Source: Michael Ballanger for Streetwise Reports 10/29/2017
Michael Ballanger examines a company with an earn-in agreement for a project at the confluence of three gold trends in Nevada.
Stakeholder Gold Corp. (SRC:TSX.V) was born in July 2011 after a spinout from Quebec-based Hinterland Metals. It was done so to highlight the company’s White Gold District landholdings featuring the well-situated Ballarat Property located proximitous to Goldcorp’s recently-acquired Coffee property. However, within the next year, the vicious 2011–2016 bear market in mining stocks arrived and the company remained inactive until late 2013 when a management change ushered in current CEO Chris Berlet.
The company briefly embarked on an IOCG prospect in northern Nova Scotia in 2014–2015 but after disappointing results, elected to return to its Yukon roots. After restructuring the share capital 1:10 in 2015, the company engaged Shawn Ryan and Groundtruth Exploration to conduct an exploration program on Ballarat, which was concluded in 2016 with “encouraging” (but not “exciting”) geological results.
In late 2016, SRC was introduced to a private Nevada company Mountainview Gold Inc. that has assembled a very interesting project in Nevada known as the Goldstorm Project. The company proceeded to consummate an earn-in agreement that closed in May 2017. The property is located approximately 17 kilometres northwest of the Midas Mine (formerly the Ken Snyder Mine) currently in production under the ownership of Klondex Mines Ltd. and which contains an approximate and impressive 2 million ounces (2 Moz) of gold and 40 Moz of silver. It is also instructive to note that it lies within the world-renown Carlin Trend, which is believed to host over 220 Moz of gold.
In 2010, West Kirkland Mining drilled two core holes on the property. DH-2010-1 is located on the Clayton Veins system, situated about 1 km south-southwest of the northern zone. Beginning at 64.4 meters (64.4m) depth, the hole intercepted a 2m vein zone that assayed 5.5 g/t Au, including a 1m interval @ 9.27 g/t Au and 73 g/t Ag. The Clayton Vein system trends NW-SE and has been tested by only this one drill hole. The parallel Prochnau Veins system, located about 300m to the northeast, has not yet been drill-tested. Both these vein systems are open to the northwest and southeast, and evidence of veining has been traced over 2,000m strike length.
SRC now has a three-year earn-in on the property and must make $2.5 million in exploration expenditures to earn 100% interest in the claims. The company later followed up with a lease agreement on the Crawford Ranch with similar terms to the Goldstorm deal, which has resulted in 3,800 acres of contiguous ground. As these deals were closing, TSX-listed Seabridge Gold (SEA:TSX) made a blockbuster announcement whereby it had entered into an agreement to acquire 100% of the
Snowstorm property held by the PFR Gold Holdings, LP (NY-based hedge fund manager John Paulson’s gold company). As can be seen from the insert, the Snowstorm property is located north-northwest of both properties and with both the Seabridge ground and SRC’s Goldstorm located at the convergence zone of three predominant gold-bearing trends: Carlin (220 Moz Au), Getchell (60 Moz Au) and the Northern Nevada Rift (51 Moz Au).
Responding to inquiries surrounding its acquisition, Seabridge Chairman and CEO Rudi Fronk said: “We are very pleased to gain Paulson & Co. as a shareholder. The Paulson team has a deep understanding of our business and the opportunities that lie ahead. We look forward to their advice and assistance as we grow the value of our Company. Seabridge has been an industry leader in finding additional gold resources over the past decade. For some time now, we have been looking for a large-scale asset in Nevada which remains one of the world’s best environments for finding large gold deposits. The Snowstorm acquisition accomplishes this objective. This project has all the earmarks of an outstanding exploration play and we appreciate the opportunity to capitalize on its exceptional potential.”
The SRC land package is even better defined in the following insert which clearly depicts the strategic nature of the land position relative to Snowstorm.
