Barkerville Gold Mines Ltd. (TSX-V:BGM) is banking on history to create value for its shareholders.
Last month, the company started pouring gold at its QR mine and mill, which is in central B.C. 110 kilometres by highway from the province’s historic Barkerville gold camp.
Better yet, said president and CEO Frank Callaghan, the company has become the first of its kind to consolidate the entire Cariboo Goldfield under one corporate umbrella. That means the Vancouver junior holds 1,065 square kilometres of mineral tenures in an area that a century ago enticed gold prospectors from all over the world.
“Barkerville Gold Mines owns the whole belt. That’s taken 15 years to assemble,” Callaghan said. “We’ve put together the whole belt thinking that at some point a major [mining company] is going to come by and say this is a once-in-a-lifetime opportunity.”
The company’s business plan is simple.
Now that QR is up and running, Barkerville has successfully made the often-difficult transition from junior explorer to producer.
Callaghan said ore to feed QR’s mill has been stockpiled and a mining plan is in place to support a 600-tonne-per-day operation.
Meanwhile, management is on the hunt for nearby ore producers that don’t have a mill of their own. The idea is for Barkerville to process ore for other producers and retain a fee for the service to hedge its bottom line while it brings its other properties online.
Lastly, the company is drilling for additional gold resources at its Bonanza Ledge, Cariboo Gold and Island Mountain properties.
Eventually, Callaghan said, gold from those deposits could be processed at QR.
“Mills are a hungry animal; they have to be fed and they like to be full,” he said. “Whether you’re running them half full or totally full it costs the same amount of money, so you want to keep running them as full as you can.”
And the company’s recent transition from gold explorer to producer may also have some positive effects for an entirely different industry – tourism.
James Douglas, a spokesman for the nearby Barkerville Historic Town, said the company’s presence could stimulate renewed interest in one of B.C.’s most renowned regions.
“I think it will be a good thing as far as the continued promotion and communication of the Barkerville message,” Douglas said. “What I’m seeing is a reinvigoration of people’s interest in gold.”
He added that there might be some cross-promotional opportunities between the historic town site and the company. Even though Callaghan said Barkerville Gold is focused on becoming B.C.’s next successful gold producer, the company has also recognized the benefit of being aligned with tales about pickaxes and prospectors.
“When you think of Barkerville, it’s the reason British Columbia joined the confederation and the railroad came west; it’s the Cariboo Goldfields,” Callaghan said. “I think it’s ironic that 150 years later we’re mining off the mountain where downstream was the richest placer mining in Canada. No one has ever figured out where all the gold has come from, but the style of gold mineralization at Bonanza Ledge is a definite contributor to the placer gold in the camp.”
1862 – Billy Barker strikes a fabulously rich pay streak and Barkerville is born
4,600 - Barkerville’s peak population during the 1860s
1868 – a fire engulfs Barkerville destroying most of the town, but no one is hurt
1958 – Barkerville designated a heritage site
101 – the amount of creeks that have reported placer gold production in the Barkerville gold camp
3.8 million – total ounces of gold produced in the Barkerville area
$1,247 – the value of one ounce of gold on September 10, 2010
Vancouver
CEO: J. Frank Callaghan
Employees: N/A
Market cap: $66.8m
P/E ratio: N/A
EPS: $(0.30)
Sources: Stockwatch, TSX