We’ve been sounding the alarm on Richfield Ventures (RVC, TSX-V) recently, and yesterday it exploded to close at $1.45 – a 30-cent gain on just over half a million shares. Some of our readers loaded up on RVC during recent weakness between $1.00 and $1.15, and they are going to be very handsomely rewarded. The Richfield chart is unquestionably extremely bullish and the stock’s strong technicals are supported by some eye-popping fundamentals. It’s one of two extremely interesting low-grade, high tonnage situations we’re reporting on at BullMarketRun.com, and both could have spectacular runs.
Richfield has “Takeover Target” written all over it – the company’s Blackwater Project in the Nechako Plateau area of central British Columbia has all the makings of a very large bulk tonnage deposit (three million ounces or more potential). Some of the drill results released last September through January of this year were absolutely phenomenal, and included 207 metres of 1.06 g/t Au and 329 metres (from surface) of 1.26 g/t Au. A total of 18 holes were drilled last summer and fall, and 50 more (totaling 25,000 metres) are planned for this next phase which begins in just six weeks. Investors aren’t waiting for the new drill program to begin – they’re starting to pile in now as the realization grows that Richfield could be sitting on one of the biggest gold discoveries mineral-rich British Columbia has ever seen.
It’s not hard to do the math here and come to the conclusion that Richfield’s market capitalization, currently just under $60 million, could easily skyrocket to $250 million or better as additional drilling confirms what many suspect – Blackwater is a world class deposit (potentially a massive open pit operation) that undoubtedly is already on the radar screens of several majors (we see another Canplats in the making here).
Currently, then, Richfield is highly undervalued in our view at just $1.45 per share, and a similar situation exists with Gold Bullion Development Corporation (GBB, TSX-V) which is exploring a potential major bulk tonnage deposit of its own along the prolific “Cadillac Trend” near Rouyn-Noranda, Quebec.
Gold Bullion is trading at only 10 cents a share with a market cap of just $8 million, yet its Granada Gold Property (40 miles west of Osisko’s Malartic Deposit) is showing as much promise as Richfield’s Blackwater Project. Gold Bullion drilled 74 metres of 0.88 g/t Au on a shallow 600-metre step-out hole just recently in its first-ever drill program at Granada, and another shallow hole graded 1.74 g/t over 32.5 metres (assay results are expected soon on 19 additional holes). Sometimes, as Osisko discovered, the best place to find a new mine is near an old mine, and that’s the approach Gold Bullion has taken at Granada, a former producer. The company has staked a large land package around the former mine and we have reason to believe, based on our intense study of the property, that Gold Bullion is potentially sitting on a multi-million ounce deposit or series of deposits.
Here are some additional important points to consider in evaluating Gold Bullion’s potential:
• Only a small portion (approximately 5%) of the Granada land package (2 km x 7 km) has been explored so far by Gold Bullion;
• The company has already conducted a large bulk sample (140,000 tonnes of which 30,000 tonnes was milled onsite) which produced an average gold grade of 1.62 g/t. How many junior resource companies have done a bulk sample of that magnitude?;
• A 90% recovery rate was realized from that bulk sample;
• The waste from that bulk sample, along with stockpile waste from previous Granada operators, graded 1.75 g/t (Granada’s waste is running at a higher grade than Osisko’s resource);
• The Granada property has grown from two vein structures to multiple vein structures;
• In this type of deposit, gold is not just confined to the quartz-carbonate vein network but is also present in significant amounts within the iron-rich sulphized wall rock (the material between the veins). This has been demonstrated by Gold Bullion’s bulk sample and assay results released the past two weeks which show that mineralization is carrying through the length of each hole. This has significant tonnage implications;
• Historical data for the Granada Mine indicates that whatever was drilled and assayed was 35% higher in grade when it was mined and milled;
• Low cost operation with excellent surrounding infrastructure, just six kilometers south of Rouyn-Noranda.
As Osisko and others have proven, a low-grade, high-tonnage deposit can be tremendously profitable to mine (as an open pit) and can deliver huge returns to shareholders. Osisko’s current market cap is approximately $3 billion and the company just released updated numbers for its Canadian Malartic Deposit, showing 8.97 million ounces as an open-pit reserve at an average fully diluted grade of 1.13 g/t.
Could Richfield and Gold Bullion repeat Osisko’s success? Anything’s possible. RVC and GBB both have huge blue sky potential. At the very least these stocks will be market out-performers and will deliver superior gains in the weeks and months ahead.
