Thursday, May 19, 2016

Does Gold Standard Ventures Pay Too Much For Drilling?

In my first article on Gold Standard Ventures I described the Railroad Pinion Project, a flagship property. 

Today I want to touch just one issue, which is incredibly important for the company - its drilling campaigns. 

On May 18 Gold Standard announced commencing its biggest drilling program in history:

                                  source: Simple Digressions

The company plans to drill 43,000 meters at the following locations:

  • Dark Star - 20,400 meters
  • Pinion - 14,200 meters (including two new targets: Irene and Sentinel)
  • North Bullion - 4,800 meters
  • Bald Mountain - 3,600 meters
Well, it is good news. Gold Standard has to explore its properties and, what is more, it has money to do it (two majors, Goldcorp and Oceana are big, strategic shareholders).

The problem is that this campaign seems to be very expensive. In 2015 Gold Standard was paying around US$169.0 per one meter drilled. 

This year it is going to pay around US$311.6 per one meter of drilling. It is 84.4% more than last year. As far as I know, the mineral drilling industry is still in trouble. Some drilling companies show more meters drilled but the prices are lower than in 2015. 

Next thing - the biggest part of a new drilling campaign comprises RC drilling (Reverse Circulation drilling), which is cheaper than the core drilling. So this price increase has nothing to do with more expensive drilling method.

Another thing - Railroad Pinion is a shallow deposit (that is why there is so much RC drilling). It means that there will be no expensive deep drilling. 

Well, in my opinion, it looks like the company, having a lot of cash, does not care too much about it...


  1. I sent a copy of your article to the head of GSV asking for a comment. If these drill results hit good results the stock could double. It is holding up very well even with the gold stock sell off.

  2. Hi SD
    I contacted Jonathan Awde the CEO of GSV. He says your information is wrong and he would like to contact you. You can reach him at (604) 669 5702) or at Please follow through so we can get this matter cleared up.

  3. Hi Harry,
    I have sent all calculations to Mr. Awde

  4. Great let me know what he said.

  5. There was no response from the company. So it looks that the thesis presented in this article is well supported. They pay too much.