Value Microcaps Junior Miners

[checkmate28]

Dr Air, Carisle Gold vs Gowest Gold Thanks for that weekend assignment. CGJ.TO: I follow that one closely as it is a direct comparable to GWA.v Gowest Gold. Both with advanced projects and are Close in market cap. Carisle is cheap, has a great resource, good mgt, good jurisdiction and good infrastructure as does Gowest. Carisle will need 190M CAPEX to produce in 2019 whereas Gowest will need about 50m to produce in 2016. 190M going to be a Tough find today. Currently CGJ is at 400M FD shares and will probably need to consolidate down the road. Carisle would be a pit, where as Gowest would go underground, first by ramping down for the high grade ore near surface, and later sink a shaft using cash flow.

I think the planets are aligning, and GWA.v is in a good position right now. The market is looking for low CAPEX, Hi grade, Hi IRR projects. GWA has most of the hard work done and will be producing 95k oz in 2016 from a CAPEX of $50 million more, using the available Xstrata Glencore Kidd mill in Timmins to process the ore. Older PEA shows 50% IRR at $1200 gold with the contract processing option. Update coming. If true, those numbers are near the best available in all the market.

http://web.tmxmoney.com/article.php?newsid=68855598&qm_symbol=GWA:TSV

http://www.gowestgold.com/wp/wp-content/uploads/2013/02/Corporate-Presentation.pdf

Gowests Bradshaw resource has 1.5M ozAu @ 5gpt (3 gpt cutoff) open on strike and at debth. The 1300m strike is nearly the largest in the entire Timmins area. This is from just 1% of their land. They have 17 other targets with Bradshaw type signatures. Due to the heavy over burden in the area, previous technology could not find the gold. Ive seen a geo magnetic fly over map. The whole area is hot. Once they start cash flowing at Bradshaw, they will continue drilling out the other targets and expanding.

I dont think the market understands whats going on. YESTERDAY 98% of share holders voted for an equity financing that will raise $4M now and another $4.5 million if the warrants get exercised AND ONLY 5K GWA shares traded. They are 100% under the radar.

At first I was negative on the current round of equity financing. It allows the Chinese investor (Fortune Holding) to become a 1/3 equity partner for $8.5M (if all warrants get exercised at .11) Share count will blow out to around 250 million when all the warrants exercise. Gowest will be funded to complete the pre feas, push the permitting process and basically get the project to shovel ready. This will subtract from the total CAPEX needed. The key is, being fully permitted with Pre Feas in their hand sets them up for fair financing.

Through conversations with the company mgt, whom I've learned to trust, I see this as a JV deal that brings in the new partner (fortune Holdings). My guess is, after the Pre Feas and permitting, partner Fortune Holdings will probably facilitate, a non dilutive loan to the company for the balance needed to get the underground ready and the Kidd line rehabbed for producing the Gowest ore. They may even fund a massive drilling program to create value for their investment. Another option is either Xstrata finance the mill rehab or AC will step in with needed cash.

If this works out, CEO Greg Romain will look like a genius in this market.

Another thing I love about GWA they have their own on board, first class technical team as well. VP ops Darrin Konnigen and Garth Wilcox designed, built and commissioned the El Castillo Gold mine that was sold to Argonot Gold and made share holders alot of money. Insiders including Darrin Konnigen own a lot of shares purchased on the open market as well.

Whats the future value of a 100k profitable producer at $1800 gold? According to the PEA, they could cash flow around $28M at $1200 gold and $75million at $1800 gold. Thats what high grades do.

Give them 8x CF for a premium jurisdiction and they value out at $600 Million FV. That would be a 20 bagger even avter dilution is factored in. Then realize that they will grow from there. If the ore sorting works, they could produce 150k - 200k oz from the same ore.

I am not advocating anyone to buy this without realizing GWA is more risky then most all the plays on this board, and I might be brain washed from being so close to this company the past few years.

I own this company mostly because I believe in this resource and the company mgt to move the project without ripping off the shareholders. Through this market, they have survived and moved forward by doing what they said. No one knows GWA, but that will change real soon. Put them on your radar.

Checkmate28