It's a Correction, Live with It
After a barn-burning opening to the year in January and February, gold and gold shares settled down for a necessary correction in March. To those who claim that gold and silver are supposed to go up every single day and any day that they do not is solid proof of manipulation, I say rubbish. All markets go up and down. Corrections are just as much part of the system as advances.
If you think gold and silver only have one dimension, reach into your pocket and hand me a one-sided coin. If you believe manipulation is the most important factor in price, you also are saying you do not believe in the laws of supply and demand. Go back to school, the reasons the rules of supply and demand are called "laws" is that they are laws. Even passed by Congress.
Guys smarter than me including Steve Saville and Tom McClellan are looking for a major bottom in the metals in the June-August time frame. I myself see a lot of signs of topping action in the major markets going on right now. Sell in May and go away certainly looks like a good bet this year in the Dow and S&P. When they top, the next big thing is going to be the metals. I don't look at cheap gold or silver as a problem, I look at it as an opportunity. If you buy cheap and sell dear, you will make money. If you insist on standing on tall hills and howling into the air about manipulation at every full moon, you are going to lose all your money.
I wrote a timely piece at the end of November. Novo Resources was $.59. Today as I write, it is $1.60. Cayden Resources was $1.10, today it is $1.85. Pilot Gold was $.94, today it is $1.35. True Gold was $.32, today it is $.37. Almaden Minerals was $1.08, today it is $1.43. Virtually all of the companies I identified as good deals in November went up. One didn't and it stuck out to me. So I went to visit them last week.
Gold Standard Ventures (GSV-V) was $.82 on November 29, 2013. We have had a nice rally early this year and we are in the end game of a minor correction in the metals. GSV dropped all during December, rose to $.92 at the end of January and has continued to drop by 33% to $.62 today. When I went to Nevada I wanted to know if I had read the tea leaves incorrectly or if the market simply doesn't get it. To my great pleasure I found that it wasn't me that didn't get it, it is the market reading the tea leaves incorrectly.
The Railroad/Pinon project, as GSV terms it, contains 102 square km of ground in the southern Carlin Trend near Elko Nevada. In all of the data on Gold Standard's website, the entire area is treated as if it is one and only one type project or deposit. That's the issue and the only issue. It's not one deposit, it's a handful.
The Carlin Trend has been the ruin of many a poor boy. While the deposits are rich, they are also deep and expensive to drill. A lot of companies have busted their picks trying to find an economic deposit in the Carlin. While GSV has had some excellent drill holes on their North Bullion target, they have yet to come up with a 43-101 resource for North Bullion that will excite even ordinary investors.
The March 5th press release where GSV announced closing the deal on the Pinon portion they didn't own is a lot more important than the market got then or gets today. First of all, I think the company is making a giant mistake by lumping all of the pieces of the Railroad District into only one project. They think of it as multiple targets, they treat it as if it is multiple targets but they talk about it on their website as if the entire district is one simple system and it's not.
North Bullion has a sulfide target that would require roasting like most of the deposits in the Carlin. But Pinon is a near surface oxide deposit that could be an open pit and heap leach mine. Pinon has non-43-101 resource that could easily and quickly be brought into a 43-101 resource that investors can easily get their teeth into.
Company president and CEO Jon Awde has done a brilliant job of communicating his very real opportunity at North Bullion and even in the extremely difficult times of the last three years, has managed to raise money from institutional investors. But retail investors have suffered when actually the company is doing great. Shares that sold for $3 in 2012 are on the auction block for $.60 today.
It's a communications issue and I think that's all. They controlled half the Pinon project until March of this year. Unfortunately, that's like having half a hard-on. You either need the whole thing or you have nothing.
They got the key piece to the puzzle when they completed their deal with Scorpio Gold in early March. Scorpio needed cash to advance their Mineral Ridge gold mine after losing $6.8 million in 2013. GSV has been trying to close a deal on that piece for years and Scorpio wouldn't budge. But everyone is broke right now and money is scarce on the ground.
Two plus two really can equal five. In the case of Pinon Gold Standard, they had something they knew was valuable but without the 2nd half, it didn't make any sense to advance the project because all they would have accomplished would be to make the portion they didn't own a lot more valuable.
In the coming months expect to see a lot of drilling and excellent results coming from Pinon. It is different from North Bullion and I'd like to see the company start talking about Pinon on its own merits. It won't take long or many holes to define a real 43-101 resource and when they do, retail investors will start to understand the very real story GSV is trying to tell.
Gold Standard and Jon Awde have pulled a real coup and the market doesn't see it. I talked at length to company geos and I believe their new interpretation is correct. I think they have identified the package of rocks that is gold bearing and they have a lot more gold there than even they think. Dave Mathewson is their VP Exploration and I believe they have the best technical team in Nevada for a junior.
Gold Standard is an advertiser and as such I have to be biased. As always please do your own due diligence.Gold Standard Ventures
GSV-V$.60 (May 15, 2014)
GSV-NYSE 105.2 million shares
Gold Standard website