Austin Gold Corp [NYSEAM:AUST] is surprisingly one of the very few gold exploration companies listed on the NYSE. It is a pure gold exploration play that is well-positioned to benefit from the ongoing rise in the gold price. It currently has three intriguing US projects in its sights which have some very serious discovery potential.
Austin Gold is focused on exploration and discovery, which is where mining investors typically enjoy the biggest returns. Its two core projects, Lone Mountain in Nevada and Stockade Mountain in Oregon, both have excellent possibilities, being underexplored and with geological characteristics that are exemplary for the types of deposits being explored for. Additionally, Lone Mountain is located within the area that has provided some of the most productive, large scale gold mines in the US.
Austin Gold has a very experienced mining team which has been involved in the building of no less than three billion-dollar companies. They have experience in every segment of the resources sector. Among the management team’s previous success stories are Pretium Resources, Silver Standard Resources (now SSR Mining) and Uranerz Energy (acquired by Energy Fuels). These are all companies which have achieved in excess of billion-dollar valuations.
Austin Gold also has two economic geologists who sit on the firm’s advisory board. W. Perry Durning and Frank “Bud” Hillemeyer have been responsible for projects that have discovered over a billion ounces of silver and 10 million ounces of gold.
Stockade Mountain project
Austin Gold’s Stockade Mountain project is seen as having district-scale potential. Although previously drilled, this work was carried out back in the 1990s by mining companies looking for open-pit deposits. They never drilled deeper for a feeder system of high-grade veins that could be the source of the near-surface low-grade gold results they were getting.
Stockade Mountain is considered a classic gold and silver epithermal mineral system. Initial drill holes have confirmed that the mineralising system is robust, containing significant gold grades. Strong intercepts have occurred including 8.19 g/t over four feet and 9.32 g/t over 2.7 feet.
Austin Gold plans to drill deeper to find the hypothesized high-grade feeder system. Deposits geologically analogous to those being pursued at Stockade Mountain include:
a) Hishikari, Japan: >11 million ounces gold mined and in reserve (342 t); considerable ore averages >1oz/ton gold (34.3 g/t).
b) Midas, Nevada: Has produced >2.8 million ounces gold eq. (87 t); was Newmont’s highest profit mine for many years.
c) El Peñón, Chile: >5 million oz. gold mined and in resource (155.5 t).
d) Fruta del Norte, Ecuador: Proven and Probable reserves of 5.5 million ounces of gold grading 7.89 grams per tonne.
While Oregon can create permitting problems for miners (e.g. the earlier explorers of Stockade Mountain ran into Oregon’s restrictions on processing ore, which became an effective ban on open-pit mining), other miners are progressing projects positively in Oregon now. Austin Gold management is confident that Stockade Mountain can proceed to full permitting of an underground mine in the event of an economic discovery.
Lone Mountain project
Lone Mountain is located in one of the richest gold districts in the world. The nearby and lucrative Carlin Gold Trend has yielded over 100 million ounces in 40 independent gold bodies, making it the largest gold zone in North America. North of the project area is the Jerritt Canyon District, which has yielded over 9 million ounces of gold.
Erosion plus basin and range block faulting has created the geological “Lone Mountain Window”, which is similar to other gold mineralized windows in Nevada such as the Carlin Window (Gold Quarry Mine); Lynn Window (Carlin Mine); Bootstrap Window (Gold Strike Deposit); and Cortez Window (Cortez Hills). It is the lower plate carbonate rocks exposed in the windows that often host significant “Carlin-Type” mineralization in these districts.
Lone Mountain is only 20 miles east of the mega Carlin Trend and has district-scale potential. The property itself covers 22 square miles with plenty of scope for further exploration. Much of the property has been held by one family for over 60 years, and large areas of Austin’s property are underexplored. Austin Gold has access to six decades of exploration data that has been held by this family which the team has been reviewing in detail.
Historical soil and stream sediment sampling at Lone Mountain have revealed areas with strong anomalous arsenic, antimony and mercury in structurally complex zones that have yet to be drilled. Although large areas of the property have been explored, there is still a lot of it that has been minimally tested or is untested by drilling.
Austin Gold has conducted a large, detailed soil sampling program at Lone Mountain, along with rock geochemistry, gravity geophysics, and geological mapping. Interpretation of these data, along with additional field work, needs to be conducted before Austin starts to drill, with an initial 10-15 holes planned.
Austin Gold’s capital structure
Remarkably, the company has only 13,271,750 shares outstanding. The shares are tightly held, with just over half owned by directors and officers. According to its most recent financial statements, Austin Gold has a little over USD 7mn in the treasury, which means its current exploration programs are fully funded.
