300H Under the Mountaintop AnomalySo this is an interesting scenario where the DS5 rises to surface at Eureka to the east/northeast while the 300H Zone continues to the west/northwest under the large mountaintop anomaly.
Looking at historic Eureka drilling I can see that the most northeastern holes were drilled into a
sort of magnetic intensity gap which reverses again as you proceed even further northeast. As a result, I am postulating that Eureka continues to meet up with DS5 close to surface for 200 - 300 meters further northeast than has been drilled in the past, up to 117+00NE or so. DS5 is already at 116+50NE, so it's not a stretch.
After plugging in the latest results I am at 14.48 million oz. Au (not AuEq) of open pit resource. I am still assuming about 2.5 million additional oz. Au being converted from Inferred to M&I open pit resource for a total of about 17 million oz. I can see quite a bit more near surface discovery next year since both Perfect Storm and Eureka have now established track records of shallow gold. The Eureka gold grade of .68 this year almost exactly matches
my average grade calculation for all of Goldstorm, indicating that the DS5 might continue to show very good consistency all the way over to Eureka. I continue to expect that Perfect Storm will eventually come in at a higher grade than Iron Cap given the trend of higher grades further north and east compared to KSM. DS5 toward Eureka might make for some good early or late season drilling out on the glacier to better utilize resources, knowing that the Pretium road is available.
Clearly 17 million oz. of open pit Au leaves the Three Amigos undervalued. The question is what will trigger a move in share prices to reflect that value?
A business combination that sets value is an obvious possibility, but there's no indication of when that might happen.
On the macro side, I continue to believe the story is good for gold. I don't feel the Fed has any room to address inflation. The fact that the
markets were willing to accept a "taper" from $120 Billion to $110 Billion per month in asset purchases by the Fed reflects the weakness of that
change - a "sham taper." I think inflation will not be transitory, but if the Fed does anything to stop it, the resulting market tantrum will
send them running for cover and lower rates. There could be some price volatility in gold, but maybe that's the best opportunity to buy in.
I am seeing shortages in goods locally down here now, not just toilet paper/paper towels.
I also feel China is well ahead of the game when it comes to managing the competition between their fiat currency and both crytocurrencies
and their big tech sectors. By moving to eliminate that competition now, they will be free to move in a number of directions to establish
a controlled, regulated, stable, crypto or "great reset" type of solution while the "free world" countries have to fight it out with their banks,
tech billionaires, and politicians for literally years. The resulting confusion could lead to a return to historic stores of value and flights to
safety, also likely good for gold. If China can manage its inflation issues better that the rest of the world on average, its currency could
grow in terms of reserve status. If they decide a higher gold price is an advantage they can move to constrain the supply of physical gold and push
up the price. as part of a strategy to dominate over the U. S. dollar. The downside to China will be that this hurts their world trading markets. However, looking long term they may be willing to accept that pain.
Most of my trading position still reflects these scenarios and I remain somewhat balanced between cash (lower dollar deflation scenario) and gold (higher inflation scenario without the Fed being able to raise rates). There are still times I nibble at the Amigo stocks if I think the charts show any support points.
Do your own DD. GLTA. Doug