares but on any correction I would be an eager purchaser. Do your own due diligence.