RE: News in 5-9 days!!!I'm betting on news next Tuesday. I wonder if the infill drilling will have a big impact on the SP? I sure hope it will wake some people up and make them realize this is RIDICULOUSLY cheap right now!!! <- {insert 75 more exclamation marks here...}
I can't believe that we aren't over $3 yet, it just blows my mind honestly. With major players like Frasier Mackenzie already calculating 4.5 million ounces at the current stages and Sprott//Cormark saying we could very well have 10+ million ounces down the line what are people thinking?
This is completely insane to me, am I taking crazy pills? If I weren't already maxed to the hilt with GCU and TRR I'd be buying as many as I could right now. Maybe I should sell my vehicle and buy more with the proceeds from that? lol :O I'm sure I'll be able to buy a Ferrari in 12 months enough if I'm willing to sacrifice and take the bus for a while ;)
I'm going to re-post the article shared by WesternRookie and will add obnoxious highlighting for all the kids that take the short bus to understand. This way everyone can finally wrap their heads around this and stop missing out on their winning lottery ticket. I could highlight even more but I want people to actually READ it this time and not be overwhelmed by the lengthy article and give up...as they obviously did the last time it was posted:
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BEAT THE MARKET
INVESTMENT NEWSLETTER
Bringing you undervalued, high growth opportunities...
Gold Canyon Resources
Working on a 10M oz Monster in Red Lake
Gold Canyon Resources GCU-V
SP Jan. 25, 2011… $2.15
Shares Out… 89M
Fully Diluted… 117M
Market Cap… $187 million
Insiders and Mgmt own 39%
Mgmt... 6%
Sprott... 20%
Pinetree... 13%
Initial Coverage Aug ’10 @
.41 +$1.69 / 412%
GCU is an early stage gold development story at with 10M oz potential at Springpole, Red Lake
GoldCanyon Resources is a company that has gone on an incredible run sinceAugust after announcing initial results of drilling at
The Springpole Lake Project inthe Red Lake District, Western Ontario. GCU has continued to deliverimpressive results throughout the fall season in their initial attemptsto define a very large gold zone called
The Portage Zone at TheSpringpole Project. The market has rewarded Gold Canyon shareholderswith a 1000% share price increase from trading in the
.20 cent range in early August to the $2 range in December after a drill program that exceeded everyone’s expectations.
GoldCanyon is quickly going from explorer of a prospective 1.5M ozhistorical deposit, to an up & coming development story in Red Lakedefining a potential 10M ounce gold deposit that has both open pit andunderground mine potential at depth.
Gold Canyon’s nameappropriately describes the subterranean view of the Portage Zone as itis a greater than 1km sheared zone of intrusive alkaline porphyry rocksthat dip close to near vertical between 70 and 80 degrees and as of yethas untested depth potential below the 400 meter level due to drill riglimitations. Based on the geology of the deposit and the continuity ofthe mineralization, this deposit is expected to run at least 500 to 600meters deep with the potential to have a typical depth of other depositsin the area which could be in excess of 1,000 meters.
Springpolewas the focus of high grade mineralization typical of Red Lake and pastoperators outlining a modest high grade historical resource at the northend of the project and the very large Portage Zone to the south. TheMain Zone was the focus of drilling last year where GCU outlined
45,000 high grade oz’s M & I and another 197,000 ounces inferred a grade in excess of 16g/t au w
hichwas a nice base high grade resource starter pit and work from there.
GCU is confident that they can confirm 400,000 ounces of gold in theMain, SPROG and EE zones, in addition to defining the massive PortageZone that extends underneath Springpole Lake to the southeast from theMain Zone. The majority of the historical resource was in the lowergrade Portage Zone at just over 1 g/t so previous operators never gavethe Portage Zone more than a passing glance.
Drilling at Portage in 2010 outlined some key findings…
Grades are consistently higher than historical averages at 1.36 g/t gold.
GCUusing HQ sized holes which gives a more accurate sample reading withmore assay material and is confident testing continuity to surface willyield consistently higher grades than historical averages.
The mineralization is rich with silver credits… so far averaging 5.95 g/t silver.
