Gold Standard Ventures (NYSEMKT:GSV) has received a great deal of attention lately. It all started in March when the company closed on the 100% consolidation of its highly prospective Pinion deposit. Then, in the first week of May, Gold Standard presented at the Gold Forum in Switzerland. Next, a May 21st company interview in the Gold Report continued to highlight renewed interest in this story. Importantly, institutional money appears to be flowing into the name.
On May 27th, a bullish independent research article contributed to a huge spike in trading volume to ~2.3 million shares (for the U.S. and Canadian tickers combined), 10 times the average daily trading volume of the prior 30 days. More recently, on May 30th, a press release was issued announcing the spin-off of non-core exploration assets in exchange for some cash and 60,000,000 shares of a junior mining company.
Why all the excitement? For answers, I turned to Gold Standard's CEO Jonathan Awde. The following interview was conducted by phone and email in the first week of June.
Your company has released important news this year, most notably the consolidation of its Pinion Gold Project. Please reiterate the importance of this milestone.
Acquiring the balance of Pinion provides GSV with 100% ownership/control of an entire district (the last remaining underexplored district) within the southern end of the world renowned Carlin Trend in Nevada. From about 13 sq. miles in 2009, our total holdings now cover roughly 46 sq. miles. This is a game changer as it's the first time the entire district has been under one roof. This district had been fraught with multiple ownership interests, mineral and water rights issues. Pinion has a historical (non NI 43-101 compliant), near-surface oxide resource with what appears to be room to expand. The consolidation of the greater Railroad district took 4 years and was an exhausting exercise at times.
In another press release, you announced that gold assays of historic Pinion drill holes not previously assayed for gold yielded positive results. Can you elaborate on the possible significance of that news?
We acquired a huge data set when we closed on the Pinion acquisition. We were pleasantly surprised to receive more core than our records indicated and several core holes and portions of other core holes were never assayed. It's always nice to essentially get free gold. It should be helpful with the publishing of our first NI 43-101 compliant resource. Over 380 holes have been drilled over the years. We believe that our current drill campaign, some twinning and confirming of historical holes as well as drilling deeper on near surface holes that bottomed in mineralization, will enable us to release a maiden NI 43-101 resource by the end of July. These holes are relatively inexpensive and take just 2-3 days to drill.
Has the newly consolidated Pinion property replaced the North Bullion Fault Zone "NBFZ" as the main focus of the company?
Yes, for the time being. Given the challenging capital market environment and uncertainty with the price of gold, drilling shallow RC holes into a near-surface oxide resource vs drilling more costly, deeper core holes into North Bullion was an easy decision. We strongly feel that making the Pinion deposit NI 43-101 compliant could be a key valuation driver. The NBFZ remains a highly significant target that's open in several directions. Our last hole that we announced at NBFZ in January was technically a very important hole that extends the mineral system in a west-northwest direction. Our technical team was very encouraged with the results of this hole.
Some pundits compare Pinion to peer Nevada heap leach projects such as Midway Gold's (NYSEMKT:MDW) Pan project, Corvus Gold's (OTCQX:CORVF) North Bullfrog and Newmont's (NYSE:NEM) Emigrant mine just a few miles from the Pinion deposit. Do you see any relevant comparisons or takeaways?
Well, all of them are oxide and Bullfrog, Pan and Emigrant have excellent economics. Historical results indicate that Pinion has the highest indicated grade of the 4 deposits; however, I must caution that we do not yet have a NI 43-101 compliant resource at Pinion and have not carried out a preliminary economic assessment or other study thereon. We've just started drilling at Pinion for our Phase 1 program but we feel very strongly about the potential.
You mentioned some positive attributes of Pinion (such as private land) that are not necessarily shared by other exploration-stage projects, please elaborate?
Dealing with private ground, which a large portion of Pinion is, is a huge advantage from a permitting/development standpoint. We've also secured certain water rights which as you know is a huge plus in Nevada. Finally, Pinion is a near-surface, oxide deposit, so drilling costs and the time it takes to drill holes is favorable compared to some peer exploration-stage projects.
Bald Mountain is your third main target. How does Bald Mountain compare with Pinion and North Bullion?
