Carlin Trend’s Gold Standard
The last project we visited on the weeklong tour of Nevada was my favorite Nevada gold story, Gold Standard Ventures. (GSV-V)
I’ve written about Gold Standard several times in the past, as recently as last December. GSV would be my number one pick as a pure option on the price of gold.
Just one of their gold projects contained in the overall land package, the Pinion project, has similar grades and tonnage to one of Newmont’s most profitable gold mines that just happens to be less than six miles from Pinion; the Emigrant Gold Mine containing 1.2 million ounces of oxide gold at a .62 g/t grade.
Gold Standard consolidated the Pinion project a year ago. It came with an 800,000-ounce historic resource of near surface oxide gold similar to that found at Rain/Emigrant with grades of between .57 g/t Au to .63 g/t Au. GSV spent $750,000 drilling Pinion to add 645,000 ounces more. They were adding ounces at just over $1 an ounce. It doesn’t get any better than that.
If Pinion was the only asset of GSV, the company would be undervalued. The deposit is open in all directions; you can look at the package of rocks the gold is contained in and realize that it outcrops all over the place. It needs a lot more drilling but doing a lot more drilling that adds ounces for $1 an ounce is pretty damned productive. If we had a serious gold market, and we don’t, Pinion would be worth $100 an ounce in a heart beat. Instead you can buy the whole flipping company for about $100 million.
Pinion is a great story that I love. But it’s just one of several mines that the market simply doesn’t get. Part of the problem is that GSV has spent the last five years consolidating the district. The area has had mining for 100 years but it was fractured beyond belief. So GSV put it all together and that creates confusion in the minds of investors. It’s the Railroad district of multiple mines, not the Railroad project with a bunch of different mineralized zones.
Pinion is going to be a mine. Instead of consolidating Pinion as part of Railroad, they should be spinning it off into a new company. It’s a mine at current grade, current price of gold and current resource. The grade may well stay the same, the resource is going to grow, a lot in my mind, and who knows, gold may actually go up one day.
Some of what GSV is doing is simply nuts and the market doesn’t get it. They picked up a new project, the Dark Star, and paid $.50 an ounce for a resource of 375,000 ounces of gold. And they are drilling to expand it . It’s close enough to Pinion to have one heap leach facility between the two areas and two pits.
I suppose that will make the stock go down. After all, if it costs you $1.25 to add an ounce of gold to your resource, that isn’t nearly as good as picking up the deposit for $.50 an ounce. When their brilliant technical guys told me that, I plopped out $.50 and asked for an ounce. Their response was that they were happy buying ounces of gold for $.50 but they wanted more for that when they sell. Cheap bastards.
The company has another entirely different style of mineralization at what they call the North Bullion deposit. It is a standard Carlin style deposit with ore requiring roasting and it’s deeper. Intercepts include 56.4 meters of 4.26 g/t, 164 meters at 3.38 g/t and 124 meters at 4.05 g/t Au. While they have multiple intercepts of high grade gold at North Bullion, they have yet to come up with a 43-101 resource for the project.
And last but hardly least; Gold Standard has the Bald Mountain project. Again, they call it part of the Railroad project but the Bald Mt target is not the bog-standard Carlin deep refractory gold. It’s near surface oxide gold quite capable of being heap leached. Initial drill results from late 2013 indicated 56.1 meters of 1.47 g/t Au and interestingly enough another copper zone of 23.3 meters of 0.4% copper. Also they had a 1.5-meter intercept of 763 g/t Ag with 1.6% copper and 11.8% lead and 2.43% zinc.
Gold Standard reminds me a lot of Cayden Ventures and indeed, GSV has added Ivan Bebek, former CEO of Cayden as an advisor. Cayden found an entire district and got taken out by Agnico Eagle for a 300% gain from when I first wrote about them. The same thing is going to happen to GSV. Adding Ivan is brilliant but all he has to do is say, “Copy what I did.” And they will.
Gold Standard has excellent management that gets it. Jon Awde, President and CEO has been wise enough to hire the best technical team he could find. Adding Ivan Bebek as an advisor is a masterpiece of thinking. Jon has understood from the beginning that the problem he needed to solve was putting the district together. As it turns out, the plummeting gold price crimped the plans of those who have held pieces of the district for decades and for a relatively low price, Jon put the giant package together.
At the same time, Jon needed to keep advancing the project. I personally don’t like Carlin style deposits, they eat a lot of money and it’s like winning all the battles and losing the war, if you run out of money, you are dead in the water.
Gold Standard’s plans for this year include a 6000-meter RC drill program at Pinion and Dark Star. That and an increase in the price of gold should be enough to start the share price going higher. In the last few days, the company has announced a $16.2 million dollar funding from one of their inside investors, Oceanagold. Oceanagold is buying about 25 million shares, no warrants for $.65 apiece.
I think I have been to see the Railroad District controlled by GSV about half a dozen times in the last 8 years. Management and the technical team has consistently advanced the project but have received little credit for it in the marketplace. One day soon that will change. Pinion/Dark Star is going to be a real attractive target to anyone wanting a low cost high margin mine in a safe mining state.
I am biased. I like the people at Gold Standard a lot. They are moving the project forward regardless of the hurdles put in their way when most of the industry is huddled up in a corner whining about how bad things are. Gold Standard is an advertiser and as always, do your own due diligence.
Gold Standard Ventures