Crossroads Gold’s flagship is the Steiglitz gold project, an epizonal orogenic gold system roughly 80 km west of Melbourne in the Bendigo zone, alongside Pheasant Creek (next to Southern Cross Gold’s Sunday Creek), plus Pambula and Club Terrace, the two projects that came with the Rox-ex acquisition. In this interview, I asked why Steiglitz was never properly drilled, what the soil sampling is showing, the first drill programs, permitting and community friction, treasury, and risks.

TL;DR

CEO Motton says first drilling is imminent, kicking off at Steiglitz in September with about 1,000m, followed by roughly 3,000m of RC at Pambula from late September into October, with diamond drilling at both in December or January. He told me they have about $4.5 million in the bank, which he says funds the next 12 months and means no raise before assays land. Assay turnaround is 6 to 8 weeks, so first gold numbers should come back within about two months of the rig turning. The CEO also told me that Parks Victoria has refused access to the historic park portion of Steiglitz before, which includes the higher grade north-south corridor. His stated targets, Hanover 1 and 2, are on private property and are the lower grade, wider disseminated part of the system, not the 38 g/t historic stuff.

What have they done for shareholders lately?

No drill results yet, this is a newly story. What they have done is surface work: roughly 850 soil samples at Steiglitz and about 1,500 at Pambula, with Steiglitz soils returning up to 4.5 g/t gold along the Hanover Fault. Motton says the soils define a roughly 150 m wide anomaly at Hanover 2 (over 100 ppb gold, with arsenic and antimony) and a smaller roughly 80 m feature at Hanover 1, and that the geochemistry is also throwing up barium, thorium, niobium and other elements he reads as an intrusion at depth. He also says the 2009 diamond holes, which came back low grade, clipped the side of the target rather than the core, which he backed up by putting the old underground workings into 3D. They added Pambula in New South Wales in the last few months, met with two local objectors for over four hours in January, and are interviewing a geologist next week to manage Pambula on the ground.

How much money do they have and what are they spending it on?

Cash is about $4.5 million, which he says covers the next 12 months. That came from the go-public financing of $5.2 million at $0.20 done in November of last year, and there are 6.5 million options and 20.8 million warrants outstanding, which with the 65.5 million shares works out to about 93 million fully diluted, so roughly 30% of the fully diluted count sits in paper. Spending goes to drilling, split roughly 50/50 between Steiglitz and Pambula over the next six to eight months. He quoted Australian dollar rates of about A$300 per metre for diamond and about A$80 per metre for RC percussion, before fuel and ancillaries. He could not tell me what the Vancouver G&A runs, saying only that Australian overheads are minimal, and he flagged somewhere between $500,000 and $750,000 to $800,000 earmarked for marketing, deliberately held back until drilling starts.

Upcoming catalysts

Technical and operational: drilling at Steiglitz in September using a man-portable rig that reaches about 50 m and a track-mounted RC rig that reaches about 150 m, roughly 1,000 m to start; about 3,000 m of RC at Pambula across roughly 25 designed pads from late September through the end of October; follow-up man-portable drilling at Pambula; deeper drilling back at Steiglitz; and diamond drilling at both projects in December or January, targeting the top 500 m. First assays should follow drilling by 6 to 8 weeks, so roughly November for the earliest Steiglitz results.

Corporate and permitting: the Pambula drill permit is at least another month away; Pheasant Creek is in native title negotiations before the licence can be granted; Club Terrace is still in application; and the Victorian state election in November, which Motton says will determine whether they can ever explore the historic park ground at Steiglitz.

Risks

The obvious ones are permitting and land access, which CEO Motton himself named as the biggest pushback he gets from investors. He rates community and permitting risk at Hanover a 3 out of 10 because it is private property needing only seven days notice, but says the historic park portion will be very difficult and depends on a change of government. Pambula has had regional media coverage of local objections and the permit is not in hand. Beyond that, this is first-pass drilling into targets that have never been properly tested, and his own expectation for the shallow holes is 1 to 2 g/t disseminated material rather than the historic high grades, with the bonanza thesis resting on drilling deeper later. He says no raise is needed before results, but a disappointing first pass would leave the company going back to market from a $12 million market cap. He said metallurgy risk is not that big (fine sulphide-hosted gold, not nuggety) and water risk isn’t either, and there are 1% NSRs with roughly $1 million buyouts on the projects, one of which is held by a person who also works for the company.

Crossroads Gold CEO Interview

VERY IMPORTANT WARNING

Please note that this company has not paid Resource Talks for the creation of this content. This website is a business that charges for the creation and publication of content. This means there will always be a potential conflict of interest which means you can never rely on anything said herein.

By consuming this content, you acknowledge that Resource Talks and/or its affiliates and/or their personnel may own, have owned, or will own interests in and/or may have a business relationship with some or all companies/entities mentioned/featured in this publication. You further acknowledge that entities which may be referenced or featured in this publication or their related parties may hold an interest in Resource Talks or its affiliates, which may create further conflict of interest.

The information provided herein is general & impersonal in nature and meant for entertainment purposes only. The reader acknowledges and agrees that the information does not constitute a solicitation of an offer to buy or sell any security or instrument or to participate in any trading strategy. The author is not a licensed investment advisor. He is just another talking head on the internet. He might own shares of companies mentioned in this publication. Always assume he doesn’t know much more than a potato does. The mining & exploration space is among the riskiest sectors to invest in. The risk of anything mentioned in this publication is 100% loss of capital. If you don’t read the official documents provided by the company on http://www.SedarPlus.ca, you will lose all of your money.