Walker River Resources’ Other Worldly Gold Grades

Miners Searching for the Motherlode

The long-predicted arrival of peak gold—the theoretical date at which the maximum rate of global gold extraction will be reached and then go into decline—looks like it will be delayed yet again, as a recent report suggests that previous near-term peak gold predictions were again off the mark. Fitch Solutions’ August report predicts that global gold production will average 2.5 percent through the decade to top 4,135 metric tons by 2029. 

This is significantly higher than the 3,300 metric tons produced in 2018 and 2019, amounts some analysts then declared as “peak,” and represented production levels that had put Goldcorp (NYSE: GG) CEO Charles Jeannes’ 2015 peak gold prediction to rest. At that time the CEO famously said, “Whether it is this year or next year, I don’t think we will ever see the gold production reach these levels again. There are just not that many new mines being found and developed.” 

While Jeannes’s peak gold prediction proved untrue, he was correct about his second sentiment as few new mines are being found and developed. Additionally, many of the world’s top producing mines are starting to experience drops in production.

So, what’s a gold miner to do? 

Well, if there was “gold in them thar hills a hundred years ago,” there’s likely to still be gold in them today—especially if the hills haven’t been mined using modern mining and geological surveying techniques. In fact, mining companies around the world are taking second and even third looks at old mines that were thought to be tapped out or abandoned for other reasons. 

For example, Canadian firm Pancontinental Resources Corp. (TSX-V: PUC) has won a bid to look for gold at a South Carolina mine that shut down after contaminating the surrounding area so much that it was named a Superfund site. This means that the company will likely have to pony up some serious cash for environmental safeguards should the company find and then try to recover the significant gold deposits company management believes the previous mining company missed. Or consider U.K. mining company Alba Mineral Resources (AIM: ALBA), which bought a 90% stake in a gold mining project that used to supply jewelers with gold used for Royal Family needs. No gold has been mined there since 1989, but Alba’s management believes that the site and surrounding region are “vastly under-explored” and that “significant gold reserves” remain.

Finding Gold in Them Thar Nevada Hills

And this brings us to an intriguing Canadian microcap company that believes there’s undiscovered gold in a previously mined area in the top gold-producing state in America. That is, Nevada, which in recent years has produced 78 percent of America’s gold and is an active modern gold rush location for some of the world’s largest gold-mining companies, including Newmont Mining (NYSE: NEM), Barrick Gold Corp. (GOLD), and Kinross Gold (NYSE: KGC). 

While Walker River Resources (TSXV: WRR; OTC: WRRZF) may not come with the status of those NYSE ticker symbols, company management is convinced that there’s plenty of gold remaining in its claims. These claims haven’t been aggressively explored in any depth for almost 100 years and have not been comprehensively examined with modern techniques until now. Initial drill results suggest that WRR management may be onto something. 

Walker River CEO Michel David first became intrigued with what the company calls the Lapon Canyon Project region in 1994 due to its mining history, unique geography, and a strong geological sense that previous prospectors may not have been able to locate and access the bulk of the gold. While working with other mining projects he kept his eye on it, and, when the opportunity presented itself, purchased the primary Lapon Canyon property in 2012. The property, it should be noted, is located in Mineral County, Nevada, named for its extensive mineralization and home to 916 active and inactive mines of all types as listed by the U.S. Geological Survey. It is also located in what is known as the Walker Lane Shear Zone, a 100-kilometre wide structural corridor between Reno and Las Vegas, that has a rich history in mining. This includes the Comstock Lode—one of the richest silver/gold mines ever found—as well as the Esmeralda/Aurora Mine, which—25 kilometres from Lapon Canyon—produced a staggering one million ounces of gold out of 100,000 tons of rock (10 ounces per ton). 

Michel’s company wasn’t initially able to conduct much exploration at the newly acquired project site due to the relative low price of gold and limited funding. However, his 35 years of geological experience combined with some limited but promising initial assays, had him convinced that he was onto something big. Thus, he persevered by bootstrapping the company with money from friends and family, while he spread the word about his theories with investors and other mining experts. Michel’s hard work paid off, as more and more mining experts began taking an interest in his modelling, allowing him to raise additional money by taking the company public in 2017. The rising price of gold spurred further attention on his company by some of the top mining investors in the world, which allowed him to raise enough money to conduct two years of intensive exploration through a recent oversubscribed private placement.   

Lapon Canyon’s Historic Gold Production

Lapon Canyon and surrounding mountains were likely first mined as a passing thought by prospectors heading to California in the mid-1800s, but the first known discovery was made in 1904 with the finding of placer gold at the mouth of the Lapon Canyon. After this was panned out, the prospectors headed into the mountains above and began searching underground. As mining equipment and techniques were still fairly rudimentary during the early 1900s, a successful mine had to produce a minimum one ounce of gold per ton, which those early prospectors must have been achieving, as they continued mining until the 1930s. 

