Stakeholder
Gold Corp. (SRC:TSX.V) was born in July 2011 after a spinout from
Quebec-based Hinterland Metals. It was done so to highlight the company's
White Gold District landholdings featuring the well-situated Ballarat
Property located proximitous to Goldcorp's recently-acquired Coffee property.
However, within the next year, the vicious 2011–2016 bear market in mining
stocks arrived and the company remained inactive until late 2013 when a
management change ushered in current CEO Chris Berlet.
The company briefly embarked on an IOCG prospect in northern Nova Scotia
in 2014–2015 but after disappointing results, elected to return to its Yukon
roots. After restructuring the share capital 1:10 in 2015, the company
engaged Shawn Ryan and Groundtruth Exploration to conduct an exploration
program on Ballarat, which was concluded in 2016 with "encouraging"
(but not "exciting") geological results.
In late 2016, SRC was introduced to a private Nevada company Mountainview
Gold Inc. that has assembled a very interesting project in Nevada known as
the Goldstorm Project. The company proceeded to consummate an earn-in
agreement that closed in May 2017. The property is located approximately 17
kilometres northwest of the Midas Mine (formerly the Ken Snyder Mine)
currently in production under the ownership of Klondex Mines Ltd. and which
contains an approximate and impressive 2 million ounces (2 Moz) of gold and
40 Moz of silver. It is also instructive to note that it lies within the
world-renown Carlin Trend, which is believed to host over 220 Moz of gold.
In 2010, West Kirkland Mining drilled two core holes on the property.
DH-2010-1 is located on the Clayton Veins system, situated about 1 km
south-southwest of the northern zone. Beginning at 64.4 meters (64.4m) depth,
the hole intercepted a 2m vein zone that assayed 5.5 g/t Au, including a 1m
interval @ 9.27 g/t Au and 73 g/t Ag. The Clayton Vein system trends NW-SE
and has been tested by only this one drill hole. The parallel Prochnau Veins
system, located about 300m to the northeast, has not yet been drill-tested.
Both these vein systems are open to the northwest and southeast, and evidence
of veining has been traced over 2,000m strike length.
SRC now has a three-year earn-in on the property and must make $2.5
million in exploration expenditures to earn 100% interest in the claims. The
company later followed up with a lease agreement on the Crawford Ranch with similar terms to the Goldstorm deal,
which has resulted in 3,800 acres of contiguous ground. As these deals were
closing, TSX-listed Seabridge Gold (SEA:TSX) made a blockbuster announcement
whereby it had entered into an agreement to acquire 100% of the 
Snowstorm property held by the PFR Gold Holdings, LP (NY-based hedge fund
manager John Paulson's gold company). As can be seen from the insert, the
Snowstorm property is located north-northwest of both properties and with both
the Seabridge ground and SRC's Goldstorm located at the convergence zone of
three predominant gold-bearing trends: Carlin (220 Moz Au), Getchell (60 Moz
Au) and the Northern Nevada Rift (51 Moz Au).
Responding to inquiries surrounding its acquisition, Seabridge Chairman
and CEO Rudi Fronk said: "We are very pleased to gain Paulson & Co.
as a shareholder. The Paulson team has a deep understanding of our business
and the opportunities that lie ahead. We look forward to their advice and
assistance as we grow the value of our Company. Seabridge has been an
industry leader in finding additional gold resources over the past decade.
For some time now, we have been looking for a large-scale asset in Nevada
which remains one of the world's best environments for finding large gold
deposits. The Snowstorm acquisition accomplishes this objective. This project
has all the earmarks of an outstanding exploration play and we appreciate the
opportunity to capitalize on its exceptional potential."
The SRC land package is even better defined in the following insert which
clearly depicts the strategic nature of the land position relative to
Snowstorm.
Stakeholder Gold is intending to commence a five-hole drill program before
the snow flies and as soon as it can obtain permits from the BLM (Bureau of
Land Management). The purpose of the upcoming program is to probe the deeper
targets at the Clayton and Prochnau veins where shallow drilling encountered
high-grade gold within veins not unlike the Midas Mine. It is expected that
in the spring of 2018, Seabridge will be ready to launch its own exploration
program after it has completed the analyses of all of the data available to
the company by PFR Gold Holdings LP.
