RVS recommended BUY on David Prscod
Being Friday, it's time to look back on the week, and com-
ments made by two high profile commentators are significant
considering who they are and the stories they follow.
The first is the Coffin Brothers of the independent Hard
Rock Analyst fame and some of their comments on our cur-
rent wishy-washy market that looks like it has found a bottom
(at least for the better stories with money in the bank), but
they are the major voices behind Riverstone Resources, so com-
ments they wrote on Wednesday are of significance.
The chart on Riverstone shows how it, like many other
explorers, has been zapped, while drilling results remain
quite decent to good but the politics in Burkino Faso might
be fading.
The Coffin’s write: “Riverstone released two holes from
the current diamond drilling campaign on the Goulagou II
zone at its Karma project in Burkina Faso. These deeper
holes generated some quite strong intercepts, notably 38
metres of 5.6 g/t gold including 10 m of 8.5 g/t gold in hole
GGDD-11 and 36 metres of 4.6 g/t gold including 20 m of 7.25
g/t gold in hole GGDD-12. Both of these holes had several
broad intersections in the 2 gram range in addition to the
intercepts noted above.
Of particular interest to us is that these holes suggest a
significant grade increase as the zones transition from near
surface oxidized material to fresh “sulphide” material at
depth. This is similar to the pattern seen at Orezone’s (ORE—
T; $4.05) Bomboré project that have done so much to en-
hance the grade and the resource size there. We can’t be cer-
tain of the mechanisms in play here at this point and it will
take more holes to confirm it as a pattern, but the same pat-
tern is apparent at the Kao resource area.
There are other heavily oxidised terrains such as Western
Australia where a pattern of gold is leached out near surface
and enriched at depth. Combining that with the results of
more extensive depth testing at Bomboré we see important
implications for the ultimate size and grade of the resources
at Karma. If the pattern holds, the large scale core drilling
program underway could generate a major expansion and
quality improvement for the Karma resource.
Although it’s a terrible day overall for the markets and
Burkina Faso continues to have a political discount there are
clearly traders taking note and bidding the stock higher. We
think they have the right idea.