hume articalThe New Comstock?
Dr. Tony Taylor, CEO of Gold Summit
Corporation (GSM: TSX-V), boasts some
40 years of international mineral
exploration experience, some of it in
countries as far away as Australia and
South Africa. When asked what sets his
junior exploration firm apart from the
rest, he zones in on their wholly-owned
Monte Cristo property in Nevada, which
is part of larger series of holdings in that
same area. The company expects to have
drill results on at least one of their own
targets there before the end of the year.
“It is our belief, based on science and
geology” explains Taylor, “that we may
potentially have found the new
‘Comstock’. These are what the industry
calls ‘bonanza’ targets with very significant
upside potential. Specifically, we are
looking at orebodies which tend to be
oval-shaped — which is unusual — and
which have one long, common axis. Our
early find at Monte Cristo is 70,000
ounces currently, but the excitement is
really the geology. Our ‘shoots’ at Monte
Cristo — that’s mining terminology —
are very similar to the original Comstock
shoots from the 1800s. They suggest very
rich zones of concentrated mineralization.”
Taylor continues, “The belt we are
exploring is 11 to 12 kilometres long.
That’s huge! Miners from the last century
extracted gold from this area at a grade of
about 3.0 grams per tonne. So far, we
have extended this zone down to 1,000
feet. In our tests, we are averaging about
6.0 grams of gold per tonne. Our resource
at the McLean Lode — in the same
relative area as Monte Cristo — is
currently pegged at some 365,000 tonnes,
but we have a lot of work still to do. More
importantly, the McLean Lode is
comparable in size and shape to several
of the original Comstock Lodes. Thinking
three-dimensionally, these targets can be
envisioned as pearls lying in a string
along a large, steeply dipping plane. In
other words, multiple, individually viable
economic targets, not just one.”
Taylor summarizes, “Our geologists believe
there are many shoots here, all potentially
very high grade. In some preliminary tests
from the same belt we found values of over
100 grams of gold per tonne!” (The
company currently has 17 targets here
they are testing and expects to have
results before the end of the year.)
“Counter-Intuitive” Economics
Suggest Large Payday
Interestingly, today’s Monte Cristo find
sits below an older, open-pit gold
operation from the 1800s. That in itself is
very significant. “Part of the challenge for
investors,” explains Taylor, “is to better
understand the economics of our
business. For example, here at Monte
Cristo, we are looking at underground
drilling beneath an open pit works, which
was operated in the late 1980s and where
underground mining was done around
the 1920s. So what do the numbers tell
us? Are the costs to mine underground
going to come in higher or lower than the
old open-pit style mining?”
Taylor answers his own question; “Here’s
the key. It’s a myth that open pit or surface
deposits are cheaper to mine. If we are
correct about the potential at Monte
Cristo and the surrounding area, then
these exceptionally rich deposits,
extracted via the most modern technology,
will actually cost less than surface mining!
This is because we are effectively moving
less rock to get to the precious ore.”
JV in the Carolinas
“Ripe With Potential”
While the Nevada property is its flagship
project, Gold Summit is also excited about
its rapidly-developing program in the
Carolinas, which is a joint venture with
Astral Mining. The JV agreement,
announced on March 13, 2007, allows
Astral to acquire a 51% interest in any
property within the Saluda Area and the
Bear Creek Area in North Carolina after
expenditures of U.S. $300,000.
“Of course, when you think gold in the
U.S., the Carolinas are not the first spot
that comes to mind. But that just goes to
show how little most people know about
our sector. The Carolina Slate Belts were
the first place that gold was discovered in
the U.S. This was the site of the very first
U.S. gold rush, lasting from 1799 to 1949.
Over 400 gold occurrences and mines are in
this very belt, which extends about 1,000
kilometres. Plus, you have to remember
these properties were profitable back at a
time when gold was a fraction of the current
price. The bulk of the work was done by
hand, with slave labour. Having a
competent and well-funded player handling
this project effectively frees us up to put
our energy into Nevada,” Taylor adds.
“So far, we have found a brand-new highgrade
gold vein system in the Saluda area
in South Carolina, and we have only drilled
down to 70 feet,” continues Taylor. “The
results, just recently announced, showed
1.98 metres of 17.8 grams of gold per
tonne. Clearly more testing needs to be
done, but the data so far suggest a very
widespread gold mineralization. The
potential is considerable; especially if it
turns out we have a large ‘bulk tonnage’
resource here.”
The Bottom Line
Taylor sums up: “We are a small, but
aggressive explorer, very attractively priced
for investors within the current market
environment and with a significantly
advanced joint-venture already in place.
We have reason to believe that results
from our current drill targets in Nevada —
a wholly owned property for Gold Summit
— will be positive, and the resulting
economics from our work there will be very
pleasing indeed for our shareholders.” ■