Redstar Waits For Drill Results
The Gold Report | Nov 09, 2016 02:13AM ET
Bob Moriarty of 321 Gold discusses Redstar Gold Corp. (V:RGC) and what investors should expect of the share price during the next few weeks, as we await drill results from the company's recently completed 1,500m program at the high-grade Shumagin Gold Zone on Unga Island, Alaska.
Unga Island in Alaska. Results should be out in about three weeks. Until then the shares will tend to be on sale as there are 27 million warrants at $.12 that expire on November 27th. Anytime between now and then, when the price goes above $.12, people wanting to exercise shares but being short of cash will sell in the open market.
The Apollo-Sitka mine was Alaska's first gold mine and was in production from 1886-1922 at a reported head grade of 10 g/t gold. Redstar drilled seven holes in the 2016 Phase 2 drill program for a total of 1,505 meters. The holes were spaced over about 750 meters strike of the 2,000-meter Shumagin Gold Zone. The holes were intended to test along strike and the down dip extension.
The Redstar technical team reports that all the holes intersected the intended breccias and vein structure. Only the results will show the gold grade, if any. Based on the results of the Phase 2 drill program, Redstar intends a larger and more intensive drill program in the spring of 2017.
Redstar is the first company to consolidate the district with the intent to explore on a district scale the numerous gold and silver targets.
At this point Redstar is a crapshoot. It's a known high-grade system and good results will blast the shares higher. Results from a 2015 drill program were as high as 202 g/t gold over 1.9 meters with 82-g/t silver and 59.1-g/t gold and 300 g/t silver over 1 meter.
In the past year, shares of Redstar have seen a low of $.025 and a high of $.17. Eric Sprott is a strategic investor and the company just pulled in about $3.6 million with the exercise of warrants at $.10. As of now they are sitting on $7.5 million Canadian. Naturally they are hoping the upcoming 27 million warrants will be exercised but in any case they are already fully financed for a major 2017 drill program.
Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Redstar Gold Corp. The following companies are advertisers on 321 Gold: Redstar Gold Corp. I determined which companies would be included in this article based on my research and understanding of the sector.
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