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Just in case everyone has forgotten, GDSM is funding the exploration and development of the Gold Star placer mine, located in Skull Valley, Arizona.
Since the topic of the afternoon seems to be illegal mineral appraisals, the following appraisal was issued by Arizona Gold Corporation in the amount of $143,437,500 for the in-ground resources of the Gold Star claims. All without a single drill hole or third-party technical report. And, if you notice, it is signed by a person claiming to be a mining and mechanical engineer (Scott Stoddard) who is not registered as either. This is a direct violation of the Arizona Board of Technical Registration.
The seal at the bottom of the certificate is a State of Florida corporate seal, which is meaningless but gives the impression that this is an official appraisal certificate. Perhaps they thought this would get them out of the AZBOTR rules, but I doubt the AZBOTR would see it that way.
A mineral appraisal is not the same as a real estate appraisal. But even real estate appraisals have to meet certain standards.
The mineral appraisals done by Stoddard and Jenkins on the Gold Star Claims and now the so-called "Azurite Mine" are being used by a public entity (GDSM) and are therefore specifically forbidden under SEC rules.
No worries about that here - Jenkins "resigned" his CPG and has no fears of losing his professional geologist registration because he currently has none. However, he should be in fear of an investigation by the AZBOTR by claiming to be a registered engineer. The SME might be a little miffed too - having a member using their name as credibility that he is a registered engineer when in fact he is not.
Goes double for Stoddard - he also claims to be a mining engineer.
The 2010 report released by GDSM looks impressive with all the numbers and geology, etc., but most of the data referenced in this report is 100 years old or more. No telling how much of the ore was mined out after the data was generated. No way to tell if the old data is credible or created to bilk Eastern investors (which was a very common scenario in those days). Throwing out numbers like $2.44 billion dollars in potential reserves is designed to bilk new investors.
Same old story, a century later.
You would really reference a report over 130 years old? I love reading about mining history too, but is that part of your DD on GDSM's fabulous new mine?
Chris - if the WSRA prelim sampling comes back good (which we still do not have any proof of), and if the next stage of sampling comes back good, and if they can do all the permitting at every stage, archaeological and bugs&bunnies studies, and the royalties agreement, they could be mining in less than a year. But, that is assuming everything goes perfectly at every stage. It would take a miracle.
Placer appraisal or placer evaluation? An appraisal implies a dollar estimate of the value of the mine. If done by a reputable professional, an appraisal should either include, or reference a readily available technical document that has attached assay sheets. It should also include detailed cost estimates and engineered feasibility study on the cost of mining, permitting, etc. If the cost of mining exceeds the provable resources, you have negative value.
If you mean evaluation (a technical document), it should include all available backup documentation including assay sheets. If the black sands at the Gold Star claims are to be included in the resource, assay sheets should be provided along with detailed methodologies as to how samples were collected, processed, and handled.
Yes, Arrakis consists of "real people". But, if you research further, they seem to have numerous links to other mining scams in the Southwest including a pretty long-running one in New Mexico. They are either unwitting dupes, or more likely, they have found a niche with mining scams providing various metallurgical services. I am sure the pay is good.
The "Australian Testing Firm" is not real in my mind until they release who it is. As far as I am concerned, it is completely bogus until proven otherwise.
My main point, however, is not about who SRCH's consultants are or whether they are legitimate or not. It is the fact that SRCH has never released any actual data in the form of a third-party report by a single one of these consultants. No actual data or report = scam. They can test forever, and keep claiming good results, but no report = scam.
Everybody is an expert at something - what you do for a day job is probably something I know nothing about and would fail miserably at. I am not "looking down my nose" at anybody - I just happen to know something about mining, mineral exploration, environmental permitting, etc., especially in Arizona. If you feel I am lying or providing misinformation about GDSM and their "mines", please point it out, and tell me where I am wrong. There is nothing personal here on my part.
