All American Gold Corp. (OTCPK:AAGC) Moves to Secure Advanced Stage Nevada Gold Project with Significant Exploration Potential
Domestically-focused precious mineral developer, All American Gold, reported signing a Letter of Intent today with Desert Pacific Exploration, covering terms and conditions for the Essex mineral property in Nevada (some 360 acres in 18 unpatented mining claims, just 10 miles southeast of Ely).
This is prime territory in the heart of the Nevada mining district that represents advanced stage exploration with no defined resource. However, drilling at roughly 400 foot centers, in conjunction with extensive underground workings, has identified a huge zone, some 4,500 feet in length (open in both directions) of mineralization. While chased down to around 700 feet in limited historic workings, the 40 g/t gold and 280 g/t silver values (USGS and other underground operations) produced by the jasperoid formation, apparently having grown along the contact between the Mississippian age Joana limestone and the Chainman shale, have yet to be substantially investigated.
The company has an exclusive period (until May 10, 2012) to investigate the property, extant data from previous mining, and other due diligence under the agreement. This is a huge opportunity for AAGC, as the company also has the option of entering into a mining options agreement with Desert Pacific during the exclusivity period.
The company's analysis looks good, with the analogy to the Alligator Ridge district/deposit (Carlin-Type gold mineralization at shallow depths) geology being sound and other similarities between the sites further refining this positive outlook for the property. White Pine County is a great place to work a mine and the overall production cost and logistics are exceptional. The host strata for Alligator Ridge (Devonian Guillemette limestone, Devonian/Mississippian Pilot Shale, Mississippian Joana limestone, and Mississippian Chainman shale) are cut by the same 2,500 meter (along strike) structural zone encompassed by the project area.
This zone stretches northwest and has encountered gold and silver all along the Joana-Chainman contact zone jasperoid via drilling/workings, offering the astute AAGC geological team a clear map of possible vectors. Targets in the main host for Alligator Ridge, the Pilot Shale, have yet to be tested and there appears to be abundant upsides for AAGC shareholders, when the company takes Essex to the next level. The recipe for Essex will be the same approach employed by the company elsewhere: modern equipment and a concerted effort by veteran mineral developers with the best geological tools the industry has to offer, balancing resource potential and simplified domestic logistics to reach new heights in precious mineral development profitability.
June gold is off 0.8% (falling $13.80) today on the Comex after closing the week down 1% to $1,642.80 as silver tests a $30 floor during the mid-day session, with a strong showing by the Socialist Party candidate for the French presidency placing second in the first round of elections (second round slated for May 6) re-igniting European investment risk. Holland's triple-A credit rating is also in jeopardy, with budget talks falling apart over the weekend as Prime Minister, Mark Rutte resigned, bringing about early elections. Add to this the HSBC's analysis of Chinese manufacturing via their purchasing managers index (up in April to 49.1 from 48.3 in March), where the data shows clear signs of contraction, and Chinese markets closed lower this morning (Shanghai Composite Index off 0.8%, Shenzhen Composite Index off by 1.8%) as expected. The Federal Reserve's two-day policy meeting tomorrow should reveal more details about domestic easing and it seems like China may be headed in that direction as well, making the price pullback in metals feel more like a lack of underlying momentum in the global economy.
In an age of unsound money, many investors are realizing an age old truth that gold is money, as markets like China (or India), which still inherently remember this truth and express it via raw consumption of precious metals, now increasingly set the trend line tone. With many companies taking profitability, even at sub $1500 levels, AAGC is in prime position to expand its domestic footprint with this deal and the company's geological team is eager to begin vetting the data, as well as exploring the site potential in further detail.
For more information on today's LOI, or to learn more about All American Gold, please visit the company's website at: AllAmericanGoldCorp.com
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