Stakeholder Gold is intending to commence a five-hole drill program before the snow flies and as soon as it can obtain permits from the BLM (Bureau of Land Management). The purpose of the upcoming program is to probe the deeper targets at the Clayton and Prochnau veins where shallow drilling encountered high-grade gold within veins not unlike the Midas Mine. It is expected that in the spring of 2018, Seabridge will be ready to launch its own exploration program after it has completed the analyses of all of the data available to the company by PFR Gold Holdings LP.
From the Seabridge release of June 7, 2017, “The Snowstorm property consists of 700 mining claims and 5,800 acres of fee lands carefully assembled in a private company over a 15 year period and explored over the past 10 years. Seabridge has staked an additional 260 claims totaling 5,200 acres that are contiguous to the claims purchased from PFR. The Snowstorm acquisition also includes an extensive package of data generated by previous operators. Although potential targets are hidden under tertiary cover, the existing data supports the project’s outstanding exploration potential. Geological and geochemical evaluations of Snowstorm have documented hydrothermal alteration zones consistent with large northern Nevada deposit types. Geophysical surveys have confirmed the structural settings which host large Northern Nevada deposit types. Limited drilling has demonstrated that some of the target areas are at a depth amenable to surface exploration and resource delineation.
Snowstorm is contiguous and on strike with several large, successful gold producers including the Getchell/Turquoise Ridge Joint Venture operated by Barrick Gold, Newmont Mining’s Twin Creeks and Klondex Mines’ Midas operations.”
The Yukon package remains highly prospective
In addition to the Ballarat property, the Yukon land package includes 10 claims located inside of the Coffee Project boundaries and since Goldcorp’s $520 million buyout of Kaminak Gold, it has requested and received permission to drive the Dawson City-Coffee road through the eastern portion of SRC’s Ballarat property. The company saved a great deal of exploration capital by delaying further exploration at Ballarat until 2018 as the Goldcorp-constructed road should be completed by next summer, making for easy (and cheap) access to drill sites. Avoiding the use of helicopters and barges will be a far more efficient allocation of resources (including time) during the very short exploration window in the Yukon summer.
Whatever remains the proclivity of the investment community toward Yukon explorers, the fact remains that Goldcorp, Kinross, Agnico Eagle and Newmont have all done major deals in the White Gold District since the big Goldcorp move to acquire Kaminak. It stands to reason that with road access, more work on Ballarat designed to investigate what were then some of the highest gold-in-soil results ever received by Groundtruth will be underway, further augmenting the multifaceted exploration opportunities present in SRC.
The opportunity for investors today lies in our belief that with the exploration budget being carried into the spring by Seabridge, there is a strong potential for a Nevada area play in the vicinity of the Carlin/Getchell/Northern Nevada Rift convergence zone. Given the sheer magnitude of potential for the district with over 300 million ounces contained in those three trends, the upcoming exploration program by Stakeholder could generate a great deal of excitement given the history of the property and the fact that the geology appears structurally similar to the Midas located further to the southeast along the more northerly portion of the Carlin Trend.
As an example of the kind of lift that is possible in today’s environment, look no further than Gold Standard Ventures whose North Bullion and Dark Star discoveries in south Carlin in 2016 allowed the company to raise tens of millions of dollars and achieve a market capitalization of nearly $500 million here in 2017. Given SRC’s current market cap of ≈ $6.5 million, the leverage in the event of a discovery could be enormous. To wit, the risk-to-reward ratio for SRC is compelling and for the investor/speculator that can deal with the volatility and risk, Stakeholder Gold Corporation is a rising star in a Five-Star neighborhood.
Stakeholder Gold Corp.
Symbol: SRC.V, SKHRF:US
Recent Price: C$.31, U.S.$.25
52-week range: C$0.80-$0.185
Issued Capital (undiluted): 21,188,662
Market Capitalization: C$6.57m, U.S.$5.19m
Head Office: Toronto, Canada
Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger’s adherence to the concept of “Hard Assets” allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.
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1) Michael J. Ballanger: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Stakeholder Gold Corporation. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies referred to in this article: Stakeholder Gold Corporation. I determined which companies would be included in this article based on my research and understanding of the sector. Additional disclosures are below.
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( Companies Mentioned: SRC:TSX.V,