Bob Moriarty of 321 Gold updates his investment thesis for California Gold after the company released a new resource report for its gold project at the south end of California’s mother lode.
I’ve been writing about California Gold Mining Inc. (CGM:TSX.V) for a couple of years now, here and here. You should read the pieces as I did a good job discussing the history of the project and gold mining in California. The company has a major gold project just at the south end of the mother lode in California. On the 1st of November the company released their initial 43-101 resource on the project. It was a barnburner and the market didn’t get it.
As I have discussed in prior pieces, the Fremont Project had a historic resource of just over two million ounces yet the company had a market cap of about $13 million at the time. After spending millions of dollars and coming out with a 43-101 resource, the company is still only selling for just over $15 million. That’s about $7.50 an ounce for high-grade gold in the ground. That’s absurd.
In the historic resource there were three resource figures given. The Pine Tree-Josephine open pit resource was estimated at 826,965 ounces. The Queen Speciment-Succedo open pit resource was estimated at 126,080 for a total of 952,973 ounces in an open pit. In addition, the underground portion at Pine Tree-Josephine was estimated at 1,107,000 ounces.
In the resource just published, the Pine Tree-Josephine open pit total resource was 879,000 gold ounces of which 515,000 ounces was in a high-quality indicated resource with 364,000 ounces in the inferred category. The most important issue with the 43-101 resource is that it not only validated the historic resource of 826,965 ounces, it actually …read more