As the gold mining majors increasingly focus on Nevada deposits, they have taken notice of a small-cap explorer with prime properties.
For billions of years, exploding neutron stars have been mass-producing cascades of the proton-heavy atom that we humans called gold or, chemically, AU.
Stardust-blasted meteoroids regularly transport "the sweat of the sun" across light years. Speeding space rocks vaporize in our atmosphere, showering gold upon our planet, where, over eons, the precious rain is buried and then uplifted by tectonic movements.
It has been calculated that all of the Earth's encapsulated gold, if it had remained at the surface, would form a miles-deep crust. But, of course that is not how nature works. As mountain ranges rise and fall, fracturing, generating incredible pressures, AU atoms combine with themselves and other elements, percolating toward the surface following discontinuities.
Reservoirs of gold can be mined, either by hammering at solid veins, or by crushing tons of ore to extract glittering grams of concentrated value. Of course, there are vast quantities of gold scattered deep and wide beneath our major cities and suburbs and oceans, but access to the element is best achieved in the desert lands, for obvious reasons.
Enter: geologically roiled and sparsely populated Nevada, one of the most productive gold fields. Zooming in on Nevada, there is a stretch of thrust-faulted, erosion-revealed, gold and silver-laden land—five miles wide and forty miles long—called the Carlin Trend.
Mined with modern methods beginning a decade ago, the Carlin Trend has produced more than 70 million ounces of gold. That comes to US$85 billion at 2010 prices.
Major gold companies—including Newmont Goldcorp and Barrick Gold Corporation—are focusing substantial capital investment on exploring the wealth of deposits in the Carlin Trend. The majors are acquiring raw acreage and developing regional mining and milling infrastructure. Thousands of exploratory holes drilled in the region by large and small explorers are revealing a range of potentially profitable mineralization ratios—disciplined by the price volatility of the cyclical commodity markets for precious metals.
And that is the wild-catting atmosphere in which a junior firm called Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE) now finds itself to be more wooed then wooer.
Gold Standard Ventures has a large portfolio of gold mineralization resources in Nevada. Its flagship property is the Railroad-Pinion project covering tens of thousands of acres of land astride the Carlin Trend in Elko County. There, the Vancouver-based firm owns or has an option on 29,941 acres of subsurface mineral rights in the form of patented or unpatented mineral lode and 23,628 acres of subsurface mineral rights secured or controlled by a contractual interest in private surface and mineral property. Gold Standard Ventures has identified six deposits in its Carlin Trend project: Pinion Oxide, Dark Star, North Bullion, Bald Mountain, Jasperoid Wash and Dixie Creek.
The company has announced mineral resource estimates at Dark Star, North Bullion and Pinion Oxide and is poised to examine the other deposits.
Of note, the Railroad-Pinion project abuts the Emigrant mine, which investment bank Alliance Global Partners reports could make the project "an attractive acquisition candidate for Newmont Goldcorp in the near future."
In fact, Newmont Goldcorp already owns nearly 14% of GVS; Oceana Gold Corporation owns 15.6%; FCMI Parent Company controls 11.7%. Institutional ownership of GSV stock clocks in at 34.3%. Insiders and associates hold 8%. That leave only 16.8% available for retail investors.
In an interview with Streetwise Reports, Gold Standard Ventures' CEO John Awde said, "It is quite rare to to have so many corporates on a junior's shareholder registry before the firm generates revenue! That speaks to the quality of our assets."
Awde explained, "Gold Standard holds the second largest contiguous land package in the Carlin Trend. With the majors developing adjacent properties, the resulting infrastructure cheapens our projected costs. We've been drilling Dark Star for three years; it remains the focus of our $2 million drilling budget for 2019."
The company has completed its 2019 phase 1 drill program on the Dark Star target with 10,700 meters of drilling in 71 reverse-circulation holes and one core hole. The core hole cut 117.3 meters of 1.54 g/t gold, including 44.3 meters of 2.55 g/t gold. Ten percent of the drill holes intercepted high-grade mineralization (avg. ~2 g/t Au), the majority of drill holes have intercepted low-grade mineralization (avg. ~0.2 g/t Au).
Awde commented that while unseasonable snow and rain delayed the start of the next round of drilling, the auguring is now underway and results will be reported soon. Gold Standard also plans to announce the results of a maiden mineral resource estimate on its Jasperoid Wash property located near the Dark Star, when the data is available.
The company's Lewis project is located 30 miles west of Dark Star next to Newmont Goldcorp's Phoenix mine, which is undergoing expansion and environmental remediation. In March, Gold Standard initiated a four-hole program at Lewis. Awde said that the program is testing high-value targets in the Buena Vista-Meagher corridor and the Virgin deposit footwall. He anticipates completing the NI 43-101 mineral resource estimate for the Lewis project by the end of summer. Awde expects the Lewis project to hold 250,000 to 300,000 ounces of gold at a grade of 1 g/t Au and 2 million ounces of silver.
How does the market view Gold Standard Ventures' future?
Alliance Global Partners (AGP) calculates GSV's Net Asset Value (NAV) at ~US$453 million or $1.60 per share. That financial model assumes an average annual production of 154,000 ounces of gold at the Railroad-Pinion project for the first seven years. That calculation factors in the Lewis project resource and also the upcoming maiden mineral resource estimate for the North Bullion deposit. AGP's NAV calculation assumes the long-term price of gold and silver of $1,300/oz Au and $20/oz Ag, respectively. The bank is applying a discount rate of 12% given the expected production start date of 2021. Alliance Global Partners anticipates that Gold Standard will need to raise CA$15 million to fund operating expenses.
Brien Lundin's Gold Newsletter is bullish on GSV. Lundin particularly likes that GSV's drill results show grades improving at depth. "GSV's share price has been largely range-bound of late, but it continues to trade at levels the make it an attractive speculation on an improvement in the gold market. For those who like the yellow metal's prospects in the back half of the year, Gold Standard Ventures remains a buy," Lundin reports.