From the Seabridge release of June 7, 2017, "The Snowstorm property
consists of 700 mining claims and 5,800 acres of fee lands carefully assembled
in a private company over a 15 year period and explored over the past 10
years. Seabridge has staked an additional 260 claims totaling 5,200 acres
that are contiguous to the claims purchased from PFR. The Snowstorm
acquisition also includes an extensive package of data generated by previous
operators. Although potential targets are hidden under tertiary cover, the
existing data supports the project's outstanding exploration potential.
Geological and geochemical evaluations of Snowstorm have documented
hydrothermal alteration zones consistent with large northern Nevada deposit
types. Geophysical surveys have confirmed the structural settings which host
large Northern Nevada deposit types. Limited drilling has demonstrated that
some of the target areas are at a depth amenable to surface exploration and
resource delineation.
Snowstorm is contiguous and on strike with several large, successful gold
producers including the Getchell/Turquoise Ridge Joint Venture operated by
Barrick Gold, Newmont Mining's Twin Creeks and Klondex Mines' Midas
operations."
The Yukon package remains highly prospective
In addition to the Ballarat property, the Yukon land package includes 10
claims located inside of the Coffee Project boundaries and since Goldcorp's
$520 million buyout of Kaminak Gold, it has requested and received permission
to drive the Dawson City-Coffee road through the eastern portion of SRC's
Ballarat property. The company saved a great deal of exploration capital by
delaying further exploration at Ballarat until 2018 as the
Goldcorp-constructed road should be completed by next summer, making for easy
(and cheap) access to drill sites. Avoiding the use of helicopters and barges
will be a far more efficient allocation of resources (including time) during
the very short exploration window in the Yukon summer.
Whatever remains the proclivity of the investment community toward Yukon
explorers, the fact remains that Goldcorp, Kinross, Agnico Eagle and Newmont
have all done major deals in the White Gold District since the big Goldcorp
move to acquire Kaminak. It stands to reason that with road access, more work
on Ballarat designed to investigate what were then some of the highest
gold-in-soil results ever received by Groundtruth will be underway, further
augmenting the multifaceted exploration opportunities present in SRC.
The opportunity for investors today lies in our belief that with the
exploration budget being carried into the spring by Seabridge, there is a
strong potential for a Nevada area play in the vicinity of the
Carlin/Getchell/Northern Nevada Rift convergence zone. Given the sheer
magnitude of potential for the district with over 300 million ounces
contained in those three trends, the upcoming exploration program by
Stakeholder could generate a great deal of excitement given the history of
the property and the fact that the geology appears structurally similar to
the Midas located further to the southeast along the more northerly portion
of the Carlin Trend.
As an example of the kind of lift that is possible in today's environment,
look no further than Gold Standard Ventures whose North Bullion and Dark Star
discoveries in south Carlin in 2016 allowed the company to raise tens of
millions of dollars and achieve a market capitalization of nearly $500
million here in 2017. Given SRC's current market cap of ≈ $6.5 million, the
leverage in the event of a discovery could be enormous. To wit, the
risk-to-reward ratio for SRC is compelling and for the investor/speculator
that can deal with the volatility and risk, Stakeholder Gold Corporation is a
rising star in a Five-Star neighborhood.
Stakeholder Gold Corp.
Symbol: SRC.V, SKHRF:US
Recent Price: C$.31, U.S.$.25
52-week range: C$0.80-$0.185
Issued Capital (undiluted): 21,188,662
Market Capitalization: C$6.57m, U.S.$5.19m
Head Office: Toronto, Canada
Website: stakeholdergold.com
All charts courtesy of Michael Ballanger.
Michael Ballanger Disclaimer:
This letter makes no guarantee or warranty on the accuracy or completeness
of the data provided. Nothing contained herein is intended or shall be deemed
to be investment advice, implied or otherwise. This letter represents my
views and replicates trades that I am making but nothing more than that.
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accept no liability for any loss arising from the use of the data contained
on this letter. Options and junior mining stocks contain a high level of risk
that may result in the loss of part or all invested capital and therefore are
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