H.C. Wainwright Analyst Jeff Wright Names Three Companies That Could Turn The Gold Trend Upside Down

TGR: Is permitting going to be a challenge?

JW: The project is on track to get its permits by the middle of 2015. Brucejack doesn't have the environmental concerns of some other projects. It's in a fairly isolated place with no major water or wildlife issues, and management has a good relationship with the First Nations in that area of British Columbia. It's a mine that makes sense.

TGR: What is another company that you think is doing a good job?

JW: One that the market has not caught on to yet is Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE) (Rated Buy). It has the Railroad-Pinion project in north-central Nevada on the Carlin Trend. The company has successfully consolidated the project and conducted a confirmatory round of drilling. It recently released a maiden NI-43-101-complaint resource calculation that shows about 1.4 million ounces gold in the Indicated and Inferred categories, as well as a little bit of silver. It has fairly shallow mineralization and could be an open-pit, heap-leach mine in the 2016–2017 timeframe with little technical risk. It is in the right neighborhood, with infrastructure and a ready-made workforce in close proximity. The permitting is straightforward. The next round of drilling is underway as management looks for extensions at depth and along strike. This company is moving the ball forward with a relatively low capital budget on the exploration and development side. It is still a couple of years out, but it is certainly interesting.

TGR: You initiated coverage with a 12-month target of $1.75/share. What do you think is going to take it there from its current price of $0.73/share?

JW: I think the market doesn't have a full awareness of the fundamental characteristics of the deposit and the timeline to production. Gold Standard released its resource estimate right as people were rotating out of gold, and that was just bad timing.

TGR: How about one more company?

JW: I visited Richmont Mines Inc.'s (RIC:TSX; RIC:NYSE.MKT) (Rated Buy) Island gold project in Ontario in April. This producer just raised its annual guidance from 75,000–85,000 ounces (75–85 Koz) to 85–90 Koz by mining deeper into a higher-grade area. The company is building out additional underground infrastructure to access the higher-grade stopes. A new CEO, Elaine Ellingham, stepped in on an interim basis and she has really jump-started the process. The focus is on increasing production and profitability while making investments on the exploration side.

Richmont stock was close to $1/share earlier in the year and now it is over $2/share. The past month has not been exactly kind, but then the stock may have gotten a little bit ahead of itself. It is starting to look as if it will have a sustained recovery based on earnings announced in August and this more aggressive approach at Island Gold. This is a company that has made the hard choices. It has invested in its project and now just needs to effectively operate and deliver.

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Disclosure: JT Long conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining ...

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