By The Gold Report
Source: The Critical Investor for Streetwise Reports 10/05/2017
The Critical Investor provides an update on Genesis Metals’ drill results and the company’s next steps.
Chevrier Gold project; IP anomaly
In between exploration success stories (for example GT
Gold) or possible myths in the making (Novo Resources) taking center stage,
Genesis Metals quietly completed the Phase 1 drill program, consisting of
4,900m of diamond drilling. Results were announced on October 3rd of nine drill holes, and
channel sampling. Management received two separate batches of results of the
Phase 1 drill program, reporting eight out of nine holes testing greenfield IP
anomalies in two target areas in (see image above in red) now in the first batch,
and the remaining 13 drill holes focused on the Main Zone will come out in the
second batch in about three weeks.
The balance of the first batch was just one verification
hole of the historic Main Zone deposit. If the anomalies wouldn’t return
meaningful assays, the only thing left to report would be just this one
verification hole and sampling results from trenching, which usually isn’t very exciting news unless assays are spectacular and much better than expected.
Free Reports:
Although the verification hole returned better results
than the twinned historic drill hole from 2002, the drilling of the anomalies
didn’t return any gold mineralization, obviously disappointing some investors
with short term high hopes, as can be seen in this chart (the news release came
out on October 3):
Share price; 10 day time frame
Management also indicated that a financing round had come
free trading recently, which might have had some impact as well. The big
question of course is, if this sell-off is justified. In my view it clearly is
not warranted. Recovery of the share price has already set in at the time of
writing, so other investors seem to share that view with me. The company has at least 8 prospective target areas to explore, as the mentioned anomaly
targets (in blue) were just the first:
For example, as mentioned in my first article on Genesis,
the East Zone is also an important target, as core shacks with core were found
on the property when doing due diligence, eventually recovering 53 drill collar
locations with often significant, corresponding assay results. Besides this,
there are many more showings, and positive trenching and sampling results to
explore, to generate even more drill targets. The company also reported good
results at Trench 29 in the news release of October 3, encountering 2.55 g/t
gold over 2.3m.
Notwithstanding all this, I strongly believe, as I also
indicated in my first article, that the main value driver is the proving up and
hopefully increasing of the historic deposits of the Main Zone and the South
Zone. Genesis Metals has a few aces up its sleeve in this regard: it has
modeled the mineralization according to a different and more realistic concept
generating more ounces, it will use a lower cut-off to define more economic
ounces, and sees a lot of possibilities to expand mineralization. One of these
last possibilities is step out drilling, but also further infill drilling could
return better drill results than the historic results, as was the case at the
first verification hole GM17-09. This hole returned 2.94 g/t gold
(“Au”) over a true width of 37.40 m (starting at 74.60 m down hole)
including 14.01 g/t Au over a true width of 4.07 m. The hole that was verified
was hole GFA-201, done by Geonova in 2002, returning 2.62 g/t gold over
33.4 m including 6.67 g/t gold over 5.00 m. Calculating gram times meter,
the difference is 56 gm versus 33.35gm for the high grade part, which is an
increase of 68%.
I am definitely looking forward to the release of the
mentioned remaining 13 assays of the Phase 1 program for the Main Zone. Of
these holes, 10 were designed to test extensions of mineralized areas while 3
were holes twinned or drilled in close proximity to and paralleling historic
holes. In the mean time, the company already announced on October 5 the
commencing of the Phase 2 drill program of 5,000m, which is expected to be
completed in early November. About 2,000m will be dedicated to more twin,
infill and step out holes at the Main Zone, confirming historic results and
looking for extension of mineralized zones. The remaining 3,000m will focus on
targets identified by previous trenching, and the evaluation of the East Zone.
The results of this Phase 2 program can be expected in 2 batches, one at the
beginning, and one at the end of December.
As is hopefully clear by now, an exploration junior can
experience misses, but it doesn’t have to implicate the end of upside at all.
Especially with Genesis Metals and its Chevrier project, they have a lot of
historic data and resource estimates to prove up, which might very well pan out
to be much more than a solid back stop for their greenfield exploration
wildcard.
I hope you will find this article interesting and useful, and
will have further interest in my upcoming articles on mining. To never miss a thing,
please subscribe to my free newsletter on my website www.criticalinvestor.eu,
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Disclaimer:
The author is not a registered investment advisor,
and currently has a long position in this stock. Genesis Metals is a sponsoring
company. All facts are to be checked by the reader. For more information go to
www.genesismetalscorp.com and read the companys profile and official
documents on www.sedar.com, also for important risk disclosures. This
article is provided for information purposes only, and is not intended to be
investment advice of any kind, and all readers are encouraged to do their own
due diligence, and talk to their own licensed investment advisors prior to
making any investment decisions.
The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long term commodity pricing/market sentiments, and often looking for long term deep value. Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name.
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( Companies Mentioned: GIS:TSX.V; GGISF:OTC,
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