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Without question, a truly remarkable Canadian exploration story over the past 2 years has been the development of Doubleview Capital’s (DBV, TSX-V) Hat Project, a growing Gold-rich Copper porphyry discovery in northwest B.C.’s emerging world class Sheslay district – the province’s “#1 greenfield district” according to the Association For Mineral Exploration British Columbia.

Last week marked the beginning of yet another exciting new chapter in this drama-filled story that will most certainly once again command the attention of investors in the weeks and months ahead.  Importantly, each round of drilling at the Hat has returned higher grades and better overall results, leading to an increasingly robust geological model for a corridor covering at least 12 sq. km.

After a just-completed comprehensive review of historical and recent Hat data by Doubleview’s technical team, and the early success from current drilling on the adjoining Grizzly Property, there are even more reasons to believe that the Lisle Zone (half a km wide and 1 km long as defined by 16 drill holes) is merely part of a much larger system at this 65 sq. km project.  In addition, BMR research also shows that the overlooked northern part of the property, featuring a magnetic high with low resistivity in andesitic rock of the Stuhini assemblage, also has to be considered favorable for potential new discoveries given the growing understanding of the regional geology.  That gives the Hat even more “blue sky”.

DBV President and CEO Farshad Shirvani doing some prospecting northwest of the Lisle Zone (BMR photo, 2014).

Returning To The Hat

Last Wednesday, Doubleview delivered an early Christmas gift to shareholders with various pieces of news including the critical fact that it’s gearing up to return to the Hat and commence a fresh round of drilling that will start with the completion of hole H-25, a 1 km step-out from the Lisle Zone.  That infamous hole, of course, was halted by Tahltan protestors in early July while the drill was turning in a zone of Gold-Copper porphyry mineralization at a depth of 270 m.  Unbelievably, H-25 was a potential new summer drilling discovery that was interrupted despite Doubleview’s multi-year drill permit and the fact that the entire property falls within the critical 2011 Atlin Taku Land Use Plan as an area specifically set aside for exploration and potential resource development.

The July blockade, as we’ve detailed in numerous BMR reports, served to put a huge stamp of value on the Hat.  It was a political “power-play” on the part of Tahltan leader Chad Day who attempted to use the drilling success of the Hat, and the potential of this massive district, as leverage against the provincial government to fast-track broader negotiations over a new and expanded Shared Decision Making Agreement (SDMA) between the Tahltan and the province.  Day’s strategy backfired in several ways, including how it embarrassed and angered some B.C. government officials.

A 2011 government-produced video (see link below) featuring Premier Christy Clark reappeared soon after the Hat incident, showing the Premier heralding “certainty” for investors from the Land Use Plan that took several years to negotiate.  The Plan, now fully implemented, was co-managed by First Nations (Taku River Tlingits) and the B.C. government, making it quite unique, and involved many stakeholders (the Tahltan, however, elected not to participate).

Claim “overlaps” are not unusual in B.C., even over existing mines.  The Tahltan and Taku share a long history in the Sheslay district, and there was even a book written about a bloody battle that was once fought in this area between the two First Nations.  The district also has an extensive history of exploration, and the Tahltan were involved in the building of the Golden Bear mine access road that connects with the past producing high-grade Gold mine immediately to the west.

Hat Highlights From Last Week’s News

Much was obviously going on behind the scenes from July’s blockade through to last week’s long-awaited update from Doubleview which included the following:

• In a draft response to Doubleview’s injunction application against the “individuals” involved in the July blockade, these individuals stated, “There has been nothing in the way of (Doubleview) returning to the property to continue its program“;
• The Hat is getting “direct attention” from some unnamed major international mining companies, attention that included site visits earlier this year;
• A just-concluded comprehensive review of historic and recent data has “significantly expanded” target areas at the Hat (the Hat “Corridor” was last reported to be approximately 3 km x 4 km);
• Doubleview has hired Jo Harris and Associates, a leading community relations consulting group that has guided clients through the approval process for 13 major mines in British Columbia.

A Second Major Discovery On The Way?