In-ground "reserves" have no value until compared to the cost of mining, permitting, etc. Being Federal land (probably USFS), good luck permitting this new GDSM acquisition as a mine! Certainly is not going to happen in 90 days (??!!). No drill data on this tired old mine means zero proven reserves.
Report on this mine is by a now-resigned CPG, and a fake mining engineer (Jenkins is NOT a registered mining engineer with SME, only a member) and is not, and never was, registered with the Arizona Board of Technical Registration (AZBOTR). Stoddard is not a mining engineer either, no clue how he gets away with signing reports as a mining engineer. The SME and AZBOTR would both pursue any complaint against Jenkins and Stoddard, if brought to their attention.
Honestly, I don't know. All I know is that SRCH is a scam. How Luxor fits in, or how they hope to make money is beyond me.
Assuming it is not a scam because some big money folks have invested and should know better, is not good logic. They have some angle to make money, and are probably well aware of the scammy nature of their investment.
Hand-dug excavations are okay in some circumstances, especially where permitting is needed to construct roads.
However, in the situation at GDSM's "placer mine", they are sampling high-bar deposits that they claim to be 40 to 80 feet thick in places. A 2' square surface sample consisting of two 5-gallon buckets of material is in no way a reasonable test of these high-bar deposits. In addition, two 5-gallon buckets of material are not a very good placer sample. Bulk samples, the bigger the better (several cubic yards would be preferred), are what you would like for evaluation of a placer deposit.
Any news from your engineer buddy working on the WSRA crew? Maybe he has some insight on why it takes three months to collect 12 or 13 surface samples at GDSM's Gold Crown lease parcel.
Any inside information on the nickel and lithium content of the samples recently collected? It would be so cool to have a nickel or lithium mine in Arizona.
Major news??? Are you kidding? GDSM optioning another Gold Tech/WSRA tired old mining claim is a joke. There are thousands of old mining claims in Arizona and the Southwest, most with no recorded production, and few with any potential.
All this is an attempt to draw attention away from the lack of progress by WSRA in the sampling of the Gold Crown state lease parcel. If they have completed sampling in the southeast area, and still have the northwest area to sample, that must mean they have done about half of the allowed 25 hand samples. That means that in the nearly three months that they have had their permit, they have collected approximately 12 or 13 hand dug samples, with a similar amount still to go? Roads washed out - that's BS - hike those buckets a little farther, and get the sampling done!
As for gold in all samples, that is to be expected. But what are the numbers? A trace of gold is not worth mining.
By the way, there are at least five Azurite Mines listed by Mindat in Arizona, with others listed in other states including one in Nevada. Which one is it? Is it a gold mine, or a copper mine? 90 days til production? Production of what? Is GDSM now a copper mining company?
I appreciate the warning, but see no reason to be careful about my thoughts regarding the slag. I will say it very bluntly - I believe there is very little gold in the slag, and I believe there is major fraud involved with SRCH's claims regarding the value of the slag.
Any company that is so careful to never, ever release any kind of actual report about their findings is surely perpetrating fraud. Why people invest based on PRs alone is beyond me, unless they are purely playing the bounces in pricing and do not care if it is a fraud or not.
The geology, mineralogy and grades of the ores processed at the Clarkdale smelter are well documented. The ores never averaged gold values anywhere near what SRCH is now claiming are in the slag. Compared to the half oz. per ton gold that SRCH is claiming are in the slags, the ores averaged maybe a tenth of that at best. Even if Phelps Dodge left ALL the gold in the slag (which I highly doubt), it is not even close to justifying what SRCH is claiming. It makes no sense whatsoever.
I have no fear in saying that SRCH's pile of slag at Clarkdale is a fraud and a scam, based on a bunch of lies from folks with a long history of documented scams. Whether it is criminal or not, that is up to the SEC and whatever court(s) it ends up in.
Make what money you can from SRCH, but it will not be from them ever producing gold.
