The World Gold Council issued its mid-year outlook last week
and trends are very bullish. It states the central banks across the globe
have signaled a more accommodating stance, bringing bond yields to multi-year
lows—and in some countries all time lows. Central banks continue as big
buyers in the market, accumulating approximately 247 tonnes though May.
Gold-backed ETFs captured US$5 billion or 108 tonnes year to date, led by
European funds.
Global monetary policy has shifted 180 degrees and will continue to be a
driving force toward higher gold prices and gold equities. Gold and gold
stocks have technically been in a bull market since the bottom in late 2015.
From the $1050 bottom in gold, late 2015, prices ran up to $1360 in about 6
months to July 2016.
That is a 30% rise, easily qualifying as a bull market, which is defined
as a 20% rise. At the recent high of $1441, the price is up 37% from that low
and up 22% from the $1180 low in 2018. No matter how you slice and dice it,
gold has started a new bull market.
All bull markets start with skepticism and disbelief. Many use the GDXJ
(VanEck Vectors Junior Gold Miners ETF) to gold price ratio as a measurement
and I believe it is an accurate indicator of sentiment with gold stocks.
Today's reading at 0.27 is not much above the 0.20 bottom in 2015 and has not
responded much at all to the recent rally in gold.
The HUI (NYSE ARCA Gold Bugs Index) around 200 has just made fresh highs
in this rally. It is up 34% since the 150 low in May and up 87% from the 2015
low. However, as sentiment above shows, there is little belief in this rally
so far.
The HUI consists of more senior gold producers and this index leads the
junior explorers. The index has cleared the first resistance and a little
further and it will breach the second resistance level. This is about the
level that sentiment will start to improve and the junior explorers start
moving. The juniors can move several 100% in just a small move on the HUI, as
we witnessed in 2016. This is setting up to happen again. Now is perfect
timing to buy quality junior explorers, the ones that will appreciate the
most.
I have come across another exceptional junior explorer and now is perfect
timing to get a position in this stock. It has an excellent property in
Nevada that has not seen a targeted drill program since 2002, despite
multiple high-grade intercepts. Back then, we were at the depths of the gold
bear market when gold had dropped under $300 per ounce. Initial drilling by Placer
Dome, a senior company since bought out by Barrick and Teck Cominco, hit some
high grade intersects.
Old subscribers will remember the fortunes we made with Franco Nevada and
Euro Nevada back in the 1990s as penny stocks. I mean buying at $1 to $3, which
was considered a gold penny stock in those days.
What first drove the early success of Franco Nevada was the famous Ken
Snyder Mine that is still in production today as the Midas Mine. Blackrock Gold
Corp.'s (BRC:TSX.V) property is near Midas with the same kind of
structures, but has seen little exploration since 2002. It has the potential
to be a company maker just like the Midas.
Blackrock Gold TSXV:BRC
OTC:BKRRF Recent Price - $0.12
52 week trading range $0.03 to $0.125
Shares outstanding 49 million approx. Fully diluted 66.1 million
Highlights
- new management recently took control of company
- strong insider buying
- low-sulphidation epithermal gold & silver property
on prolific Nevada gold belt
- little exploration since 2002
- no follow up work despite high grade drill intercepts
(157 g/t over 1.5m)
- financing completed and exploration programs underway
- first targeted drill program to commence by Fall to
follow up high grade intercepts by Teck and Placer
Management
Blackrock has a very strong management team that joined/took control of
the BRC in the past several months.
For nearly fifteen years, Andrew Pollard, CEO, Director, has
established himself as a sought-after management consultant within the mining
industry. Mr. Pollard founded the Mining Recruitment Group Ltd (MRG) in 2006
and has amassed a "Who's Who" network in the mining and finance world,
leveraging his personal relationships to help shape what have become some of
the most prominent and successful resource companies. In a sector where
management is crucial, he has served as a trusted advisor to exploration
companies and producers ranging in size from seed round to over $100 billion
in market cap.
