Vancouver-based Barkerville Gold Mines Ltd. (TSX-V:BGM) has hired a consultant and is drilling further at its Cow Mountain property as it battles to have a BC Securities Commission (BCSC) cease-trade order (CTO) lifted.
The company, which has drawn market and regulator skepticism since its announcement in June of a massive discovery of high-grade gold, was ordered to cease trading in August after the BCSC rejected the company’s technical report.
Barkerville Gold has announced the new measure as it works to produce an “acceptable” version of the technical report for the BCSC.
Company president and CEO Frank Callaghan said Barkerville Gold still stands by the numbers in the first report, which was prepared by geologist Peter George of Geoex Ltd.
“We’re really confident in the numbers,” he said. “We support the guy that’s done the work, and we’re not prepared to throw him under the bus. He’s done a good job.”
He added that George has 45 years of experience.
“This is not his first dance.”
However, Callaghan said that the disclosure requirements call for details that some senior geologists, such as George, believe that “everybody should know.”
He said the company’s new report, which is being overseen by Snowden Mining Industry Consultants Pty, will provide those details.
“The new report, when it does come out, is going to be very, very comprehensive to a point where a 10-year-old is going to be able to read it and understand it.”
Callaghan said as part of Snowden’s report oversight, the company is twinning some of its drill holes and digging deeper.
He expects the new version of the report to be released in late November and added that, if he’d anticipated the reaction the company has gotten since announcing the gold find, the company would have provided more details on its methodology in the first place.
Matthew Zylstra, a mining analyst with Northern Securities Inc., said Barkerville Gold is acting appropriately to address the market’s concerns.
“I think they will address some of the concerns, in particular because they’re adding a number of holes to verify some past drilling, but also it’s more about the company behind the report,” he said.
Zylstra said Snowden is “reputable” and has overseen an estimate of a geologically similar mineral resource for Vancouver-based Pretium Resources Inc. (TSX:PVG; NYSE:PVG).
“[Snowden] adds some credibility,” Zylstra said. “So whatever they come out with, I think this is going to be viewed a lot more positively.”
However, Zylstra said he expects to see Barkerville Gold’s gold estimate drop in the second report.
“I think they’re going to use a lot more strict criteria, so my feeling is that they won’t come out with the same kind of numbers that Peter George did.” •
Barkerville’s Cow Mountain saga
June 29: Barkerville Gold announces indicated resource of 10.6 million ounces of high-grade gold at its Cow Mountain deposit, sending its stock soaring by nearly 50%
July 12: Amidst market-watcher skepticism and plummeting stock, Barkerville Gold “clarifies” its technical disclosure and confirms that BCSC has expressed “concerns” about the estimate
August 13: Barkerville Gold files a technical report to clarify how it reached its resource estimate
August 14: The BCSC rejects the technical report on the grounds that it doesn’t comply with disclosure requirements and issues a cease-trade order (CTO)
August 15: Barkerville Gold confirms that the CTO will be in place until the company files an “acceptable” technical report
October 19” Barkerville Gold announces that it has engaged Snowden to help the company satisfy the CTO conditions and that it is twinning some drill holes at Cow Mountain as it drafts a new version of its technical report
