Aston Bay Holdings de-risks with 10 new assays, more to follow in August

On July 22nd, Aston Bay Holdings (TSX-V: BAY) / (OTCQB: ATBHF) announced long-awaited results from 10 large diameter, HQ-oriented diamond drill holes (1,218m) at its Buckingham project Main zone in central Virginia, USA. Significant gold values were intersected in seven holes, and strong intervals (similar to, but not quite as good as) last year’s highlights, were found in three holes.

Drill results advance, de-risk Buckingham project, but no blockbuster holes

Importantly, combined with Phase 2 drilling (results expected next month) the mineralized strike length of the Buckingham vein was extended by 150m and by 50m down dip. The vein remains open at depth and to the southeast.

Furthermore, the deepest intercept to date was found at 85m vertical depth. Results announced on July 22nd; core-length intercepts of 5.81 g/t Au over 6.3m including 29.9 g/t Au over 0.92m, 19.25 g/t Au over 1.4m and 14.54 g/t Au over 1.1m in quartz vein.

Taken together with last year’s highlights of 35.6 g/t Au over 2.0m & 24.7 g/t Au over 3.6m, as well as 2.2 g/t Au over 18.1m and 1.9 g/t Au over 22.2m in adjacent but separate zones, there’s absolutely a deposit worthy of additional work here. Less sexy, but still important, lower grade disseminated gold mineralization to the west & west-northwest of the Buckingham Vein included four intervals of 9.0 to 52.7m of 0.24 to 1.01 g/t Au. {avg. of 28.8m @ 0.45 g/t}.

Lower grade mineralization combined with high-grade vein(s) can result in compelling projects. Management notes that there continues to be meaningful similarities between Buckingham and OceanaGold’s open-pit Haile mine (~5M Measured & Indicated + Inferred ounces at ~1.7 g/t) ~200 miles to the south.

OceanaGold’s Haile mine 5M oz., 1.7 g/t Ausimilar to $BAY’s Buckingham?

The Haile mine commenced production in 2017 and is ramping up to 150k ounces/yr. OceanaGold paid roughly US$170/oz. of gold in the ground for the Haile project in 2015 (when gold was in the US$1,200s/oz.). At the time, Haile was fully permitted and two years away from production. Imagine how much more per ounce might have been paid with gold at US$1,867/oz.!

CEO Thomas Ullrich commented in the press release,

“The Buckingham Vein is a high-grade, near-surface, steeply-dipping vein that remains open at depth and to the southeast. Together with broad zones of lower grade disseminated gold mineralization, we are developing a very attractive and increasingly compelling gold exploration story here at the Buckingham Property in Virginia. We look forward to building on this with assay results from our ongoing Phase 2 drill program.

We clearly have additional exploration potential along-strike to the southeast and down-dip with the Buckingham Vein, as well as prospective areas for broader zones of lower grade disseminated gold mineralization to the west and west-northwest. IP geophysics & additional step-out drilling are the next steps at Buckingham…”

Aston Bay is exploring for gold & base metal deposits in Virginia, (USA) and in Nunavut, Canada. The current focus is on its U.S. properties. The Company is led by CEO Thomas Ullrich with exploration in Virginia directed by advisor Don Taylor, the 2018 Thayer Lindsley Award winner for his blockbuster discovery of the Taylor Pb-Zn-Ag Deposit in Arizona.

The Company acquired exclusive rights to an integrated dataset over certain prospective private lands and signed agreements with timber & land companies granting the Company an option to lease mineral rights to 11,065 acres in central Virginia. This property is within a gold-copper-lead-zinc mineralized belt prospective for Carolina Slate Belt Gold.

Large land package of 11,000+ acres, new properties under consideration

Part of this land package, 4,400 acres, is in the Virginia Gold Belt. These are brownfield properties that have seen little modern exploration, but are surrounded by past-producing mines. The Company is in advanced stages of negotiation on locking up additional land packages in the area. 

Aston Bay is also 100%-owner of a property located in Nunavut near Teck Resources’ past-producing Polaris (Pb-Zn) Mine. The Aston Bay property hosts the Storm Copper & Seal Zinc deposits, with drill-confirmed presence of sediment-hosted copper & zinc mineralization. Other Majors in the area include China’s C$22B Shandong Gold and C$23N Agnico Eagle.

Phase 2 drilling almost finished, results expected in August

Phase 2 drilling is nearly complete with six holes done to date. Gold-bearing quartz vein material was intercepted in all four step-out holes located up to 115m along strike from Phase 1 drilling. Drilling of the seventh and final hole is well underway. Management plans to provide an update on the Phase 2 program in the next 10 days. Assays are expected to be released in August.

The NW-SE trending Buckingham main zone comprises a series of visible gold-bearing quartz vein outcrops that extend over a strike length of at least 150m. Grab samples have assayed up to 701 g/t Au (22.5 troy ounces). We’re still early on in exploring & discovering all there is to find on this promising 11,065-acre footprint.

Aston Bay is currently down 29% (intra-day, July 22nd). The market cap at C$0.085/shr. is C$13.1M = US$9.7M. While these assays did not offer high excitement or entertainment value, they were good, solid results. These assays de-risked the project, not entirely, but extending mineralized strike length is, obviously, a good thing. Remaining open at depth and to the southeast, another good thing. Having many other drill targets and mineralized zones? Yes, a good thing.

Management notes that a hole drilled by a previous operator 35m southeast along strike from two that Aston Bay just announced, yielded anemic results. That hole had been an overhang, casting doubt on the continuation of a productive vein. The latest results validate the continuity of the vein, a very positive development.

With the gold price soaring, +33% from last year’s low, any attractive gold story in a favorable jurisdiction, with a strong management team, is worth more than US$9.7M! Look at the gold chart below. Is this the time to be selling a gold junior?

Valuation appears cheap at US$10M, strong mgmt. team, blue-sky upside

At C$0.085, shares are up 143% from a COVID-19 low of C$0.035 in March. That’s nothing compared to dozens & dozens of precious metal juniors up 500%+. Like Aston Bay, many top performing gold juniors are pre-maiden resource. Some are in much more challenging jurisdictions.

If management could delineate a reasonably-sized resource next year, with line of sight to 1 or 2 million ounces (not a sure thing, but there’s plenty of unexplored property, AND the Company might acquire / option additional properties), that could attract mid-tiers & Majors to the story. A 1.0 million ounce gold resource in 2021 could be as valuable as a 1.5 million ounce resource from 2017 or 2018.

This is especially true because a viable resource in mining-friendly Virginia could probably be put into production by a well-funded entity in 5 or 6 years. Projects in highly remote, unsafe or geopolitically risky areas can easily take twice as long.

It would be hard to overestimate how critical Aston Bay’s management / technical / advisory teams are at this stage of the Company’s development. Please see the bios of key team members here. These are proven mining exploration / development execs, the kind of experts that institutional fund managers will want to back as the story continues to be de-risked.

Management has come under fire for being slow to release drill results and close land deals. With any luck, more drill results are coming in August. It makes little sense to be a seller of Aston Bay Holdings (TSX-V: BAY) / (OTCQB: ATBHF) at these levels in the midst of a bull market that’s currently gaining steam.

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At the time this article was posted, Aston Bay was an advertiser on [ER] and Peter Epstein owned shares in the Company. 

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