Numerous mining assays from one group’s efforts circa 1915 met the one-ounce-per-ton threshold, with one recording a motherlode 20.6 ounces per ton. It’s unclear exactly how much gold the early prospectors pulled out of their Lapon Canyon claims, but the descendants of those prospectors are all quite wealthy, according to Michel. He believes the mining efforts eased during the 1930s because the companies were no longer able to consistently produce the one-ounce-per-ton. However, a 1936 sampling effort that cut into 28 different locations in the various tunnels and shafts of those early mines retrieved from a 10^th of an ounce (3 g/t) to 5.13 ounces per ton (145 g/t), with seven of the samples exceeding the one-ounce-per-ton threshold. This certainly suggests that plenty of gold remains underground, but the trick is in finding it.  

Despite those insanely high grades from the 1936 sampling effort, no one has made a concerted effort to get to the gold since the late 1950s and early 1960s, an initiative that was reportedly abandoned in its initial stages after an accident at the site. 

WRR Now Finding Significant Gold in Them Thar Hills 

And now, with Walker River Resources in control, exploration in this initial phase is already bearing substantial golden fruit. In the most recent drilling results from the Lapon Gold Project, WRR reported outstanding grades. This includes drill holes that retrieved gold in the amounts of 96.03 grams per ton over 13.7 metres and 94.81 grams per ton (uncut) over 6.1 metres, with the first also producing a respective 547.05, 199.06, and 115.8 grams per ton over 1.5 metre sections. The latter drill hole also retrieved 305.25 grams per ton over a 1.5 metre section, while a third drill hole at only three metres returned 346.4 grams per ton over a 1.5 metre length. To date, all drilling at this Lapon project zone has returned gold mineralization and the recent results strongly reinforce initial WRR geological mapping and prospecting efforts that suggest “significant” gold mineralization in the zone—and “significant” may very well be an understatement.

And this is just one zone. Not only is WRR poised to begin drilling in three other zones, but the company also recently expanded its claims and holdings by purchasing properties—Rattlesnake and Pikes Peak—on both sides of the Lapon Canyon project. WRR secured these properties to capture suspected extensions of gold mineralization zones in Lapon Canyon.    

WRR Capitalized for Extensive Exploration

Recent investor interest has helped Walker River secure enough funding for extensive exploration over the next two years. Support for the company’s theories about Lapon Canyon Project gold is so great that the company recently increased a private placement offering due to excessive investor interest. The company is now sitting on C$3.5 million in cash and has a market cap valuation of about C$18 million, an amount we feel heavily discounts the company’s true value. Given what we know, WRR would be valued much higher if it were a better-known gold company with a longer history. This makes the company a bargain basement deal in relation to share price, as future positive drilling results will undoubtedly help the company build its reputation and make it a notable name in gold mining.  

While the additional dilution combined with a recent flattening of the price of gold has served to subdue WRR’s stock price, the expected upcoming drilling program could easily provide a nice pop to the share price, especially if the results resemble or exceed any of the other drilling Michel and Co. have done to date. 

Stellar, Gold-Focused Management Team 

Walker River Resources has stacked its management team with personnel who believe in the significant promise of the Lapon Canyon Project and are dedicated to ensuring that the company finds the gold. Key personnel include: 

Michel David, BSc, president and CEO—With more than 35 years of experience in geology, geophysics, metal exploration and mining, Michel has managed numerous mining projects around the world and has served as the director and officer of several mining companies. Under his guidance, a number of these companies have made significant gold discoveries. Michel also has significant experience mining in Nevada and was working with a collaborator company when Barrick Gold made their first big strike at the Carlin claim. 

Eugene Gauthier, P.Eng, vice president of exploration, director—Eugene has over 25 years of mining experience, including production and mining jobs with several Canadian mines, including Gwillim, Louvicourt, and Malartic Southern, one of Canada’s largest gold mines.  

Michael Hackman, MPP, FAICD, director—Michael has extensive experience in the transport sector, having served as director and executive for a number of companies, including a position as executive vice president of Genting HK, a subsidiary of the Genting Group, one of Asia’s largest conglomerates. Among his numerous roles in corporate governance, Michael has advised gold mining companies during their government licensing negotiations.

René Lessard, director—A former director of Nemaska Lithium Inc. (TSX: NMX), during its C$1 billion market cap heyday, and Monarques Resources Inc. (TSX: MQR) and former sales manager of Campagna Motors Inc. and T-Rex Vehicles Inc.. René is an independent sales consultant. 

Will Positive Vibes Lead to Positive Finds? 

If you listen to Michel David about Lapon Canyon you’ll immediately sense his exuberance about the project and feel like you’re talking to someone who’s reluctantly holding onto a big secret. Michel firmly believes that Lapon Canyon contains extremely significant gold deposits yet to be discovered.. He has held this belief ever since he first laid eyes on the property, noting that its potential is not obvious unless you examine the property with the right perspective. More and more people are starting to see the potential from Michel’s perspective, especially given the most recent drill results.

If you watch video below you’ll get the sense of his excitement and knowledge of the area and its rich history. We do apologize in advance for the (extreme repetitiveness of the) music though. “Three chords and the truth” is great for up to 3 minutes, not 17. Johnny Cash knew this.