LYNN LAKE, Manitoba – A Manitoba gold and silver prospector is exploiting structural clues and geophysical evidence that will tip its hand on a high-grade mineral belt.
If fresh drill assays confirm the company’s predictive model, Carlisle Goldfields (TSX: T.CGJ, Stock Forum) likely will find that its Holy Cow What The Fluffy Is This target, an eight-channel anomaly just southwest of its prime MacLellan Mine site, is rich enough to command respect in the market.
Perhaps as much respect as other extreme-grade silver and gold prospects are achieving in a sideways metals equities market, among them $1 billion-strong Extorre Gold Mines (TSX: T.XG, Stock Forum) at 35-grams-gold per tonne Cerro Moro in Argentina. And yes, that sounds outrageous and optimistic to the point of lunacy when making the case for $40 million Carlisle (146 million shares issued with another 33 million warrants and 14 million options priced between 1o cents and 35 cents Canadian).
I trekked across Carlisle Goldfields’ 2,200 hectares of claims and leases at the MacLellan Mine site, an adjacent Dot Lake property and high-grade rock piles at Burnt Timber and elsewhere on this black-spruce and poplar-dotted landscape.
Carlisle Goldfields has more property on the northern end of the Lynn Lake greenstone belt in Manitoba, Canada, than anyone with the exception of First Nations bands. So much land, in fact, that four separate NI-43-101 reports are in the works. “That makes sense for us what with 20,000 hectares and maybe 25 km of the Johnson Shear Zone,” says Bruce Reid, a financier, former metals analyst for Research Capital and Toronto-based CEO of his reborn Carlisle Goldfields.
For those looking for glamour, look elsewhere. Carlisle’s office sits in the middle of forlorn Lynn Lake, a town of 800 with burnt-out storefronts, skin-bracing poverty, an abundance of fetal-alcohol and other syndromes and a largely aboriginal population. (Photo: Bruce Reid near MacLennan Mine site with stacks of legacy core in background – Thom Calandra photo)
Bullet points for Carlisle:
- Carlisle’s land package also includes 20 km of what is known as the Agissez shear. No single claims or rights holder has as much property sway in the region, with the exception, of course, of the local Marcel Colomb band of First Nations citizens. Mr. Reid negotiated a memorandum of understanding with the band.
- The current 43-101 completed in summer 2010 is headed toward an early 2012 revision. VP of Exploration Peter Karelse, a geologist who has worked on these lands for about six years, has an informal target of another 750,000 ounces of measured and indicated in an open pit at MacLellan. “We’re going deep,’ Says Mr. Karelse.
- Carlisle is halfway through about 95,000 meters of drilling for 2011. Two or three holes expected back from that HOLY COW WHAT THE … target run the same direction (northwest-southeast) as the shear from the MacLellan targets to the west. The 45-degree shear zone appears to have the exact same structural controls as targets that have yielded significant gold and silver grades at sizeable meters on other long stretches of Carlisle property.
- Mr. Karelse and assistant Evan Hastie, a University of Windsor structural geology graduate student (both pictured here – Thom Calandra photo), exhibited core from unpublished holes 47 and 48. I report here – with the warning that there are no guarantees from Carlisle managers or anyone else in the Lynn Lake galaxy -- that the core (with biotite alterations running just below surface to as deep as 50 meters, represents an aggressive and first-time stepout for the company. If these fresh holes in coming days show three grams per tonne gold with heady silver grades, a boomer of anew deposit might lay naked before the eyes of gold and silver-covetous investors. All of us will have to wait for the holes, sitting at a Saskatoon lab. (Photo below: Fresh core, some of it with streaks of 20-grams and greater gold per tonne, plus silver – Thom Calandra photo)
- Ballpark guesses at recovery rates for the gold around these lake-dotted lands of walleye and pike fishing aficionados come in at 94 percent or more. Gravity frees about 42 percent of the gold. “We think we have six or seven times the grades of Sangold,” Mr. Reid says about one comparable deposit in the region. On valuation, only one company’s stock appears to be less expensive than the shares of Carlisle Goldfields based on market worth per ounce of resource in the ground: Mega Precious Metals (TSX: V.MGP, Stock Forum).
