In a Sept. 20 research report, Eight Capital analyst Craig Stanley discussed GFG Resources Inc.'s (GFG:TSX.V; GFGSF:OTCQB) initial assay results from its 100%-owned Wyoming gold project Rattlesnake Hills. "Assays from the initial eight drill holes that tested brownfield targets intersected broad zones of low-grade mineralization. The assays are geologically interesting and generally above a likely cut-off grade of a potential heap leach operation," Stanley highlighted.
Stanley listed the results reported by GFG Resources:
- RSC-184 was drilled in the flank of Antelope Basin and hit 73.2m of 0.43g/t Au at 82.3m down-hole depth in Precambrian schist that extend nearly 200 meters east of the quartz monzodiorite dike that hosts mineralization at Antelope Basin.
- RSC-188 was drilled on the west side of the North Stock intrusion, 70m from the nearest historic hole, and hit 114m of 0.45 g/t Au at 74.07m down-hole depth
- RSR-001 (15.2m of 0.55 g/t Au at 196.6m down-hole depth) and RSR -003 (7.6m of 0.37 g/t Au at 117.35m down-hole depth) tested the middle ground area between Antelope Basin and North Stock.
- RSR-006 tested the northwestern extension of the mineralization at North Stock and hit 15.2m of 0.29 g/t Au at 21.34m down-hole depth.
- RSR-007 tested a strong IP anomaly 350 meters southwest of North Stock and hit 10.7m of 0.51 g/t Au at 128.02m down-hole depth.
- BJR-001and BJR-005 tested the western portion of the large (400m by 750m) gold -silver soil geochemistry anomaly at Blackjack and hit 18.3m of 0.79 g/t Au + 36.86 g/t Ag at 120.4m down-hole depth.
In terms of next steps, Stanley noted that "GFG has completed 50% of its 2017 drill program with 14 holes pending assay results" and explained that GFG Resources will begin drilling the remaining 15 greenfield holes in October. He stated that "the drill program is expected to finish in early November, with assays being reported on a monthly basis for the remainder of the year and potentially into 2018."
"We believe GFG could receive interest from senior and mid-tier gold producers. We note that in 2011, Agnico-Eagle (not covered) signed a $76 million joint venture agreement to earn a 70% interest in the Rattlesnake Hills Gold Project, which is less than half GFG's current market cap," Stanly concluded.
Eight Capital has a Buy rating and target price of $1.60 per share for GFG Resources. The company is currently trading at $0.64 per share.
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Disclosures from Eight Capital, GFG Resources Inc., First Impressions, Sept. 20, 2017
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