Brought to you by:
Advance Gold (AAX.V) Sirios Resources (SOI.V) Walker River Resources (WRR.V)
First thing I would like to point out is that we have added a new member to the website sponsorship program with Walker River Resources. Not long ago, I decided to reopen the Allan Barry Reports for sponsorship as I could see some bullish trends in the markets coming to life.
It isn’t like we are back to a raging bull market for gold. One thing we are definitely seeing for around 6 months or so, as juniors put out good drill results they are getting some love in the market.
Obviously the big trick is to deliver with the drilling. Easier said than done, which makes the truth machine a great filter for which companies to follow. I monitor a pretty healthy amount of mining companies on my radar screen. Only a select few make it on as picks.
Walker River Resources has been a pick in the Allan Barry Reports for a few months, I’ve also been a shareholder for around the same time, with an average purchase price around 11 cents.
Nevada is one of my favourite places to look for gold exploration stocks. It is mining-friendly, one of the most worldwide. It has a long mining history, which means there is a lot of infrastructure and a lot of geological knowledge built up. Good climate, so you can work pretty much work year round all over the state. These attributes all keep the
costs down, for exploration and mining.
One of the main reasons I like Nevada gold exploration so much, is when a company has success, they get a premium. In this case the Nevada Premium. It all has to do with a long history of remarkable gold geology, everybody knows when you find something special in Nevada it can be very big. So, investors will often pay a higher price for drilling success in Nevada.
It’s nice to have good projects in Nevada, it is an entirely different matter to be able to deliver with the drilling. An even tougher task is to find a high-grade gold system. Even trickier is to find a system that can be big.
I made Walker River Resources a pick in the report, became a shareholder, and invited them to join my website sponsorship program because I think they have an exceptional gold discovery. One in Nevada that can deliver high grades up to bonanza grades, and as importantly has evidence of significant size potential.
That is a recipe for success no matter where you are looking for gold. In a few days, I will be writing a more full report on Walker River. So, I don’t want to go into their whole story today. I wanted to announce them as a new website sponsor in this report and also discuss them in a general sense as they are an ideal example of what I look for in junior explorers.
For me it as a measuring exercise. On one side of the balance is the realistic potential of a company’s projects. On the other side is the valuation. I’m looking to stack the deck in my favour, with strong potential that is being priced way too cheaply.
When I find those with the right potential to valuation setup, I make them a pick in the reports and start coverage. Sometimes, I invite picks to become a member of the website sponsorship program.
I’m so thankful to those that join, as it makes the reporting I do on the industry possible. As I mentioned in a recent report, there is a big need not being met for quality commentary on the junior mining sector. With the support from sponsors, it helps me produce the content.
One of the things I’m working on is a redesign of my website. One of the key features will be to showcase reports on the sector. I hope to promote not just the Allan Barry Reports, also other voices that I admire their work.
When it comes to online content creation, one of the most engaging forms is in video. Over the years I have done hundreds of videos, so the new website will be just like the old one when it comes to being the place to find our videos. I will also start sharing more videos of presentations that I think can be helpful to investors in junior explorers.
The mining sector is not always full of first movers in new technology, but, social media is becoming more important for stocks and for commentary. I’ve used all the various stock chatting platforms over the years. Sadly, I find that as the sites try to add more complexity with features, the systems end up getting gamed.
I will be adding a chat feature, in a prominent place on the homepage of the new website. I see a lot of potential for community building in the sector on online chats, the problem is it usually becomes a yelling match between bulls and bears on a stock who only really want to pump the stock up or bash it down depending on whether they are buying or selling.
To me, the best way for investors to increase their chances of successes is through homework. I know it doesn’t sound complicated, but, understanding the companies you are investing in, will help you pick better companies and improve the odds of success. The chat feature will be a place to come to find high quality information.
