RE: RE: Bang or bust, vein 22 Some interesting comments lately. Personally, I feel that the current management group, from an operating and technical perspective at least, has the right intent; however their finances and the current state of the markets will make that intent incredibly difficult if not impossible.
The recent MD&A stated that the estimated cost to conduct the intended dewatering, rehabilitation and underground drilling was $28 million. As of March 31, the company had approximately $3 million cash in hand. Clearly, the company has some challenges ahead, and its aspirations are undoubtedly high given their finances and the markets. I really don't know how they can proceed with the program given these circumstances. As someone alluded to earlier, now that they've started issuing flow through shares, they'll inevitably have to continue this form of financing as it will be expected. As most know, flow through shares often put a lid on the sp. The most recent financing at 0.40 / flow through share essentially has a break even price of about 0.20 when tax considerations are taken into effect. So when the 4 month hold period is over, investors often unload limiting any advancement in the sp.
Personally, I feel that the intended development should have begun a couple of years ago when they had the finances and support of several funds and analysts. After a couple of years of drilling and several million dollars, the best that they could muster was a drill inferred resource which I found quite disappointing. I worked with Noramco Mining as a geologist in the late 80s on the Pickle Crow property so have held an interest in its progress over the years. We had also outlined a similar resource with, if memory serves me correctly, approximately 400 surface and underground holes. We dewatered the mine as well. PC Gold has this data. Why they never simply twinned our holes and conducted an infill drill program with higher drillhole density to raise the resource to a more feasible/bankable measured/indicated category is beyond me. Actually, I think I know, but that's another post. Instead they chased showings all over the property. There was the "deep vein" - 1000 m at depth that reported a bonanza grade or two, but fizzled with follow up holes. Then they went after the Cohen-MacArthur zone and beyond and were touting the low grade (< 0.5 g au/t) bulk tonnage potential, but later abandoned that. And now the No. 22 vein is the focus. Reminds me of throwing spaghetti against the wall and hoping something sticks.
As far as the 22 Vein goes, with the exception of a couple bonanza grades, it is a narrrow relatively low grade vein as can be seen in the table of most recent results below. Widths of the vein itself range from 0.5 - 1 m in width. There are some "vein zones", but you'll note that the grades for those zones are weighted meaning they essentially average the higher grade material over a greater width. Without seeing the individual sample assays, it's hard to know what these zones grade on their own. Also most grades are 0.3 - 3 g Au/t. Given the narrow widths and low overall grades for these intervals, I personally question any talk of this being a potential open pit. Dilution of wall rock and the waste to ore ratio would be too great; but that's my own personal opinion.
Havng said all that, I continue to hold a small position in PKL. There's no doubt that the property holds potential. Whether PC Gold can realize the potential of that property given the scope and cost of the work that needs to be accomplished to advance it to the next stage remains to be seen.
Have a great weekend.
Table 1: Shaft 3 Area Drilling Results
| Hole ID | Zone | From
(metres) | To
(metres) | Width
(metres) | Au
(g/t) | Visible
Gold |
| PC-11-244EXT | No. 22 Vein | 110.17 | 111.56 | 1.39 | 2.59 | Yes |
| | Including | 111.00 | 111.56 | 0.56 | 5.54 | |
| PC-12-259 | Zone, Vein | 41.74 | 42.50 | 0.76 | 1.62 | |
| | No. 22 Vein | 82.05 | 83.21 | 1.16 | 0.87 | |
| PC-12-260 | No. 22 Vein | 49.29 | 49.81 | 0.52 | 2.97 | Yes |
| PC-12-261 | No. 22 Vein | 61.00 | 61.50 | 0.50 | 3.27 | |
| PC-12-262 | Zone, Vein | 39.10 | 40.70 | 1.60 | 1.39 | |
| | hole abandoned after 98m due to deviation | |
| PC-12-263 | Zone, Vein | 177.30 | 179.64 | 2.34 | 2.79 | |
| | Including | 178.30 | 178.90 | 0.60 | 6.05 | |
| | Zone, Vein | 221.55 | 231.70 | 10.15 | 3.24 | |
| | Including | 221.55 | 227.10 | 5.55 | 4.56 | |
| | Including | 223.35 | 224.35 | 1.00 | 15.76 | |
| PC-12-264 | No. 22 Vein Zone | 95.00 | 99.00 | 4.00 | 1.20 | |
| | Including | 95.00 | 95.65 | 0.65 | 4.49 | |
| PC-12-264EXT | No Significant Intercepts | |
| PC-12-265 | No. 22 Vein Zone | 46.30 | 51.00 | 4.70 | 1.08 | |
| | Including | 50.30 | 51.00 | 0.70 | 4.19 | |
| PC-12-266 | Zone, Vein | 38.00 | 39.00 | 1.00 | 1.91 | |
| PC-12-266EXT | No. 22 Vein | 77.29 | 77.79 | 0.50 | 0.18 | |
| PC-12-267 | Zone, Vein | 78.45 | 80.30 | 1.85 | 0.83 | |
| | No. 22 Vein Zone | 98.90 | 109.93 | 11.03 | 0.30 | |
| | Including | 102.81 | 103.76 | 0.95 | 0.68 | |
| PC-12-268 | Zone, Veining | 60.00 | 76.96 | 16.96 | 1.47 | |
| | Including | 61.02 | 64.80 | 3.78 | 3.32 | |
| | Including | 63.00 | 63.80 | 0.80 | 9.61 | |
| | No. 22 Vein Zone | 84.90 | 97.80 | 12.90 | 0.49 | |
| | Including | 86.00 | 87.00 | 1.00 | 1.24 | Yes |
| PC-12-269 | Zone, Veining | 87.76 | 90.40 | 2.64 | 2.31 | |
| | Including | 88.76 | 89.74 | 0.98 | 3.91 | |
| | No. 22 Vein | 119.55 | 120.13 | 0.58 | 5.75 | Yes |