Stocks To Watch

Friday,25 July,2014

Barkerville Pours First Gold Dore Bar from Bonanza Ledge Mine

Small-cap stock investors always have to be patient to see a company develop, but maybe none so much as those investing in the mining sector. Biotechs may be the only that rival miners, with both consuming millions of dollars and often taking more than a decade to bring their product, albeit a new drug candidate or a mine, to commercialization. However, the rewards can certainly be worth the wait.

Those that have put their time into Vancouver-based Barkerville Gold Mines Ltd. (TSX-Venture:BGM) got their patience rewarded a bit on Friday, not by a spike in share price, but by hearing that the first gold dore bar has been poured at the Bonanza Ledge Mine. The mine, which was dubbed a new discovery nearly a decade and a half ago when Barkerville was exploring a different target, is situated on the company’s Cariboo Gold Project near Wells, British Columbia.

Barkerville’s portfolio contains more than 1,100 square kilometres of land along a strike length of 60 kilometres that’s approximately 20 kilometres wide in central B.C. In addition to the Bonanza Ledge Mine, the Cariboo project includes seven former producing mines as well as the Cow Mountain, Barkerville Mountain and Island Mountain exploration targets. The company also owns an operating milling facility, called "QR," near Quesnel, British Columbia that it acquired early in 2010 as part of a package deal that included a permitted gold mine and another milling facility in Revelstoke, B.C. that is currently on care and maintenance. The QR mill has been processing ore from mining at the QR project as production from the Bonanza Ledge Mine neared.

As mentioned, it’s a slow grind to production. From discovery in March 2000, Barkerville brought the Bonanza Ledge Mine every step of the way, including resource estimates, pre-feasibility study, a 13,000-wet-tonne bulk sample (in 2005), permits and mine development to initiating production in March. A technical report from 2012 shows that the mine can produce about 73,500 tonnes at an average grade of 9 grams per metric tonne, equating to a mine life of four years and 661,500 grams of gold (23,334 ounces). At $1,300 per ounce, that’s roughly $30.3 million.

Barkerville hauls the ore and gold from the mine 110 miles up the road to its QR mill facility. The company began trucking ore from the mine for milling early this month. Barkerville chief executive Frank Callaghan said, "It’s a proud moment" for the company on July 7, when the shipment news was disclosed. He may be even happier today as the first gold dore bar poured from the Bonanza Ledge Mine had a total weight of 11,528 grams, or about 406 ounces. At $1,300 per ounce, that’s a $528,000 block of gold.

Shares of BGM started 2014 strong, rising to hit 74 cents in January after capping 2013 at 42 cents, but fell to a low of 30 cents each at the start of June. A slow and steady rise from the bottom, including a jump from 40 cents to touch 50 cents on Monday, has the stock back in positive territory by about 15 percent for the year. Shares are trading flat in Friday action at 47 cents.


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