Maybe it is the racehorse handicapper in me, which I started doing as a kid, my mom was a racehorse owner and trainer when I was growing up. To handicap the horses, you need the Daily Racing Form, which is a newspaper that keeps all the stats on past performances of racehorses.
I think chat sites have the potential to be a crowdsourced way to compile information, with bullish and bearish commentary on mining sector. A key goal of the new website will be focused on making a platform to better crowdsource exploration and promote good commentary on the sector. Sort of a Daily Racing Form for mining exploration.
Drill Drill Drill
Drilling is the most crucial tool to evaluate what a company has in the ground, knowing how to value what they hit can make investors a lot of money. Another important factor is share structure. Drilling, share structure and valuation is what I focus on in the reports, as should investors.
I’m finding that most investors in the space, tend to look at the daily share movement as the judge of valuation. I truly wish they were much more focused on drilling.
I get that geology is not a simple endeavour, exploration for buried treasures is a challenging task. Investors have a wide understanding of drilling, from very little to off the charts. I’m not saying an investor in the space has to be a geologist to be a good investor, far from it, in reality, most geologists are not great stock pickers.
What I am saying is that no matter what your level of knowledge about drilling, you can find stuff that will help you as an investor. A perfect example is how eager is the company to start drilling.
They all say they want to get drilling, often, their actions on the other hand tells a different story. Which is the story that investors should be focused on.
Look at Aurania Resources (ARU.V), they have a marquee geologist as a big investor and leading the company. He was involved with the Fruta Del Norte discovery in Ecuador. It was a huge winner and his involvement has been a main focus of the promotion of the company.
Meanwhile, on the ground, they have been doing a lot of surface sampling, and no drilling. They have no problem getting funded for drilling, they do a lot of sampling, just no rush to drill. There is lots of promotion and storytelling, just no hurry to go test it drilling with the truth machine.
Yet, the company has a rich valuation for a surface sampling company. These are things that any investor in the space can understand, geologist or not. You don’t even have to be interested in rocks and metals.
Common sense tells you that if they have no problem raising money to drill, promote the heck out of what they find with their surface sampling, then don’t get around to drilling, they lack confidence in their projects. So should investors and they should also be careful about what they pay in valuation.
They aren’t the only ones, there are plenty of juniors that are long on promotion of their surface sampling and other work to prep for drilling, and short on getting drilling.
Some can take it to an extreme, like Novo Resources (NVO.V) which burst onto the scene a couple years ago when they found some high-grade boulders. Next thing you know, the promotion is in motion about them being the next Witwatersrand conglomerate gold story.
Their early samples kicked back impressive grades, instead of a few grams per tonne of gold like at Witwatersrand, it looked like they found vast areas of conglomerates at surface with a couple ounces per tonne.
The trouble is, as they have done more testing of the conglomerates, the grade has come in at low grade. It is a pretty good indication that they were either extremely lucky with the early samples, or they selective chose where to take them.
Which brings up an important point for investors in the space, pay attention to where and why they are drilling a particular location. Selective surface sampling can come back with impressive results, but, they don’t mean much until you take bigger samples with drilling or bulk sampling.
In addition to drilling, one also wants to keep a close eye on how long it takes to get results back and reported. Novo is an example of another thing to be careful with when it comes to explorers.
Since they came bursting onto the scene and their stock went parabolic to around a billion buck valuation. They did a lot of surface sampling, each step along the way making lots of fanfare about it in news releases and corporate presentations.
You might be shocked at the few results they have reported, considering all the company hype and their promoters. I’ll save you the trouble, few results have been reported, and the ones that have are low grade. Much lower than the well selected early samples that got the Wits 2.0 promotion pumping.
The leader of the company has said the samples are not representative, so they haven’t reported them. And they were completed months ago. What he really should have said is the results are much worse than the few reported samples.
The pump continues, the latest twist is that ore sorting will save the day by turning their low grade gold into high grade. This stuff is all out there for investors to look at, still, this company has around a half billion valuation. They are another one that is extremely expensive for a surface sampling company.
