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Should Gold Mining Investors Consider Kilgore Minerals - fil-90
We wrote approximately Kilgore Minerals this beyond winter, as it holds potential U.S. uranium properties. While reading the agency, it have become obtrusive the agency’s uranium could take a backseat to the agency’s gold assets in southern Idaho. We reviewed Robert Bishop’s observation in his self-posted Gold Mining Stock Report. Mr. Bishop is quite appeared as an astute junior gold inventory picker, and his evaluation is pretty thorough. There is little question Bishop holds excessive esteem for Kilgore Minerals’ Chief Executive Norman Burmeister.
More importantly, the very a success Pinetree Capital (Toronto: PNP) has made a considerable funding in Kilgore. Respectively, the Chief Executive and CFO, Sheldon Inwentash and Larry Goldberg, of each Pinetree Capital and closely touted Mega Uranium (TSX: MGA), have individually invested in Kilgore Minerals. A latest Forbes mag article took a swipe at each Mega Uranium and Pinetree Capital. Actually, it turned into extra of a head butt. Pinetree Capital is again to buying and selling above C$17/share, up from a 12 months in the past while it traded for much less than $3/share. So the Forbes article turned into a non-occasion for Pinetree Capital. And their holdings in Kilgore Minerals, which reportedly are expected at among 10 and 20 percentage of the agency, have been exceeded via way of means of with out notice.
Property History
Kilgore’s Idaho gold assets has been explored for the reason that 1930’s, while a gold discovery turned into made via way of means of the Blue Ledge Co. Nearly 50 claims have been staked in 1982 and leased to a Kennecott subsidiary withinside the mid 1980s. Seven holes have been drilled. By 1990, Placer Dome obtained the assets and drilled 39 holes, extra than 21,000 toes of drilling. A Pegasus joint task drilled any other 23 holes, almost 10,000 toes of drilling, via way of means of 1994. Echo Bay earned majority hobby withinside the assets, via way of means of 1996, after having spent $3.five million drilling 122 holes for extra than 82,000 toes. In 1997, with the falling charge of gold and problems withinside the mining region introduced on via way of means of the Indonesia inventory fraud, Bre-X Minerals, Echo Bay dropped its exploration objectives on Kilgore – and shelved all of its exploration projects. In 1998, Latitude Minerals persevered a modest exploration of a touch extra than 4,000 toes.
Near the lowest of the gold undergo marketplace, Kilgore Gold (a completely owned subsidiary of Kilgore Minerals) obtained a hundred percentage possession of the assets. A new spherical of initial exploration diagnosed new gold objectives. By 2004, Kilgore Gold accelerated the agency’s assets holdings to 3,000 acres. Has this assets been drilled like Swiss cheese or does Norman Burmeister understand what he's doing? It’s had almost 2 hundred diamond and opposite movement drill holes, totaling extra than 126,000 toes of drilling.
In an in advance interview with Burmeister, he advised us, “I’m very enthusiastic about this challenge. It turned into a assets that turned into very excessive on Echo Bay’s list.” Major corporations have expended extra than $eight million to outline a modest, and probable economic, aid. At least 3 one-of-a-kind entities have hooked up aid estimates at the Kilgore gold assets. In 1996, Placer Dome said 14.1 million heaps, grading 0.04 oz./ton and with a cut-off grade of 0.015, for a deposit of 561,000 oz. of gold. A 12 months later, Echo Bay launched a sectional estimate record displaying 18.7 million heaps, grading 0.029, for a complete of 534,959 oz. of gold.
However, the most effective aid estimate accredited via way of means of Canadian regulators (Kilgore trades at the Toronto Venture Exchange) is the Van Brunt/Rayner Technical Report, filed in October 2002, and that's compliant with National Instrument 43-101 (NI 43-101). This record confirmed approximately 7 million heaps buying and selling 0.031, with a 0.01 cut-off grade, for an indicated aid of 218,000 oz. of gold. The record confirmed an inferred aid, including any other 269,000 oz. of gold. This is near sufficient to the Placer Dome and Echo Bay estimates, however it's far not going to be mineable except Kilgore unearths extra gold.
During the 2004 drilling software, Norm Burmeister were given the sniff of what may make this an appealing acquisition via way of means of a first-rate gold agency. “We are seeking out a excessive grade feeder gadget,” Burmeister advised us. In the preceding drilling software, Burmeister were given and inspiring intercept of 0.465 ounce in step with ton gold over 10 toes inside a broader 170-foot region of low-grade mineralization at 0.04 oz. in step with ton. On Tuesday, Kilgore Gold made its statement it'd begin its chase to discover if, indeed, there's an elephant discovery of gold on its assets.
