ATAC vs. Goldstrike: The Next Carlin King?Alpha Flight Blog: Goldstrike Resources June 22, 2012 Market Commentary Installment (ii) Private Placement & 2012 Yukon Exploration Program & ATAC / Strategic / Archer Cathro Comparison and Commentary
GSR.V June 21 2012 Market Commentary:
Someone operating under Anonymous / Jitney cover low-closed GSR today with a last minute, 500 share trade to knock the price down. The trade was for a modest $152.00, minus fees.
500 shares is the minimum order size that will be officially recognized to set price. No trades are anonymous unless specifically requested by the seller or buyer. This trade took place with 46 seconds left on the clock.
The goal is to scare investors and bring down offer prices across the board.
There’s no doubt this move was intentional.
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Recent Trades - Last 10 of 33
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Time ET
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Ex
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Price
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Change
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Volume
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Buyer
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Seller
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Markers
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15:59:18
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V
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0.305
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-0.075
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500
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1 Anonymous
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99 Jitney
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K
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15:46:41
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V
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0.34
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-0.04
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2,000
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79 CIBC
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1 Anonymous
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KW
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15:46:41
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V
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0.34
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-0.04
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1,500
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79 CIBC
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1 Anonymous
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K
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15:46:41
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V
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0.355
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-0.025
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2,500
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79 CIBC
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99 Jitney
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K
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15:40:11
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V
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0.335
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-0.045
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1,000
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1 Anonymous
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79 CIBC
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K
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15:40:11
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V
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0.33
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-0.05
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4,500
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7 TD Sec
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79 CIBC
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K
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15:40:11
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V
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0.325
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-0.055
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1,500
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1 Anonymous
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79 CIBC
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K
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15:40:11
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V
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0.315
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-0.065
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2,000
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99 Jitney
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79 CIBC
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K
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13:10:32
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V
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0.35
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-0.03
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1,000
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7 TD Sec
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1 Anonymous
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K
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12:40:01
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V
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0.33
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-0.05
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2,500
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124 Questrade
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99 Jitney
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K
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So, for about $150, the parties involved made a dent in the bid and dropped GSR’s market cap to $14M dollars. They will now sit on the sidelines and see if the bid will thin out, and if the market will come down to match it.
Those involved hope this strategy will work. If it does, they will move back in under Anonymous and Jitney cover and accumulate. It’s a smart and time-tested strategy that works exceptionally well in bear markets.
These types of actions have the potential to generate tens of thousands of dollars in the short term based on nothing more than volatility. But that’s not the motive here. So what then are the real reasons for the types of trades we’ve seen over the last few days, and in particular, today’s purposeful low close? We find the answers beneath the surface of the market, and surprisingly, based squarely on Goldstrike’s outstanding fundamentals.
GSR is now fully-financed and about to go drilling on its first-rate Plateau Project. Whomever is playing stock games has one thing in mind: Do whatever it takes to accumulate as much inexpensive stock as possible and hold through the news season with the goal of massive returns. Not bad for a $150 sacrifice trade!
June 20th 2012, GSR announced the closing of an oversubscribed private placement. In a time when most junior resource companies are desperately seeking any source of financing, GSR’s placement was opened and closed in a matter of days, and priced at a premiumto market. My calculations suggest GSR is now sitting on approximately $3M+ dollars in the treasury. The company is run on a shoestring budget, with no paid executives, directors or employees. In other words, nearly all of this money will be invested in Goldstrike’s current exploration and drill program, announced May 14, 2012.
How was GSR able finance so aggressively in such volatile markets? Simple: An outstanding track record of discovery. Goldstrike has 31 prospects with 5,989 claims covering approximately 125,200 hectares across the Yukon. Each claim is target-focused and based on a specific geological model:
- 17 Carlin-style targets, ATAC Model
- 9 Orogenic vein targets, Kinross & Kaminak Coffee Creek Model
- 3 Intrusive related targets, AM Gold & Victoria Gold Model
- 2 High sulphide epithermal vein breccia targets, Rockhaven Model
Out of 144 companies exploring for gold in the Yukon, and over $300 million dollars spent, Goldstrike made more new and original gold discoveries than all others combined. But what is truly special is Goldstrike’s totally new, Plateau Carlin-Style District.
Investment Case: Geological Prospectivity vs. Market Cap – ATAC Comparison
Compare ATAC’s Osiris first-pass Gold discovery highlights to Goldstrike’s Plateau Gold discovery first pass highlights:
- ATC.V Osiris core gold and arsenic anomaly covers an area of 150 * 500M with 60% of the soil samples grading in excess of 1 g/t gold.
- GSR.V Plateau core gold and arsenic anomaly covers an area 150 * 500M with 70% of soils grading in excess of 1 g/t gold.
- ATC.V soil samples grading up to 17.5 g/t gold.
- GSR.V soil samples grading up to 11.34 g/t gold (All soils ran gold, below 1 g/t not mentioned).
- ATC.V gold mineralization grading from1.92 to 12.15 g/t gold.
