Vancouver — The Carlin Trend in northeast Nevada is known as elephant country thanks to seven major gold deposits, each exceeding 20 million tonnes. Gold Standard Ventures (GV-V) may have found its elephant.
Gold Standard’s Railroad property covers 64 sq. kmoutside of Elko, Nev., and is the last significant underexplored claim on the Carlin Trend. Railroad had not been explored using modern methods until the company’s 7,900-metre drill program in 2011.
The property sits on the southern border of Newmont Mining’s (NMC-T, NEM-N) Rain gold mine, the most recent major discovery in the area. Newmont’s Carlin operations have proven and probable open-pit reserves of 264 million tonnes grading 1.27 grams gold per tonne equalling 11.3 million contained oz. gold.
Gold Standard’s Vice-President of Exploration Dave Mathewson was head of exploration for Newmont, and has made a number of discoveries in the resource-rich Rain district. He has over 35 years of geological experience in the state of Nevada, and developed the “Rain Model” now used to determine the existence of Carlin-type gold deposits.
On Feb. 22 the company announced high-grade assays from Railroad’s North Bullion fault zone. The most notable intercept was in hole 11-16, with 56.4 metres grading 4.26 grams gold, including an interval of 18.3 metres carrying 7.03 grams gold. The flat-lying nature of the gold mineralization seems to indicate the recorded intervals are approximate true widths.
“I’m very, very pleased about the hole,” said Mathewson said during a conference call, “It represents a piece we’ve been after. The shallowness of the intercepts indicate that as you get closer to the feeder zone’s heart, the mineralization will reach up further into the surrounding rock structure. The results are very evident of the high-grade material we were looking for. That 56-metre number is a true thickness. We think we’re in the upper-part of the target zone.”
High-grade feeder zones in the Carlin Trend are typically found at greater depths. Results from the current assays are at about 267 metres. Gold Standard is currently waiting on samples taken at depths of up to 567 metres, which they expect will be released in the next five weeks.
Mathewson also discussed the importance of hole 11-09, which establishes the continuation of the main mineralized trend over 610 metres to the north. Highlights include: 9.9 metres carrying 3.03 grams gold and 10.4 metres of 0.56 gram gold.
Hole 11-3 focused on 122 metres of previously identified, continuous gold mineralization, returning 222 metres of 0.5 gram gold, including 81 metres of 0.94 gram gold.
When asked to compare the recent results at Railroad to the northern Newmont Rain trend, Mathewson said, “The breccias bodies we’re dealing with are much larger, and reflect a much more powerful system then I encountered at Rain. I would be of the belief that we’re dealing with something substantially larger in general. I can’t speak for the grades yet, but we’re getting up there.”
In an update to clients, senior mining analyst Adam Graf of Dahlman Rose & Co. notes that the extensive intervals of mid- to high-grade gold at shallow depth point to significant open-pit potential at Railroad.
Graf views the results as the “start of high-grade hits as drilling approaches a Carlin feeder structure,” and maintains his “buy” recommendation with a target price of $7.62 per share.
Gold Standard enjoys a key advantage over other companies in the vicinity: it is operating on private land. Due to the private nature of the surface and mineral rights, the property lies outside the bounds of the U.S. Department of the Interior’s Bureau of Land Management, effectively allowing Gold Standard to drill at its convenience.
Shares took off following the announcement on Feb. 22. Opening at $1.20 per share, prices rose 55% on a 6-million trade volume to a close of $1.86.
According to Gold Standard president Jonathan Awde, the company maintains $6 million in its treasury, as well as outstanding warrants expiring in July, September and October that could increase available capital to $11.5 million. Gold Standard currently has a market cap of $97 million, with 60.7 million shares outstanding.
According to Mathewson and Awde, the deeper results from the 2011 drill program should continue to be released throughout March. The results at depth are of interest due to the nature of high-grade mineralization on the Carlin Trend. Gold Standard is hoping it’s found the next Nevada elephant, and investors should know the answer in the next 12 months.
The company is in the final stages of permitting a 30-hole, $1.5-million drill program scheduled to start in December.