Comstock attracts attention with Yukon trenching

VANCOUVER — Comstock Metals (CSL-V) has caught the eye of investors with some enticing trench and sample results from its QV project in Yukon’s White Gold district.

On July 25 the company announced that a 75-metre trench sample returned an average of 3.74 grams gold per tonne over the entire length of trench QVTR12-06. Starting some 205 metres east on strike, trench QVTR12-03 returned 45 metres grading 0.85 grams gold. Trench QVTR12-04, starting roughly 150 metres south of where QVTR12-03 ended, returned 15 metres grading 0.15 gram gold.

Then on July 30 Comstock announced several new sample results between 62 and 83 metres southwest of its discovery trench QVTR12-06, including roughly 1.5 metres grading 16.15 grams gold, 0.7 metre averaging 7.71 grams gold, and 0.7 metre averaging 3.27 grams gold. The samples were taken as chip samples but the company is treating them as grab samples due to incomplete exposure.

Since the initial QVTR12-06 results, Comstock has seen a major increase in trading. The most the company traded in a day in July before the news was 70,000 shares, with no trades at all on several days, while the company has now seen 9 million shares traded over six days. In that time Comstock’s share price has risen 10¢ or 71.4% to 24¢.

Comstock only listed on the Venture just under a year ago after completing a reverse takeover and name change of Tectonic Minerals. Since listing the company’s share price has hovered between 9¢ and 29¢ with 44 million shares outstanding. The company is led by Rasool Mohammad as president and CEO, who holds the same role at La Ronge Gold (LAR-V). Comstock directors Larry Johnson and Douglas Turnbull are also director at La Ronge. The company names Jerry Blackwell, Shawn Ryan, and Adrian Fleming as technical advisors.

In its qualifying transaction Comstock listed the Mexican Corona property, on which it has an option to earn 75%, as its principal property. In February the company set out to drill up to 7,000 metres on the Corona property in western Chihuahua, but only completed some 2,100 metres. Results included 34.5 metres grading 0.36 grams gold of porphyry-style mineralization, and 1 metre averaging 258 grams silver, 6.33 grams gold, 3.8% lead, and 2.83% zinc while testing the Esperanza showing for the first time.

As to the company’s 103.7-sq.-km QV property, Comstock optioned it from Shawn Ryan and can earn 100%. The property sits 15 km north of Kinross’ (K-T, KGC-N) Golden Saddle deposit on its White Gold property, and Comstock believes QV could represent a northern extension of the large scale structure that hosts the Golden Saddle deposit. Comstock completed two soil-sampling programs and airborne magnetic and radiometric surveys on the property last year.

This year Comstock set out to complete 1,500-metres of trenching spread over 12 trenches. The company has already completed 6 trenches over 550 metres, with results still pending for three of them. The 2012 program also includes 1,400 soil samples to define the limits of the 2011 soil anomalies. The latest sample results establish a 100 to 250 metre by 250 metre soil anomaly.

With the increased attention, Comstock has increased the size of its non-brokered private placement, first announced in late June, from $1 million to $3 million. The placement is being done at 20¢ per flow-through unit and 15¢ per non-flow-though unit. The company closed a first tranche of $125,000 in flow-through and $175,000 in non-flow-through in early July.