GFG Resources Inc. (GFG:TSX.V; GFGSF:OTCQB) announced at the end of June an aggressive 2017 exploration program at the company's 100% owned Rattlesnake Hills gold project in central Wyoming. The program is scheduled to run from July through November. According to the company, "the fully funded, U.S.$4.0 million exploration program will consist of approximately 50 holes or 15,000 metres of drilling focused on four brownfield targets and six greenfield targets, additional soil and rock sampling and metallurgical testwork."
Analyst Craig Stanley of Eight Capital recently visited the site and wrote on July 24, "Overall we were impressed with the team's professionalism and experience, the project's location and accessibility, and came away with a greater appreciation of the geology, notably the various structural orientations that prepared the rocks to host gold mineralization."
He noted that three rigs are on site, "with the first batch of assays expected as early as August," and a "maiden resource estimate is scheduled for H1/18 and will be based on nearly 100,000 metres of drilling, 20,000 metres of which were drilled by GFG."
Stanley also stated that the Rattlesnake Hills project "hosts widespread gold mineralization in a 100% controlled, district-scale land position with excellent infrastructure in a mining-friendly jurisdiction. As such, we believe GFG could receive interest from senior and mid-tier gold producers," adding that in 2011, "Agnico-Eagle signed a $76 million joint venture agreement to earn a 70% interest in the Rattlesnake Hills Gold Project, which is less than half GFG's current market cap."
Rattlesnake Hills, Stanley commented, "has numerous geological similarities to the Cripple Creek gold system in Colorado, which has produced over 20 million ounces of gold."
Stanley also called attention to GFG's "proven management," noting that GFG is led by Brian Skanderbeg, "a professional geologist and former President and Chief Executive Officer of Claude Resources Inc., a TSX-listed gold exploration and mining company that was acquired by Silver Standard Resources in May 2016 for $337 million." He also noted that GFG's VP Exploration, Timothy Brown, "worked for 21 years at Cripple Creek, including nine years as Exploration Manager during which over six million ounces of gold were added to the resource. Three geologists that worked with Mr. Brown at Cripple Creek have also joined the GFG team."
Eight Capital has a Buy rating on GFG and target price of CA$1.60 per share. Shares are currently trading at around $0.53.
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Disclosures from Eight Capital, GFG Resources Inc., Comment, July 24, 2017
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