Pinnacle Digest to Fire River Gold: A TURN KEY GOLD MINING OPERATION
(firmenpresse) -
Pinnacle Digest to Fire River Gold: A TURN KEY GOLD MINING OPERATION
Dear member,
Griffiths McBurney & Partners, a well respected investment dealer serving corporate and institutional investors released a quantitative and technical analysis report on gold this week. The report was boldly titled, "Gold and Gold Equities nearing Completion of Corrections." In the report GMP stated, "We continue to anticipate a spring 2010 intermediate top for gold that should at minimum reach $1,500. We believe that the current pullbacks are near completion and present a quality opportunity to accumulate gold and gold equities."
And that is exactly what we plan to do at Pinnacle.
It's been almost 5 months since we featured a gold company. The last gold company we put our name behind was in September of 2009 - Teryl Resources, operating in the world famous Tintina Gold Belt, Alaska. In less than 2 months after releasing our introductory research report, Teryl Resources was offered a buyout from Kinross Gold for its interest in the Gil JV Project and its shares increased 151% from our notification price. This was a huge win for our members and team.
Our team has gone back to the world renowned Tintina Gold Belt in Alaska to find our new Featured Company. We have selected Fire River Gold Corp. (FAU:TSXV) as our Featured Gold Company of 2010. The company's flagship project is the Nixon Fork Gold Mine, a past producing high grade gold mine where management's objective is to re-establish production in the next 18 months, or potentially much sooner. And, thanks to the recent market pull back, the stock has dropped to a price level which ultimately dictated the timing of our selection. Fire River Gold currently trades at $0.44 per share, down from its peak of $0.75.
Fire River Gold is by far the most advanced mining company we have featured on any of the junior exchanges to date. It took 5 months of scouring the junior resource market to find this company. The long hours at the office were well worth it.
Fire River Gold is a company with a market cap of just under $18 million. With over $100 million in infrastructure already in place at the company's Nixon Fork Gold Mine, we have truly found a turn key gold mining operation. Never before have we found a mining company with this amount of infrastructure and a market cap of less than $20 million.
When most junior miners talk about infrastructure, they are talking about electricity, roads, a potential nearby work force, etc. (all very basic components that don't hold a candle to what Fire River has in place). When Fire River Gold explains its current infrastructure it is clear just how advanced its Nixon Fork project is, as the company owns a turn key gold mining operation.
How do we define turn key?
Fire River Gold owns a fleet of mining vehicles, a self-contained power plant, water and septic systems, maintenance facilities, drilling equipment, an 85 person camp, office facilities and a 1.2km long landing strip.
That's not all.
Facilities also include a 200 tpd floatation plant with a gravity gold separation circuit and a sulphide floatation circuit. In 2008, a CIL gold leaching circuit was purchased and is currently 60% installed.
Finally, and most importantly, the very difficult and time consuming factor of permitting a mine has already been accomplished at Nixon Fork. The mine is fully permitted and bonded. The bond alone cost $3.6 million to complete and takes 5 years to receive.
It's clear after reading the above summary just how advanced Fire River's Nixon Fork Gold Mine is.
If you're wondering why you've never heard of Fire River Gold - you're not alone. We were wondering the same thing upon first learning of its project. Fire River Gold is a recent IPO and has only been trading on the TSX Venture for less than three months under the trading symbol, FAU.
In order to understand Fire River Gold's plan and the potential for the Nixon Fork Gold Mine, you have to understand the circumstances in which it was acquired as well as all past work and production rates at the mine.
Nixon Fork Gold Mine History
The first company to work on the project was Nevada Goldfields Inc. (NGI) who constructed and operated the Nixon Fork high-grade gold mine from 1995-1998, producing 137,749 ounces of gold and 2.1 million pounds of copper, with additional silver credits. The average production grade was extremely high, 42 grams per tonne (gpt) of gold, with an average production cost of only US$266 per ounce. Nevada Goldfields' profitable operation at Nixon Fork funded its parent company, Real del Monteʹs development projects in Mexico. The Mexico projects were not successful and as a consequence the Nixon Fork Mine was closed in 1999 due to the bankruptcy of Real del Monte amidst declining gold prices.
That opened the door for St Andrews Goldfields Ltd (SAS) who leased the mineral rights for Nixon Fork in 2003. From 2004 through 2008 approximately US$54 million was expended on upgrades to the processing facilities, mine infrastructure and new equipment. During 2007 - 2008, 9,381 meters of reserve resource definition drilling was conducted.
Limited production in 2007 resulted in recovery of 6,775 ounces of gold and 78,644 pounds of copper. As time went on, speculation grew that St. Andrews was not properly allocating their resources when it came to Nixon Fork.
Alastair Ford, in an article from minesite.com released January 19th, 2010, stated in reference to St. Andrews' work at the Nixon Fork Mine, that, "At that time St Andrews seemed to be pressing the self-destruct button all over the place, and Nixon Fork was no exception."
In the fall of 2008, during the market collapse, the mine facility and camp was put on care and maintenance.
Like all miners, St. Andrews Goldfields was not immune to the market crash of 2008. During the crash, when cash was extremely tight amongst miners, the company decided to utilize what resources it had left on its Holloway Mine in Timmins, Ontario (which is now producing gold), thus putting the Nixon Fork Mine up for sale. So once again, due to a monetary crisis and unusual circumstances, the door was re-opened on the Nixon Fork Gold Mine. This was an opportunity not to be passed up by Harry Barr, Fire River's President, who strongly believes that within every great crisis, there is great opportunity.
