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Should Gold Mining Investors Consider Kilgore Minerals

We expounded on Kilgore Minerals this previous winter, since it holds imminent U.S. uranium properties. While examining the organization, it became obvious the organization's uranium would assume a lower priority in relation to the organization's gold property in southern Idaho. We evaluated Robert Bishop's discourse in his independently published Gold Mining Stock Report. Mr. Diocesan is profoundly viewed as a sharp junior gold stock picker, and his examination is very careful. There is little uncertainty Bishop holds high regard for Kilgore Minerals' Chief Executive Norman Burmeister. 

All the more critically, the effective Pinetree Capital (Toronto: PNP) has made a huge interest in Kilgore. Separately, the Chief Executive and CFO, Sheldon Inwentash and Larry Goldberg, of both Pinetree Capital and vigorously promoted Mega Uranium (TSX: MGA), have actually put resources into Kilgore Minerals. A new Forbes magazine article attacked both Mega Uranium and Pinetree Capital. All things considered, it was to a greater degree a head butt. Pinetree Capital has returned to exchanging above C$17/share, up from a year prior when it exchanged for under $3/share. So the Forbes article was a non-occasion for Pinetree Capital. What's more, their possessions in Kilgore Minerals, which purportedly are assessed at somewhere in the range of 10 and 20 percent of the organization, were passed by without notice. 

Property History 

Kilgore's Idaho gold property has been investigated since the 1930's, the point at which a gold revelation was made by the Blue Ledge Co. Almost 50 cases were marked in 1982 and rented to a Kennecott auxiliary during the 1980s. Seven openings were penetrated. By 1990, Placer Dome obtained the property and penetrated 39 openings, in excess of 21,000 feet of boring. A Pegasus joint endeavor penetrated another 23 openings, almost 10,000 feet of boring, by 1994. Reverberation Bay acquired lion's share interest in the property, by 1996, in the wake of having burned through $3.5 million boring 122 openings for in excess of 82,000 feet. In 1997, with the falling cost of gold and inconveniences in the mining area welcomed on by the Indonesia stock misrepresentation, Bre-X Minerals, Echo Bay dropped its investigation aspirations on Kilgore – and racked the entirety of its investigation projects. In 1998, Latitude Minerals proceeded with a humble investigation of somewhat more than 4,000 feet. 

Close to the lower part of the gold bear market, Kilgore Gold (a completely possessed auxiliary of Kilgore Minerals) gained 100% responsibility for property. Another round of primer investigation recognized new gold targets. By 2004, Kilgore Gold extended the organization's property possessions to 3,000 sections of land. Has this property been bored like Swiss cheddar or does Norman Burmeister understand what he is doing? It's had almost 200 jewel and opposite course drill openings, adding up to in excess of 126,000 feet of boring. 

In a prior meet with Burmeister, he delineated for us, "I'm extremely amped up for this task. It was a property that was exceptionally high on Echo Bay's rundown." Major organizations have exhausted more than $8 million to characterize an unassuming, and perhaps financial, asset. At any rate three unique elements have set up asset gauges on the Kilgore gold property. In 1996, Placer Dome detailed 14.1 million tons, evaluating 0.04 ounces/ton and with a remove evaluation of 0.015, for a store of 561,000 ounces of gold. After a year, Echo Bay delivered a sectional gauge report showing 18.7 million tons, evaluating 0.029, for a sum of 534,959 ounces of gold. 

In any case, the lone asset gauge endorsed by Canadian controllers (Kilgore exchanges on the Toronto Venture Exchange) is the Van Brunt/Rayner Technical Report, documented in October 2002, and which is agreeable with National Instrument 43-101 (NI 43-101). This report appeared around 7 million tons exchanging 0.031, with a 0.01 remove grade, for a showed asset of 218,000 ounces of gold. The report showed a surmised asset, adding another 269,000 ounces of gold. This is adequately close to the Placer Dome and Echo Bay evaluations, however it is probably not going to be mineable except if Kilgore discovers more gold. 