William (Bill) Howald, Executive Chairman, is a successful
entrepreneur who founded several public companies as well as led the
exploration division of a major mining company. He has over 34 years of
experience building effective exploration teams and delivering quality
resources. As an executive, Mr. Howald provided strategic vision, planning,
and implementation of many value-creating programs for junior and senior gold
producers. Most recently, he led the acquisition, build out and start-up of
the Florida Canyon mine in west-central Nevada. The mine achieved commercial
production within 18 months. To date, Bill has raised approximately $300
million for properties in Argentina, Brazil, Chile, Peru, Dominican Republic
and Nevada.
Prior to creating junior mining companies, he was GM of Exploration, the
USA and Latin America, for Placer Dome. During his tenure at Placer Dome, Mr.
Howald was an integral part of the teams that delivered over 100 million
ounces of gold resources to the Placer portfolio. Several of these, including
Turquoise Ridge, Pipeline, Pueblo Viejo, are now mines. While there, he also
oversaw the last drill campaign on Silver Cloud.
Tony Wood, director, currently serves as CFO of Aurania Resources
Inc. Mr. Wood's executive experience includes oversight of finance and
operations of various publicly traded exploration, development and production
staged resource companies. Over the last 20 years, he has successfully
completed close to $1billion in financing and M&A transactions in the
mining industry. Mr. Wood has a proven record of success with strategic
planning, organizational development and company transformations. Mr. Wood is
an honors graduate, Management Sciences (Marketing) B.Sc. from the University
of Lancaster, U.K., and a qualified Chartered Accountant in the UK and
Canada.
Mr. Hendrik Van Alphen, director, has over 30 years of experience
in the mining industry. He has been a key player in such companies as
Corriente Resources, Cardero Resources, Trevali Mining, Balmoral Resources
and International Tower Hill Mines. During his career Mr. Van Alphen has been
involved in raising over $1 billion in financing for various junior resource
companies. He has been president and CEO of Wealth Minerals Ltd. Since 2005 .
My comment: These juniors were all big success stories.
Dr. Alan Carter, director, has 30 years of experience in the mining
and minerals exploration industry. He spent seven years working for Rio Tinto
Corp. in South America and the United Kingdom, and, in 1996, he became
president and CEO of Balaclava Mines. Dr. Carter joined Billiton Plc in 1998
and in 2000 moved from Lima, Peru, to Vancouver. Dr. Carter was president and
CEO of Magellan Minerals Ltd. until its recent sale to Anfield Gold Corp. in
May 2016. He is a director of Peregrine Diamonds Ltd. and Anfield Gold Corp.
The management group at Blackrock has been involved in numerous
discoveries that became mines and have been instrumental in raising
considerable sums for exploration.
Property
The Silver Cloud property is a large, 4,537 hectare (11,210 acre) claim
block, strategically located near the confluence of the Carlin Trend and the
Northern Nevada Rift within north-central Nevada, the richest gold mining
area in North America. The property is located 8 km (5 miles) west of the
Hollister mine, which has a Measured and Indicated Resource of 0.43 Mt @ 16.6
g/t gold. Hecla's Midas Mine lies a short 20 km (12.5 miles) along strike of
the Rift to the north of Silver Cloud and has a Measured and Indicated
Resource of 1.11Mt @ 12.9 g/t gold (for 419,000 oz Au).
Silver Cloud, like both Midas and Hollister, is a low-sulphidation
epithermal Au-Ag banded vein deposit. At Silver Cloud, despite the extensive
presence of mercury-bearing silica sinters on surface, the property has not
been extensively or systematically drill tested. However, a limited drill
program completed by Teck (10 holes) between 1999 and 2001 encountered 157.7
g/t Au over 1.5 meters immediately below the Silver Cloud Mine area, and
subsequent to that, in 2002, Placer-Dome drilled 5.53 g/t Au over 12.2 meters
in the Northwest Canyon target area, confirming the presence of high grade
gold mineralization at depth.Neither of these intercepts were ever followed
up.
Near the end of June BRC identified a new vein system in the northeastern
portion of the Silver Cloud property, noted above in top right. The east-west
banded vein was found by mapping an area with highly elevated silver (up to
7.4 grams per tonne (g/t) silver), arsenic (up to 94.5 parts per million
(ppm) arsenic), lead (up to 39.8 ppm lead) and zinc (133 ppm zinc). These
values were returned from the company's recently collected soil samples.
Assays are pending from rock chip samples collected on the outcropping
vein. The gravity anomaly in this area is similar in scope and dimension to
the one occurring over the Silver Cloud mine.