- Aside from geology and land position, mid-grade to high-grade waste rock is owned 100 percent by Carlisle Goldfields and piled neatly within spitting distance of all-weather Route 391 at Burnt Timber and near the MacLellan Mine site, old A-frame and Carlisle core shacks.
- Mr. Reid, a friendly and well liked outdoorsman and hockey fanatic, owns 18 percent of Carlisle Goldfields. He spent years negotiating to resolve previous management’s discrepancies regarding flow-thru financings that were supposed to be spent on exploration. A final settlement at what Mr. Reid and his legal team say are favourable terms is expected from Canada Revenue Authority in coming weeks.
Lynn Lake many years ago was the toast of Canadian nickel, silver and gold mines: two major shears, at least 29 drilled-out deposits, a half-dozen or more underground mines and historical reserves and resources that ballpark at three grams gold with a 9-to-1-ounce silver-to-gold overprint. “The names of the mines and the companies tell the story, Noranda in ‘46, Sherritt-Gordon,” says Mr. Reid, who at age 55 has contributed at the front and back ends to the success of U.S. SilverCorp. and its Galena Mine and at least a half-dozen others. (Mr. Reid, our audience will remember, also was early and willing at Sandspring Resources in Guyana (TSX: V.SSP, Stock Forum) but no longer involved there.)
Mr. Reid has about $10 million or so in the company treasury and has taken steps to ensure that existing shareholders have a chance to benefit from the administrative mistakes of Carlisle Gold’s predecessor. Mr. Karelse tells me he will have three rigs (Black Hawk) drilling at the property until about a week or so before the Christmas holiday.
A preliminary economic assessment for the existing resource is within a month or less of seeing light of day. Mr. Reid says he believes the company’s proven and probable silver and gold probably (my addition) ensure open pit mines that would generate more than 100,000 ounces a year of gold, plus the silver. This is of course a very rough estimate and one that is not guaranteed.
The Carlisle Gold team of 10 professional geologists, engineers and financial types also has other sites suitable for underground drilling – thus those four separate 43-101 reports that are in the works. The folks I interviewed in Lynn Lake and in Toronto this week seem to agree that Carlisle Gold could be producing gold by 2014, perhaps a tad earlier.
We’ll see. “I can build a mill anywhere in North America and have it shipped here to the railroad station in 20 days or less,’’ Bruce Reid says. “We are fortunate to have what we think are the lowest electricity rates in the world here in northern Manitoba. And I can watch a hockey game on any flat-screen bar anywhere on this highway.”
I do not own the shares. I hope to buy the stock, which sells for 28 cents a share Canadian on the Toronto board, before Carlisle’s next assays are released. But I think you’d have to be a lunatic about cheap but proven gold prospectors to purchase before more results come out. Lunatic, that is, unless you have seen what I have seen. And no, I have nothing in my portfolio that is even 100 kilometers within striking distance of Manitoba.
NOTES:A wad of Colombia prospectors will be releasing fresh resource statements or drill assays in coming days and weeks. My beloved Bellhaven Copper & Gold (TSX: V.BHV, Stock Forum), which is my largest position by number of shares, on Tuesday published its 43-101 report. The gold-copper deposit at La Mina shows 1.6 million gold-equivalent ounces. La Mina sits in the same Middle Cauca belt that Sunward Resources (TSX: V.SWD, Stock Forum), Colombia Crest (TSX: V.CLB, Stock Forum), Continental Gold (TSX: T.CNL, Stock Forum) and others inhabit. BHV shares after its compliant report rose sharply Tuesday. I still own all of the shares I have owned, approximately 1.7 million shares.
NOTES: I will be speaking and showing and telling atCambridge House’s Toronto conferenceThursday 1 p.m. I will be in Toronto most of this week. … I will be speaking and eatingsuckling pig at Brien Lundin’s New Orleans Investment Conferencein late October. You can click on this link to get a deep discount on the entrance fee. … I am a partner of Torrey Hills Capital, which is in Del Mar, near San Diego. That investor outreach firm lists none of the companies in this report as clients.
Stockhouse members – the service is free – can see my entire portfolio online. It is under the portfolio function and my user name, which is TCALANDRA. There is nothing in my portfolio suitable for risk-averse investors. I am not a financial adviser. Owning any of these securities could result in your participation in the crying game. Please see my comments on Stockhouse about the benefits of holding securities and physical metals for long spans of time.
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