Barkerville, the BCSC is calling
"The chief promoter and CEO of Barkerville Gold Mines Ltd over the past 18 odd years, Frank Callaghan has fostered a mixed reputation, and it’s not just for his penchant for loud ties and golden adornments," wrote Tommy Humphreys on Monday. "But something big happened last Friday. Mr. Callaghan surprised Howe Street by announcing an indicated gold resource of some 10.6 million ounces at Cow Mountain, one of Barkerville’s properties."
But that something big has seen Barkerville's stock price tumble down hill 40% since Friday's high of $1.05. And Investors aren't the only group not convinced by the company's report, even the British Columbia Securities Commission (BCSC) has raised an incredulous eyebrow.
As stated in the company's press release today, Barkerville received a "letter from the BCSC asking the company to provide additional information to the BCSC to support the indicated resource estimate and exploration target disclosed in the original news release."
Barkerville's NI 43-101 compliant report indicated a resource of 69 million tons with an average grade of 0.154 ounces gold per ton (5.28 grams/T) and 10.6 million ounces of contained gold.
It didn't take long for analysts to express doubts over numbers that showed a "quantum leap" in both size and grade and turned Cow Mountain into one of the richest global gold deposits.
A summary of the BCSC's concerns reads like a lengthy list of drill result don'ts: drill-hole assays were not composited before estimating resource grade, estimates do not apply grade capping, resources appear to be unconstrained by the geological model of the gold hosting structures, failure to cap and use of an unconstrained bulk-tonnage resource model likely resulted in material overestimation of grade and tonnage, no external cut-off grade.
The BCSC has asked Barkerville to complete an audit of the resource estimate and the company confirms that a SEDAR technical report, backing up its Cow Mountain claims, will be filed within the 45-day period.
Until that time Barkerville "cautions investors not to rely on either the indicated resource estimate or the 'geological potential' disclosed in the original news release."