At the Silver Cloud mine, located approximately five kilometers to the
south of the newly discovered vein, the high-grade gold drill intercepts (1.5
meters grading 157.7 g/t gold and 12.2 meters grading 5.53 g/t gold,
including 1.5 meters grading 12.5 g/t gold and 1.5 meters grading 12.5 g/t
gold) were encountered at elevations similar to the Midas and Hollister
mines.
Mercury is related to gold and the graphic below shows the mercury in
rocks or heat map trending east–west between the two high grade intersects.
This work was completed in the past year and further confirms the east-west
direction of structures.
The old drill intersects align at the same elevation along an east-west
zone with 1,500 meters of strike potential. BRC is planning a drill program
to test the east-west theory and it will be the first systematic drill
program to Silver Cloud in nearly 15 years. BRC is also focused on the
northeast section of the property, which represents the westernmost extension
from Hecla's Hollister mine. This area is host to another past-producing
mercury mine and a soil geochemical survey carried out in May of 2018 showed
elevated silver readings, making this never-before-drill-tested section of
the property a priority for BRC.
After Teck and Placer Dome, the project was with Allied Nevada, which made
another discovery on one of Carl Pesico's projects that kept it occupied.
Then the property reverted back to the original vendor, Carl Pesico, who
first staked the claims in 1998. Blackrock first optioned the property in
2017 but the previous management and with poor market conditions were unable
to advance the project very far. The new management team amended the original
agreement with more favorable terms in June of this year. Blackrock can
purchase 100% of the project subject to a 3.5% royalty for $3.5 million any
time prior to Oct. 27, 2023. Annual payments to keep the agreement in good
standing begin Oct. 27, 2019, at $75k.
Oct 27 2020 $100k
Oct 27 2021 $150k
Oct 27 2022 $200k
Oct 27 2023 $500k
Blackrock can keep the option valid for another five years with payments
totaling $5 million.
Financial
Last financials at end of April reveal little cash of $17,880 and no
long-term debt. Since then a $600,000 private placement was completed at 10
cents per unit which included 1/2 warrant, priced at 16 cents, good until
June 17, 2022. CEO Andrew Pollard participated for 1 million units.
This funding will be ample for BRC's current exploration program and some
shallow drill holes. I suspect BRC will complete another financing at higher
prices before or during the start of a drill program. This would enable it to
continue drilling upon a discovery. I do not expect that BRC will have any
trouble raising more funds with this strong management group and property.
Summary
The new management group that took control of Blackrock is quite
impressive. One of the first things it did was cancel a 5 cent financing to
do it at a higher price of 10 cents. Very rare to see this, especially in
recent markets. Insiders could have lined their pockets at 5 cents but
instead bought shares in the market.
Management and insiders have been gobbling up stock since mid-May up to
current prices, as you can see with insider trading filings here. They are walking their
talk.
The Silver Cloud property is in a prestige location. It is quite amazing
that it has seen little exploration in almost 20 years given its location and
very excellent early results by majors Placer Dome and Teck. This makes it a
unique opportunity we can take advantage of.
BRC's recent ground geochemical and geophysical work confirms east/west
vein trends. Both Placer and Tech were drilling based on north/south. Bill
Howald did the work for Placer and he is now convinced the structures are
east-west and they drilled the wrong way. If this is correct, a big discovery
can be made. Regardless, I think the stock will run on the speculation.
A comment by executive chairman Bill Howald in a recent news release
provides a nice summary of the project potential. Bold highlighting is my
doing. "The newly identified vein gives the company a third
meaningful target to explore. The three targets include the Silver Cloud
mercury mine, the Jackson and Surprise mercury occurrence, and the newly
discovered banded vein. In all these areas, the target is a high-grade gold
and silver vein system with widths similar to the Midas mine (one metre to
2.7 metres width) and gold grades comparable to the nearby Hollister mine
(plus 15 g/t gold and plus 80 g/t silver). The company is preparing the
east-west-trending Silver Cloud mine/Northwest Canyon vein system for a drill
campaign and has started the permitting process. The addition of the West
Silver Cloud property provides additional strike potential to the west of
Northwest Canyon. As I have stated before, the Silver Cloud project is an
excellent under explored asset located in an extraordinarily productive part
of north-central Nevada along the Northern Nevada rift."
