Jake Margolis, US Exploration Manager, oversees a second phase drill program at Redstar’s North Bullfrog project in Nevada.
For junior exploration company, Redstar Gold (TSX.V:RGC), raw data has proven to be as good as gold; both figuratively and literally. Like some information-age fable come true, facts and figures have helped lead this Vancouver-based, low-risk junior into ideal projects that have garnered it several Cinderella partnerships. In a recent chat with President and CEO Scott Weekes, we learned that he had just recovered his voice after a long promotional road show that culminated in the Vancouver Cambridge Gold show. After hearing Redstar’s story, we knew why he had gotten hoarse; there is a whole lot to talk about.
Scott Weekes is a geologist by trade and training, who’s been involved in Redstar’s management for the past five years. Having centered Redstar’s energy on Red Lake, Ontario for some time, he knew diversification was the only way to keep its gold edge honed. So when Weekes decided to strike out in a new direction, he decided to first find a good roadmap.
“When AngloGold Ashanti was moving out of North America two and a half years ago, they had a huge geological database for Nevada up for sale. We had a pretty good relationship with Anglo from our work in Red Lake, so we structured a deal with them where we acquired exclusive rights to their database, and it’s unbelievable. It’s probably one of the top geological databases that exist anywhere. And we were buried by it.”
A daunting portion of the 140 file boxes of geological data that facilitated Redstar’s entry into exploring Nevada
Anglo Gold is renowned for their data manipulation, and had, at that point, amassed a heap of information. Although the records were non-43-101’d, they were very well-catalogued property-specific geophysical and geochemical data. In order to make sense of his newly-acquired 140 file boxes, plus a dozen or so DVDs of data, Weekes realized he needed a qualified interpreter to excavate this mountainous endeavor. As luck would have it, former AngloGold geologist and Nevada aficionado Jake Margolis was brought on to assist in the task of sifting through the stockpile.
Following a Massive Treasure Map
Before doing anything, Redstar created a “wish-list” of what attributes would be ideal in a property, which included:
- Resources that didn’t occur on Forestry or Native American lands.
- Land that was already permitted for mining.
- Areas on known mineral belts.
- Properties where Redstar could secure 100 percent ownership.
They expected to find a number of properties that came close to meeting their goals, and then measuring the pros and cons of each site. Scott’s team was shocked to discover many promising sites that conformed to all of their criteria. Redstar, with its dedicated man in Reno, aggressively obtained eight projects in Nevada: Pine Nut, Dry Gulch, North Bullfrog, Eagle Basin, Painted Hills, Richmond Summit, Root Spring, and Cooks Creek.
Here is a junior mining company, with the entrepreneurial spirit of a start-up, and the informational armory of a major mining company. It wasn’t long into their map sifting and claim staking before Redstar began to attract quality, well-funded partners with resources to spare. International Tower Hill, a solid junior explorer, joined Redstar on a property, headed by another former Anglo Gold manager, Jeff Pontius. Assuring at least two drill programs this year, Gold Fields also came a-knocking, ready to drop $1.4 million in the first year on Redstar’s discoveries in the inescapable Carlin Trend. Weekes is cheerful in his realization:
“What’s outstanding to me is to think that a company like Redstar, up until a few years ago, had no history at all in Nevada. The Carlin projects are a perfect example of our dedication. (Our claims in the Carlin Trend) were open-ground projects that we went into and staked (outright), and were able to (do so) because we had access to data that nobody else had. They’re both within six miles of over 30 million ounces of solid gold production and reserves, one of which has surface samples running as high as seven grams.”
The Financial Snapshot
At present, Redstar has approximately 48 million shares outstanding, trading at $0.18 ($0.25 at time of publishing) with a market cap of less than $12 million. This number gives away just how unknown Redstar is, despite their meteoric growth over the past year. Weekes muses, “It’s just getting to the point now where we can really beat the drum, and I think we’re gonna get some advancement out of it.”
With currently around $1.3 million cash in the company, Redstar’s work in Nevada doesn’t drain the company’s cache due to their model of partnering with the bigger guys who tend to spend the bigger bucks. These cash-generating option payments, according to Weekes, will eventually allow the Redstar’s business in Nevada to become self-sufficient and allow the company to develop even more projects.
Diamond drilling on Redstar’s Painted Hills project in northern Nevada
Redstar at Red Lake
The main program Redstar has been investing their own money in is their Red Lake project called Newman Todd, which they also own 100 percent of. Originally optioned from Rubicon, Redstar’s Canadian work on the sprawling Red Lake land has uncovered high-grade gold near the surface from two small, yet significant drill campaigns. In similarity with the main mines at the Red Lake camp, a kilometer breccia corridor has been traced, as have great silica breccias, quartz carbonate textures and quartz veining and sulfide replacement bodies. About a month ago, Redstar initiated an aggressive drill campaign here on this otherwise virgin territory featuring near surface grades producing upwards of 69 grams over a meter within a three-meter section running almost three- quarters of an ounce.
