Gold Sum­mary for Jan. 10, 2019

Stockwatch Daily - - MINES & METALS - By Stock­watch Busi­ness Re­porter

NEW YORK spot gold fell $7.10 to $1,286.10 on Thursday. The TSX Ven­ture Ex­change fell 1.18 points to 596.93 and the TSX Gold In­dex slipped 1.67 points to 178.44. New Gold Inc. (NGD) traded briskly again to­day, but was lower, drop­ping 11 cents to $1.50 on 6.88 mil­lion shares.

John McCluskey’s Alamos Gold Inc. (AGI), down 10 cents to $5.04 on 2.08 mil­lion shares, has re­ceived as­says of up to 152.07 grams of gold per tonne over five me­tres from drilling at the Western Ex­ten­sion zone at its Is­land mine, about 80 kilo­me­tres north­east of Wawa in North­ern On­tario. The lat­est holes from the 2018 pro­gram, which in­cluded 141,000 me­tres of drilling across 719 holes, also yielded note­wor­thy as­says from the Main Ex­ten­sion zone, which pro­duced hits of up to 56.6 grams per tonne across 4.81 me­tres, and from the East Ex­ten­sion zone, where the com­pany drilled 10.65 grams of gold across 2.94 me­tres.

Mr. McCluskey, pres­i­dent and chief ex­ec­u­tive of­fi­cer, calls the Is­land gold mine a “tremen­dous suc­cess story,” both in terms of the min­ing op­er­a­tion and the min­eral re­serve and re­source base. He cheered the com­pany’s ex­plo­ration effort last year in that re­gard, laud­ing the glit­ter­ing hit in the Western zone as “one of the best di­rec­tional holes ever.” (That in­ter­cept oc­curred 200 me­tres down plunge from the ex­ist­ing re­source.) The lat­est Is­land re­source es­ti­mate lists a re­serve of 2.79 mil­lion tonnes at 10.69 grams of gold per tonne, plus an­other 841,000 tonnes mea­sured and in­di­cated at 8.18 grams per tonne and 3.67 mil­lion tonnes in­ferred at 9.99 grams per tonne, for a grand to­tal of nearly 2.4 mil­lion ounces.

The Toronto-based Mr. McCluskey, now in his late 50s, has been with Alamos Gold and its pre­de­ces­sor since the mid-1990s. He has been draw­ing a base salary of over $550,000 (U.S.) for the past sev­eral years, and for his work in 2017 he re­ceived a reg­u­lar cash bonus of over $800,000 (U.S.). If that was not enough, he also raked in just over $1-mil­lion (U.S.) to cover club dues, med­i­cal health cover­age, park­ing fees and - for what hope­fully are the big items — a re­ten­tion pay­ment and match­ing con­tri­bu­tions for his share pur­chases. Dr. Michael By­ron’s Nighthawk Gold Corp. (NHK), un­changed at 44.5 cents on 217,000 shares, has re­ceived as­says of up to 6.91 grams of gold per tonne over 14.75 me­tres from drilling in the Horseshoe zone of its Damoti Lake gold project in the North­west Ter­ri­to­ries. The as­says, from the lat­est 17 holes drilled in the Horseshoe and Red Moun­tain zones, also in­cluded hits of 1.89 grams of gold per tonne over 8.65

me­tres in the Red Moun­tain zone. That hit, and an­other that re­turned 3.31 grams per tonne over 4.25 me­tres, rep­re­sent a new dis­cov­ery at Red Moun­tain that re­mains open in all di­rec­tions.

Dr. By­ron, Nighthawk’s $240,000-per-year pres­i­dent and CEO, was pleased, not­ing that while Nighthawk had not drilled Damoti since 2010, he nev­er­the­less had been ea­ger to “re­sume ac­tiv­i­ties” on what he de­scribes as a “unique, high-grade, near-sur­face de­posit,” one that he con­sid­ers to be — note the hedges — of great value as po­ten­tial feed to aug­ment pos­si­ble fu­ture devel­op­ment at Colo­mac. Dr. By­ron adds that the drilling nine years ago was de­signed to val­i­date and ex­pand the main de­posit, but the most re­cent work was aimed at new tar­gets be­yond the main body, seek­ing new growth op­por­tu­ni­ties. He went on to of­fer what is of­ten a pro­mo­tion-sti­fling com­ment, that “ad­di­tional drilling and ex­plo­ration work will be con­tin­gent” upon the in­cor­po­ra­tion of all re­sults so far into a ge­o­log­i­cal model. (Dr. By­ron is a ge­ol­o­gist, not a nat­u­ral pro­moter, and he likes his mod­els.) Damoti hosts a re­source of 40,600 tonnes mea­sured and in­di­cated at 26.17 grams per tonne and 17,800 tonnes in­ferred at 16.38 grams per tonne, for a to­tal of 43,600 ounces of gold. Pre­vi­ous, now non-com­pli ant es timat es ranged as high as 2.08 mil­lion tonnes at 9.24 grams per tonne, or over 600,000 ounces. Dr. By­ron says that the his­tor­i­cal cal­cu­la­tion is “be­lieved rel­e­vant but should not be re­lied upon.” The reg­u­la­tors would of­fer only the lat­ter opin­ion, while ea­ger in­vestors usu­ally see only the rosy num­bers.

Larry Phillips’s Com­pass Gold Corp. (CVB), down four cents to 24 cents on 148,000 shares, has re­ceived as­says of up to 1.97 grams of gold per tonne over 13 me­tres, on the Ouas­sada por­tion of its Sikasso prop­erty in south­ern Mali. The as­says are from the first eight holes drilled, which tested five of the 14 prospec­tive tar­gets on Ouas­sada. Mr. Phillips, CEO, says that he and his crew are pleased with the re­sults — rarely do pro­mot­ers ad­mit oth­er­wise — cit­ing the gold hits in ev­ery hole, and be­cause some of the in­ter­sec­tions were up to 46 me­tres wide. Based on the re­sults, he says that more drilling is planned — ap­par­ently with­out the need for an up­dated ge­o­log­i­cal model.


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