Almost exactly 2 years ago, DBV President and CEO Farshad Shirvani pulled off one of the most dramatic moments in Canadian exploration in recent years when he returned to the Hat Property for the drilling of a series of holes during extremely challenging overall market conditions.  He actually mortgaged his house to carry out this drilling, and the bold move paid off big-time as it resulted in an important new discovery and sparked a district staking rush beginning in late January, 2014.  Within just a few months, Doubleview experienced a 10-fold increase in its stock price and the Sheslay region was instantly recognized as one of Canada’s premier exploration districts.

Keep in mind, the Hat Property had never been drilled until the spring of 2013.  Shirvani’s perseverance through challenging market conditions, and other obstacles such as July’s blockade, has been impressive to say the least – an unusual spirit of determination that often leads to huge success.

It’s hard to imagine that more discoveries aren’t on the way, given the prolific nature of this property and the region.

The Hat is proving to be a dynamic porphyry complex that has not been limited in any direction.  The last reported drill hole, H-23 in the Lisle Zone, returned 332 m grading 0.25 g/t Au and 0.29% Cu from 68 m to 400 m, with higher-grade sections within that long interval (more results pending from deeper down).  A plethora of encouraging geological, geophysical and geochemical data suggest the Lisle Zone could be just the “tip of the iceberg”, part of a much bigger system that connects with the Hoey showing to the south and with targets well to the north and northwest along a structural corridor of intermediate andesitic volcanic and intrusive rocks.  Sulfide mineralization is associated with intense calc-potassic alteration and veins within multiple crosscutting stocks and dykes of augite-hornblende diorite intrusions.

While no NI-43–101 resource estimate has yet to be carried out at the Hat, some back-of-the-envelope calculations for the Lisle Zone, combined with the potential of the other areas, are lighting up the imaginations of many.  Defining a high-grade starter area will be key, and success elsewhere in the district will only serve to add further value to Doubleview.

Doubleview’s Lisle Zone discovery in January 2014 breathed fresh life into the junior resource sector.  We expect history to repeat itself due to this company’s perseverance and a mountain of evidence stacking up over a growing corridor. 

Premier Clark Heralding The Land Use Deal

Signed government agreements are very valuable documents.  A government video explaining and promoting an agreement can be priceless, as you’ll see.

Every investor in B.C.’s junior resource sector should view this short but informative 2-minute video (click on link below) publicly released by the government in the summer of 2011.  The facts speak for themselves.

Note:  Jon holds a share position in DBV.   

Gold has traded between $1,075 and $1,088 so far today…as of 10:30 am Pacific, bullion is down $5 an ounce at $1,077…Silver is off 13 cents at $14.15…Copper has slid another 2 pennies to $2.08…Crude Oil is up slightly at $40.76 while the U.S. Dollar Index has jumped more than half a point to 99.61…

Another Islamist terrorist attack this morning, exactly 1 week after the deadly attacks in Paris…gunmen, shouting “Allahu Akbar”, stormed a hotel in Mali’s capital today, killing at least 10 people and taking more than 170 hostage…they apparently freed those who were able to recite verses from the Koran, as security forces gained entry to the hotel…the attackers are still inside…the West African nation has been battling Islamist extremists for several years…

A top Federal Reserve official hinted yesterday that “some major central banks” could move away from near-zero interest rate policy “in the relatively near future.  We have done everything we can to avoid surprising the markets and governments when we move,” said Fed Vice Chairman Stanley Fischer at a conference sponsored by the San Francisco Fed…Fischer noted that the question lingers of whether Asia and emerging markets are prepared for policy tightening by global central banks…emerging market central bankers have told the Fed to “just do it”, he added…

The likelihood of higher rates by year-end is 68%, up from 50% at the end of October, futures data show…

The Gold market has stabilized and appears to have pretty much factored in tightening by the Federal Reserve as early as next month, meaning much of the bearish news is now “baked in the cake”…prices tumbled by more than 10% over the last month to a new multi-year low this week before bargain-hunters stepped up to the plate…since any Fed tightening is likely to be very gradual, the best thing to happen to Gold might be to get the speculation of this initial rate hike out of the way…