Drillinghas confirmed that all the zones are related. The alkaline porphyryrocks being the intrusion with the high grade core area being theepithermal blowout event.
Considering the upper Portage in the northarea pinches near surface it lends credence that this area came underextreme pressure with the Main Zone being the blowout event
Recentholes indicate that Portage opens up underneath the main zone from 53meter width to 250 meter and most likely dips underneath the Main Zonesuggesting the zone may be open to the north as well, certainly atdepth.
What makes Gold Canyon’s Springpole Project even moreenticing, aside from the potential of Portage hosting a 10 million ouncedeposit, is that Gold Canyon has mapped the rock structure containingthe Portage Zone another 5km of strike and are extending the zone afurther 500 meters this winter along this highly prospective rockstructure. The porphyry structure was thought to veer off underneaththe main body of the lake but re-interpretation is putting Portage moreat SE heading. In addition to such a long continuous, highly prospectiverock structure, these rocks have been map on other parts of theproperty hitting extensive intervals of low grade gold between 0.2 g/tau and 0.3 g/t au confirming the theory that this is not an isolatedgeological event giving Gold Canyon’s Springpole a very good chance ofhosting another very large ‘Portage-like’ gold bearing structure in thearea.
Springpole: A Unique Canadian Shield Deposit
Springpole is a unique Canadian deposit in the sense its geology is much more similar to a deposit like Anglo Ashanti’s 30M+ Cripple Creek in Colorado or Barrick’s 28 million ounce Porgera in Indonesia being an
alkalic type precious metals deposit with mineralization associated with
hydrothermal and epithermal activity. Most Canadian Shield deposits are typical
Canadian Archean Greenstone deposit types where mineralization is hosted in
quartz-carbonate veins, especially typical of gold deposits found in Red Lake.
These deposits are typically very high grade and run deep.
ThePortage Zone mineralization is hosted in a sheared zone of high levelpotassic stock in an intrusion of alkaline porphyry rocks. Th
is putsGold Canyon’s Springpole Project under unique classification for aneastern Canadian gold deposit whose mineralization is typical of some ofthe largest gold systems in the world.
Withmineralization that is very consistent and geology that is similar tothat of the biggest systems in the world, having drilled the formationover 1km strike and to a depth of close to 400 meters; Gold Canyon maybe sitting on a world class deposit at Springpole Lake that could rival arecent Canadian discovery like Osisko’s Malarctic. When comparing aninvestment type story, GCU is on target to be the next big mine inOntario and could follow a similar investment type path as an emergingdevelopment story similar to Osisko. Once they have added the ounces atSpringpole this spring, the investment community will see this as alegitimate contender to being the next big gold mine in Canada. Th
ereare not very many stories that have a chance at defining 10M ounces andmore and GCU is one of those stories, although it is still in the earlyinnings of this ball game.
Multi-million Ounce World Class Potential
Recentdrilling at Springpole’s Portage zone has so far exceeded expectationsand is pointing to a world class multi-million ounce deposit in Red Lakewith mineralization averaging widths of 90 to 150 meters and certainparts of the zone opening up to as wide as 250 meters at depth at thenorth part of the zone. So far drilling has suggested a depth of morethan 370 meters and the gold zone being traced along a strike of up to950 meters.
GCU has suggest a 3 –5 million ounce gold target within the current defined strike to a depth of 300 meters which is more double the depth of the 1.5M oz historical resource.
Combinedwith an increased grade from around 1 g/t to 1.36, additional silvercredits and an extension of the strike another 250 meters, it is easy tosee where GCU is going to attain such a large initial resource for thePortage Zone. In addition to Portage, GCU estimates 400,000 – 500,000ounces with inclusion of all the work at the Eastern Extension and CampZones into the resource. EE drilling hit decent shallow low gradeintercepts of
54 meters @ 0.64 in a hole that had anaggregate of 63.4 gram-meters and hit some decent intervals in the campzone which is a transition zone from the Main to the Portage of
21.5 meters at 1.31 g/t and 41 meters at 1.08 g/t au.