You are looking at it from an engineering/process angle. Back up a little and think about one thing - why hasn't SRCH ever released any reports documenting the sampling of the slag, and the verification there really is gold there? I see that as proof that there is negligible gold in the slag. From what I know about the geology and the production figures over the years, there is no justification for believing there is much, if any, gold in the slag.
No need to look any further.
Laugh all you want, but you didn't answer my question - how long are you willing to wait for SRCH to produce something?
Having followed DGRI for a while, they are about as amateurish as they come when it comes to things like sampling, etc. I am sure you are right, it is for PR only and to keep interest going for another few months.
No argument here, just curious what avenues of DD research an average investor takes if public documents are of no interest. What other kinds of DD are possible beyond the PR's for a non-reporting company like GDSM?
There is nowhere in Arizona that Freeport (formerly Phelps Dodge) has not looked at closely. It would not surprise me to hear that PD looked at Copper Chloride at some point, but Copper Chloride is way too small to interest Freeport. There really is copper and it might be mined someday, but nowhere near the size that Freeport is looking for.
I won't ask about the specific results of the DD you are doing on GDSM, but I am curious about the general nature of the DD. What kind of resources are you looking at?
And this one is a placer - notoriously hard to evaluate and develop. It will be interesting to see how this proceeds - maybe similar to one of the Skull Valley placers with huge "reserves" and very little sample data to back it up?
People often invest in sketchy operations, hoping to catch a bounce in the price and make a tidy profit. I have talked to a lot of investors in penny stocks and almost all of them acknowledge that just about every penny stock is a scam of one kind or another. SRCH is no different except that it is particularly well laid out, long-lived, and very hard to disprove what they say because they never issue anything but PR's.
How long will you wait them out to actually produce gold from slag? Another month? Another year?
Apparently Luxor knows a good, long-running scam when they see one. Seven years and counting! SRCH could string their investors on for many more years with their endless testing and press releases (but never, ever release an actual report confirming anything).
I completely understand, and sympathesize to a point. What you are saying is that you are a bagholder, and hoping to find a new bagholder to take your place. That basically makes you complicit in the scam in a way.
Knowing about this scam, and having projects in the area, I cannot stand by and watch new investors buy into this joke of an operation. So, for your sake, I hope the price spikes and you can unload. For the sake of new investors, I hope the price collapses completely and these jokers end up in jail.
Totally agree with you Rufus about the market, and GDSM's role in it. I hope you make a few bucks, but most will lose every dime they stick into GDSM.
I read the article when it came out, but I had already researched El Capitan and decided it was a grandiose scam! Interesting in that they have ties to another long-running scam - the Searchlight scam - they share consultants (Arrakis).
Sorry, it clearly is a scam, therefore I feel no obligation to be concerned about share price or whether they "succeed" or not. The tailings have very little gold, their so-called E leach process is a fraud, and they are environmental violators.
I know lmcat will respond to your comment, but I doubt it is lmcat. And besides, who cares who took the pictures and sent it to ADEQ, if that even happened? If a company is seriously violating State law regarding groundwater, someone should contact ADEQ. It sounds like you are just upset that Hondo got caught.
Besides, Hondo's own photos on their website clearly show that the tailings pile had recently been disturbed, which meant the tailings were no longer exempt as "historic" tailings, and fall under the Aquifer Protection Permit rules.
If you just used a nugget trap to catch the big stuff (which you can weigh), and ignored the fine gold, you could save money on assays. But, most times, the fine stuff (in the black sand) is half or more of the total gold, and you had better be assaying as well.
But taking samples and not processing or assaying them seems odd to me.
The burden of proof is on the company that issues the ore reserves figures. No proof, no reserves.
You cannot seriously think someone questioning the reserves must trespass, hire a professional geologist or engineer to collect samples, pay for assays, and prepare a report? That is not only illegal, but unnecessary (and ridiculous). The lack of a credible sampling report is all that is needed to say that there are no reserves.
