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“The chief promoter and CEO of Barkerville Gold Mines Ltd over the past 18 odd years, Frank Callaghan has fostered a mixed reputation, and it’s not just for his penchant for loud ties and golden adornments,” wrote Tommy Humphreys on Monday. “But something big happened last Friday. Mr. Callaghan surprised Howe Street by announcing an indicated gold resource of some 10.6 million ounces at Cow Mountain, one of Barkerville’s properties.”
But that something big has seen Barkerville’s stock price tumble down hill 40% since Friday’s high of $1.05. And Investors aren’t the only group not convinced by the company’s report, even the British Columbia Securities Commission (BCSC) has raised an incredulous eyebrow.
As stated in the company’s press release today, Barkerville received a “letter from the BCSC asking the company to provide additional information to the BCSC to support the indicated resource estimate and exploration target disclosed in the original news release.”
Barkerville’s NI 43-101 compliant report indicated a resource of 69 million tons with an average grade of 0.154 ounces gold per ton (5.28 grams/T) and 10.6 million ounces of contained gold.
It didn’t take long for analysts to express doubts over numbers that showed a “quantum leap” in both size and grade and turned Cow Mountain into one of the richest global gold deposits.
A summary of the BCSC’s concerns reads like a lengthy list of drill result don’ts: drill-hole assays were not composited before estimating resource grade, estimates do not apply grade capping, resources appear to be unconstrained by the geological model of the gold hosting structures, failure to cap and use of an unconstrained bulk-tonnage resource model likely resulted in material overestimation of grade and tonnage, no external cut-off grade.
The BCSC has asked Barkerville to complete an audit of the resource estimate and the company confirms that a SEDAR technical report, backing up its Cow Mountain claims, will be filed within the 45-day period.
Until that time Barkerville “cautions investors not to rely on either the indicated resource estimate or the ‘geological potential’ disclosed in the original news release.”
Read more on Tommy Humphreys’ interview with Barkerville CEO, Frank Callaghan >>
2 Comments
Serminesincusa
Once again my initial “gut feelings” expressed about 10 days ago…..a structural vein with that kind of tonnage …but still I only hope for the honor of the field geologist and not the egg head computer geologist?? working in this business that Mr. Callaghan “The chief promoter and CEO of Barkerville Gold Mines Ltd over the past 18 odd years, is right with the appraisal of his geologist results !!. We do not need more mud in our faces. We need professional ethic to the max and good finances for our work!!
Sergio Pastor, geologist
Ed Walsh333
This is a great informative report.It spells danger for much of us who rely on press releases without further back up. I hope Barkerville has what it purports to have released pertaining to the Cow Mountain resource. You have to ask yourself what is a NI-43-101 worth if you cannot rely on its contents. If it’s not true I hope the company gets slammed but good. I remember a few years ago they issued a press release and I sent them an e-mail and as well, I believe, I phoned them regarding a discrepancy in a report they made back then. Of course, they didn’t give me the courtesy of a reply by contesting what I said or apologize for what was reported.