Unlimited depth potential
Recentlydrilling has confirmed the Portage Zone to a depth of 370 meters at thesouthern extent and to 300 meters at the north end which more thandoubles the open pit depth potential.With the depth being testedin excess of 370 meters and it is safe to assume that Portage Zoneextends to depth to at least 400 meters, one can infer the Portage Zone4M to 5.5M ounce resource. In my conversations with Quinton, thedemonstrated continuity of the mineralization and geology of the areainfer that the Portage Zone runs to depths in excess of 500 to 600meters which he estimates would be the maximum open pit depth for aproject like Springpole. Quinton believes that the depth of the Portagezone porphyry structure could extend well in excess of 1,000 meters.
GCUwill bring in a rig this summer that is capable of testing the depthbeyond 400 meters. Another 200 – 300 meters of depth will double theproject from the anticipated spring resource calculation.
Virtually Untested Strike
The strike of the zone has also been increased with a greater degree of confidence by more than 30% with
some of the best intersections to date coming right at the end of the zone at 950 meters.This winter GCU is testing the strike of the Portage Zone to thesoutheast another 500 meters where they are confident it extends with agood degree of certainty. Historical estimates had put Portage more tothe southwest instead of where it is currently projected to lie a bitmore to the southeast, because of this, historical testing of the strikeof Portage intersected extensive intervals of
0.6 to 0.7 g/t au whichis typical of fringe Portage Zone mineralization.
Gold Canyon believesthat a couple well placed holes should hit the Portage Zone with thesame type of continuity that has been defined to the north.
The furthest hole south hit
225 meters at 1.48 g/t au,which is one of the project’s best right at the south end of the defined strike including
a 47 meter zone averaging 3.47 g/t au.
This bodes very well for continued expansion of the Portage Zone alongstrike this winter with mineralization giving no sign of tailing off.The high grade zone continuing to the end indicates the zone will extendfurther south for a material distance. The grades in this type oforebody will gradually deplete as opposed to abruptly ending.
Withthe style of mineralization very continuous and likely to give signsthat the zone is weakening well in advance with depleting grades, thePortage Zone can conceptually be looked at as being 1,500 meters instrike and persisting to depths of at least 400 meters and beyond.Justby looking at tonnage, it is easy to see how a 1.5M ounce 20Mt – 30Mt project balloons into a massive 8 – 10M ounce 100Mt – 200Mt project at Springpole Lake. Extendthe project another 500 meters along strike with comparable grades andwidths and the size of GCU’s Portage Zone becomes one of the biggestunmined gold deposits in Ontario.
Springpole Project: A Bulk Tonnage Open Pit Mine
Springpole Lake is showing potential for both a low cost bulk open pit mine and underground mine potential.
Ifthere ever was a guaranteed deposit that will one day become a minebased on geological merits, Springpole is it. It has been thought tohave world class potential for decades but because of the atypical styleof mineralization when compared to a typical Archean Greenstonedeposit, especially those in nearby Red Lake, it was often ignored formore pervasive high grade deposits in the area. If this deposit hadbeen in Quebec along the
Golden Highway, it would have beendeveloped years ago.
Springpole was always a project that had merit atmuch lower prices in gold, but since gold prices have risendramatically over the last decade, a project like Springpole becomesvery lucrative with the consistent grade and the shear scale of aproject.
Current drilling has revealed a much higher grade thanhistorical at the current 1.36 g/t au vs. historical 1 g/t estimate.(Some historical estimates actually estimated an even lower grade below 1gram). The higher grade assays is attributed to the fact thatSpringpole has never been tested with HQ sized drill holes which allowsfor a much larger sample base and grades can be estimated with much moreconfidence.
GCU has tested for silver and assays an average of 5.95g/t which provides another 0.10-0.15 g/t credit to the grade of theproject and brings Springpole an inferred average grade of around 1.5g/t gold eq from current drilling program.
