Golden Hope’s President Says A Dysfunctional Market is Killing Juniors
By Kevin Michael Grace
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Wednesday should have been a good day for Golden Hope TSXV:GNH President Frank Candido. His company released the first resource estimate of its Bellechasse-Timmins gold project, and he might have expected the market to reward its pioneering work in Quebec’s Beauce region. Instead, it was pummeled. Again.
Golden Hope shares fell Wednesday from $0.125 to $0.08. Candido is weary but not surprised. He explains, “In today’s market, good news doesn’t affect the market’s view of companies. If you look at all the press releases we’ve put out since March 1, you can be the judge if the results were good or if the information was positive.”
Candido doesn’t exaggerate. Golden Hope issued seven press releases featuring high-grade assays since March 1. The result was that their share price halved. Now it has halved again. “Press releases in this type of market are seen as liquidity events,” he says. “If you have volume, people are looking to get out.” He argues that this points to a dysfunctional junior market. But more on that below.
Based on a mere 268 holes and trenches, the June 19 43-101 estimates an in situ indicated resource of 2.9 million tonnes grading 3.36 grams per tonne gold (313,900 ounces) and an inferred resource of 2.17 million tonnes grading 1.46 g/t (102,000 ounces gold), based on a 0.6 g/t cutoff.
Candido comments, “It’s a first for our company and a first as far as I know in terms of [any company issuing a] resource estimate in southeast Quebec. So we’re very happy. And we’re especially happy with the grades we’re getting. We’ve always felt we have a nuggety type of deposit, and maybe the drill bit underestimates the grade, and there seems to be reason to believe that’s true.
Press releases in this type of market are seen as liquidity events. If you have volume, people are looking to get out —Frank Candido
“If you look at what we drilled in 2010 and 2011 and early 2012, I think if you add them up, it works out to roughly some 32,000 meters of drilling in a 2.5-year period or so. So it wasn’t a lot of drilling to achieve the results we achieved, and we certainly have a plan to continue drilling and exploring to increase that resource both shallow and at depth.”
Candido is excited by the possibilities of the newly discovered Champagne Zone. He says, “There was a historical resource on it, non-43-101, of course, of some 300,000 tonnes grading something like 2.4 grams gold, and it’s a VMS target. Unfortunately, we didn’t know where the collar locations were when we drilled it because we don’t have that information available to us. But we drilled it and intersected similar-type mineralization. We flew a VTEM over the winter months, and now we know exactly where we need to drill. We think we can bring the Champagne target into resource. It’s very exciting. We’re in a brand new region of Quebec; we’re not in the Abitibi or in Timmins, Ontario; and we’re the first company to actually make a go of it. Other companies have come into the area but are certainly nowhere near as advanced as we are.”
Golden Hope had $1.5 million in cash “as of the last quarter.” Its burn rate is about $70,000 per month, but Candido admits “that obviously doesn’t include major exploration. We definitely will at some point need to finance, but we don’t need to finance right now.”
Financing could be a problem. Candido reports, “I was in Toronto [Tuesday], and afterwards I was speaking to a number of bankers and analysts, etc. The business is dead, and there’s nothing going on. Financings aren’t getting done; companies aren’t getting any bids; things aren’t moving; lots of companies are in trouble.”
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