Darkstar - Don't give me any of that intelligent life crap, just give me something I can blow up?

Gold Standard have been releasing some decent new hits from North Dark Star over the last couple of months, and so I cajoled (thanks Rob) into revisiting the project to see where these holes were drilled and to see what is new.

My updated model can be found here (link) and I've also uploaded the drill-hole data as well (link).

Summary

TAG's officially bad BoTE (back of the envelope) resource calculation for North Dark Star is: 

• 43.7Mt @ 0.78 g/t Au or
• 1.1 Moz Au

Basically this is a small, moderate grade deposit which is similar to the others they have found around the project:

1. Pinion - 1.7Moz Au (92 Mt @ 0.58 g/t Au
2. Dark Star - 0.38Moz Au (23Mt @ 0.51 g/t Au)

Is there potential for Railroad to host a big gold deposit? It is possible, but the drilling is telling us that in reality, there are probably just a few small deposits like NDS scattered around.

Why don't we have a look at the recent drilling in a bit more detail. 

If you ignore holes 07 and 10, all they are hitting are narrow, low grade zones.

We can quickly see (heck they draw lines to them) where the good holes are located! They are all drilled into that nice yellowy-pink blob, and all the crap holes (narrow low grade zones or no mineralisation) are located around it, and all of their holes exploring the South Dark Star corridor found diddly squat!

Let's look at the sections - going from north to south

Section 4480200N

Hole DS16-01 - very disappointing

Hole DS15-10, 11 and 13 all hit zone high high grade mineralisation (again these 3 holes are only 40m apart) but as soon as we move away from the core zone, the grade disappears. Look at hole 16-01 - just a few narrow, low grade zones and it is only 30m from 150m @ 1.4 g/t Au! 

Section 4480080N

Same again, high grade (>1g/t Au) core that quickly dies out

DS16-08 hit a nice thick gold zone and this has continued down to hole DS16-24, but up-dip the story is totally different, hole DS16-21 drilled just 60m away hit precisely SFA.

Section 4479960N

Same again....

We see the same again, some great values in hole DS16-03B, but holes 17 and 23 again drilled 60m and 70m away respectively again hit a bit of grade (hole 27) or no grade (hole 23).

All of the drilling data is telling you that there is a small, high grade core 100m wide x 500m long) at North Dark Star and grades quickly drop off.

But it isn't all bad news, hole DS16-07 hit, what may be the continuation of the Main DS deposit to the NW or maybe just a small zone of mineralization wedged between 2 faults? 

Do these narrow zones come together at depth?

Some drilling to the west of these holes would answer that, but if there is any decent mineralization out there, it is going to be deep (greater than 200m depth).

So, if I'm correct-ish, GSV now have ~3 Moz of gold at a moderate grade (0.6-0.7 g/t Au), which is nothing special, so why do they have a market cap of ~US$500m?

They don't have anything special (ok, they have a good postcode and some rich neighbors), but not a project like Juanicipio that sell themselves. There is nothing in drill data that shouts "World Class Deposit"

However, what they have done is focused on drilling out and extending the known high grade zones. You will notice that they maximize the value of their drill data by:

1. Always including a 'stellar' intercept in all their press releases.
2. Never have release 'bad' results on their own. You'll see that GSV always include a decent intercept with poor results 
• e.g. Oct 20th PR - data released from 12 holes, 6 (50%) contained no gold, and only 2 (DS16-07 and 10) had semi-decent results.
3. Release news regularly to maintain momentum and interest in the company:
• 10 PRs since August
• 34 PRs in 2016 - one every 10 days
4. Raise money when you can, not when you are desperate!
• They already had a healthy cash position but they raised >$33m to have a "significant treasury for annual strategy and beyond"

It is a good strategy, and it has allowed them to raise a lot of cash, but will the market be disappointed when they do a resource calculation on North Dark Star and tell the market that it is a bit average?

Here is an example from North Bullion - the August 30th PR data

Great assays, but at 322m depth below surface, can you do anything with it?

Just some comments regarding the DH data.

1. Elevation data was obtained from the USGS 10m DEM downloaded from Earth Explorer
2. Collar locations were obtained from:
• 43-101 reports (exact)
• digitising them from the plan maps that accompany the press releases (within 20m)
3. Downhole survey data was taken from the assay tables, they do not include deviation.
4. Assay data was taken from the press releases and residual grades were back calculated using Core box's excellent drill interval calculator.