Falcon Gold Guest Post, a tiny company with giant plans

The following article is a Guest Post from Equity.Guru’s Chris Parry. Falcon Gold is an advertiser on Epstein Research and Peter Epstein owns shares in the company. Chris P. is a great writer, but this story truly tells itself. With gold above US$1,916/oz. as I write this on Sunday night, it’s less than US$10/oz. away from an all-time high!

Now’s the time to acquire property, explore for new discoveries, swing for the fences. Falcon Gold is in the right place, in the right sector at the right time. This is a company that’s situated in a world-class jurisdiction in Ontario, with a strong mgmt. team and great projects. Please read the following piece and consider spending more time learning about this exciting company.

I love it when a plan comes together. Little Falcon Gold (FG.V), that only recently boasted the sort of market cap that would have bought you a 3 bedroom in Red Deer, announced Thursday it is enjoying such success it has now tripled its land holding in the Antikokan gold camp.

FALCON TRIPLES CENTRAL CANADA GOLD PROJECT IN SIZE

Falcon Gold has acquired an additional 7,477 hectares of mineral claims, consisting of 369 units, in the rapidly developing Atikokan gold camp, growing the company’s land position to 10,392 hectares and a new project total of 507 units.

That’s a big chunk of land, and brings them right up alongside Agnico Eagle Mines‘ (AEM.T) property.

The [new] northern staked claims are contiguous with the [Agnico Eagle] Hammond Reef property on its northern boundary and are located approximately 3.5 km north of the main part of the […] gold zone that reportedly hosts a Measured & Indicated Resource on the order of 4.5 million ounces.

Translated for those in the cheap seats: Agnico has a filthy large resource, and Falcon grabbed some land away from it, started drilling into that land, and is liking what it sees enough that it’s filled the gap between the two companies, in the expectation it might find connective tissue.

Agnico is a $22 billion company.

Falcon, even after jumping 400% in value over the last four months, is a $9 million company. 

Being small has advantages for first mover investors, who have already turned a healthy profit if they read our site and acted on the information within, but being small sucks for the company proper. A look through its news release history will show small raise after small raise, reflecting money grabbed as needed to expand and drill and get more land and, well, exist.

$150k here. $460k there. $100k more where you can get it. $77k? Fine, they’ll take it. A million shares for debt? Why not.

This is evidence of a small group swinging hard every day, crawling along, trying to keep dilution low while the stock price is low, but also determined to shift from nanocap to microcap with the long term ambition of growing up to be a smallcap.

But they’re not just taking money. Most of those raises involved management putting money into the till, rather than extracting money from it.

They’ve built this the hard way. But they actually built something.

Now they get to play.

If you watch any reality TV mining shows on Discovery channel, you’ll understand a little of where they’re getting at here:

The northern claim group is underlain by the Marion Lake Batholith. However, the claim units appear to occur at a very important potential location where there is a confluence of three or more structural zones or faults that are splays running off of the Quetico Fault Zone. These splays that trend commonly to the northeast are recognized as hosting many of the gold deposits in the Atikokan camp. Falcon believes that the confluence of the splays and the very close proximity of the Hammond Reef deposit make the new northern claims group an excellent gold target.

For the layman: Gold doesn’t just happen, it comes up through the ground from lava moving upward through cracks in Earth’s crust. It tends to gather in fault lines and be pushed up as mountains are pushed up, and when it hits the surface it will sometimes move with rivers and gather in bends.

The bends are worked by panners, detectors, and scrapers like these guys.

The crust action, however, that’s where you spend a few years drilling first, properly mapping out exactly how large your resource might be, because that’s where the big stuff can be found.

Falcon here is saying they’ve got land nearby the spot where three or more faults meet, and the neighbours have already found a load of gold under the surface, and their new land grab gets them more of that opportunity.

So is the boss, Karim Rayani:

“Our Company now controls a combined 51 kilometers of strike length along the Quetico Fault Zone and its major northeast trending splays such as the Marmion Fault zone. Our original Central Canada optioned ground and the new staking combine to make Falcon one of the largest land holders in the mining camp second only to Agnico Eagle Mines.

But they’re not done. Rayani wants more land.

We fully intend to continue to aggressively identify lands worth staking where our technical team identifies high potential gold targets and solid gold occurrences in Atikokan area.”

Why?

Because this area has been mined for a few hundred years, but nobody has really done the work of connecting the dots.

With this long history there is a surprising lack of comprehensive data on which to build an understanding of the gold deposits and their characteristics within the camp. However, Falcon has been actively searching archives and historical journals and is building its own database as it applies to the Atikokan gold camp.

The Company believes that as an early participant in the region and one that holds a major land position, it is poised to build one or more gold asset that could lead to a new mining operation or attract a significant corporate suitor to the benefit of our stakeholders, large and small.

Did I say they aspire to be a smallcap?

It doesn’t appear that ambition will hold them.

The first drilling program at the Central Canada Camp has just completed, which means results of that drilling are incoming. The beauty of a company this small, right now, is if they miss, or bring back only so-so results, nobody cares.

But if they hit, and they just snapped up a ton of land around that drilling, the current $0.15 may well be considered a bargain.

— Chris Parry

FULL DISCLOSURE: Falcon Gold is an Equity.Guru marketing client, and we own stock in the company.