Goldshore Resources (GSHR.V) is coming out of the gate running as the company recently announced the start of an extensive 100,000 meter drill program on its Moss Lake flagship project.
Moss Lake was acquired from Wesdome Gold Mines (WDO.TO) and currently contains a total of 1.4 million ounces of gold in the indicated category at 1.1 g/t and 1.6 million ounces at 1.0 g/t in the inferred resource category as part of an open pit resource, while there is an additional (small) underground resource of just over 135,000 ounces at an average grade of just under 3 g/t gold. A historical PEA on the Moss Lake project shows an after-tax NPV of just under C$300M but that PEA was completed in 2013 and thus outdated.
While the open pit already contains about 3 million ounces of gold across all resource categories, there is additional exploration upside as the areas that make up the open pit resource remain open along a 20 kilometer trend with several gaps in between previously drilled zones. Additionally, it looks like there may be more potential at depth and this could either reshape the contours of the open pit or add additional ounces to an underground resource.
At C$0.65/share, Goldshore is trading at a C$63M market cap and an enterprise value of approximately C$45-50M (depending on the current cash position) which represents less than C$15 per ounce in the ground. As drilling progresses and the company updates its resource and economic studies, a multi-million ounce gold play in Ontario will likely draw some interest and it’s probably not a coincidence the company highlights past transactions of similar projects in its corporate presentation.
Disclosure: The author has a long position in Goldshore Resources. Please read our disclaimer.
