July 5, 2021
Cassiar Gold Corp (TSXV:GLDC, BUY, C$1.50 target, David A. Talbot) announced that a second drill rig has been mobilized at its 100%-owned Cassiar gold project in BC as part of its ongoing 15,000m drilling campaign. The second rig is stationed at South Cassiar, where it is targeting high-grade vein extensions of the historical Bain and Cusac mines, which together produced 114k oz Au at >15 g/t Au between 1986 and 1997. The company also plans to explore untested areas where favourable geology and vein periodicity suggest potential for new high-grade targets. As described in our initiation report, South Cassiar/Table Mountain contains a historical resource of ~70k oz Au at a whopping 23 g/t Au (indicated + inferred). While non-compliant, we believe this historical resource demonstrates the high-grade nature of the South Cassiar veins currently being tested, and we therefore expect high-grade assays to follow. We also note that South Cassiar hosts several known veins that have yet to be tested via the drill bit. Meanwhile, drilling continues at the ~1M oz Au Taurus deposit at North Cassiar (read more), with one rig expected to: 1) infill widely spaced areas to upgrade resources and better define continuity; and 2) test prospective higher-grade corridors as the zone is open in all directions. Overall, we are encouraged to see the company tackle two types of mineralization concurrently: high-grade veins (primarily at South Cassiar), and low-grade, bulk-tonnage targets (primarily at North Cassiar). We also note that the ongoing drill program represents Cassiar’s first drill program of the year, and the first ever drill program by the company that includes drilling at South Cassiar. Cassiar Gold trades at a discount to peers with an EV/oz AuEq of US$15.20/oz vs. peers at US$33.30/oz, and with plenty of news flow ahead and high-grade results anticipated, we believe the company could start to close this valuation gap. Read more