On the other hand, look at an explorer like Amex Exploration (AMX.V), they are busy drilling and reporting results. I don’t blame them they have hit a bunch of high-grade to bonanza grade gold at their new discovery, over the past few months.
No selective surface samples with Amex, it is all about the drilling results. The truth machine is delivering the high-grade over a significant strike and depth extent already.
When looking at a high-grade discovery, it is all about grade, mining widths and continuity. They have already announced bonanza grades from near surface, for over 150 metres of depth. With more holes pending from drilling at depth.
Equally as important, the recent big news that impressed me was a 25-metre step out hole they did along strike. It also hit the same kind of rocks and grades as in the high-grade vein nearby. More of the step out holes along strike are being done and are pending.
Another great tell about a project is whether or not it sounds hard and complicated or fairly straight forward. Recently, I did an interview show with Victor Cantore, CEO of Amex, and his VP Exploration Kelly Malcolm. I encourage those interested in Amex to check out the interview, it is clear the exploration is not complicated and they are on top something special.
Starting off, the grades are impressive, they are in steeply dipping veins. They are blind, so not coming to surface doesn’t give them a lot of help with geochem. They understand the deep structures, and those are what helps guide their drilling. It is really exploration with a drill rig, by some smart guys I would add.
I think they have something special and the guys running things clearly understand where to drill. Now that they have tagged a few veins, they can use those to lead them along strike and at depth.
It looks like they have a big gold system on their hands. They have a few veins that look like they could come together at depth. When I did the recent interview, Victor made an excellent point that there could be more veins, and Kelly was beaming about the prospect. Stay tuned, they are funded for drilling throughout the rest of the year and will have a strong news flow.
I don’t know if it as obvious to everybody, but, I can always seem to understand a lot about the enthusiasm of a company from their news. It is a key tool that every investor should try to sharpen, and use when doing research on a company.
Sirios Resources (SOI.V, Member of Allan Barry Reports website sponsorship program) is very good at presenting their information. They do a lot of highly technical work, but, what impresses me is that every investor can understand it.
They don’t just explain their results, they show great images. I wrote a book a few years ago and wanted to use some geological maps to explain things investors should look for. I asked Sirios to use their images because they do such a great job of it.
I know cynics will say yeah but they are your sponsor. Which is true. Just like it is true they do an excellent job of presenting their results. Just look at their recent results when they announced a new high-grade gold discovery with bonanza grades as well.
After you read the news, take a look at the image that goes with the news release. You can clearly see where they have a bunch of holes, which is where they are currently doing a resource estimate on a well defined gold discovery. Then just to the west, you can see a few holes, which is where they made the bonanza grade gold discovery.
This new discovery hit some really nice gold grades, and it looks like it can get a lot bigger and have an impact on the resource area beside it.
Another great source for trying to assess a company’s understanding of a discovery is in their corporate presentations, and their websites. Go check out Sirios’ website, presentations and news releases, you will quickly see how good they are at presenting their project.
Great Bear Resources (GBR.V) is another company adept at presenting their highly technical work work in images that make it easier for everyone to understand. One of the best things they have out to understand what they are doing is a webinar, you can find on their website, in the investor section.
In it they present a 3D geological model to explain the drilling, geological structures and gold mineralization they have found and what remains open laterally along strike and at depth.
This is another one that I think is onto a special gold discovery. Even at their current valuation, if you look at the room for them to find more gold. Plus, Red Lake is known for multi million ounce gold finds. It still has a modest valuation.
Lots of gold explorers say they are looking for 5-10 million ounce or bigger deposits. Few actually have the drilling that shows it is a realistic target. Great Bear is one of a small group.
My newest website sponsor Walker River Resources (WRR.V), is another one that is showing the realistic potential of being in the multi million ounce target category.