On the chart below we can see that a new uptrend has begun. The stock has
crossed the 200 day MA and that average has turned up. A golden cross has
just occurred where the 100 day MA crossed above the 200 day MA. A very
bullish and reliable indicator. The volume of the last three months is the
highest in the stock's history and the OBV (on balance volume) indicator
confirms heavy accumulation in the stock. The first break away gap higher
ended at 12.5 cents and the recent consolidation since that high provides an
excellent buying level ahead of the next move higher. The 9 to 10 cent level
is the new support level.
Struthers' Resource Stock Report 23 years ago. The report covers
senior and junior companies with ample trading liquidity. He started his
Millennium Index of dividend stocks in 2003 - $1,000 invested then was worth
over $4,000 end of 2014 and the index returned 26.8% in 2016. He retired from
IBM after 30 years in customer service, systems and business analyst, also developing
his own charting software. He has expertise in junior start-ups and was a
co-founder of Paramount Gold and Silver.
[NLINSERT]
Disclosure:
1) Ron Struthers: I, or members of my immediate household or family, own
shares of the following companies mentioned in this article: Blackrock Gold.
I personally am, or members of my immediate household or family are, paid by
the following companies mentioned in this article: None. My company currently
has a financial relationship with the following companies mentioned in this
article: Blackrock Gold is an advertiser at playstocks.net. Additional
disclosures below. I determined which companies would be included in this
article based on my research and understanding of the sector.
2) The following companies mentioned in this article are sponsors of
Streetwise Reports: None. Click here
for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not
of Streetwise Reports or its officers. The author is wholly responsible for
the validity of the statements. The author was not paid by Streetwise Reports
for this article. Streetwise Reports was not paid by the author to publish or
syndicate this article. The information provided above is for informational
purposes only and is not a recommendation to buy or sell any security.
Streetwise Reports requires contributing authors to disclose any
shareholdings in, or economic relationships with, companies that they write
about. Streetwise Reports relies upon the authors to accurately provide this
information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged
to consult with his or her individual financial professional and any action a
reader takes as a result of information presented here is his or her own
responsibility. By opening this page, each reader accepts and agrees to
Streetwise Reports' terms of use and full legal disclaimer.
This article is not a solicitation for investment. Streetwise Reports does
not render general or specific investment advice and the information on Streetwise
Reports should not be considered a recommendation to buy or sell any
security. Streetwise Reports does not endorse or recommend the business,
products, services or securities of any company mentioned on Streetwise
Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers,
employees or members of their families, as well as persons interviewed for
articles and interviews on the site, may have a long or short position in
securities mentioned. Directors, officers, employees or members of their
immediate families are prohibited from making purchases and/or sales of those
securities in the open market or otherwise from the time of the interview or
the decision to write an article until three business days after the
publication of the interview or article. The foregoing prohibition does not
apply to articles that in substance only restate previously published company
releases.
Charts and images provided by the author.
Struther's Resource Stock Report: All forecasts and recommendations are
based on opinion. Markets change direction with consensus beliefs, which may
change at any time and without notice. The author/publisher of this
publication has taken every precaution to provide the most accurate
information possible. The information & data were obtained from sources
believed to be reliable, but because the information & data source are
beyond the author's control, no representation or guarantee is made that it
is complete or accurate. The reader accepts information on the condition that
errors or omissions shall not be made the basis for any claim, demand or
cause for action. Because of the ever-changing nature of information &
statistics the author/publisher strongly encourages the reader to communicate
directly with the company and/or with their personal investment adviser to
obtain up to date information. Past results are not necessarily indicative of
future results. Any statements non-factual in nature constitute only current
opinions, which are subject to change. The author/publisher may or may not
have a position in the securities and/or options relating thereto, & may
make purchases and/or sales of these securities relating thereto from time to
time in the open market or otherwise. Neither the information, nor opinions
expressed, shall be construed as a solicitation to buy or sell any stock,
futures or options contract mentioned herein. The author/publisher of this
letter is not a qualified financial adviser & is not acting as such in
this publication.
(c) Copyright 2019, Struther's Resource Stock Report
