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Did Barkerville Gold Mines Ltd. make one of the greatest Canadian gold discoveries in decades? If so, investors aren’t buying it just yet. Until last week, Vancouver-based Barkerville was a little-followed junior mining company on the TSX Venture Exchange, one of hundreds. It is now in the spotlight because of a massive gold resource it reported at its Cow Mountain project in central British Columbia.
Barkerville said drilling at Cow Mountain has uncovered a staggering 10.6 million ounces of indicated gold resources. The company’s press release also stated the “geological potential” of Cow Mountain could be as high as 90 million ounces.
To put it in perspective, the legendary Timmins gold camp has produced about 70 million ounces. Less than 100 million ounces are produced globally each year. It is unusual for a company to use geological potential figures at the top of a press release like that (particularly with such monstrous numbers), and it troubled some experts.
Barkerville has a market value of only $107-million, suggesting that there is not much confidence in the resource right now. When the announcement came out June 29, Barkerville shares immediately doubled. But they have slipped back, closing Friday at 97¢, as the Street has taken a more careful eye to the numbers.
A 2006 study on the Cow Mountain property yielded an indicated resource of only 431,000 ounces of gold, so analysts are curious as to how the tonnage and grade rose so much that it got above 10 million ounces.
One particular issue confounding observers is that all of the 10.6 million ounces are in the “indicated” category. Typically, a resource estimate at this stage would have a great deal of “inferred” resources, experts said, which are less certain and defined.
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