Running through their property is a key structure with cross cutting structures. At one of the cross cutting structures, which you can see easily from Google Earth. You can see the roads that the historical miners used decades ago to reach 3 adits. It is the starting of a classic Nevada gold mining story.
You have the oldtimers, doing back breaking hard work with rudimentary tools to dig the rocks full of high-grade gold out of the mountains. They literally only scratched the surface.
Walker River comes along, uses the old workings, geological structures, geochem and the roads to drill deeper into the mountain. Sure enough, the historical work left lots of crumbs to follow.
Walker River has released a batch of holes in 2019 that clearly show the grade potential. If you look at the old work, and the Google Earth image, it is clear they are looking at a big system with high-grade gold, in Nevada.
When it comes to gold elephant country, Nevada is one of the prime locations worldwide. They are in the right neighborhood and so far it looks like the historical miners didn’t just leave crumbs of where to explore, they left a lot of gold behind as well.
At the moment they are prepping for their next drilling program. They are building drill pads up the mountain, which will give them easier access to target the gold into the mountain. Stay tuned, the next round of drilling should prove to be very exciting.
Advance Gold (AAX.V), where I’m the president/CEO, has a new discovery that is focused on one of the most prolific regions in Mexico. The state of Zacatecas has Goldcorp’s Penasquito gold mine in the northern part of the state.
Down to the south, near the cities of Fresnillo and Zacatecas, they have been mining precious metals since the 1500s. Approximately 10% of all the silver ever mined, worldwide, has been mined in the state of Zacatecas.
We recently announced the completion of a private placement which will fund our next drilling program. It is currently being planned to commence shortly. Our announced goal is twofold.
We want to drill the vein near surface in the oxide zone. We hit a 12 metre intersection of the oxidized vein around 125 metres along strike from the historical silver mining done by Penoles. This is significantly wider than what Penoles mined, usually 2-4 metres.
Plenty of streaming and royalty companies are looking for near term producers. Considering the wider vein area could be interesting, we also have a 100 metre shaft, mining equipment and a mining permit. Hopefully, within a few shallow holes we can get a good handle on the near term mining potential.
The other goal is very exciting. We have drilled into a large epithermal vein system, in an area renowned for mining these systems. In an epithermal vein system, it is important to understand where you are laterally in the system. All but one of the veins is blind, they don’t come to surface, which indicates that the entire system is intact.
At the outer limits of the system, the gold grades can range from anomalous to low grade. This is because it isn’t the right part of the system where there is the right temperature and pressure for high-grade mineralization. That is found at the boiling zone in these systems, which remains to be drilled at Tabasquena, but, will be the first hole of our upcoming drilling.
It is also worth noting that in addition to the gold mineralization, Penoles mined silver above. We also hit high-grade gold at the top of the system.
I took over as the CEO of Advance a couple years ago. Since then, I have been focused on getting high quality projects, drilling and keeping the stock structure as tight as possible. Our fully diluted sits at 35 million, between the insiders which own over 30% fully diluted, and a small group of shareholders with another 30%, around 60% is tightly held.
I try to live what I preach with Advance. This business is about projects and share structure. We have a good group of projects and a strong share structure. Next step, drill baby drill.
There you have it folks, a group of companies that are either drilling or will be drilling soon that I follow very closely.
Of course I follow my own company Advance the closest, then I follow my sponsors very closely, and my picks as well. Knowing the company you invest in, especially what they are doing with the drilling will help every investor. The best investment decisions have always been based on my understanding of the company I owned stock in.
On that note, I encourage folks to check out the past reports on the website, plenty of hidden gems of companies and information in them. Be my guest to share the report to friends that follow mining exploration. Your efforts to promote my work is greatly appreciated.
All the best,
Allan Barry Laboucan
Allan Barry Reports
Advance Gold (AAX.V)
P.S. my reports are for information purposes only, before making any investment decisions it is important to do your homework and speak with your financial advisers.