Nixon Fork was acquired by Pacific North West Capital in February 2009. Fire River Gold is a Pacific North West Capital spin out and acquired Nixon Fork for $3 million in cash and shares from Pacific North West Capital in June 2009. Pacific North West Capital is still the largest shareholder of Fire River. Harry Barr is the CEO and President of both Fire River Gold and Pacific North West Capital.
As the last two operators of the Nixon Fork mine focused most of their financial efforts on underground development, the mine infrastructure, equipment, permitting and bonding, only a limited amount of their budget was spent on the exploration upside. Numerous exploration targets have since been identified and Fire River's management plans to focus on these and other areas throughout the claim block with the objective of outlining new resources. Fire River wants to find out just how big of a gold mine they are sitting on. It is management's belief that there is significant exploration upside at Nixon Fork as well as excellent potential for near-term production.
WHAT TO EXPECT
An NI 43-101 resource calculation will be completed this year. This report shall incorporate the results of a CDN $1.25 million program which began in late April 2009. The objective is to complete a re-evaluation of the mine, mill, underground resource and comprehensive study to re-process the tailings pond. The report will come out in stages, with the first milestone being the completion of the tailings study. According to the Northern Miner, Fire River Gold's 5 acre tailings pond is "somewhat of a gold mine itself". After reviewing previous reports we understand why they made such a bold statement. There is 150,000 tonnes of mill tailings that a previous study showed average grades of 8.1 grams per ton.
The objective is to look at the feasibility of re-processing the tailings through the new CIL plant that was purchased and is approximately 60% installed in the mill. A drill program and metallurgical study is in progress on the site and the complete evaluation is expected to be finalized with a corresponding report issued shortly. Subject to positive results, management plans to install the balance of the CIL plant (which is all on site) and related tailings production equipment in the winter of 2010. The decision to process the tailings is slated to occur after spring breakup, in March 2010 (just over one month from now) - a key reason why we are introducing you to Fire River Gold now.
Fire River has big plans for 2010 and won't be relying on Nixon Fork's past operators for old data. With a team of over 100 years experience working in Alaska, Fire River Gold believes their technical crew provides superior expertise in the area. Without relying on any historical reports, Fire River will be undertaking an extensive assessment ($1.25M) and an exploration program of 20,000 metres in 2010 which will result in its own NI 43-101 on the Nixon Fork Gold Mine this fall - a key reason why we are telling you about this company now. On top of that, the company's technical team will be re-logging over 200,000 ft of historical drilling and doing among other things, a geochem program to establish priority targets for this seasons extensive drill program.
More Details on Fire River's 2010 Work Program:
- Between April and August 2010, underground infill drilling will commence as 12,000 metres (36,000ft) has been planned on 5 targets.
- Between May and September 2010, Surface Exploration Drilling will commence as 8,000 metres (24,000 ft) is planned to be drilled on 3 targets.
Remember, Fire River Gold has another 'iron in the fire' in 2010.
Added to the exploration upside is the gold in the tailings, estimated at between 150,000 tons grading 7 g/t and 170,000 tons grading 9 g/t. This could prove to be a significant near-term revenue generator for the company.
It is important to note that Fire River is well financed, an enviable position for a junior miner to be in. As of January 2010, they had $3.5 million in the company treasury which will help them capitalize on the potential gold run to record levels.
The coming price rise of gold represents a "once-in-every-300-years" phenomenon stated Rob McEwen, Founder and ex-CEO of Gold Corp., also an advocate of the junior resource market which finds the world's future producers.
Greg McCoach, the widely recognized mining speculator, bullion dealer, investor, and newsletter writer has generated an impressive track record over the years. This past week, he took a very strong stance by stating, "I fully expect gold to break the $1,500 level within the next 12 months. That means 2010 will a breakout year for junior gold stocks beyond anything we have experienced in the last 10 years. We still have a long way to go before the junior gold stock markets reach their peak. I urge you to begin establishing positions now."
When it comes to Fire River Gold (FAU:TSXV), the facts speak for themselves. We are buying shares in the company this coming week and putting our name behind our Featured Gold Company of 2010.
All the best with your investments,
PINNACLEDIGEST.COM
VISIT FIRE RIVER GOLD ONLINE: http://www.firerivergold.com/s/Home.asp
VIEW DETAILED ONLINE INVESTOR FACT SHEET ON FIRE RIVER: http://www.firerivergold.com/i/pdf/FAUslideshow.pdf
Disclaimer: PinnacleDigest.com is an online financial newsletter owned by Maximus Strategic Consulting Inc. We are focused on researching small-cap and large-cap public companies. Information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. This material is not an offer to sell or a solicitation of an offer to buy any securities or commodity. All statements in this report, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's registered filings what are available at www.sedar.com.PinnacleDigest.com and its affiliates, officers, directors and agents have been compensated to perform research and therefore information should not be construed as unbiased. PinnacleDigest.com is an information service for investors and traders, and is neither a recommendation nor an offer to buy or sell securities. 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Datum: 01.03.2010 - 03:24 Uhr
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