Lacking significant catalyst, Redstar Gold jumps 12% on 15x volumes
The junior mining market suddenly pivoted towards an Alaska-focused gold explorer today, which is advancing a high-grade gold play in Alaska.
Redstar Gold (TSXV:RGC) saw 5.62 million shares change hands, which is nearly 15 times average volumes. Many of the shares traded were on the buy side of the counter, with the stock shooting up 12% to close at 14 cents a share on the Toronto Venture board Thursday. What explains the gravitational pull towards the Vancouver-based small-cap? Redstar was mum to a request from IIROC (Investment Industry Regulatory Organization of Canada) to comment on the sudden hit on the stock price.
"The company is not aware of any material change in its business or affairs that has not been publicly disclosed that would account for the recent increase in volume or price," it said in a statement.
But followers of the junior gold space almost certainly noticed a report out recently by Byron King, a well-known newsletter writer whose bio includes editor of three investment newsletters: Outstanding Investments, Real Wealth Trader and Military Technology Alert. King has also advised the U.S Department of National Defense and his work appears regularly on Streetwise Reports. In his latest report, King put a Buy recommendation on Redstar Gold, whose Unga project hosts epithermal (surface-level) high-grade gold. Unga Island was Alaska’s first underground gold mine, an operation that churned out 150,000 ounces of gold from rock averaging 10 grams per tonne, and underground stope widths that averaged 6 to 8 metres. Here's an excerpt from what King had to say about Redstar Gold in his report which made the stock pop:
It’s early in the exploration game, but I’m willing to say that Redstar likely has what is called a district-scale deposit, with extensive rock masses infused with high grade gold, as well as silver and copper. From past mining – which barely scratched the surface – we know that the Unga deposit is epithermal gold. This means that it’s easily mineable, near the surface.
Already, Redstar has dug trenches and taken samples that show gold indications – actual gold, and related gold-hosting minerals. There are multiple drill ready targets, and that gets us to what’s happening this summer. Redstar is conducting exploration drilling, beginning this month. I expect drilling results to arrive any day now.
When those results come back — and if they are as promising as we expect — this company could skyrocket in value, possibly as much as 1,000%.
Redstar Gold started drilling the Shumagin zone of the property in May, after having performed a geophysical survey of the zone in April. Up to 5,000 metres are expected to be drilled this spring with the goal being to trace a 1.6-kilometre fault, a new footwall splay, and an additional parallel footwall structure, which according to the geophysical survey could host high-grade gold mineralization. "Drill targets have now been defined, and our technical team have commenced a focused and methodical step-out diamond drill program southwest along the Shumagin structure towards Orange Mountain," Redstar President and CEO Peter Ball stated in a press release announcing the drill program.
Disclosure: Redstar Gold is an advertising client of MINING.com. This was not paid-for content.