In addition to increasedgrade and silver credits, Springpole’s shear size gives it economies ofscale with an eventual +200,000 oz per year producer possible as afuture bulk tonnage mine operation with both open pit and undergroundpotential. Even though Portage sits underneath a lake and might beconsidered more an underground operation like Agnico-Eagle’s Goldex Minein Quebec, the lake is very shallow at no more than 27 meters depth andnarrows at 2 critical points and is not much more than 10 meters deepin these sections.
The part of the lake the Portage sits under caneasily be dammed and drained into the main body of Springpole Lakefurther south.
Gold Canyon’s Portage Zone already represents a very large open pit project with the current dimensions of a 950 meter strike and a depth of 300 meters.The total dimension of the project to date is 1350 meters with anotherpotential 500 meters making a massive open pit that could easily include500 – 600 meter depth with a strike of 1850 meters. If the projectcontinues along strike beyond that then Springpole could end up a megaopen pit project like Newmont’s Twin Creeks in Nevada which is a seriesof massive open pits that follows a +5km mineralized strike. TwinCreeks is currently the largest open pit in Nevada.
The shear sizeand grade of the project supports building a mill and on site processinginstead of shipping ore to Red Lake which will decrease costs atSpringpole and every meter of strike and depth added to the depositfurther supports this theory with economies of scale and a long minelife. What is also very good is GCU renegotiated the 5% NSR and had itreduced to 3% which can be further reduced to 1%. With the way themineralization is situated, any open pit would have a very low stripratio. Gold Canyon is just in the initial stage of metallurgicaltesting, but the core is often soft and broken and shows qualities ofore that will be very amenable to conventional milling processes.
Theupcoming prefeasibility study should be very positive.
Initial results at Springpole are very appealing and point to great economics supporting a potential open pit mine with 
undergrounddevelopment to follow. Current drilling points to a 100,000,000Mt openpit project if conceptualized to a 400 meter deep open pit.
Thecurrent drill program’s average grade is 1.36 g/t au with additionalsilver credits averaging 5.95 g/t which indicate $65 to $70 per ton rockat current metal prices which is very nice rock when you have 100Mt’sof it. GCU has also been drilling HQ sized holes which gives plenty ofsamples for met work which is being completed this year for theprefeasibility study. The continuity of the mineralization is a bonusfor mill throughout and with the nature of the mineralization beingquite soft and broken, should making milling and recoveries verypositive. These are all key points that point to mining at Springpole.Even at much lower prices.
Currently Gold Canyon has these targetsfor Portage…
950m strike * 100-150m width * 300m depth = 3M – 5M oz deposit
1500m strike * 100-150m width * 300m depth = 5M – 6M oz deposit
1500 m strike * Infer depth to 400+ meters =8M – >10M oz deposit
GoldCanyon will add material ounces to the upcoming NI43-101 resourcecalculation of at least 3-5M oz’s. Portage looks more and more like a10M ounce open pit project if the strike is successfully extended.Springpole grows dramatically at that point if they extend depth and could be well in excess of 10M oz’s if the depth is successfullyextended a materially distance.
The Winter Drill Program Set to Add Material Value
ForGCU to confidently report a resource for Portage, they need to drillthe middle portions of the zone as well as test the zone to surface,which is a major goal for resource definition and a prefeasibility studyis soon to follow.
GCU will be drilling 10,000 meters this winter andhave 3 rigs on the property, 2 rigs are infill drilling the middleportion of Portage and testing the zone to surface while 1 rig testsPortage’s strike up another 500 meters this winter. This programgives GCU a two pronged strategy of growth by developing a very largealready identified gold zone as well as stepping out and materiallyexpanding the strike of this zone this winter.
When you have azone that is 400 meter deep, is 100 to 150 meters, every 50 - 100 metersof successful step holes along strike provides material potentialexpansion to future calculations to the resource base. In addition toanother 500 meters of strike, the long term viability of Portage will be viewed with its depth potential. IfPortage keeps continuing to impress at depth, there will be some bigbuyers who will be very interested and willing to invest in this projecthaving the potential for an extended mine life.