During the 2004 boring system, Norm Burmeister got the sniff of what may make this an appealing securing by a significant gold organization. "We are searching for a high evaluation feeder framework," Burmeister advised us. In the past boring project, Burmeister got and empowering capture of 0.465 ounce per ton gold more than 10 feet inside a more extensive 170-foot zone of poor quality mineralization at 0.04 ounces per ton. On Tuesday, Kilgore Gold made its declaration it would begin its pursuit to see whether, to be sure, there is an elephant disclosure of gold on its property. 

In an email to us, Norm Burmeister expressed, "The high-grade zone, called the "Elsa Zone", was met at a center profundity of 410 feet. Note that this opening was bored in a space that had never been penetrated approximately 4650 feet from the asset region." The Elsa Zone is situated inside the Dog Bone Ridge target territory. Burmeister likewise brought up, "There are no known activities around there, and there is no known gold mineralization at the surface, hence making the Elsa Zone a genuine 'dazzle revelation.' Kilgore's visually impaired disclosure in the Elsa Zone demonstrates there might be a few possibilities in the enormous Dog Bone Ridge target region. 

Reasoning 

The motivation behind the 2006 boring system, Burmeister advised us, is to decide "the genuine capability of the Dog Bone Ridge region target." Niel Prenn, an expert designer with Mine Development Associates of Reno, Nevada, finished a perusing level update of Echo Bay's 1996 evaluation of the task. He expressed, "The venture seems to have sensibly appealing financial matters if the 'conceivably mineable material' can be multiplied at $375/ounce gold value." Prenn saw the Kilgore project as one with a "huge epithermal gold store." This affirmed a prior geographical report by Stanton W. Caddey, who wrote in an October 2003 report, "Investigation potential at the Kilgore property for dramatically increasing the current gold asset with additional investigation penetrating is viewed as incredible." 

The empowering drill opening in 2004 aided move this undertaking to the current penetrating project. "We accept the Dog Bone Ridge target territory addresses the center of the aqueous framework that has created the known second rate asset at Kilgore," Burmeister guessed. That is the reason he is boring the Dog Bone Ridge target region. The principal openings will be counterbalances to the promising 2004 revelation opening. "We don't have a clue about the heading or plunging," said Burmeister, asking "What direction does it go?" The primary opening will help Burmeister situate the bearing on the north side of the objective. Burmeister advised us, "The information we desire to acquire from the Elsa Zone balances will be significant in effectively testing other Elsa 'look-a-like' authoritative focuses inside the Dog Bone Ridge target region." 

Assumptions 

A drill crusade will in general heighten assumptions. Offer costs will in general revitalize higher, contingent on economic situations, during a drill crusade. The organization desires to penetrate around twelve openings, down somewhere in the range of 500 and 800 feet, in the objective region. The principal opening might be empowering, however the outcomes from that opening capacity as an identifier for where to put the following drill opening. "The best objective has never been contacted," said Burmeister, alluding toward the north side of the Dog Bone Ridge. Likewise with many promising properties, they don't generally offer the most effortless access. For this situation, Burmeister's hopeful objective on the north side of Dog Bone Ridge may just be gotten to by helicopter, if that is the place where he needs to penetrate. 

What occurs if Burmeister is exact in his evaluation? On the off chance that his supported Dog Bone Ridge target does address the center of the aqueous framework, at that point what will he have found? "All things considered, it addresses an alluring high evaluation epithermal vein-type gold objective," Burmeister reacted. "The effective interference of high evaluation gold during the 2004 program affirmed this understanding." 

In 1980, Burmeister established Bull Run Gold Mines, filling in as Chief Executive and building up an effective Nevada gold mine. He orchestrated the IPO, which prompted a NASDAQ National Market posting, and ran the organization for a very long time. 

For a very long time before that, he was the central geologist for Silver Standard Resources. Burmeister found the Mill Creek orebody in Elko (Nevada), which pushed that organization ahead. The property was therefore offered to Freeport-McMoran. Burmeister likewise imagined for Silver Standard of a novel local investigation program, covering 10,000 square miles in the Yukon over almost neglected region. In a joint-adventure with ASARCO, he helped revelation the Minto orebody in the Yukon. The copper-gold store is presently going into creation through Sherwood Copper. 

Following forty years in the mining business, he trusts Dog Bone Ridge will add to his line of gold disclosures and corporate examples of overcoming adversity.