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Avidian Gold Corp (CVE: AVG) CEO on Multiple Gold Projects

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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

Avidian Gold Corp (TSX-V:AVG) CEO David Anderson sits down with James for an introduction to the company. Avidian Gold is based in both Nevada and Alaska. In Alaska, their highest priority project is a property called The Golden Zone. The project has a resources of approximately 300,000 ounces and Avidian is in the process of exploring the surrounding area. In Nevada, they’re active in the Humboldt Trend, that has seen production of over 200 million ounces through the years.

 

Transcript

James West: I’m joined now by David Anderson. He’s the CEO of Avidian Gold Corp., trading on the TSX Venture under the symbol AVG. David, welcome.

David Anderson: Nice to be here, James.

James West: David, tell me about Avidian: what’s it doing, where is it doing it?

David Anderson: Avidian is a company that’s been around for quite a few years. We practice a philosophy of buy low and sell high in the gold markets, so when nobody wants gold properties, we acquire them. And our criteria is, we like district-style plays in elephant country, and once we have amassed a property position, we’ll take them public.

In this case, we’re active in Nevada and Alaska. Nevada it’s in the Humboldt trend, which probably has produced in Nevada itself over 200 million ounces over the years, and up in Alaska, which is to date, I believe, in the 125 million-ounce range. So we’re definitely in elephant country, and our philosophy is, it takes as much work to find a big deposit as it does a small deposit, so we’re going to go for the elephants.

And the company is, biggest project, our highest priority project, is a property called The Golden Zone up in Alaska. We have a resource of roughly 300,000 ounces on the project; we’re in the process of exploring the peripheral area around that, and in the 2018 program, highlighted some new areas in the immediate area of the Brescia pipe deposit that we can see that resources will increase as we go forward. So we’re very optimistic that we can increase the resource of 300,000 ounces.

The property itself has a strike length of about 15 kilometres, and the, you know, in the company right now, there are five target areas identified that we would consider having the ability to deliver a multi-million-ounce deposit. Now, that’s not the only targets, but those are the ones that we’ve highlighted.

James West: Okay.

David Anderson: We’ve been working on the Golden Zone Brescia pipe because of the resource, and realizing that we can add the greatest amount of value there for the lowest dollar amount in the short term, and we’ll continue to focus on that area, but there’s three other projects in Alaska: one called the Copper King, which is immediately south of the Golden Zone, of the Brescia pipe, and then one called the JJ, which is slightly west; about five kilometres to the west.

So it’s a, the resource that we have is on an existing mining lease good till 2050, and we have started forward with the concept of doing some baseline studies to get things organized for when we do decide to go forward.

Now, the fourth project that we have in Alaska is one called Amanita, and it adjoins to Fort Knox gold mine. So in Fort Knox, as you know, is a prolific producer; I think 380,000 ounces a year.

James West: Tell me about some of your more prolific drill intercepts, can you give a sense of grade?

David Anderson: Well, the 300,000 ounces has a grade of about 2 grams at this point. We have intercepts that run quite high; last year we drilled 149 metres of plus-3 gram material.

James West: Oh wow, that’s huge.

David Anderson: At least on the axis of the pipe; I’d have to give you the exact quote. But needless to say, it was great. But what we’ve learned is, in the Brescia pipe deposit, it was clipped off at the base of the deposit; it’s on the side of the hill, so the ability to extract the mineralization is very favourable from a mining perspective.

But last year, 2018, we found what we believe is the fault of the extension of it, and it was about 400 metres to the north of where the existing deposit is, and the gold there is actually hosted in a different environment. But we believe that the source of the two is one and the same, and lies between the two of them, there.

The Copper King deposit, which is a porphyry style deposit to the south, we probably won’t do a lot in the short term, because it is an expensive deposit to explore; but last year we drilled, I think, 9 metres of 8 grams of gold and 3 percent copper, along with 50 or 60 grams per tonne of silver.

James West: What makes it expensive?

David Anderson: Just the size of the deposit.

James West: I see.

David Anderson: The footprint itself is probably in excess of a kilometre and a half, and we’ve got gold and copper in the entire peripheral area of that.

James West: In a porphyry setting.

David Anderson: Yeah. Well, it’s kind of, some kind of – I’m not sure, it’s induced, the IRGS-style intrusive systems in a porphyry max, so it’s a little bit more complicated geology. But it appears like a porphyry in some aspects of it, is right. So the reality is, if you compare that, it’s something that we’d love to drill, but it takes a lot of money to drill. The market’s not kind these days to junior explorers, so we turn around and look at a project like the JJ Zone, and it’s a deposit – not a deposit, but an occurrence that we discovered late last year that has about a 500 metre strike length and a 300 metre vertical that we can observe. We understand and can see that it goes quite a bit further deep.

A hundred and fifty metres wide, and there’s a series of intrusives into sediments that’s sitting at surface. The intrusives are mineralized at 6 grams we were running, the sampling we were doing, and the sediments between the intrusives appear to be mineralized as well. We’re seeing anywhere upwards of a gram, but typically a half gram in sediments, which means if you’re taking out the intrusives, you’re taking out the sediments, you’re getting credit for mine.

Now, that is sitting out in the open, easy to drill. And even for those dimensions, if we were to get something in the order of a gram and a half universally across it, open pit-able, you know, you’d be a million-plus ounces. So if I was to decide where to drill, James, I would be more inclined to go to the JJ zone than the porphyry, where I know I’m going to have to dig into my pockets and work for a little while to unravel that.

James West: Sure. Well that’s an intriguing opportunity, by the sounds of it. What’s the market cap of the company right now?

David Anderson: The market cap of the company is probably on the order of about 8 million, 7 to 8 million. Really undervalued. Of course, everybody will say that as a CEO.

James West: Well, you know, it’s interesting to me that, you know, what is this, the sixth year? No, this is probably almost the 8th year of the real downturn in metals in markets, and junior mining in particular, and you know, it strikes me as odd that people are not collectively thinking, okay, well, this has got to turn around at some point. I mean, even in 2012 we thought this was going to last a while, but it’s got to turn around. And at these prices, I think that, you know, personally, I am buying juniors.

David Anderson: Right.

James West: And loading up on positions with this, that and the other thing, because one day it’ll turn, and a different story.

David Anderson: A hundred percent. And you know, I’ve been involved in the building and selling of two of these companies, historically, and interestingly enough, from the time they went public to the time they were sold, it takes about six years. You know, so KGX restarted and took it public in 2002, sold it in 2008. Antares Minerals we started in 2004, sold it in 2010. You look at production on the majors side, and you can see, A), a couple of things come into play, and this is why I’m figuring that we are timing is very good, even if the market’s not there; it is coming, is the production is falling. The rate of discovery has fallen off. We’re not finding 10, 15 million-ounce  deposits; it’s getting harder.

Reserves are not being replaced. If you look into about 2022, and that range, you’re going to see supply/demand come into play in gold where they’re not going to be able to, you know, they’re going to be short gold on the production side. And then you have, in general, a decrease in confidence in FIAT currency, so I think we’ll have a couple of things work in our favour. So my thinking is, if we took this company, Avidian, public in 2017, by about 2023, we should be well-positioned.

And yes, you know, I’m an optimist; I’m a gold bug, I’ll give you that.

James West: Yeah.

David Anderson: But I’ve been here before, done it before, and I’m very comfortable with the environment. So, you know, bullish.

James West: Yeah. Great. Okay, David, let’s leave it there for now. We’ll come back to you on the next drill program and see how you’re making out. Thank you very much for joining us today.

David Anderson: You’re welcome. Nice to meet you, James.

 

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

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