While one small miner hurts its shareholders, another just delivered a windfall.
[While one small miner
hurts its shareholders, another just delivered a windfall.]
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Painful Dilution and Incredible Numbers
[Gerardo Del Real Photo] By [Gerardo Del Real]
Written Monday, October 17, 2016
Gold was relatively flat this week, settling in the $1255 range. After several weeks of declines it appears to be consolidating a bit.
I’d still be cautious and expect to see a couple of head fakes before another leg down.
The dollar continues higher and closed up approximately 1.4% of the week.
Like gold, silver was also relatively flat, registering a slight gain of approximately 0.3% for the week and settling in the $17.43-an-ounce range.
Copper fell approximately 2.4% this week and closed at approximately $2.11/lb. while platinum and palladium were down approximately 3.1% and 4.1% respectively.
Oil held above the $50 level as Brent crude settled in the $51.70 range.
The Week in Juniors
Gold Standard Ventures Corp. (TSX-V: GSV) (NYSE: GSV)
On October 13, 2016 Gold Standard Ventures reported assays from three holes at its North Dark Star gold deposit. The headline number was 97.3m of 3.16 g/t Au, including two higher-grade intervals of 10.1m of 4.02 g Au/t and 49.1m of 4.62 g Au/t; and, DS16-27 returned 39.0m of 0.72 g Au/t.
These new results continue to increase the size, width, continuity, and down-dip extent of the deposit.
The market didn’t respond much, as everyone seems to be in wait-and-see mode with the recent consolidation in the gold price and the juniors.
Jonathan Awde, CEO and Director of Gold Standard, commented:
"Drilling at North Dark Star continues to find unusually high grades in oxide material. I think we can now safely say that this deposit represents an important new discovery in the Carlin Trend and we have yet to establish its limits. Our technical team has noted that key geological characteristics of the North Dark Star occurrence are present in untested areas within the Dark Star Corridor. Drilling continues.”
Drilling has been tougher and slower than expected but the company keeps hitting. Definitely a program to keep an eye on.
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Tinka Resources (TSX-V: TK)(OTC: TKRFF)
On October 11, 2016 Tinka Resources followed up last week’s news release, which showed successful metallurgical testing, with a C$10 million private placement.
The placement will see up to 50,000,000 new common shares of the company at a price of C$0.20 per share for gross proceeds of up to C$10 million. Ouch!
Did I say Ouch out loud? I liked the metallurgical results from last week. Not so much the dilution this week.
The company plans to use the net proceeds from the offering to fund exploration expenditures at the company’s Ayawilca Project in Peru, as well as for general working capital and corporate purposes.
You know who did really well on this deal? GMP Securities (the agent). Tinka agreed to pay the agent a cash commission of 6% of the gross proceeds raised under the offering and issue broker warrants equal to 6% of the number of shares sold.
Arizona Mining (TSX: AZ)(OTC: WLDVF)
Here’s something I like. More drill results from Arizona Mining. The headline reads "Arizona Mining Drills 90 Feet of 17.5% Zinc, 12.6% Lead and 4.1 opt Silver." There’s a lot in the release to like.
On October 11, 2016 Arizona Mining announced results of a further five (5) exploration drill holes from its current program targeting the expansion of the Taylor Zn-Pb-Ag sulfide deposit located on its 100%-owned Hermosa Project in Santa Cruz County, Arizona.
[arizona
mining taylor deposit]
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Here are the details from the release. It’s a long one but a good one:
"HDS-374 is an angle (-75 degrees) core hole drilled to expand the mineralization to the southwest of the current resource area. The drill hole intersected nine (9) mineralized zones with a cumulative thickness of 601.5 feet (all intervals are interpreted to be within 5% of true width).
"The results from this drill hole continue to indicate that good continuity exists between the original resource area and other step out drill holes in the area. Several well mineralized zones were intersected in the drill hole, including a 402.5 foot thick interval assaying 7.3% zinc, 6.2% lead and 2.1 ounces per ton ("opt") silver.
"Within this broader zone of mineralization are three sub-intervals including an upper zone 90 feet thick, which assayed 17.5% zinc, 12.6% lead and 4.1 opt silver, and a lower zone 29.0 feet thick, which assayed 10.1% zinc, 12.4% lead and 4.2 opt silver.
"HDS-373 is an important step out angle drill hole (-87.5 degrees) drilled northwest of the boundary of the previously reported resource area. The drill hole results indicate that good continuity exists between the original resource area and step out drill holes located further north and northwest. HDS-373 intersected seven (7) distinct mineralized horizons with a total cumulative mineralized thickness of 258 feet.
"Several well mineralized zones were intersected in the drill hole, including an 11 foot thick interval assaying 16.0% zinc, 11.7% lead and 8.4 opt silver within a broader 65 foot thick zone of mineralization.
"HDS-370 is also an important angled (-87.5 degree) step out hole drilled northwest of the previously reported resource area. The drill hole results also indicate that good continuity exists between the original resource area and step out drill holes located further north, including HDS-338, HDS-340, HDS-341 and HDS-373, reported above.
"HDS-370 intersected seven (7) distinct mineralized horizons with a total cumulative mineralized thickness of 246.5 feet. Several well mineralized zones were intersected in the drill hole including a 20 foot thick interval assaying 4.1% zinc, 23.0% lead and 10.4 opt silver. A second interval of note in HDS-370 is a 103.5 foot thick zone which assayed 3.7% zinc, 4.5% lead and 1.5 opt silver, which included a zone of 5.5 feet which assayed 23.1% zinc, 23.2% lead and 13.0 opt silver.
"HDS-369 is an exploration step out drill hole located 1,000 feet north of the current resource area. The hole was drilled at a steep angle to extend the mineralization further to the north/northwest.
"The drill hole encountered six (6) distinct intervals of weak to moderate zinc-lead-silver mineralization. Notable in the drill hole is a 67 foot thick interval that assayed 0.3% zinc, 3.5% lead and 2.2 opt silver.
"HDS-367 is a step out drill hole located approximately 500 feet northwest of the resource area. The drill hole encountered three (3) distinct mineralized horizons with a cumulative mineralized thickness of 70 feet. Most notable is a 23.5 foot thick horizon near the bottom of the hole that assayed 5.9% zinc, 5.4% lead and 1.7 opt silver.
"Arizona Mining CEO Jim Gowans commented, "The drill results being released today continue to expand and add confidence to the Taylor Deposit resource. As such, we will continue the aggressive drill program already in place at least through the end of 2016.”"
Incredible numbers. Congrats to those who got in early on this and congrats to newsletter writer John Kaiser, who was telling people to do so when it traded in the C$0.30-C$0.49 range. Shares currently trade around C$2.63.
To your wealth,
[gerardo-sig]
Gerardo Del Real
Editor, [Resource Stock Digest Premium]
For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through [Outsider Club] and [Resource Stock Digest Premium]. For more about Gerardo, check out his [editor page].
*Follow Outsider Club on [Facebook] and [Twitter].
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