Drilling Hartless Joe Complete

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There is a good news/bad news element to bear markets turning into bull markets. In a bear market you can have drill results back in two to three weeks. The bad news, of course, is that you can’t raise the money to drill or pay for assays. On the other hand, in bull markets money flows like fine wine at a PDAC dinner but assays take an eternity.

I began telling the story of Strategic Metals (SMD-V)(SMDZF) a little over a month ago. Go back and reread the piece, it’s good. Ten days after I wrote my piece, Strategic Metals announced the commencement of at least a 5,000-meter drill program on three of its wholly owned projects in the Yukon. The program is open-ended based on results received. The company is well cashed up with over $20 million in the till.

So far the company has finished 6 holes at Hartless Joe and has moved the drill rig to the Mars property. Strategic would like to continue drilling Hartless Joe this year but delays at the assay lab will probably prevent that. Access to many holes will require construction of chopper pads and the winter comes early in the Yukon. Look for complete results from Hartless Joe in about four weeks. Expect more drilling there next spring depending on the results.

On the other hand, the Hopper high-grade gold project has road access. SMD has moved a 2nd drill to the project and has begun to drill. Again, expect drill results in 4-6 weeks and depending on the result the company may extend the drill program into later in the fall.

With 122 wholly owned projects in the Yukon, the company enjoys an embarrassment of riches. With cash and shares of other junior mining companies given in return for joint ventures equal to their market cap, SMD has utterly derisked investing in the company. In a wise move, the company is drilling three of their highest potential targets this year. If they drill all 122 projects themselves and they all come up a cropper, I will be leading a lynch party with President and CEO Doug Eaton as the guest of honor.

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Gary Tanashian 3 years ago Contributor's comment

While exploration is by definition very risky, the rewards can be great. The prospect generator model is lower risk than an explorer w/ one or two projects. Also, SMD is cashed up. I'd be careful of post-article price run ups, but it appears to be a solid pick in a risky space.