If Gold Canyondefines a gold zone at Portage that extends another 500 meters then thatwill put GCU’s Springpole Project a close rival to Osisko’s Malartic’sat 9M – 10M oz’s of gold. Obviously that is a big if and an initialresource calculation for Portage is needed to provide a base for futuredevelopment, but
considering the nature of the geology, abrupt changesare not expected and chances are that GCU will successfully step outthis winter assuring Springpole of a +5M ounce gold deposit. Springpoleis the first Canadian Gold company to come along in a long time to havereal 10M ounce discovery potential since Osisko!!! In a provendistrict like Red Lake, GCU just needs to keep defining this monstergold zone and someone will come knocking.
Demonstrated Substantial resource expansion
Thesummer and fall drilling programs at Springpole indicating asubstantial increase in the resource, much more than historicalestimates indicate. Drilling has confirmed historical results,increased the grade, and expanded Portage at depth (double) and alongstrike (40%) with some of the best holes to date.
Some Springpole Facts
Highly contiguous throughout the entire zone
Consistently higher grades than historical plus silver
Extended the strike to 950 meters
Confirmed depth to 370 vertical meters
Zone width averages 90 – 100 meters
North end of the zone opens up to a 250 meter width at 300 meter depth
Open pit style to potential scale of Newmont’s Twin Creeks in Nevada
Soft and broken nature of mineralization point to good recoveries for milling
Continuous mineralization points to very good throughput
Deposit style points to low strip ratio.
Underground potential similar to that of Agnico Eagle’s low cost Goldex mine in Quebec if mineralization extends to depth.
New Resource Calculation and Feasibility Study
Reasons to invest…
Significant resource increase… 3 to 5M ounces gold upcoming resource calculation
Potential for >10M oz gold resource with Red Lake type depth potential.
Over million shares of insider buys in November / another 500,000+ by Sheldon Inwantesh in December
Winter program will add material value defining and adding ounces
New resource calculation after winter drill program
Pending prefeasibility study
Potential excellent open pit / underground mine potential
Deposit shows excellent continuity
Increased gold grade at depth + silver credits
Geological environment suggests underground depth potential in excess of 500 meters
Geological environment suggests world class potential in the scale of Cripple Creek and Porgera. (30M ounce gold deposits)
Proven mining district in Red Lake / Safe jurisdiction
Project scope suggest dedicated processing facilities
Well financed with a strong shareholder base
Excellent management track with history of managing shareholder value.
Management has a long history with company
Insiders own 39%
Sprott 20%
Pinetree 13%
Management 6%
GoldCanyonRates High as an Early Stage Development Story
Whenlooking at current projects to compare GCU. GCU compares favorably toother early stage development stories including low grade names such asVolta, Trelawney, and even East Asia Minerals when it was still early.
Gold Canyon has a chance to rival Osisko’s Malartic in the long run.Gold Canyon has announced some of the best, most continuous resultsalong a 1km strike from surface to depth that rival some of the bestearly stage low grade development projects in the world and at initialglance looks like it could be a low cost producer from both open pit andunderground scenario’s for a years to come. Add the fact that it is inour own backyard in Red Lake, Ontario. This is one of the bestdevelopment projects to come along in awhile.
Springpole shows thebest potential for significant multi-million ounce expansion alongstrike and at depth because of the continuity of the mineralization andthe type of geology demonstrated. Springpole so far is remarkablycontiguous and will compare very favorably to these projects as a bulktonnage open pit mining operation and will easily end up being a +100Mtproject containing +5M ounces of gold.
The big prize is that GoldCanyon may be on a 10M oz deposit at depth which would mean Gold Canyonshareholders are sitting on what may be one of the most coveted prizesin the Canadian gold sector since Osisko and Rainy River. Bothcompanies did it on their own because the majors didn’t believe… WillGold Canyon be another Canadian in-house success story or will themajors wake up and realize the potential of these massive low gradeprojects?
Either way, Gold Canyon is set to develop one of the biggest gold projects in Canada.
GoldCanyon is rated as a strong buy at $2.15 and I am confident they willcontinue to deliver on their theories and demonstrate that Portage isindeed a World Class Deposit that will rival some of the best producingmines anywhere in Canada one day.
Christopher Skidmore
Reporter for Beat the Market Stock Picks
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