- GSR.V gold mineralization grading from 1.24 to 159.5 g/t gold (gold visible in rock – this is over 4 oz/t!)
ATAC’s drill hole OS-10-01 partially tested a 150* 500M gold-arsenic soil geochemical anomaly over the Osiris Horizon where 60% of the soil samples grade in excess of 1 g/t gold. This was the catalyst that started ATC.V move to over $9 a share.
Goldstrike’s first-pass results over their Carlin-style Plateau project are not only vastly superior to the initial showings over ATAC’s Osiris horizon, GSR’s results were put together in only few weeks by a small, elite exploration team as opposed to the months of resources deployed to generate the initial Osiris results—which begs the question: What kind of outstanding results will GSR’s exploration teams produce with a full budget, and drill programs starting now?
Compare market capitalization as of June 21, 2012:
ATAC Resources market capitalization: $239M Canadian
GoldStrike Resources market capitalization: $14M Canadian
ATAC is an excellent company, led by some of the brightest minds in the business. I own it in my portfolio and I believe they have a winner with Osiris. But ATC has also had its great run, and it is well off its highs. The story has been championed by a number of house analysts and it is now fully digested by the market. Although Goldstrike’s management and technical teams are legends in the industry—and particularly within the Yukon Gold exploration business—the company eschews spending any money on hype and promotion. You will not see them at any investment show, nor will you see any paid newsletter writers promoting the story. GSR’s management team prefers to drive all dollars into exploration first, and let the rocks do the talking.
Goldstrike’s team has a long and storied history of world-class mines found, which is well known by industry insiders, and so far the outstanding results speak for themselves. But if that isn’t sufficient, I have no problem letting the brain trust behind ATAC Resources, which is Archer Cathro & Associates / Strategic Metals Ltd. publicly advocate of behalf of Goldstrike’s new Plateau Carlin District. It’s clear that the team behind ATAC itself considers GSR to be the new Yukon discovery benchmark, as evidenced in the June 7, 2012 press release from New Dimension Resources regarding their 2012 exploration program at the Company's Lansing Project:
New Dimension Resources Ltd. is pleased to announce that field preparations are underway for its 2012 exploration program at the Company's Lansing Project, comprising 12 central Yukon properties under option from Strategic Metals Ltd. ("Strategic").
New Dimension's Lansing exploration program will focus on its highly prospective Lance and Liam properties. The program, led by Archer, Cathro & Associates (1981) Ltd. ("Archer, Cathro"), will be comprised of systematic soil geochemical sampling, prospecting, geological mapping, hand trenching and drill pad construction and is designed to prepare the properties for diamond drilling. This work is scheduled to begin in late June and will be completed from camps on both of the properties.
New Dimension's technical team believes the geological setting at Lance closely resembles the setting found at Goldstrike Resources' Plateau North and Plateau South properties, located 18 and 23 kilometres, respectively, southwest of the Lance Property. At the Plateau Properties, high grade gold in-soil and rock samples were discovered within recessive linears and Goldstrike has recently mobilized its crew to the properties to begin an extensive follow-up program that will include soil sampling, prospecting, geological mapping, hand trenching and diamond drilling.
While some of the most seasoned and prestigious groups in the Yukon are initiating attempts at copying Goldstrike’s geological model (and will not drill targets this year) GSR’s Plateau Project has already generated world-beating first pass results and aggressive exploration, which will include including drilling, has just begun.
Whether retail investors know it or not, all eyes in the Yukon Gold exploration industry will be focused on the next moves Goldstrike makes on the Plateau Carlin District Project. The first pass results are truly outstanding—enough so to have the brains behind ATAC give GSR their undivided attention and build a staking program based on Goldstrike’s results.
ATAC rocketed to over $9 dollars a share with good results drilling a Carlin-style target with first pass results nowhere near as good as those found at GSR’s Plateau Project.
GSR is about to drill its very first hole (of many) in the Plateau District.
For the average retail investor, ATAC is the benchmark for Yukon exploration success. But for the minds behind ATAC, Goldstrike has created the new geological paradigm to be followed.
With this in mind, it is obvious why GSR’s financing was open and shut in a matter of days, priced above market. Now you see why sophisticated players are using whatever tactic is necessary to nail down as much inexpensive GSR stock as possible—before drill results hit the market.
I challenge the investing public to do their own due diligence on GSR and the results found in the company’s extensive presentation. If you are truly serious about making money in the junior resource game, don’t take my word for it, or for that matter the opinions of the brains behind ATAC. Spend the few hours and a few hundred dollars to hire a consulting exploration geologist. Tell them to pore over GSR’s presentation and press releases. Get that expert opinion. It is what I do.
And as a result, this is hands-down my top Yukon Gold stock pick. It has been for a long time. I am confident it is a winner. The geology and management’s track record of mine finding is simply too outstanding. Irrespective of these markets, charts, stock games and manipulations, I am accumulating and I will not back down.
Fortune favors the bold,
James Hudson, AlphaFlight Portfolios Inc.