* Explorer has project in Nevada's Carlin Trend
* Region dominated by Newmont, Barrick
* Gold Standard dealing with tough funding environment
* CEO sees company eventually acquired
* Share price soared early last year, then plunged
By Cameron French
TORONTO, March 1 If mineral exploration, like
real estate, is all about location, then Gold Standard Ventures
Corp would appear to own the equivalent of a penthouse
on Park Avenue.
Its flagship gold project sits in Nevada's productive
Carlin Trend, nestled next to projects owned by Barrick Gold
Corp and Newmont Mining Corp. Its location
makes the explorer a prime prospect to be scooped up by one of
the mining giants or secure financing for its Railroad project.
Unfortunately for Gold Standard, fundraising is often about
timing. These are tough times to be a gold explorer,
particularly one trying to delineate an extractable resource in
a district where development costs tend to be high.
Put simply, the Vancouver-based company, like other gold
explorers, is having a hard time raising money, though
exploration has gone well, it said. As a consequence, Gold
Standard's shares, which ran as high as C$3.03 last year, are
now struggling to stay above C$1.00.
"In this market - I'll be blunt - everyone's having a tough
time getting traction, but we feel that (our) contiguous land
package is very rare and unique," said co-founder and Chief
Executive Jonathan Awde, who will travel to Toronto this week
for the annual Prospectors and Developers Association of Canada
That package consists of 19,000 acres on the Carlin Trend, a
geologic formation that is home to big operations such as
Barrick's Goldstrike and Newmont's Rain mine and has produced
more than 70 million ounces of gold.
Gold Standard purchased Railroad in 2010, and has since
bought additional parcels of land to the south of the project.
The company is now the third-largest landholder on the
Carlin Trend, and has several former Newmont staffers on its
payroll, including head of exploration Dave Mathewson, a former
head of Newmont's exploration in the region.
If this makes it look like Gold Standard is just biding time
until it gets bought by one of the nearby giants, Awde isn't
looking to disagree.
"I think the two ways in this market to maximize shareholder
value are discovery and M&A. Very few juniors can ever make the
transition form explorer to producer," he said.
FORMER HIGH FLYER
Until that happens, if indeed it does, Gold Standard must
continue to fund its own exploration and move toward the point
where it can produce a 43-101 resource classification, which
would raise the value of the project and make funding easier.
The company was a Toronto Stock Exchange high-flyer early
last year, its shares quadrupling in a little over four months
on the back of encouraging drilling data. One hole yielded a
rich 3.38 grams a tonne over 164 meters. That result drove the
company's shares up by 61 percent overnight.
But the stock ran into trouble when it announced a public
stock offering in June, around the time fears were rebuilding
about the global economy.
The deal was priced at C$2 a share, about 25 percent below
where the company was trading, which sparked immediate selling
that only got worse when Gold Standard reported drill results in
August that failed to meet the market's lofty expectations.
The offering "took a lot of arm-twisting to get it done, and
our stock just got pounded and beaten," said Awde. "We were
shorted and pounded and were bid by a large fund with a price
sensitive order that was 17 percent below the market."
The company now has about C$9 million in cash, which Awde
says should get them through six to nine months of drilling
before they'll need a fresh infusion.
For all the potential of Railroad, experts said the Carlin
Trend is a technically challenging and pricey place to work,
meaning finding more gold won't be cheap.
"The types of Carlin deposits that these guys are drilling
are in broken rock and long structures, and so it's slow
drilling and it's expensive drilling," said a mining analyst who
didn't want to be identified, citing company policy.
Analysts are generally positive on the company, with Thomson
Reuters I/B/E/S showing three "buy" ratings and an average
target price of C$4.21, well above the company's closing price
of C$1.03 on the TSX Venture Exchange on Friday.
If the market doesn't improve over the next several months,
Awde said the company may turn to some of its deep-pocketed
investors, including Toronto-based hedge fund manager Albert
Friedberg, who came on board in 2011 and currently owns 15
percent of Gold Standard.
"At some point this market will turn and I think companies
that have good assets in good, politically safe parts of the
world around existing infrastructure will receive love," Awde