Southwest British Columbia gold explorer New Carolin Gold (TSX-V: LAD, OTC: LADFF) announced that it has completed underground preparations required for its 2019 underground drilling program at its 100% owned flagship Ladner Gold Project in southwest British Columbia, Canada. Last month I laid out the reasons why I believe New Carolin offers a compelling opportunity for junior mining investors at a dirt cheap valuation.
As drilling and surface exploration commences at Ladner (in the next 2-3 days), New Carolin has the opportunity to begin to unlock some of this value and bring LAD shares up to a more appropriate valuation for a company that has a highly prospective gold project with an existing resource, existing infrastructure, and an extremely attractive location (road access to site with power lines running right up to the property).
The entrance to New Carolin’s Ladner Project.
Underground drilling will initially focus on stepping out down-plunge from the known resource at the Carolin Mine, with an emphasis on expanding the existing resource. Surface exploration will include following up on areas surrounding historic workings with anomalous historic results returned from drilling, trenching, and geochemical surveys. New Carolin may then decide to follow up the surface exploration with surface drilling at the most prospective targets.
One of the surface targets that jumped out at me when I was reviewing the latest NR and maps is called the “Lorraine Target”:
The Lorraine target occurs 300 meters west of the historical Pipestem mine workings and consists of a one kilometer long by 50m to 150m wide > 200 ppb gold in soil geochemical anomaly with grab samples of mineralised quartz veins returning up to 10.1 g/t Au. The Lorraine Target has only seen cursory drilling (in 1982) that may not have sufficiently tested the zones. New Carolin is eager to drill test the Lorraine as well as the nearby Pipestem Mine targets.
The key for New Carolin will be to prove through drilling that gold mineralization extends down-plunge at the Carolin Mine and to prioritize other prospective drill targets across the rest of the property. With its excellent location (a 2 hour drive from Vancouver and 18 kilometers from the town of Hope,BC) and substantial infrastructure in place, New Carolin has a potentially very valuable asset on its hands at Ladner. The key will be to demonstrate that the resource extends well beyond the current ~300,000 ounces (average grade of 3.34 grams/tonne gold using a 2 g/t Au cut-off) in the 43-101 compliant resource for the Carolin Mine.
From a technical charting vantage point, the setup right now in LAD shares couldn’t be much better. Let me show you why…
Since the June low at C$.08 was put in place LAD shares have stair-stepped higher, forming a series of higher lows in the process. Resistance at C$.145 has been tested on eight different trading days since August and we know that the more times a level is tested, the more likely it is to result in a breakthrough (breakout or breakdown). In LAD’s case a breakout above C$.145 could quickly target a further move to above the C$.20 level.
Disclosure: Author is long LAD.V shares at the time of publishing and may choose to buy or sell at any time without notice. Author has been compensated for marketing and promotional services by New Carolin Gold Corp.
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