Prize Adds Another Prize
Seven years ago I went to see a junior mining company with an option on a gold project in Peru. The numbers were incredible and I titled the piece, If it looks too good to be true... it probably is… because it really did look too good to be true. Rio Alto was picking up a giant project for peanuts and planning on going right into gold production.
Management knew what they were doing and the shares of Rio Alto went from a tiny $.385 in early February of 2010 to about $4 a share when they were taken over by Tahoe Resources exactly five years later in early February of 2015. Keep in mind gold topped in late 2011 and was in a dreadful bear market when Tahoe ate Rio Alto. The management of Rio Alto deserves all the credit in the world for giving their shareholders a 900% return in the midst of a dreadful bear market in gold.
So when Feisal Somji contacted me a few months ago and began to talk about his latest company, I paid attention. He was the founding president and CEO of Rio Alto when I went to see them in 2010 and he knows how to advance a project to production and how to cash out.
The keystone pair of projects for Prize is located in Canada about 10 km from the town of Nelson in BC. The properties are near power and rail and experienced labor is close.
The entire project is called the Kena/Daylight property but is made up of a number of smaller blocks. Within the Kena gold project there is a large but low-grade gold resource of about 1.8 million ounces. The Daylight piece of the property is home to four formerly producing high-grade gold deposits. Modern exploration techniques have never been applied to the Daylight mine. In the 43-101 the QP Vivian Park wrote, “geological indication suggests the potential for more than 3 million ounces of gold in the four target areas.”
On June 21st Prize announced an option on what is called the Toughnut Showing which is next to the Daylight property. Toughnut has shown past drill results as high as 90 g/t gold over 1.53 meters in a hole drilled in 1988 by US Borax. Prize is paying $150,000 in cash, 250,000 shares and taking on a $750,000 CDN work commitment as well as a 2% NSR on production.
It doesn’t matter how great a racehorse is, if you don’t have an experienced jockey aboard, you will lose the race. Prize has the management experience and depth that so many other junior companies lack.
The business plan of the company is to isolate as much high grade material as possible and put it into production. They are aiming at a production cost in the $800/oz range and thinking about 50,000 ounces of gold yearly. Only time will tell how their projections will work out.
For now the company is well cashed up with $6 million in the bank. A serious exploration program will begin shortly.
Prize is an advertiser and I have owned shares for years and participated in a recent PP. I am biased so do your own due diligence.