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Gwen Preston – “Maven Tuesday”

 

 

 

 

 

This week’s Maven Monday is being sent out today because of the Canadian Labour Day weekend and I don’t want any of you to miss out on all the great news that is jam packed in my latest Maven Letter!

 

I start with Great Bear Resources (TSXV: GBR) which hit it out of the park with a phenomenal drill hit that suggests Dixie Lake could well host the next great Red Lake gold deposit, which I’ve included in this email for you below.

 

This next portion of my letter is only available if you subscribe to my weekly Maven Letter but just to give you a brief overview of my talking points, here’s a summary…

 

Red Eagle (TSX: R) also issued big news, of a new investor and a complete financial restructuring that will leave the company debt free. I also look at Red Eagle in the Mailbox segment, where I answer a few other subscriber inquiries — love hearing from my subscribers!

 

Then it was time to look at Northern Empire’s (TSXV:NM) rapid success and look at the value in management teams that can identify and unlock stranded assets. I then look at the business models of mining from an investor’s perspective — how do risk and reward change when you move from a single project explorer to a project generator or a multi-project explorer or a new miner?

 

Finally, I share a short article on nickel which seems to offer near-term upside — it’s all included in my full letter, subscribe for details!

 

As always, if you enjoyed reading this and would like the full Maven Letter, sign up for a free trial. Or if you’ve already used up your free trial, subscribe here. 

 

Don’t forget that I also have a new letter called Maven Metals, targeted to generalist investors interested in metals — why metals offer opportunity and how to invest in the sector. Try it for FREE here! Or share it with family and friends that might be interested!

 

 

Thanks always for your interest!

 

 

From The Maven Letter: August 29, 2018…

 

 

Great Bear’s Huge Success 

 

 

Great Bear Resources (TSXV: GBR) has been in the Maven Letter portfolio since December. That’s when I met with president and CEO Chris Taylor and heard one of the best exploration stories I had heard in a long time.

 

Chris and VP Exploration Bob Singh are experienced, sensible, and intelligent guys. They put this company together on their own during the bear market, assembling a highly prospective but underexplored land package in prolific Red Lake and putting it in a company with a very tight share structure.

 

Their first drill program at Dixie Lake had easily confirmed the high grades from limited historic work, which had been poorly recorded, and that gave Chris and Bob the confidence they were onto something. As importantly, the work supported their theories on how the gold came to be and where there might be more.

 

In December, when I met Chris, they were completing a small financing, just enough to do a small drill program. Drilling at Dixie Lake is very inexpensive – there is Tim Hortons exploration, and in the heart of Canadian gold country. I invested and offered it to Maven Premium subscribers.

 

That program again returned very high grade gold, as has subsequent drilling. And they are hitting gold not just in the main Dixie Limb zone but in multiple locations along the prospective geologic contact.

 

 

 

 

 

 

The market took some note of Great Bear’s first few rounds of drilling but it wasn’t until the latest results that GBR shares soared. And for good reason.

 

The hits – 26.9 g/t gold over 16 metres in one hole and 44.5 g/t gold over 7 metres from a second hole 15 metres deeper – came from the Hinge zone. GBR had pulled good gold from the Hinge previously, but not of this caliber.

 

This drill intercept is phenomenal. Red Lake can produce these kinds of hits, but not very often – and when they do happen, the discovery usually becomes something very significant. Think the High Grade zone at Goldcorp’s Red Lake operation, where the average grade is more than 2 ounces per tonne (62 g/t).

 

And Hinge is the perfect place to pull this kind of result. In my December writeup I noted that Dixie Limb looked very nice, with incredibly consistent high-grade gold hits along several hundred metres of strike and all within a few hundred metres of surface, but that the large unexplored prospective geologic contact was just as exciting. A big part of that excitement was Hinge – the best gold zones in Red Lake occur where prospective geologic contacts fold and that is precisely what happens at Hinge, where the contact doubles back on itself.

 

At this point Great Bear has:

 

  • Dixie Limb: high-grade gold along 2km strike and several hundred metres depth. Open in all directions. Widespread silica/sulphide replacement along structure and gold occurs in multiple rock units and is not restricted to a particular lithology or vein set (all of which suggests a big, strong system). Longer, lower-grade intercepts right at surface suggest potential for open pit to start.
  • Hinge zone: incredibly high grades in two stacked holes roughly 100 metres below surface. Prime geologic setting for high-grade Red Lake gold. Open in all directions.
  • Northwest Stepout: GBR stepped 1.6 km to the northwest along the prospective contact and hit 12.7 g/t gold over 1.7 metres. That is an immense stepout in Red Lake, where stepouts are often 15 metres. Another suggestion of the strength of the system along this contact, which begs the question of how many zones along the stretch hold good gold.
  • South Limb: the contact folds back on itself at Hinge, which puts South Limb parallel to Dixie Limb only a few hundred metres away. Historic work returned gold from this area; GBR has not had time to explore yet.

 

 

The results from Hinge are very exciting, but the bigger picture is even better. Hinge has the potential to be the best part…of a very good Red Lake gold system. The consistency of Dixie Limb (where over 90% of holes have returned at least 3 g/t gold over at least one metre, a success rate almost unheard of in Red Lake), the fact that an absolutely huge 1.6 km stepout along the contact returned gold, the potential at the South Limb – these factors all contribute to making Dixie a very exciting project.

 

And that project is in very good hands. Great Bear has a tight share structure and a focus on keeping costs low. The team is that ideal mixture of experience, smarts, and youth, with guidance from a strong board that includes John Robbins.

 

And now Rob McEwen will also be lending guidance. McEwan is the epitome of Red Lake gold exploration success (Goldcorp found the High Grade zone under his leadership) and he is investing $4.8 million, personally, in GBR. His gold company, McEwan Mining, is putting another $1.2 million into the raise. It’s a strong endorsement of the potential that a Red Lake veteran sees at Dixie.

 

The questions you all have is: is the stock a buy today?

 

It is always hard to invest in a stock that just tripled. Obviously I am very happy to own this stock at $0.30. That said, this has the potential to be a very big win. It could also falter, but the potential for this stock to keep going is real. So if you do not own any GBR yet, I would consider buying some today – but a small amount, with the intent to buy more if the price declines.

 

And a decline is very possible. This is exploration and not every drill hole is going to return almost an ounce of gold over 16 metres! That said, if a few more holes do return those kinds of numbers, this stock will soar again. Investors really want to own the next big discovery and this has the potential to become exactly that.

 

There are zero guarantees in exploration, but the record of success on this project to date is stellar and the potential is very significant.

Posted September 4, 2018

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