A Picture is Worth a 300 Mil Market Cap The Quantec Tesoro Geological Report shows a very detailed and complex drill plan developed by Quantec showing exactly where St. Elias should drill, how deep they should drill, and at what angles to drill in order that they have best possible chance of intercepting gold mineralization. While St. Elias might have sold investors on the story of the solid gold ovoid, Quantec didn't consider it a high priority drill target, in fact the picture of the giant pink anomaly with the red blob in the middle -- the image that captured everyone's imagination -- isn't even in the report.
So where did this image come from and why was it used to promote St. Elias? It appears that management was swept up by the picture's potential and made the intellectual leap that it must be gold without thinking (or caring) that interpretion of geological data was much more complex than merely looking at an enormous pink mass and deciding it must be gold. But that was the beauty of this image. It was so simple, so black and white. Anyone could look at it and immediately understand the potential. If that thing held just 1 g/t of gold, this would be the biggest gold strike in history. And that's how it got promoted. That's what everyone wanted to see: just what did this massive body contain? All they had to do was pull out one drill core to prove it was gold and boom, this would be the biggest gold strike in history. Cha-ching, 300 mil market cap please.
The problem was everyone was too excited by the potential of this massive anomaly to question why Quantec didn't even consider it a priority to stick a drill into it.
Fast forward to today and what you're left with is a drill program that failed to intercept economic gold mineralization in any of Quantec's high priorty drill targets. Does that mean Tesoro is a bust? I'm sure many people can argue no, that this is far from over. But at the end of the day what you're left with is a junior explorer with a decimated share price who just emptied their treasury and came up empty drilling the most prospective targets on their flagship property. Where do they go from here? The price of failure in junior resource space is a 20 to 1 consolidation. Prepare to be diluted.