Um excelente artigo da SmallCapMedia.com
Silverado Gold Mines Ramps Up Its
Placer Gold Production and Now
Believes It has the Prolific ‘Mother
Lode’ Source Within its Reach
By Marc Davis, Managing Editor
June, 2007
Corporate Overview
Silverado Gold Mines Inc. (NASD OTCBB:SLGLF) (Frankfurt: SLGL) (Berlin: SLGL) is a
diversified natural resources company that is riding the crest of two major trends – one
involving a sustained bull market for gold prices and the other being the imperative to
develop innovative new forms of inexpensive ‘green energy.’
For more on Silverado Green Fuel Inc., a wholly-owned subsidiary, please refer to Part II
of this investment assessment.
All told, Silverado (
www.silverado.com) has spent about a quarter of a century
developing prospectively world-class gold projects in mineral-rich Alaska – home to
some of North America’s most prolific gold mines and developmental stage gold
deposits.
Moreover, Silverado’s progress has thus far been quite lucrative. In fact, while hunting
for major ‘lode’ deposits, the Company has carved a profitable business niche for itself in
the placer gold mining business. And all of this placer gold is known to have originated
from nearby buried concentrations of gold that represent the ultimate prize or ‘mother
lode.’ Specifically, the placer gold has leached out of rich proximal gold vein/shear
structures into river drainage systems, where over the millennia it has become part of
ancient gravel beds.
While Silverado continues to use sophisticated geo-scientific sleuthing technology at its
Nolan Property to zero-in on the exact location of the buried lode treasure trove, the
Company is also building considerable intrinsic value into its share price by way of its
steady stream of gold revenues.
This gives Silverado a pronounced competitive advantage over legions of other gold
exploration juniors that have no gold production to sustain them. Instead, they have
nothing but grandiose dreams of winning the mineral exploration jackpot to justify their
much-hyped share prices. By comparison, Silverado is still very modestly priced.
To date, the Company’s tangible gold assets have generated over U.S. $20 million in
sales since the 1980’s – much of it in gold and silver bars and the rest in sizeable gold
nuggets which are highly sought after for Alaskan jewelry.
In essence, this placer gold mining business serves as a financial backstop for a ‘best of
both worlds’ business mode. One that provides meaningful and consistent cash-flow, as
well as a commitment to finding the lode source of all of its placer gold.
Notably, more than half of all of Silverado’s gold revenues were generated in 2006,
alone. This resulted from the recommencement of underground mining at the
Company’s wholly-owned Nolan Mine. This suggests that Silverado may be starting to
tap into remnants of very rich lode vein systems along a prolifically mineralized trend or
horizon. This represents the culmination of 16 years of systematic exploration of the
expansive Nolan Property for the source of the placer gold.
All told, an estimated 354,686 troy ounces of gold resources have so far been delineated
by mining and drilling on Silverado’s Alaskan properties, according to independent
geological reports. Canadian investors should note that this mineral resource estimate is
not National Instrument 43-101 compliant as Silverado does not operate its gold projects
in Canada. (In other words, this resource figure does not satisfy guidelines that
constitute a Canadian federal government recognized standard for a “mineral reserve.”)
The Emerging Nolan Gold Deposit/Mine: An Overview
Some of Silverado’s gold resources have to date been outlined at the developmental
stage Nolan Gold Mine. Located 280 road miles north of Fairbanks in the state’s Arctic
Circle region, it is the site of an extremely cost-efficient and profitable surface mining
operation for gold-bearing gravel. In the winter, underground mining of frozen gravels
also takes place, allowing for year-round revenue generation.
In the summer months when the gravel has thawed, snow melt water is available for
gold recovery by sluicing. Environmentally conscious investors will be happy to learn that
the sluicing process uses only gravity and water within a closed circuit, ensuring that
there is zero discharge to the environment. Also, lands disturbed by the Company’s
mining activities are fully reclaimed.
Most of the gold found at the Nolan Mine is in nugget form. This offers a distinct
advantage over conventional mining methods that typically involve crushing and grinding
large volumes of rock to extract gold particles. Instead, Silverado’s nuggets can be
easily and inexpensively extracted from the gravels and sold for a hefty premium to their
melt-down value (averaging about 33% above bullion’s spot price).
For instance, one nugget recovered at Nolan weighed 41.35 ounces and sold for U.S.
$50,000 – a 212% premium above its melt-down value. Another weighing 13.78 troy
ounces was taken from the floor of the Nolan Mine’s Mary’s East Tunnel after a
controlled blast as recently as February of this year.
Tapping into a Rich Vein of Opportunity: 2006 Nolan Exploration Highlights
Silverado believes that the increasing frequency of sizeable gold nuggets being found at
the Nolan Property suggests that the Company is zeroing-in on their lode source. This is
where gold in water flows through fissures or the spaces between cracks in rocks, where
it precipitates out. In turn, this forms ‘ore-zones’, or rich quartz gold veins, such as the
ones that Silverado has encountered during last season’s drilling and trenching
programs.
