-- Posted Tuesday, 28 September 2010 | | Source: GoldSeek.com
Shares outstanding: 45.9 million
Fully diluted: 56.3 million
Nevada, what a beautiful state…especially if your idea of romantic is watching the diamond drill rigs turn in the sun set! Seeing as most people reading this probably smiled or laughed when they read this, I’m guessing that this piece will be well received.
In April of this year, Nevada Sunrise and Animas Resources entered into a joint venture agreement valued at $5 million whereby $3.5 million was to be spent on their Golden Arrow project and $1.5 million was to be spent on their Kinsley Mountain project. This expenditure is under the following terms: the expenditure had to be made within 3 years and it would earn Animas a 51% interest in the projects. In 2010, Animas MUST spend $1 million on the Golden Arrow project and $200,000 on the Kinsley Mountain project. To date, there hasn’t been meaningful work on either project until now. The drills start turning as of a couple of days from now on the Golden Arrow project. The drilling program will include 20 drill holes totaling approximately 18,000 feet (5,480 meters). Nine of holes will test for Round Mountain-like gold mineralization. With the amount of work that must get completed over the balance of the year, there will be a mountain of news flow over the next couple of months which will be good for the share price.
We should first talk about the Golden Arrow project. First off there are 296,500 ounces of measured and indicated gold grading 0.81 gpt and just over 4 million ounces of silver at an average grade of 11.36 gpt. There is a slightly lower grade 50,000 ounces of gold and 1.2 million ounces of silver in the inferred category. This project is located in the historic Walker Lane district that has produced over 30 million ounces of gold and 400 million ounces of silver to date. The Walker Lane trend has produced several deposits including Round Mountain that is owned and operated by Kinross and Barrick Gold. The company is looking for more ounces around its gold deposit. The JV with Animas should prove very useful in trying to define more ounces. The Walker Lane is very prolific so the odds are good. This property has been drilled by 7 other companies in the past for a total of 45,000 meters of combined RC and diamond drilling. There are plenty of geophysical and geochemical signals that tell the company that there is a major gold deposit around, it’s just a matter of finding it. If multiple targets are hit during the drilling program, the size of the Golden Arrow deposit could quickly approach more than one million ounces.
The Kinsley Mountain Project has been mined in the past to the tune of just over 130,000 ounces. There is also plenty of information that the company will explore. I however am more interested in Golden Arrow as it is the one that will be drilled. In the mean time the drill starts turning in a couple of days and results should follow shortly after. Based on what is already there in there in terms of ounces and potential, I would expect this deposit to grow. This will truly be shown with drilling which is what is going to happen.
Conclusion
The company has an excellent technical team and is well managed. The Golden Arrow Project alone has the potential to ultimately grow into a multi-million ounce gold deposit with a significant high grade core to enhance the economics of the deposit. With its tight share structure, good investor sponsorship, joint venture arrangements, and imminent drill program, there is potential for significant growth in the share price. At current price levels, Nevada Sunrise is valued at approximately $15 per ounce gold/eq, based on the current NI 43-101 Golden Arrow resource. Given that the peer group trades at an average of $40-$50 per ounce gold/eq, displays the potential for significant share price appreciation for Nevada Sunrise, notwithstanding any further expansion to the current resource.
With a market capitalization of just over $7 million dollars it is a very good bet that this is the start of an exciting time for Nevada Sunrise.
I will update you all as results come out.
Victor Goncalves
http://www.enereport.com/
Disclaimer:
Please be advised that any articles containing, but not limited to, price targets, resources estimates and any other speculative statements are the opinion of ENE Report are the opinion of ENE Report. We are not registered investment advisors. You should not make any kind of investment decision in relation to these articles without first obtaining independent investment advice from a registered investment advisor.
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-- Posted Tuesday, 28 September 2010 | Digg This Article
| Source: GoldSeek.com
