Monte Cristo ResultsAs we wait on the results suggest that people re-read tooclassy's earlier post.
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?p=0&m=23131325&l=0&r=0&s=GSM&t=LIST
My review of the Gold Summit drilling program and a conversation with Tony Taylor
Okay you guys...I take exception to the statement that no news is bad news, or any suggestion that if the stock price is drifting the wrong direction it is because nothing but bad news is coming from the current drilling program at Monte Cristo. This is the exploration business, it is a long process and it takes time. Furthermore, this investment climate for resource sector stocks has been very negative recently, and negative generally ever since the subprime crisis-driven stock market meltdown of August, 2007. Further negative since the meltdown in the price of Novagold. Negative - meaning "lower stock prices". Only a small percentage of resource stocks have been moving up in this environment. That said, GSM is not sitting on its hands and doing nothing.
Ongoing drilling at Monte Cristo
GSM is finishing the last of its drilling work, the final drillhole. When it gets the assay data from the last two holes it will analyze all drill results and put out news on what it all means. No, I don't know how successful is the current program. GSM president Tony Taylor was completely tight-lipped about it, and I am sure the market will not know anything until there is a news release.
New 43-101 compliant resource estimate to follow the drill program
Taylor said that a 43-101 compliant updated resource estimate will likely be produced after a near term follow-up drill program (if there is one) is completed, or after both programs if possible. I reviewed a 3D representation of the area of mineralized anomolies below the Maclean pit where a 43-101 resource calculation was previously produced and where more drilling is being done now. Clearly there are further mineralized areas extremely prospective for gold intercepts. Furthermore, the areas between previously drilled intercepts of ore grade material are even more likely to include ore grade intercepts as well, as probable as one can get in this business.
Here, the so-called infill drilling will improve the confidence level in past and current drill results and it's obvious to me that the originally reported and very conservative 43-101 compliant resource estimate of about 70,000 ounces of gold in the inferred category will be substantially upgraded in number of ounces and where possible to a higher confidence category. This is a given. GSM will find more gold where it has already found gold, and secondarily in other untested areas in close proximity which are known to have mineralization with a similar geological signature. More gold intercepts, plus higher confidence level drilling (holes spaced closer together than before), plus perhaps a lower cutoff grade, could easily lift the reported resource to perhaps 125,000 ounces or more should such a 43-101 report be announced. An expanded near-term followup drilling program could lift this to 200,000 or even 250,000 ounces depending on the number of holes done. These are my "guesstimates", and any future surprise "bonanza" grade drill holes would of course build up all these gold ounce numbers further and faster. With nice metal grades and a rising resource base, one can start to envision a small, profitable mine in the making here. All from merely one area among many within the Monte Cristo area. If GSM were to focus only on the area below the Maclean pit it would reduce the risks of exploration in the short term and provide momentum for the company which could later be capitalized on for exploring the other highly prospective targets of Monte Cristo. Meanwhile, the substantially higher numbers in an updated resource calculation should be positive for the stock price.
Silver ounces to get some respect at Monte Cristo
We will get some millions of ounces of silver out of any analysis of current and future drilling. Historical data for silver underneath and near the Maclean pit was poor or non-existent, so there is some past handicap here in determining what we have had, but this will become clearer in the near future. There have been some very high silver grades and intercepts over mineable widths in prior drilling work by the company.The silver is important because it can increase the rock value by up to 50% of the gold value. This can considerably improve the economics of a future mine.
Putting the current drill program in perspective
I reviewed the area of mineralized anomolies below the Maclean pit where a 43-101 resource calculation was previously produced. Clearly there are further mineralized areas extremely prospective for gold intercepts.
The current program will be expanded and followed up more aggressively as decided by the JV partners based on the drilling results obtained. The drilling work done here is only in one area among many (a dozen or two) within the Monte Cristo land area. Drilling results from below the Maclean pit will by no means tell us how successful will be the drill programs in each of the other most prospective areas of the Monte Cristo land package. The other areas have a similar or essentially identical geological signature. Based on that it is my opinion that if and when there is substantial (extensive) drilling of the other areas and if those areas obtain results similar to those obtained below the Maclean pit, it is likely to ramp up the gold and silver numbers into the millions of ounces eventually. Of course, whether the JV partners will drill the other areas depends on how successful are the earlier drilling programs such as the current one, and financial constraints. GSM needs substantial results to build up the necessary momentum to justify the drilling of the other areas. I am patiently waiting for GSM to announce its drilling results in a few weeks or so, and for clarification about the scope of the drill program to follow. I am also looking forward to the resource calculation updates.
tooclassy