Global holdings in exchange-traded products backed by Gold dropped to 1,504.54 metric tons yesterday, the lowest level since March 2009 according to data compiled by Bloomberg…

Agnico Eagle Mines (AEM, TSX) is emerging as the winner among major producers in the race to shield profit from slumping Gold prices, according to a Bloomberg News report…since Gold began a more than 40% plunge from its 2011 peak, the miner’s gross margins have narrowed by just 1.9% thanks to expansions and a strengthening U.S. dollar…for every dollar of Gold Agnico Eagle sold last quarter, 49 U.S. cents was gross profit, little changed from 4 years ago when Gold touched U.S. $1,900…that’s the best performance among 15 major producers tracked by Bloomberg, whose margins compressed by an average 64%…

In today’s Morning Musings…

1.  Prospects for an important new northwest B.C. discovery grow at Grizzly Central…

2.  A busy time at Pretium Resources‘ (PVG, TSX) Brucejack Project, and an updated PVG chart…

3.  Updated TSX chart shows promise going into year-end…

4.  Lucky LUC…

Plus more…to view the rest of today’s Morning Musings, login with your username and password, or click here to gain full access to this and other exclusive BMR content and features…

Garibaldi Resources (GGI, TSX-V) has winterized its camp, meaning things are getting very serious and even more promising on the ground as a first-ever drill program continues at Grizzly Central.   The company clearly has a “tiger by the tail” and an apparent exciting new discovery in the works in northwest British Columbia’s emerging world class Sheslay district.

With Doubleview Capital (DBV, TSX-V) gearing up to return to the Hat deposit 10 km to the east, where a major expansion of that system could prove to be just a few holes away, the Sheslay district could soon light up like a Christmas tree.  Just in time to give the beaten-down junior resource market new hope and a boost of confidence entering 2016.

We’re seeing ample evidence of why the Association For Mineral Exploration British Columbia now refers to the Sheslay region as the province’s premier greenfield district.

Hole 4 Step-Out Hits Dark Pyrite-Magnetite Unit Intersected In GC-15-03

After what appears to be a stellar 3rd hole (GC-15-03), as reported November 10, Garibaldi confidently stepped out 600 m to the west-southwest and hit the same favorable pyrite-magnetite unit beginning just 36 m deeper (at 139.8 m) in GC-15-04 and extending right through the remainder of the hole.

Hole 4, as you can see in the map below, was drilled immediately adjacent to a fault in an area of strong but more moderate mag and chargeability responses than observed around the earlier holes.  While Grizzly Central is mostly covered by a thin to variable glacial till, outcrop discovered adjacent to hole 4 displayed intense potassic alteration and quartz veining containing chalcopyrite with traces of malachite and bornite.

After just 14.5 m of overburden, GC-15-04 immediately entered an intense silica chlorite-sericite breccia for 22 m. This was followed by a 103-m interval with sections of finely disseminated chalcopyrite and pyrite stringers in andesitic volcanoclastic rocks consistently chlorite-sericite altered, featuring approximately 5 to 15% quartz veins.

“These widely spaced initial holes at Grizzly Central…clearly offer the potential for yet another new discovery in this still very underexplored district,” commented Garibaldi President and CEO Steve Regoci. 

Assays, of course, will be the final determination of how significant this discovery is, but there’s no question Garibaldi is oozing in confidence at the moment.  This is a company with a proven track record of discoveries in Mexico, and they’ve obviously made highly-effective use of technology to find quick success over a land package at Grizzly that encompasses a whopping 286 sq. km.

This is the kind of drill core, shown on the GGI website, that gets us very encouraged regarding the Gold potential disseminated in the cooked-up rocks at Grizzly Central.

Drill core sample from GGI website – Kaketsa has cooked up something perhaps quite unique in this part of the prolific Sheslay district.

More in today’s Morning Musings, and over the weekend at BMR.