We're very excited about Bald Mountain. We made an oxide discovery that was announced in October of 2013. We hit 56m of 1.47 g/t oxide, including 7.3m of 5.66g/t in hole RRB 13-1. The geological setting that exists at Bald Mountain suggests something important could be going on. We weren't able to do any follow on drilling at Bald Mountain in the fall as there were some land issues that got resolved when we closed on the Pinion acquisition. We will do a follow on program later in the summer into the fall.
A month ago, your company presented at the European Gold Forum in Switzerland. How would you describe the interest in Gold Standard Ventures at that event?
We had several really productive meetings. Interest in our company is picking up. We find that investors don't know much about Pinion and are kind of taken aback by the fact that a near-surface oxide deposit with good grade was still available in the Carlin Trend. We have several institutions, investors, analysts and companies coming to the see the project over the next few months.
You have plans to release a NI 43-101 compliant resource for both Pinion (July, 2014) and North Bullion (later this year). Does the $11 million you raised in March fund you through both of these key milestones?
Half of the money raised was used to acquire the remainder of the Pinion property; the rest will allow us to publish our first NI 43-101 compliant resource for Pinion. Drilling is well underway and the first program will be finished this month.
Will your maiden NI 43-101 compliant resource compare to historic resource estimates?
The historical resource at Pinion (non 43-101 compliant resource) is based on over 330 holes (318 RC and 12 Core holes). We have over 90% of the RC cuttings and chips and all of the core holes. However, a lot of the historical work never tested the limits of the mineral system at Pinion. Our phase two program is designed to do just that. In addition, past companies that explored Pinion always ran into surface and mineral rights constraints that forced companies to drill portions of sections, not as a district; an issue we don't face. We also have a new interpretation of the geology. So while I can't comment on the specifics of historical estimates, we are certainly looking forward to releasing our initial NI 43-101 resource estimate this July.
Please tell us more about your recent agreement to sell non-core assets for some cash and 60 million shares in Tanqueray.
We were looking at ways to monetize those non-core assets. We looked at spinning them out, selling them or JV'ing them. We found in the end that getting an independent valuation done and selling them to the new company was the best option. Gold Standard will retain a large exposure to these assets through our ownership in Tanqueray when the sale completes in or about mid-August.
Some investors might be concerned about the recent departure of David Mathewson. What was the rationale behind his leaving the company?
We thank David for all he's contributed and the exploration team he helped build and leaves behind. However, please remember that David will remain with us as a technical advisor for at least the next year. In my mind, we get the best of both worlds, he remains a technical advisor to our company AND we benefit from the 60m shares of Tanqueray Exploration stock that we will receive in conjunction with David leaving us. Based on current market prices, our stake in Tanqueray would be worth approximately C$3 million. David always made it clear to us that he greatly prefers doing grass roots exploration-- making discoveries. That's where he excels.
Importantly, we hired another very talented, highly experienced, senior geologist. John Norby has over 35 years of experience as exploration, project and chief geologist. John has extensive Nevada experience including nearly 20 years spent designing and executing exploration and resource delineation programs for Barrick Gold (NYSE:ABX) and Newmont mostly in the Carlin and Cortez trends.
Can you describe your investor base? For example, last summer Agnico Eagle (NYSE:AEM) acquired a 5% stake. Who are some other large holders? How much does management own?
We have a solid investor base. Yes, Agnico took a 5% stake last summer after several site visits. It was a great endorsement of the project and our team to receive an investment in a very challenging environment for junior companies. FCMI, American Century, US Global, Royce, Phoenix and Oppenheimer have been very supportive. Management owns in the low teens percentage-wise of our outstanding shares, so a meaningful stake for sure.
Thank you so much for your time this week, I enjoyed talking with you about Gold Standard Ventures. Do you have any final comments to leave readers with?
Thank you Peter, I think we covered a lot of ground. I would simply reiterate that we have a large, recently consolidated, contiguous land package in the Carlin, the most prolific gold trend in the western hemisphere. For the first time ever, the last unexplored window in the Carlin trend is being explored using modern technologies, led by a world-class exploration team. We have near-term catalysts in the form of drill results and maiden NI 43-101 compliant resource reports from Pinion by the end of July and North Bullion later this year. Barrick has made it clear again and again how important Nevada is to its future. We strongly believe that Nevada is the best place to explore for and develop gold deposits.
Disclosure: I am long GSV. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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