Tuesday, November 27, 2012

Grizzly Gold (GRGZ) Has Yet To Growl

I got another mailer from a stock promoter, this time from Montgomery Gates' Wealth Generation Report, which has little more than some teaser paragraphs on its website at this time.  The mailer touts Grizzly Gold (GRGZ on OTC), a junior explorer based in Nevada.  Let's see if this one has any surprises.

The management team is pretty thin; the CEO is a geologist but his most recent experience has been in consulting rather than operating mines.  I don't know what the other two directors actually do.

Grizzly's main project is the LB/Vixen property.  It's cool that it's sandwiched geographically between two proven mines but that doesn't necessarily mean its geology contains ore bodies of similar quality.  The property has changed hands several times in three decades with no successful exploratory results.  The drill results they've listed so far on the project page don't exactly thrill me, with poor grades of Au 0.02-0.09 g/t and one somewhat promising hole apparently flooded.  I'd like to know whether they plan to perform an aerial magnetic survey of their property before drilling any further, because that would kind of help find the hot spots.

The 10-K Grizzly released on Jul. 25, 2012 says they plan to run exploratory drilling at least through April 2013 provided they can fully fund it.  Their 8-K from Oct. 18, 2012 indicates they successfully raised $250K at $1.00/share, and it's interesting to note that the public share price already started moving above $1.00 around that time.  It has since fallen to $0.54/share as of today, so raising private placements isn't enough to permanently move the needle without better drill results.

Eyeballing the map they posted on their website shows that LB/Vixen is about ten miles from the nearest major road.  Their capex budget, assuming they strike some decent grades, will have to cover scraping out at least ten miles worth of unimproved connecting roads if they don't already exist.

Grizzly is a long way from having a viable project but only a complete drilling program next year will reveal whether they have a property worth selling to a major producer.

Full disclosure:  No position in GRGZ at this time.