Gold Standard Ventures:
"Money in the Bank"
Issue 154, February 2016
Jonathan Awde had spent his whole career as a broker and prop trader in Vancouver, until the Railroad gold project on Nevada's Carlin trend crossed his desk.
Awde bought the project with a group of investors from a private company in 2009, led a reverse listing into Gold Standard Ventures in 2010 and began drilling in less than a month.
Since then, the company has consolidated a 50 sq km land package, assembling a team of former Newmont geologists and hitting two blind gold discoveries, including a thumping 157m at 1.5 grams per tonne. Shares are flying and have doubled in the last three months, leading a bounce in gold mining stocks.
“In the Carlin trend, when you hit 500 feet of a gram and a half oxide, historically that has meant that you're into a large, robust system,” Awde says by telephone, picking his words very slowly, as if trying to avoid hyperbole.
Behind Newmont, its neighbour to the north, Gold Standard is now the second largest landholder in the region. Consolidating the land has been a “significant effort”, says Awde, who has negotiated with 91 different landowners to buy surface, mineral and water rights.
“This is among the largest, most well-endowed gold regions in the world. For us to go out and replicate what we've done here, you couldn't do it. But it's really put us in a position now to look at this project as a district with multiple target opportunities that could evolve and develop into something much bigger.”
Gold majors appear to be tripping over themselves to follow Awde into the property. Agnico-Eagle bought shares in 2013 and OceanaGold subscribed for C$16m of stock last year. In January, Goldcorp jumped in, buying a further C$16m. Oceana has responded by topping-up its holding with an additional C$13m.
“It puts us in a really strong financial position,” says Awde. “We've raised all the money we need, we've consolidated additional land and we've got money in the bank.”
“Goldcorp coming in here really validates the drill holes and the discovery, but more important is the land package and the team. To get a group like Goldcorp, I think it speaks volumes for what we're trying to do. They've got a great balance sheet and they've bought some phenomenal assets and they've got a pretty good pipeline.”
And yet, Newmont looks like a more logical partner. Its Emigrant mine to the north is a template for what Gold Standard aims to achieve: a low-cost, heap leach oxide operation with capex under $100m, pouring cash flow into exploration.
With an overflowing treasury, Gold Standard is due to announce metallurgical tests shortly, as well as its spending plans for the year. Awde wants to “keep a lid on costs”, but will accelerate drilling “pretty aggressively.” Gold Standard may be carrying an even more positive message: with a clear plan and diligent focus, building a company in the mining industry is possible, even in the current market.
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