In every precious metals cycle there comes a time where a company has good assets but for one reason or another has failed to garner traction and has to pretty much give away projects. That point came for Canarc (CCM-V) last year. They pretty much gave away a high-grade gold project with over a million ounces of gold in a current 43-101 to a junior that was little more than a shell at the time.
In October Canarc announced a binding agreement with Getchell Gold Corp. (GTCH:CSE) for an option on two major gold properties in Nevada. The Fondaway Canyon project is the subject of a 2017 43-101 report by Canarc showing a indicated resource of 6.18 g/t gold for 409,000 ounces as well as an inferred resource of 660,000 ounces at 6.4 g/t Au.
Getchell Gold is paying $4 million in cash and shares over a four year period to get 100% ownership with a small, 2% NSR over the two projects. The 2nd project is called the Dixie Comstock project and shows signs of having some mining activity but there are no reports of production. There was a minor historic resource from a prior owner of the property dating back to 1991 of 146,000 ounces.
There is a $1.45 million work commitment over the same four year period. The company has just completed a $1.65 million financing and is well cashed up. The financing was especially attractive from an investor point of view with the shares at $0.10 with a full warrant at $0.14 that can be accelerated if the shares close above $0.25 for a ten day period. That would bring in an additional $2.3 million to advance the two projects.
At this point the company is a work in progress. It has no skeletons hidden in the closet, the company is too young for that. Management has negotiated an especially attractive deal on a solid pair of projects in one of the most mining friendly jurisdictions in the world. Investors are getting ounces of relatively high-grade gold in Nevada for about $10 an ounce after Getchell has paid for the 100% ownership.
The company is so young that literally now they need to sit down and figure out how to spend the money wisely. Obviously they need to do things that will catch the eye of investors but with a market cap under $7 million CAD, they are pretty cheap. Management has the tools to make this a success, now it's up to them to deliver.
One of the biggest problems is visibility. The shares pretty much trade by appointment. There is neither pressure to buy nor pressure to sell. The stock is liquid, the company just needs to attract more attention.
I was a shareholder before they did this deal. I participated in the private placement and the company is an advertiser. Do your own due diligence.
The company has done an excellent job of doing a presentation and interested investors should take a gander at it.
GTCH-C $0.13 (Jan 31, 2020)
GGLDF-OTCQB 54.8 million shares
Getchell Gold website.
Bob Moriarty founded 321gold.com, with his late wife, Barbara Moriarty, more than 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.[NLINSERT]
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