Discovery Watch is a weekly 15-30 minute audio show produced by HoweStreet.com where Jim Goddard interviews John Kaiser about resource juniors with projects that have caught John's attention. The projects will not be limited to companies he has covered through the Spec Value Rating System. Jim and John will periodically circle back to review the projects and if necessary close them out as no longer worth watching. Check out the catalog of KRO Free Stuff. We currently have a USD $275 Membership Special which grants full access to the end of 2020. Discovery Watch is available via YouTube or Podcast..
Wolfden Resources Corp was introduced to DW in August 2018 based on the intriguing story of Maine reforming its mining code and re-opening itsef to exploration after more than a decade of no trespassing signs. Wolfden was a first mover to do a deal on the Pickett Mtn VMS system which Getty found and explored during the 1980's. Since then we have been watching to see if Wolfden can expand the existing resource. This was accomplished with the January 2019 resource estimate for the West-East lenses after drilling pushed the West Lens deeper. 2019 was supposed to be the year Wolfden discovered new lenses in the Footwall Zone and in fold limbs parallel to the West-East lens limb. But technical drilling problems turned the campaign into a bust except for a teaser stringer zone in which the last hole was lost. But during 2019 Wolfden flew geophysical surveys, not just on the property, but also on a 30 km by 10 km grid covering geology similar to that which hosts the Bathurst Camp in New Brunswick and Buchans in Newfoundland. To avoid equity dilution Wolfden raised USD $3.5 million January 2020 by selling timber rights. It also filed for land use rezoning from logging to industrial for a 500 acre parcel that would be the site for mining infrastructure. This rezoning is necesaary for a mining permit application and they hope to get it by Q1 of 2021. In early Q3 2020 Wolfden will publish a PEA for a 1,000 tpd UG mine which was the basis for the rezoning application. I created a SC 1,000 tpd scenario OV in the ShareCollective which yields a USD $135 million after-tax NPV that implies a future CAD $1.24 stock price, but that is a worst case scenario. Much more interesting is the exploration potential to boost the existing resource to 10 million tonnes at the same grade so as to support a 2,000 tpd scenario with a 10 year mine life. The SC 2,000 tpd scenario is much more interesting at USD $464 million NPV with a corresponding CAD $4.26 stock price. Wolfden began a 5,000 m drill program in July 2020 designed to test multiple new targets at Pickett Mtn whose EM conductors represent potential tonnage footprints of 15-20 million tonnes. The DW hope is that Wolfen turns one or more of these targets into satellite massive sulphide zones that boost the resource towards 10 million tonnes. Failing that, Wolfden is negotiating with landowners for deals on some of the sourrounding area it flew in 2019. If successful, the play turns into a regional quest for Buchans scale VMS clusters. On July 13, 2020 John Kaiser conducted a Zoom Interview with CEO Ron Little and Expl VP Don Dudeck. (Jul 15, 2020)
Zephyr Minerals Ltd has been a KRO Bottom-Fish Spec Value rated company since late 2017 based on the Dawson-Green Mountain gold project in Colorado where the junior has a small 111,300 oz resource for which a PEA supporting a small 300 tpd underground mine was published in early 2017. This resource in the Dawson segment has been outlined only to a depth of 275 m because it dips into a mountain and it is not practical to drill deeper. The idea is that if a small scale mine were developed a much bigger resource could be delineated by drilling from underground. The upside for the Dawson segment thus hinges on a gold bull market to bring in the required CapEx. In 2018 Zephyr acquired the Green Mtn segment to the west where it hopes to establish a similar system. Zephyr was introduced to DW in May 2019 on the basis of a Broken Hill type zinc-lead-silver target that emerged in 2018 within the El Plomo segment, a down-dropped block between the Green Mtn and Dawson segments. It features a high grade Zn-Pb-Ag horizon that was tested to a shallow depth decades ago but given up on because although it strikes for 3 km it is narrow. In the Broken Hill model metamorphism will have folded and remobilized such a system to create structural thickening and higher grades. Regional geochemistry suggests such a process could have taken place, so during the summer of 2019 Zephyr conducted an airborne Mag-EM survey over the property to see if there is a magnetic anomaly associated with the El Plomo trend that supports the hypothesis that a much thicker Broken Hill type deposit exists at depth. In September 2019 Zephyr revealed that there is such a magnetic anomaly worth drilling from 4-5 locations along the trend.An analog which fits the target's tonnage footprint is the Cannington deposit in Australia, a smaller but richer version of the original Broken Hill deposit. A KRO Cannington Clone Outcome Visualization indicated such a deposit would be worth more than CAD $7 billion at current metal prices, which, if Zephyr could avoid dilution beyond its current 74 million fully diluted, implied an ultimate price target of $100. Further support for the BHT model emerged when an electronprobe study revealed that silver occurs within a rare mineral uniquely associated with BHT deposit. Testing this target, however, is not simple because El Plomo is bighorn sheep habitat where drilling is restricted to July 1 to Oct 31. Zephyr's plans to drill during the 2020 summer were nearly disrupted when an anti mining NGO appealed the drill permit. The appeal was heasrd on July 22 and unanimously dismissed. Drilling is now expected to begin in the second week of August. Due to the visually obvious massive sulphide nature of a BHT system a new discovery could become evident early in the drill program, launching the stock into S-Curve speculation territory. If a discovery were to demonstrate Cannington scale and similarity, it would have a profound effect on the resource junior bull market awakening after a decade long drought. (Jul 22, 2020)
Disclosure: JK owns Wolfden; Pacific Empire is a Bottom-Fish Spec Value rated Favorite, Wolfden and Zephyr are Good Spec Value rated Favorites