Michael Ballanger of GGM Advisory Inc. shares i-80 Gold Corp.'s recent 'exceptional interceptions' as well as his thoughts on the current quiet junior market.
Nevada Explorer-Developer i-80 Gold Corp. today reported an exceptional 22 meter intercept of 31 grams per tonne gold (g/t Au) at Granite Creek and issued an update on progress in the South Pacific area.
i-80 Gold Accelerates Granite Creek Exploration and Development Program to 2024
“RENO, Nevada, May 7, 2024 /CNW/ – i-80 Gold Corp. (“i-80”, or the“Business”) is pleased to provide an update on the programs planned on the Company's Granite Creek property (“Granite Creek” Or “the property“) located in Humboldt County, Nevada. This work carried out in 2024 is expected to include definition and expansion drilling, underground development and test mining of the South Pacific area, as well as a study of feasibility.
The main objective is to bring the South Pacific area closer together (“SPZ“) in the long-term mining plan. The SPZ is expected to become the main mining horizon once initial development is completed.
extended to provide access. Under the 2024 program, infill drilling to support increased measured and indicated mineral resources will be accelerated prior to the completion of a feasibility study for underground mining at Granite Creek.
In addition, expansion and exploration drilling will also be carried out.
The 2024 drilling program will follow the successful 2023 “Phase 1” drilling from the subsurface and surface (see Figure 1). Underground drilling has been completed in the upper part of the SPZ, where a first stop is planned, and surface drilling has been completed in the northern part of the deposit. Both programs generated outstanding high-quality results, including:
Highlights of 2023 South Pacific underground drilling results (core width)
- 1 g/t Au over 21.9 m (0.91 oz/ton Au over 72.0 feet) in hole GCPU23-22*
Through enhanced definition drilling, initial development and test mining of the SPZ, the Company plans to complete an updated resource estimate and feasibility study. The SPZ remains open to expansion at depth and laterally northward toward Nevada Gold.“.
Comment: This further accentuates the difficulties faced by junior developers.
With a market capitalization of US$450 million on a share count of 384 million, even superb results from a Nevada-based company, advance the project failed to make a difference.
Getchell Gold
This is my best answer as to why a $400 rise in the price of gold failed to make a difference. Getchell Gold Corp. (GTCH: CSE; GGLDF: OTCQB) whose market capitalization of US$12.4 million values its Nevada ounces at US$8.31 per ounce. i-80 Gold has inferred and indicated resources of 14.5 million ounces and, with a fully diluted market capitalization of US$458 million, its value per ounce is US$31.58/ounce.
The company recently reported a loss of CA$0.07 on revenue of CA$25.84 million. It is therefore evident that the market was not impressed by the total number of resources and/or the execution. Add to this a bought deal financing of 115 million Canadian dollars, adding 69,698,050 units (total potential dilution of 104,547,075 shares) to the 384,896,725 shares already issued, which represents a dilution of 27.2% of the existing basis of ownership. The stock hit a 52-week low of CA$1.55 and is currently at CA$1.58.
To be honest, May is generally the quietest month for the junior space and has been since I started trading junior explorers in 1977. The reason for this is seemingly irrelevant in 2024, but it has always been related to the weather, as the month of May is called. During spring breakup, when most of the snowpack and frozen lakes melt, and with muddy and swampy conditions in northern Canada, drillers wait for drier weather and ground conditions to return before resume drilling.
In other words, it is always “calm” during the May-June period. I expect imminent announcements of drilling plans for other juniors like American Eagle Gold Corp., Fitzroy Minerals Inc. (FTZ:TSX.V; FTZFF:OTCQB)And Vortex Metals Inc. (VMSSF: OTCMKTS; VMS: TSX; DM8: FSE) will trigger buy-side volume. As for Getchell, I expect that the results of the metallurgical study and the next revised resource estimate, in preparation for or including the PEA planned in June, will increase the prospect of an upgrade (i.e. i.e. higher price targets) for GTCH.
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Important Disclosures:
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their households) own securities of Getchell Gold Corp., American Eagle Gold Corp. and Vortex Metals Inc.
- Michael Ballanger: I, or members of my immediate household or family, hold titles of: All. My company has a financial relationship with: Fitzroy Minerals Inc. I determined which companies would be included in this article based on my research and understanding of the industry.
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Disclosures from Michael Ballanger
This letter makes no warranty as to the accuracy or completeness of the data provided. Nothing contained herein is intended or should be considered as investment advice, implied or otherwise. This letter represents my point of view and reproduces the transactions I make, but nothing more. Always consult your registered advisor to assist you in your investments. I accept no responsibility for any loss arising from reliance on the data contained in this letter. Options and junior mining stocks contain a high level of risk which may result in the loss of part or all of the invested capital and are therefore only suitable for experienced and professional investors and traders. One should be familiar with the risks involved in junior mining and options trading and we recommend that you consult a financial advisor if you feel that you do not understand the risks involved.