The following is an excerpt from our recent Tickerscores Top 10 Report, which has 50+ pages and is 100% independent. The report, only $55, covers ten resource stocks (8 gold, 2 energy) that have upcoming catalysts and could have significant upside this summer. Prosper Gold (PGX.V) is one of the companies we cover in the report.
Prosper Gold is a relatively new company on the TSX-V; however the management team is no stranger to the exchange or to discovering world-class assets. The Prosper Gold management team is run by the former Richfield Ventures team that discovered the 5 million ounce gold Blackwater deposit near Vanderhoof B.C., which was bought out by New Gold for $500 million. Their new target is the Sheslay Project in Northwest BC, which they have the option to earn 80% interest. Prosper managed to get six holes done in 2013 and initial results are promising for a low-grade, bulk tonnage copper-gold deposit. CEO Bernier and VP Exploration Tempelman-Kluit are known for their aggressive style and are expected to be very aggressive drilling targets over the summer exploration season. The plan is to target and identify a bulk tonnage style deposit such as the Imperial Metals (III.T) Red Chris mine.
Prosper is in a comfortable cash position with ~$1 million in cash as of the end of January 2014. The management team is currently arranging a $4 million private placement (50¢ per share), which will be used for this summer’s exploration season. The recent financing climate has been better than in 2013 and with the management track record, getting this raise done should not be an issue.
President and CEO Pete Bernier and VP Exploration Dirk Tempelman-Kluit were recipients of the 2011 AME BC Award for Excellence in Prospecting and Mineral Exploration for their Blackwater discovery. Along with their excellent track record in the business, both Pete and Dirk are significant holders in Prosper Gold. Pete owns 3.4 million shares, while Dirk owns 3.2 million. Chief Financial Officer Susanne Bonn is former CFO for Richfield Ventures; she not only brings M&A experience to the table, but also treasury management. Previous experience in controlling and forecasting the required funds for an exploration program can help to limit the shareholder dilution that occurs over a company’s lifecycle.
The Sheslay property is located in the Hackett River valley in Northwest B.C. and currently the only access to the property is by fixed wing aircraft. Prosper Gold has the ability to option 80% of the Sheslay project through an earn in agreement with Firesteel Resources (FTR.V). Historical work on the property dates back as far as 1950 and is composed mainly of sampling and mapping along with 45 drill holes. Firesteel had previously put together a $1.7 million exploration program comprised of sampling, mapping and 26 drill holes. Access to infrastructure is currently an issue, however the Northwest Transmission Line and Forest Kerr hydroelectric projects will aid significantly in these areas. Through both historical work and last summer’s initial exploration plan, Prosper has identified five targets for the 2014 season: Pyrrhotite Creek, Copper Creek, Star, Star North, and Star East. The team began drilling the Star target in 2013 and completed a six-hole program, which yielded several long intersections of copper-gold mineralization (See below). The Star area is open for expansion in all directions. The closest major deposit is the Imperial Metals’ Red Chris deposit, which has average reserve grades of 0.359% copper and 0.274 g/t gold. The takeaway here is that the bulk tonnage style deposit does work so long as the tonnage is there, which is why Prosper needs to get on the drill bit hard this summer season. Another thing to note is that there is significant mineralization in the 500m-1000m below surface range at Red Chris. Prosper has yet to drill past 600 meters and they have noted that several holes have finished amidst mineralization.
True to their style, Prosper has big plans for the relatively short exploration season, which means there should be lots of headline action. Step number one will be closing their $4 million financing deal. However, with their current balance of ~$1 million, they will already be able to cover phase 1 of their exploration plan. Management has plans to start fieldwork in early May and work till late in the fall. Phase 1 will be 6 holes (3000m), with 2 holes at Pyrrhotite Creek and 4 holes at the Star targets. Phase 2 will be an additional 10,000-meter drill program, likely based on results from phase 1 drilling and a 50km IP survey at Pyrrhotite Creek. If all goes well a NI 43-101 compliant resource will be in the cards. Investors will be watching closely for drill hole assays as that will be the catalyst. Look for long intercepts of low grade similar to last season. Another item to watch is how far the holes are spaced apart (step out holes) as this is where the tonnage will come from. [table id=3 /]