Nyal Niemuth
Arizona Geological Survey
1520 W. Adams (call or use door bell for entry)
Phoenix, AZ 85007
602-771-1604 or page me at 771-1601
He has a list of consultants that he hands out to folks who inquire - he can't recommend any in particular, and you may have to work your way through the list to find one that is experienced in placer evaluations. Few geologists work with placers because most are scams, and the few that aren't scams are hobbyist level only. There is a reason the big mining companies have no interest in placers.
Just be careful, and ask specifically, do you have experience evaluating placer claims?
Reality has little bearing on this "mine". It is a penny stock, and a pinkie which means they can get away with just about anything (like fraudulent ore reserves numbers).
You are correct - currently approved POO is for Chaffee (not WSRA) to do preliminary sampling program on State lease land. Another POO would have to be filed for additional sampling, or for any mining.
That other plan you linked to is a joke - 600,000 oz. of gold and platinum. Apparently ASLD did not buy it, and it was never approved - no activity at that mine (located about 2 miles from Gold Start claims).
I "produced" the document for discussion. I didn't create the document, obviously, but I did something that GDSM or WSRA would never do.
Depending on whether they move forward after the initial results, they may (or may not) file another POO. That's the nature of exploration. Would you admit that maybe the results won't be good enough to move forward?
Given that they supposedly have 6.75 million yards of 0.025 oz/ton of gold as proven reserves, why even do the sampling? Why not just forego the sampling and submit the 1964 sample report or maybe that fake Stoddard appraisal along with a mining POO to the ASLD? ASLD will make a decision whether the ore reserves numbers are BS or not. That would be a hoot!
They are prohibited from any, and I mean all mining until they get a POO to do mining. There will be no income, nada, zero, until they file a POO, do the various studies needed, negotiate a royalties contract, and post the bond.
There is no way this will happen anytime soon. As of two weeks ago, no POO was filed to begin this process. It would take a month or two to get the POO reviewed. Even if they filed a mining POO today, it would be sometime in September before it is conditionally approved pending completion of the various studies, the royalties agreement, and the reclamation bond.
To think these guys are ready to mine is ludicrous. There is no proof they have even done the preliminary sampling. And by proof, I don't mean a PR, I mean a results report filed with ASLD.
How's the verification coming?
And if documentation from prior to GDSM's involvement is not relevant, how about removing all links to that hokey 1964 "sampling" report, or the fraudulent reserves figures done by an owner of the claims in 2005? Just make a clean sweep and dump it all.
I think the denied 2011 POO is relevant - it shows a much more robust sampling program, and probably what they should be doing now. Can't figure out why they are now doing such a skimpy program - is it funding? One hand-dug surface sample per 13 acres is not a very good start and barely digs into that fabulous exploration budget. Are they going slow on purpose? If I were an investor, I'd be furious that they are not moving forward with some urgency.
The rule for verification is apparently that nothing is verified unless straight from GDSM or WSRA. Therefore, I doubt we'll see any verification.
As far as I am concerned, there is no right way or wrong way. The "usual" reason given by promoters of a stock is that bashers are bashing to try to lower share price so they can pick up cheapies.
As for me, that is not the reason, couldn't care less about the share price. Haven't even looked at GDSM share price today.
Cosmic - long hot summer, and not much going on with SRCH. Wonder what they are going to say in their next PR to raise interest levels again. Maybe it is time for them to start pumping their Searchlight mining claims again?
Or find some new thing to promote - nobody has promoted the old "gold in volcanic ash" thing for a while, maybe Ager can get that going again. He can set up shop in Flagstaff which is really nice this time of year, and take people on tours of the ash pits outside of town. Worked real well 20 years ago, and now a new crop of gullible folks are primed for the picking. Gotta hand it to these guys - just about the most successful group of mine scammers ever!