In an electronic mail to us, Norm Burmeister wrote, “The excessive-grade region, referred to as the “Elsa Zone”, turned into intersected at a center intensity of 410 toes. It is vital to word that this hollow turned into drilled in a place that had in no way been drilled a few 4650 toes from the aid place.” The Elsa Zone is placed in the Dog Bone Ridge goal place. Burmeister additionally pointed out, “There aren't anyt any regarded workings withinside the place, and there's no regarded gold mineralization on the surface, therefore making the Elsa Zone a proper ‘blind discovery.’ Kilgore’s blind discovery withinside the Elsa Zone proves there can be a few possibilities withinside the very huge Dog Bone Ridge goal place.
Rationale
The reason of the 2006 drilling software, Burmeister advised us, is to determine “the proper capability of the Dog Bone Ridge place goal.” Niel Prenn, a expert engineer with Mine Development Associates of Reno, Nevada, finished a scoping degree replace of Echo Bay’s 1996 evaluation of the challenge. He wrote, “The challenge seems to have moderately appealing economics if the ‘probably mineable material’ may be doubled at $375/ounce gold charge.” Prenn noticed the Kilgore challenge as one with a “huge epithermal gold deposit.” This showed an in advance geological record via way of means of Stanton W. Caddey, who wrote in an October 2003 record, “Exploration capability on the Kilgore assets for extra than doubling the prevailing gold aid with similarly exploration drilling is appeared as excellent.”
The encouraging drill hollow in 2004 helped pass this challenge to the contemporary drilling software. “We consider the Dog Bone Ridge goal place represents the center of the hydrothermal gadget that has generated the regarded low grade aid at Kilgore,” Burmeister speculated. That’s why he's drilling the Dog Bone Ridge goal place. The first holes can be offsets to the promising 2004 discovery hollow. “We don’t understand the path or dipping,” stated Burmeister, asking “Which manner does it go?” The first hollow will assist Burmeister orient the path at the north facet of the goal. Burmeister advised us, “The understanding we are hoping to advantage from the Elsa Zone offsets can be vital in correctly trying out different Elsa ‘look-a-like’ definitive objectives in the Dog Bone Ridge goal place.”
Expectations
A drill marketing campaign has a tendency to heighten expectations. Share expenses have a tendency to rally higher, relying upon marketplace conditions, at some point of a drill marketing campaign. The agency hopes to drill approximately twelve holes, down among 500 and 800 toes, withinside the goal place. The first hollow can be encouraging, however the outcomes from that hollow feature as an identifier for wherein to vicinity the subsequent drill hollow. “The high-quality goal has in no way been touched,” stated Burmeister, regarding the north facet of the Dog Bone Ridge. As with many promising properties, they don’t continually provide the perfect access. In this case, Burmeister’s expectant goal at the north facet of Dog Bone Ridge may most effective be accessed via way of means of helicopter, if that’s wherein he has to drill.
What takes place if Burmeister is correct in his evaluation? If his preferred Dog Bone Ridge goal does constitute the center of the hydrothermal gadget, then what is going to he have found? “As such, it represents an appealing excessive grade epithermal vein-kind gold goal,” Burmeister responded. “The a success interception of excessive grade gold at some point of the 2004 software showed this interpretation.”
In 1980, Burmeister based Bull Run Gold Mines, serving as Chief Executive and growing a a success Nevada gold mine. He organized the IPO, which caused a NASDAQ National Market listing, and ran the agency for 8 years.
For 13 years earlier than that, he turned into the leader geologist for Silver Standard Resources. Burmeister located the Mill Creek orebody in Elko (Nevada), which moved that agency forward. The assets turned into in the end bought to Freeport-McMoran. Burmeister additionally conceived for Silver Standard of a singular nearby exploration software, masking 10,000 rectangular miles withinside the Yukon over almost unexplored territory. In a joint-task with ASARCO, he helped discovery the Minto orebody withinside the Yukon. The copper-gold deposit is now going into manufacturing thru Sherwood Copper.
After 40 years withinside the mining industry, he hopes Dog Bone Ridge will upload to his string of gold discoveries and company achievement stories.