Third Party CommentaryGold Summit (GSM.V) - partners Monte Cristo property with International Bethlehem
Comment by Objective Capital , Jan 31, 2008
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Monte Cristo LOI agreement
The agreement gives International Bethlehem Mining Corporation the right to earn up to a fifty percent interest in the Monte Cristo property by spending US$3 million in exploration over four years and issuing 600,000 common shares. IBMC has the right to acquire a 25 percent interest for US$1.5 million in exploration expenditure and issuing 400,000 shares. If exploration results are favourable, International Bethlehem has the right to accelerate payments and share issuances.
To date, Gold Summit has established an NI 43-101 inferred resource of 331,000 tonnes averaging 6.5 grams per tonne of gold and twenty grams per tonne of silver for around 80,000 ounces of contained gold and gold equivalent resources. This resource is in the vicinity of the McLean open pit. Gold Summit has identified several additional drill targets within the eleven-kilometre strike length of the structure.
Objective's view:
During last year, Gold Summit made slow progress at the Monte Cristo property, largely due to the inability to raise sufficient funds for their planned core drilling campaign. The company drilled 2,000 metres of reverse circulation drilling, concentrating on the Ohio Camp in the south of the property. Results showed that gold is widely dispersed in the volcanic host rocks, and not concentrated in veins.
This recent development provides a welcome financial boost and should enable Gold Summit to advance its exploration campaign, subject to receipt of a Plan of Operations permit, expected in early February. The programme is designed to expand the existing resource in the McLean lode and to test several of the better drill targets. Gold Summit will be the operator, with budgets and programmes subject to International Bethlehem’s review and approval.
Meanwhile, work is progressing on Gold Summit’s JV property, financed by Astral Mining. Core drilling is expected to start in mid-February on two gold targets, as reported in the press release dated 21 January.
Elsewhere, Gold Summit has been successful in raising funds for its newly optioned Burning Lake nickel-copper deposit in Ontario. This is a different direction from the high-grade underground targets the company has been chasing in Nevada and the Carolinas, and will offer a more balanced portfolio for investors.
Gold Summit remains confident in the potential of the Monte Cristo property, comparing it to the historic Comstock Lode. Clearly the delays and rising industry costs will have taken their toll but gold price forecasts remain bullish. Against that background we view the agreement with International Bethlehem as a reasonable approach to enable the company to continue exploration.