Gold has traded between $1,069 and $1,088 so far today…as of 9:45 am Pacific, bullion is up $12 an ounce at $1,080…Silver has pushed 11 cents higher to $14.29…Copper is flat at $2.11…Crude Oil has lost 45 cents to $40.30 while the U.S. Dollar Index has slipped half a point to 98.95…

Discovery Ventures Inc. (DVN, TSX-V)

Strong new management has helped turned Discovery Ventures (DVN, TSX-V) in a more positive direction as the company pushes forward with its high-grade Gold-Copper Willa-MAX Project in southeastern British Columbia…so we see this opportunity as one of the better ones on the Venture going into 2016…

Technically, it’s worth nothing that Discovery’s 200-day SMA has flattened out at 15 cents and should start reversing to the upside over the coming weeks – always a bullish sign…

DVN is unchanged at 16.5 cents as of 9:45 am Pacific…

Note:  John and Jon both hold share positions in GGI and WRR.  Jon also holds a share position in DBV.

Gold has traded between $1,066 and $1,073 so far today…as of 10:30 am Pacific, bullion is unchanged at $1,070…Silver is off slightly at $14.16…Copper is 3 cents lower at $2.11…Crude Oil dipped briefly below $40 a barrel for the first time since August and is currently down 26 cents at $40.41, while the U.S. Dollar Index is flat at 99.67…

The latest report from the GFMS team at Thomson Reuters states that the Silver market is expected to be in an annual physical deficit of 42.7 million ounces in 2015, marking the 3rd consecutive year the market has realized an annual physical shortfall (you wouldn’t know it by the price action)…such deficits do not necessarily influence prices in the near-term, but multiple years of annual deficits can begin to apply upward pressure to prices over time…this year, however, net outflows from ETF holdings and derivatives exchange inventories on a year-to-date basis have lessened the impact of the physical deficit, bringing the net balance to –21.3 million ounces…

Total Silver supply is forecast to fall by 3% from last year…this decline is expected to be driven by flat mine production, a 5% drop in scrap return, and some net de-hedging…mine production is slated to total 867.2 million ounces in 2015, up 0.3% from a year ago…this would be the weakest performance since 2002 when mine production fell by 2%…total physical demand is forecast to contract by 2.5% in 2015, primarily driven by a drop in electronics demand…

Meanwhile, Silver bullion coin sales reached a fresh record high in the 3rd quarter of this year, totaling 32.9 million ounces, and are up 95% year-on-year, according to GFMS’s bullion coin survey…the slide in Silver prices in July and August to 6-year lows triggered a surge in buying in the Silver coin market, particularly in North America where sales increased by 103% in Q3…

Gold 6-Month Daily Chart

Extreme oversold RSI(14) conditions have emerged in Gold, similar to what occurred in July, which is why we’re taking a contrarian approach to this market right now after we correctly anticipated the recent slide in prices and went long on the triple-short DUST ETF…

Gold has chart support at $1,065…one can’t rule out a sudden, brief wash-out to a lower level, but the intense sell-off from the high of nearly $1,200 last month has largely run its course in our view…

Executives of Gold mining companies are focused on cutting costs and can probably find areas to do more, according to RBC Capital Markets in a report summarizing a London conference hosted by the bank, with 11 of the industry’s largest producers making presentations…with the recently declining Gold price “broadly out of companies’ hands, focus is on managing the costs they can control, with operational and cost efficiencies seen as the way to protect margins,” RBC stated…

In today’s Morning Musings…

1.   A big victory for Doubleview Capital (DBV, TSX-V) as it prepares to return to drilling at the Hat, while Garibaldi Resources (GGI, TSX-V) gets bold after GC-15–03 with a major step-out at Grizzly Central…

2.  Updated Canadian dollar and CRB Index charts…

3.  Two Gold producers that should be in everyone’s portfolio…

4.  Nemaska Lithium (NMX, TSX-V) is halted, pending news, while Equitas Resources (EQT, TSX-V) bounces back strongly…

Plus more…to view the rest of today’s Morning Musings, login with your username and password, or click here to gain full access to this and other exclusive BMR content and features…