During the fall period of Silverado’s 2006 exploration program, Silverado also carried out
a total of 920 feet of backhoe trenching to investigate gold bearing antimony-quartz vein
systems. Ones that are part of the Solomon Shear, a five mile long gold bearing shear
zone (which is a geologically favourable structure for the emplacement of significant gold
deposits).
Such developments constitute a major exploration breakthrough for Silverado. This
allowed the Company to announce that it was beginning to outline the parameters of
what it describes as a “significant gold/antimony deposit.” A discovery that Silverado
CEO Garry Anselmo says may be a “potentially huge source of gold.” One that will be
aggressively explored in 2007.
That said, the discovery of high-grade gold zones is now a function of the methodical
development of the sizeable Solomon Shear Trend, which may prove to host many rich
gold zones, each with multi-million ounce potential.
An airborne geophysical survey published by the State of Alaska is also being used in
conjunction with on-going ground geological, geophysical, and geochemical surveys to
pin-point the exact location of such enriched gold zones
Meanwhile, of the three mineralized zones identified to date by trenching, the ‘main
zone’ was revealed to host 16 gold veins across a zone of alteration 192 feet wide. A
total of 71 combined chip and channel rock samples were collected during the trenching
program and submitted to ALS Chemex in Fairbanks for analysis.
Out of these 71 samples, 32 show values higher than 0.01 ounces of gold per ton (opt)
and ranged from 0.01 opt to 0.83 opt. These results offer clear confirmation that highgrade
lode gold mineralized quartz veins exist in the Solomon Shear Zone, according to
Silverado’s geological team.
Drilling at Nolan Reveals a High-Grade Antimony Discovery
Another notable coup for Silverado in 2006 was the discovery at the Nolan Deposit of
rich antimony values, running from 1% to 46% in rock samples. To put this in dollar
terms, rock containing 46% antimony would be worth about U.S. $2,300 per ton (at the
current antimony price of $2.56/lb). By comparison, the same ton of rock would have to
contain roughly 3.5 ounces of gold per ton (at $656/ounce) to be of the same monetary
value.
Preliminary metallurgical tests on Nolan’s antimony samples showed combined lead and
arsenic present in amounts less than 0.1%, which constitutes some of the purest
antimony in existence, according to Silverado. This is very important since antimony
contaminated with over 0.5% combined lead and arsenic has to be shipped overseas to
be processed.
Antimony Prices Are Poised to Spike Higher
Antimony is a silvery-white metal with a very low melting point and is used in North
America primarily in chemicals. It is most commonly used to impregnate plastics,
textiles, rubber and other materials as a flame retardant. Antimony is also mixed with
other metals to increase their hardness and strength, such as batteries and the lead in
bullets, and it is considered a military strategic metal. It is also used to seal the fire
sprinklers which when heated melt and allow the water to flow.
As an aside, China produces 82% of the world’s antimony, Russia 8%, South Africa 3%,
Tajikistan 2% and Bolivia 2% (for a total of 97%). In November 2006, China indicated
that it would cut its export quotas of antimony and tin by 30%, which will likely create a
supply squeeze.
In turn, antimony prices are almost certain to surge higher, which is nothing but good
news for Silverado. This is particularly the case since North America accounts for only a
fraction of global production, while it accounts for most of the world’s industrial usage.
Other Key Developments
In 2005, the Company began underground mining on the Swede Channel portion of the
Nolan Mine, involving the implementation of extensive infrastructure and mining
equipment and other support facilities. This gold-rich zone yielded 939 ounces of gold
last year, 785 of that being high premium nugget gold.
However, that figure only represents a portion of the gold that has already been outlined
in the Swede Channel. In fact, only about 30% of the Swede ore zone was removed in
2005/06. The balance of the ore, along with a newly discovered extension to the Swede
Channel, was mined out in the winter of 2006/07. The resultant 18,000 cubic yards now
await gold extraction, which will begin later this month.
Widespread Regional Gold Potential Including Silverado’s Hammond Property
The Company has also optioned property that covers the adjoining Hammond River
placer deposits. The Hammond Property adjoins the Nolan project to the northeast. It
contains the Slisco Bench, a prime placer prospect and one of Silverado’s future
exploration targets.
Silverado therefore plans to conduct drilling to delineate additional gold resources, while
also gaining geo-technical and engineering data for potential mining of this ancient
riverbed.
The Hammond River is historically and currently a rich gold producer in the district.
Exploration to date, including 103 drill holes, reveals that the Slisco Bench is an
attractive underground prospect which may prove to be a significant gold producer in the
future. Notably, the Company drilled 33 holes on this bench in 2006 with 15 of them
hitting significant gold values. These values ranged from 0.01 to 0.5 ounces of gold per
bank cubic yard of gravel.
Other Key Assets
In addition to the Nolan Gold Deposit, the Company also owns the Ester Dome Gold
Project, as well as the Eagle Creek Project, both of which are located close to Fairbanks,
Alaska. Significantly, they are also part of the same gold belt where Kinross is operating
its huge Fort Knox Gold Mine. Likewise, Kinross’ True North Gold Deposit is also in
close proximity to both of these geologically very prospective projects.
