Gold Standard Ventures makes oxide discovery

Geologists at Gold Standard Ventures (TSXV: GSV; NYSE-MKT: GSV) could be on the brink of another major discovery in the Carlin trend.

The company has released two high-grade intercepts north of the resource at its Dark Star North oxide deposit, which it says show grade and thickness that are an order of magnitude better than anything it has drilled so far at Dark Star.

The first drill hole, 510 metres north of the Dark Star deposit, intersected a vertical gold zone with an upper oxidized intercept of 149.4 metres of 1.38 grams gold per tonne, while the second hole — 60 metres east and 10 metres north of the first hole — returned 157 metres of 1.51 grams gold.

“It’s not every day that you drill 157 metres of 1.5 grams in these thick intercepts, and now we have some separation between them,” the junior’s vice-president of exploration Mac Jackson said on a Nov. 10 conference call. “We’re clearly into something that has volume, is mineralized … and fortunately, it’s relatively shallow and oxide.”

Mark Bradley, Barrick Gold’s (TSX: ABX; NYSE: ABX) principal geologist of exploration opportunities — who is responsible for reviewing and evaluating third-party exploration and resource opportunities in North America — asked several questions on the conference call that prompted analyst Michael Gray of Macquarie Research to later write in a note that it was “the first time we have heard the seniors jump into the Q&A on a conference call hosted by a junior.” Gray described the latest intercepts as “a real ‘wake-me-up’ set of drill results,” and added that when geologist “Mac Jackson speaks — we listen.”

Jackson, who has worked as an exploration geologist for the last 16 years, has several discoveries under his belt. He contributed to the Leeville and Turf discoveries on the Carlin trend, and the Fiber Line deposit at Twin Creeks.

Other members of the team are also well known for their accomplishments. John Norby, Gold Standard’s chief geologist, has worked as an exploration geologist for 30 years and Steven Koehler, senior geologist and manager of projects, has worked in the industry for more than 24 years.

Norby spent 16 years designing and executing exploration and resource delineation, and expansion programs for Newmont Mining (NYSE: NEM), Placer Dome, Barrick and Victoria Gold, while Koehler held senior-level exploration positions with Newmont, Placer Dome and Miranda Gold. Norby helped find Cortez Hills and Deep Sulfide Feeder, and Koehler helped discover the Cortez Hills, Fence/Crow and Leeville deposits.

In an interview, the company’s co-founder, Luke Norman, described the drill hole results as “a bit of a game-changer for us,” and said the oxide discovery was good news for Gold Standard and the entire industry, which has been battered by low commodity prices and dismal markets.

“There are a lot of investors looking for the next shining light in the exploration space to lift some of these things out of the mire, because it’s been such a challenging time in the exploration space,” he says. “There have been numerous instances of good exploration or discovery holes that have had little to no reaction in terms of the share price, and we saw Gold Standard’s shares react to that second drill hole … people are seeing that there’s an opportunity here where we can reignite some interest in exploration, where there’s been a complete feeling of failure in the space for so many years.”

News of the first drill hole on Nov. 4 sent Gold Standard’s shares up 14% to 59¢. Results of the second drill hole on Nov. 10 drove the shares to 74¢.

Dark Star is part of the company’s Railroad project at the southern end of the Carlin trend, and is 2.1 km east of its Pinion oxide gold deposit. Pinion, in turn, is 15 km south of its North Bullion deposit, which Gold Standard discovered in 2011 on the wholly owned Railroad–Pinion property. Newmont’s Emigrant mine sits 16 km north of the project.

Last year the company released a National Instrument 43-101 compliant resource for the Pinion deposit, which doubled the historic resource. Pinion’s indicated resource stands at 20.8 million tonnes grading 0.63 gram gold for 423,000 oz., with inferred resources measuring 55.9 million tonnes at an average 0.57 gram for 1 million oz., using a cut-off grade of 0.14 gram gold per tonne.

In March, Gold Standard released an initial inferred resource of 23.1 million tonnes grading 0.51 gram gold for 375,000 oz. gold at the same cut-off grade as Pinion, based on 105 historic reverse-circulation drill holes.

CEO and co-founder Jonathan Awde  noted on the conference call that it has taken the company almost five years to consolidate its Nevada land package, which now makes up just over 20% of the Carlin trend.

“We have had to deal with 91 owners of surface, mineral and water rights, and we’ve used the downturn in the last three-plus years to get a lot of land on the cheap,” he says. “This is a part of the world that is difficult to acquire and secure a large, contiguous land package, and now we have the second-largest contiguous land package in the Carlin behind Newmont.”

Awde noted that the oxide discovery is not only the second blind discovery that the company has made at the project, but that the historic resource at Dark Star was previously seen as hosted in the wrong rocks.

“Gold Standard’s exploration team thought a little bit differently about the potential of Dark Star and that whole major north–south corridor that runs from Emigrant, which is 10 miles north, to as far south as our Dixie prospect,” Awde says. “There’s a lot of room for expansion here.”

He adds that “the deposit is blind, because in soils and rocks at the surface in this area we only detected weakly anomalous amounts of gold and Carlin pathfinders. We don’t think it comes to the surface, but it should be shallow to the east and the immediate footwall of that fault.”

The next two holes will be drilled at 100-metre spacings moving south from the two intercepts, Jackson says. “In the larger picture, we have 6 km of strike length … so we have lots of strike length of that corridor to explore.”