Back in mid-July I did a piece on Auryn Resources Inc. (AUG:TSX.V) where I talked about their use of drones for imaging and Rotary Air Blast (RAB) drilling. Auryn is working in the far north of Canada where costs are double and more of working in, say, British Columbia. By use of RAB drills and down-hole cameras they have come up with cost savings of up to 75% yet the data they acquire immediately is as good or better than core drilling.
Auryn is working with a consulting company named Groundtruth Exploration based in Dawson, Yukon Territory in Canada. It was actually Groundtruth that came up with the concept of mixing down-hole cameras, common in the oil industry, with RAB drills. RAB drills are far faster than core rigs at 25% of the cost of core drilling but they provide chips, not core. Geologists always prefer core even if the accountants can’t stand them. But the combination of RAB drilling and down-hole cameras makes both the geologist and the accountant happy at the same time.
Groundtruth is the product of a number of people associated with and around Shawn Ryan and Cathy Wood in the Yukon. In May of 2011 the New York Times published a piece about Shawn Ryan. I wrote a piece talking about the heroes of mining about 18 months later where I gave credit to Shawn as being the best prospector in the Yukon.
In short, Groundtruth is leading the entire mining industry worldwide in the introduction of new technology to solve old mining exploration problems. They are doing it with Auryn and now with Stakeholder Gold Corp. (SRC:TSX.V) in the White Gold District of the Yukon.
Stakeholder began in a sea of optimism in mid-2011 at a high price of $5 a share. They somehow managed to literally nail the top of the gold market. The shares promptly dropped to an incredible price of $0.02 a share by the middle of 2013 before rocketing higher to $3.20 in 2014. From the high in 2014 the shares again tumbled back to $0.02 a share at the time of the low in gold in December of 2015.
Since that time they went on another moon shot higher to $0.70 before correcting to their current $0.455. The important lesson to be learned is that if you don’t take a profit when you have it, you will take a loss when you don’t want it. You can both make a lot of money in the penny dreadfuls and lose a lot of money. I talk about when to sell shares at some length in Nobody Knows Anything. It costs $6.49 for some of the best-paid advice you will ever get.
I suspect Stakeholder is on the way back to $5 or so. They pretty much died in 2015 at the end of the gold bear market and were forced into a roll back. Now they only have a little over 15 million shares and they have used Groundtruth to great effect on their flagship Ballarat property in the White Gold District, only some 10 km from the Coffee project that was originally a Shawn Ryan property and had soil samples done by Groundtruth. Kaminak began exploration at Coffee in 2010 and was bought out by Goldcorp Inc. (G:TSX; GG:NYSE) for $520 million in May of 2016 after definition of over 5 million ounces of gold.
Exploration has been going on for months by Stakeholder at the Ballarat property with results of ground soil samples released recently. The purchase of Coffee through the acquisition of Kaminak by Goldcorp is significant for several reasons. Goldcorp plans a road from Dawson through the eastern portion of Ballarat. That will lower costs of transportation for Stakeholder during exploration and development. Shawn Ryan vended the Coffee project to Kaminak in the first place and he sees a lot of similarity between Coffee and Ballarat. Shawn Ryan is an advisor to Stakeholder, a significant shareholder and will be helping supervise the work done by Groundtruth on the project.
Stakeholder is an interesting potential investment. The technical team working on the project is the very best in the Yukon and like the project a lot. The Phase 1 exploration work seems to have generated some good targets for RAB drilling to start soon. Investors should know that during the Klondike Gold Rush about 104,000 ounces of gold were taken from Ballarat Creek, draining the Ballarat property. The gold had to come from somewhere on the Ballarat Mountain and it’s up to SRC and Groundtruth to find it.
A RAB drilling program will begin at Ballarat shortly. Results will start to flow in late October/November. The price of the shares will turn based on those results. With a market cap of about $7 million and only 15.3 million shares outstanding, the price action could be violent.
Stakeholder is an advertiser and I am a shareholder. As such naturally I am biased. Please take some responsibility for your own investment decision.
Stakeholder Gold Corp.
SRC-V $0.46 (Sep 19, 2016)
SKHRF OTCBB 15.3 million shares
Bob and Barb Moriarty brought 321gold.com to the Internet almost 14 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 820 missions in Vietnam. He holds 14 international aviation records.
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1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Stakeholder Gold Corp. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. Stakeholder Gold Corp. is an advertiser of 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
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