Historically, the Eagle Creek Property was Alaska’s second largest antimony producer.
In the late 1980’s, Silverado built a 100-ton-per-day gravity plant and processed the old
mine dumps, successfully selling all the antimony produced. Although Silverado
originally studied this property for its antimony potential, the constant discovery of gold
soon changed the property status from antimony to gold/antimony.
In addition to the high-grade gold bearing quartz veins found on Silverado’s large Eagle
Creek property, the Company also made a significant new gold discovery at the project
area in 2006. This new discovery area shows gold dissemination throughout intrusive
rocks and will be better investigated at a future date.
At the Ester Dome Property, Silverado has sporadically worked the area since 1978 to
present. This includes the development of lode gold deposits on the Grant Mine portion
of the project area. All told, this has in the past yielded some U.S. $10 million in highgrade
gold bullion bars.
An extensive exploration program in the mid 1990’s at the St. Paul Shear Zone on Ester
Dome resulted in the discovery of a potentially large lode gold ore body. Since then, only
a small but representative part of the property has been drilled to very limited depths on
gold mineralized zones which are “open” (continuous) to a vertical extent at depth and
along a lateral plane (strike length).
An extensive exploration program in the mid 1990’s at the St. Paul Shear Zone on Ester
Dome resulted in the discovery of a potentially large lode gold ore body. Since then, only
a small but representative part of the property has been drilled to very limited depths on
gold mineralized zones which are “open” (continuous) to a vertical extent at depth and
along a lateral plane (strike length).
This is also the case with the O’Dea and Ethyl-Elms mineralized zones on this highly
attractive Ester Dome Property where a recorded four million ounces of placer gold have
been taken from around the base of this small mountain.
The Company therefore believes that it has only just ‘scratched the surface’ of what
remains a potentially very rich gold property with plenty of ‘blue sky’ potential. However,
Silverado has strategically decided to focus the bulk of its near-term exploration activities
at the Nolan Property.
Moreover, an outdated 300-ton-per-day gold processing facility is the legacy of a highly
productive lode mining era at the Easter Dome Property. This mill complex is worth at
least U.S. $6 million in 2007 dollars and is being relocated to Mississippi to provide
valuable processing infrastructure for the Company’s fledgling Green Fuel business.
Investment Summary
Shareholders of Silverado Gold Mines are in an enviable position. They have
considerable exposure to a rising tide market for gold prices, as well as for antimony.
Not only does this come in the form of the ‘blue sky’ potential for finding a prolifically rich
‘mother lode’ style gold deposit at the Nolan Property; but it also can be measured in
more tangible terms by way of the Company’s small-scale but very lucrative placer gold
mining operation.
Then there’s an additional dimension to the Company by way of Silverado’s radically
non-linear diversification into the 21st century alternative energy business. This involves
its wholly owned subsidiary, Silverado Green Fuel Inc.
The Company’s ‘green’ alternative fuel source heralds a major breakthrough in
inexpensively solving North America’s addiction to dwindling foreign oil reserves. And it
could substantially help mitigate carbon dioxide emissions, nitrous oxides, sulfur
dioxides and particulate matter throughout the industrialized world, as well. With a much
sought-after business model for the wide-scale commercialization of this clean fuel
initiative, Silverado certainly has a tiger by the tale.
SmallCapMedia therefore believes that a convergence of powerful value drivers is now
setting the stage for a very bright and dynamic future for Silverado. One that promises to
reward patient investors with considerable ‘home run’ potential.
Hence, SmallCapMedia believes that the share price of this enterprising, up-and-coming
Company will continue to establish a sustained upwards trend during the balance of
2007. And the advent of plenty of ‘blue sky’ potential at its gold projects and its green
energy venture should provide a powerful springboard for Silverado’s share price in
2008 – a time when SmallCapMedia expects to see the Company’s stock trading at many multiples of its current price.
This publication is reprinted from the online financial news and commentary web site, SmallCapMedia.com, and is intended for
information purposes only. No statement or expression of opinion directly or indirectly, is an offer, solicitation or recommendation
to buy or sell any of the securities mentioned. SmallCapMedia does not assume any liability. Also, SmallCapMedia strongly urges
you to consult a professional investment advisor prior to making any investment decisions. It is the responsibility of the readers to
evaluate for themselves the accuracy, completeness and usefulness of any opinion, advice or other content presented in this
publication. Readers, please note that certain costs are incurred by SmallCapMedia with regards to our ongoing research into the
speculative equities that we cover. Similarly, certain ongoing costs are also incurred in the creation, presentation and
dissemination of informational corporate profiles of the companies that we introduce to our readers. These costs are therefore
defrayed, in part, by way of a nominal annual Cdn. $5,300 corporate sponsorship fee that is paid to Davis & Associates Capital
Corp., the publisher of SmallCapMedia, by the companies that we select for coverage.
Enviado: 6/8/2007 12:11
, a evolução (?) do ouro penso estarem do lado da SLGLF para subir, mas no meu caso estou a contar com o EUR/USD, pois estou muito exposto ao dollar, e se ele continuar a descer vou ter que reduzir algo.