Is Cow Mountain a golden calf? Barkerville stock corrects as doubts over bonanza find creep in

Barkerville Gold Mines  (TSXV:BGM) ended Wednesday down more than 10% at $1.09 in massive volumes of seven times the usual daily average.

The Vancouver-based miner, worth $85 million on the Toronto venture board, lost 17% in value on Tuesday and has been one of the most actively traded stocks of the past week.

Barkerville opened on Tuesday (Monday was a public holiday in Canada) at $1.47 up more than 50% since Friday when the company announced an indicated resource estimate for its Cow Mountain project in British Columbia that stunned investors and has been keeping stock discussion boards buzzing ever since.

Some analysts have now expressed doubts over those numbers that showed a "quantum leap" in both size and grade and turned Cow Mountain into one of the richest global gold deposits.

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, but the estimates may show signs of "grade smearing" according to the blog posting which raises several "red flags".

The company's project is located in the Cariboo in central British Columbia and "Mesothermal lode gold systems such as Cariboo commonly display such 'nuggety' gold," according to report purported to be by Exploration Insights and re-posted on a Latin American-focused mining blog.

According to the Barkerville press release of Friday the estimate was compiled by Geoex.

"This resource estimate on 10% of the company's prospective gold belt, which I believe puts the Cariboo Gold Project into the world class category, coupled with the company's recent news announcing it has received the necessary permits to begin production on its Bonanza Ledge discovery, is a testament to the team we've assembled and 18 years of hard work and perseverance," company president and CEO J. Frank Callaghan said at the time of the announcement. Callaghan became CEO of Barkerville in April.

"The current resource estimate has been made possible through the compilation of over 7,100 drill holes totalling 347,000 meters completed by the company and previous operators, with the most significant results coming from an expanded drill program which was completed in December, 2011."

The indicated resource is between the elevations 3,550 feet and 4,550 feet and the project is based upon an open-pit model for a quartz deposit.

The company's tenure also encompasses Island Mountain, Cow Moutain and Barkerville Mountain with total contained gold ounces ranging from 65-90 million ounces.