To the Potential Investor
Weekes states, “There’re almost 800 meters between those two intercepts that have almost no work done on them at all. Our chances of exploration success there are pretty high and when you couple that with the work that’s going on in Nevada, I think you’re giving shareholders an awful lot of chances for exploration success,” said Weekes. Indeed, Redstar appears to be in a unique position where a small exploration triumph could possibly power the market considerably.
These obvious benefits and Redstar’s severely undervalued status only seem to make Scott more dedicated to generating more value. He continues, “When you think of a company with an 8 or 9 million dollar market cap, and I look at some of the other companies out there that are working at 70 or 80 or 90 million dollar market caps, I think it’s pretty reasonable to think that without a huge amount of exploration success, Redstar can get there. If you can get even to the $50 million market cap, you’ve just increased your shareholder value five times.”
Redstar isn’t stopping, as they continue to pour over their mountain of data, with which they are now becoming more and more familiar. Nine projects and one very unique story later, Weekes readily admits to the advantageous nature of having such a resource made possible by AngloGold at hand. For example, Redstar is the only junior company in Nevada with whom Gold Fields is exclusively involved.
In Weekes’ words, “It’s a story not a lot of industry folks know, but with this most recent $1.4 million option agreement - in their first year - with Gold Fields, it has turned a lot of heads.”
“Up in Canada where we have more public access to data, it’s a bit less of an issue, but in the United States, boy, data is power.”
“With so much to talk about, another big focus of what we do this year will be for me to not lose my voice.”
Strong epithermal veining on the Painted Hills project in Nevada.
For more information visit Redstar’s website at http://www.redstargold.com/
Management
Redstar is one of four companies (including Abacus, Skygold and Niblack) that works out of the same office. While Redstar is the only company active in Red Lake or Nevada, the companies share a very strong technical and management team and allow Redstar to operate with extremely low operating costs.
Scott W. Weekes, B,Sc
President
Mr. Weekes brings over twenty three years of experience in field-based mineral exploration and project management in Canada and internationally. Mr. Weekes has worked in numerous geological environments and has been involved in project generation as well as advanced exploration and early development stage projects. Before joining the board of Redstar, Mr. Weekes was involved in the evaluation, generation and management of the Company's past and present properties in the Yukon and Ontario.
Douglas A. Fulcher
Director
Mr. Fulcher has over twenty-eight years experience in mining exploration and project management with Pamicon Developments Ltd., a geological consulting firm in Vancouver, British Columbia. He also has over sixteen years in budgeting and financial management. Mr. Fulcher has also been a director of a number of junior mining companies including Abacus Mining & Exploration Corp.
Michael D. McInnis, B.Sc. (honours), P.Geo
Director
Mr. McInnis has over 30 years of experience in mineral exploration, in North America and overseas. He is Chairman and a Director of International Curator Resources Ltd., which he joined in 1981. He also has 15 years experience in running publicly traded companies. Mr. McInnis provides solid management expertise and has an impressive track record in acquiring high quality base and precious metal projects.
John P. Nicol, MBA, BA
Director
Paddy has over ten years experience in public company management while serving on the Boards of Abacus Mining & Exploration Corp, Redstar Gold Corp., and more recently with Skygold Ventures Ltd. He has also spent over fourteen years with Pamicon Developments Ltd., a Vancouver-based private geological contracting firm with extensive mineral exploration and project management experience for junior and senior mining companies in Canada, the United States, and overseas. Paddy is currently President and CEO of Niblack Mining Corporation.
Jacob Margolis (MSc, PhD)
Exploration Manager - USA
Dr. Margolis has 25 years of experience in gold exploration and gold deposit research. He has held senior exploration positions with Homestake Mining Company and AngloGold-Ashanti and consulted for the junior sector. He has served as exploration manager at a major mining operation in Nevada and successfully developed and explored many grassroots projects in Nevada. His experience spans a broad spectrum of gold deposits, including Carlin-type sediment-hosted gold, volcanic-hosted epithermal gold-silver and porphyry copper-gold systems. Dr. Margolis is responsible for Redstar's Nevada project development and exploration programs.
Bob Singh, BSc, PGeo
Exploration Manager, Canada
Bob is a professional geologist and Exploration Manager with extensive experience in the mineral exploration industry. Since graduating from the University of British Columbia in 1991, Bob has worked for both Junior and Major mining companies. Bob also started his own software company that developed new technologies for recording and analyzing geological data. Bob has a wide range of geological, data analysis, computer and project management skills. Recently Bob was involved in the discovery of high grade mineralization at Redstar's Newman Todd property and is Canadian Exploration Manager for Skygold Ventures Ltd. and Redstar Gold Corporation in Vancouver B.C.
For more information visit Redstar’s website at http://www.redstargold.com/
Email: info@redstargold.com
Address: 800 West Pender Street
Suite 615, Vancouver, BC V6C 2V6
Telephone: 604 682-0301
Fax: 604 682-0307