Bottom-Fish Comment - October 6, 2009: PC Gold on track with second rig to drill the mother of all holes at Pickle Crow
PC Gold Inc has had several false starts this year, but we should soon see a definitive uptrend develop as the breakout in the gold price compels the market to get its head around the complex exploration program the junior has underway on its Pickle Crow gold project in northwestern Ontario. We tagged PC Gold as a medium priority bottom-fish buy in the $0.20-$0.29 range on December 24, 2008 and stepped up our coverage during the spring of 2009 on the basis that this junior had the potential to track an uptrend in the price of gold thanks to the 1.3 million ounces left behind when mining shut down in 1966, and to go ballistic on the upside if deep drilling confirms that high grade mineralization extends well beyond the maximum mined vertical depth of 1,231 metres and perhaps even blossoms as turned out to be the case in the Red Lake camp.
During the summer, however, PC Gold distracted and confused the market with a round of shallow drilling to test several geological theories. One of these theories was that a thick conglomerate unit which the miners had tunneled through to get at the high grade quartz-carbonate veins was mineralized with gold, but at a lower grade than the veins, thus explaining why this material was never processed. The similarity with the Timiskaming sediment package at Timmins and Kirkland Lake, where such mineralization serves as a significant gold host, led PC Gold management to speculate that perhaps a major near surface gold resource had been overlooked in the Pickle Crow camp.
This idea got some brokers at Canaccord very excited, which led to a $2,430,000 private placement financing of 4.6 million units at $0.53 in July. The stock developed a sharp uptrend when a 4 hole drill program encountered thick intervals of disseminated to semi-massive sulphides within the conglomerate unit, of which the core photo below is a good example.
Unfortunately this impressive 338 metre intersection from hole PC-09-029 consisted only of pyrite and pyrrhotite and very little gold, though gold bearing arsenopyrite quartz veins of the sort found near the No 13 vein cross-cut the conglomerate, suggesting that the barren sulphides were deposited prior to the main gold mineralizing event.
When PC Gold announced this on August 10 the stock dropped like a rock, which was not a good development for bottom-fishers, but a good sign that speculative interest in exploration plays had returned to the market after a multi-year absence.
Lost in that same August 10 report was news that additional drilling designed to test the contact between the prospective hanging wall Pickle Crow assemblage and the presumed barren footwall Confederation assemblage rocks to the south had encountered short intervals of high grade veins (24.89 g/t gold over 0.4 metres) within the Confederation aged **bro rocks.
The structural and mineralogical similarity of the Confederation hosted veins with those in the Pickle Crow rocks has opened up a whole new target in the Pickle Crow camp. As the map above shows, the southeastern side of the vein trend is covered by swamp, so there was no chance prospectors would ever note vein mineralization in rocks which were supposed to be barren.
Furthermore, because the veins dip toward the northwest, there was no reason to drill from the footwall side even during the winter when the swamp was frozen. PC Gold is now conducting a Titan 24 Induced Polarization/Resistivity survey designed to detect disseminated sulphides to a depth of 700 metres over the Pickle Crow/Confederation contact and the swamp covered area to the south.
On September 28 PC Gold rekindled the market's interest with news that a new pipe like gold zone called the Conduit had been discovered in the area of the Albany Shaft. Three-dimensional modelling indicates a north-northwest trending shallow plunging pipe-shaped body characterized by highly deformed stockwork and breccia style veins.
The association within a planar structure leads PC Gold to believe that a stacked series of such bodies may be present. Typical intervals were 35.6 m of 3.17 g/t gold in hole 36 and 40.5 m of 2.11 g/t gold in hole 37 within which are included shorter high grade intervals.
This body had not been encountered by historical drilling, which goes to show that despite being swiss-cheesed by 4,500 holes and riddled with 52 km of underground workings this small mining camp still hosts lots of secrets. PC Gold is nearly finished with a digital compilation of all this historical data which will form the basis for a massive revisualization of the Pickle Crow system's geometry.
On October 6 PC Gold brought the market's attention back to the original story with news that a second drill rig with a vertical depth capacity of 2,500 metres was now on the property. Wedge hole PC-08-014AW03 has been completed in the No 1 Shaft area and did intersect the No 5 Iron Formation/Vein zone and the No 11 Vein, and wedge hole W04 targeting the No 5 Iron Formation zone at a 1,160 m depth is now underway.
As soon as this wedge hole is done the rig will be moved to another location from which a new mother hole will be drilled to a vertical depth of 1,700 metres, from where wedge holes will test for extensions of the key veins. This is the hole about which we expect market speculation to intensify, because it will test the high grade veins more than 500 metres below the deepest mine level.
So now we have at least three exploration targets at Pickle Crow: the deep vein extensions, gold in the Confederation rocks and along the contact, and the Conduit pipes in the Albany Shaft area. At the same time we have gold at $1,040 and itching to head higher. With the Pickle Crow project of PC Gold having an implied project value of only $42 million based on an $0.80 stock price, a 100% net interest, and 51.9 million shares fully diluted,
PC Gold is a no-brainer to head higher during the next six months, and bottom-fishers who hold this junior should not even consider selling until the stock is trading above $2. As the stock is now well above the original bottom-fish buy range, up 176% from the $0.29 bottom-fish limit, we are converting PC Gold Inc into a Spec Cycle Hold 100% recommendation.
AUT Price at posting:
5.5¢ Sentiment: Buy Disclosure: Held
(20min delay)