Prospecting for Gold in Nevada

by Sean Brodrick

I recently visited a gold explorer in the Nevada desert. I thought you might find the video interesting.

This is not a recommendation. I'll explain why.

Good points include...

  • It's in a highly prospective geologic area.
  • It was previously a working gold mine. Often the best place to look for gold is in an old gold mine. The old-timers missed a lot, especially when they were chasing visible gold in veins.
  • The geologist, Tom Callicrate, really knows his stuff.
  • Technology has improved quite a bit, and that could help the discovery process.

However...

  • The company that owns the Eagleville property is very small. Its share price is low.
  • It has enough money to cover expenses for this year, but then it will have to raise more cash.
  • The trading volume on the stock is very low.
  • I cannot emphasize enough how risky a gold exploration stock is, especially in an environment in which gold prices are drifting sideways to down. And this company is in the VERY early stages, which makes it even more risky.

And yes, it's near a working gold project. But that can be akin to the similarity between lightning and a lightning bug. The jury is out until this company proves it has a deposit.

One final point: You can buy working gold mines with good prospects for expansion at close to book value right now - sometimes cheaper than book value. Maybe not for $0.15 a share, but they're producing mines. This project I visited in Nevada is not.

So no, I do not recommend this company at this time. It has a whole drilling program ahead of it. Anything can happen. It might actually turn up a sizable gold deposit. It might not.

All the best,

Sean

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