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Kestrel Gold Inc: THE INVESTMENT CASE

Kestrel Gold steps up drilling on highly prospective Yukon ground

The group has five gold properties in Yukon and four copper-gold properties in British Columbia..
Kestrel Gold steps up drilling on highly prospective Yukon ground
INVESTMENT OVERVIEW: KGC The Big Picture
Blast from the past - the Tintina gold belt hosted some of the most famous gold rushes but it’s still giving up metal

“We have five gold properties in Yukon and four copper-gold properties in British Columbia,” says Kevin Nephin, the chief executive of Kestrel Gold Inc (CVE:KGC).

“The key one right now is the Val-Jual property in the White Gold district of the Yukon.”

This project sits in tandem with Kestrel’s Ten Mile property on the other side of the Ten Mile Creek, plumb in the middle of some of the most prospective gold country in the world. The Tintina gold belt hosted some of the most famous gold rushes of the nineteenth century, and it’s still giving up metal today.

“Val-Jual was originally staked by Jean Pautler, who’s considered to be one of the best geologists in Canada.”

She was honoured in 2010 by the Yukon Prospectors Association for her work in opening up the White Gold District. She played a key part in the discovery of Golden Saddle, which put multiple zeroes on the end of Underworld Resources’ valuation when it was eventually sold to Kinross. And she was central to the discovery of the Coffee deposit too.

So with that sort of geological pedigree behind him, it’s hardly surprising that Nephin speaks with confidence about the prospects of success at Val-Jual.

“We’re currently drilling Val-Jual,” he says.

“We’re on our third hole, drilling an area that hasn’t been drilled before. I believe we’ll hit some pretty good numbers there which will drastically change the outlook for Kestrel Gold. Jean Pautler thinks we should hit good in there, and so do I. And we should know in a month or a month and a half what the numbers are.”

So, an intriguing moment in the history of Kestrel Gold.

Some knowledge of Val-Jaul already exists. For a while it sat inside Teck (NYSE:TECK), but it was hardly the company’s primary focus. But because Val-Jual looked so attractive Teck was loath to let go as it pulled out of all its other Yukon properties.

It had around US$3mln spent on it, was eventually let go to another junior that was cash starved and focussed instead on Ten Mile, before it eventually found its way into Kestrel’s hands.

Now, with money in the bank and a team that’s willing to commit time and energy to it, Val-Jual looks set to emerge as a significant asset.

“We plan on building a substantial resource there,” says Nephin.

“This is the first round. It’s reverse circulation there. But with positive results we’ll do a fairly big diamond drill program.”

Although there’s only a fairly small float, the shares do trade in reasonable volumes, and are likely to be sensitive to newsflow about the ongoing work at Val-Jual.

Longer-term, though buyers may also come in for the company’s other properties, many of which should be teed up for drilling by next season.

“King Solomon’s Dome is one of the most solid properties in the Yukon,” says Nephin. “The area has produced 20 mln ounces since the Klondike rush. We have drill targets in eight different zones, the best of which would be the Mitchel Zone.”

Here’s there’s an old shaft down to around 80 or 90 feet, with a 40 foot drift off the bottom.

“For them to go down that far in 1914, they must have been getting some pretty high grade,” says Nephin.

“There’s a fair bit of interest in King Solomon’s Dome.”

A fair bit of interest in Clear Creek too, which already boasts economic drill holes from surface on down. On current gold pricing scenarios that already looks like an open-pit heap-leaching type operation.

All of which goes a long way to explaining why Kestrel’s shares have increased by more than five times in value since March, and why they’ve resumed their upward trend again after a short lull in the summer.

“There’s definitely an appetite out there for exploration companies,” says Nephin. “In particular there’s an appetite for companies that have had a fair bit of work done on them and that are basically drill-ready.”

Kestrel fits the bill on all counts, and momentum looks set to build nicely in the weeks and months ahead.

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Kestrel Gold Inc Timeline

Newswire
February 07 2018

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