Going for the Gold in the Carlin
A brand new company has been started to explore one of the almost virgin pieces of property in the Carlin Trend. The company hasn’t been trading long enough to really develop a fair value but it has great potential.
The company is named Gold Standard Ventures. (GV-V) It has a tiny 35 million shares outstanding and is quoted at $.75 a share but the website is so new the paint is still wet. They control one of the key undeveloped projects in the Carlin Trend, the Railroad project, unexplored for over 30 years as well as the Crescent Valley North property.
I went and spent a day on the project a month back with famed geologist Dave Mathewson, VP of Exploration for Gold Standard Ventures. Dave knows the area well; he found the 6 million ounce Rain gold district located just four miles north of Railroad. Dave has a couple of theories about gold in the Carlin Trend and now he gets to prove them. He believes that gravity is a good indicator for picking drill targets and he believes the highest values are in the lower plate rocks, called the Devil’s Gate Limestone.
The gravity high at Railroad is some three times bigger than that of the Rain mine. He proved the value of gravity when he found Rain and now he gets to combine that with some far deeper rocks than the 500-foot holes that have already been poked into Railroad.
There is an existing 150,000-ounce gold non-43-101 resource in the center of Railroad called the POD deposit consisting of surface oxide gold in the 3.5 g/t to 4.0-g/t range. Mathewson believes the POD portion of the Railroad is just a symptom of a far larger deposit deeper down. Dave has spent the last 9 months putting the data together and planning a major drill program. The company has $4.3 million cash on hand and if all the options and warrants are exercised, that will bring in an additional $8.2 million.
It’s been said that the race is not always to the swiftest or the battle to the brave. But that is the way to bet. Dave Mathewson is one of the top experts in the Carlin Trend geology and he has wanted to explore the Railroad project for a long time. If you were going to bet on a really big project, it would be with Railroad and Dave Mathewson.
Drilling in the Carlin is both expensive and technically difficult. The Trend has broken a lot of hearts and created a lot of wealth. Tim Wood has done some brilliant work about how the Gold ETFs have scavenged the value out of gold shares and I think he’s right. What the industry really needs is a giant new find. Gold shares are cheaper at $1200 gold than they were at $252 gold. That’s going to last until it doesn’t.
We were early adopters of Gold Standard Ventures and participated in the last placement. We are biased. The company is drilling today and results could come out as early as mid-August. GV is a crapshoot but the potential payoff is a hell of a lot higher than the odds.
Gold Standard Ventures