Is Scottie Resources a Deeply Undervalued Gold Junior in the World-Famous Golden Triangle?

Peter Epstein of Epstein Research compares this explorer to others in the area.

In May I conducted an in-depth interview with Brad Rourke, president and CEO of Scottie Resources Corp. (SCOT:TSX.V). Scottie owns/controls 18,544 hectares (~45,823 acres) in the world-famous Golden Triangle (GT) in northwestern British Columbia in Canada. Some of the best historical gold intercepts on the company's seven properties are: 107.1 grams per tonne (g/t) over 4.18m, 108.3 g/t over 3.44m, 2.13m of 174.2 g/t, and 4.2m of 70.6g/t.

Yet, these historical results barely scratch the surface of a newly expanded land package consisting of two substantial contiguous claim blocks in one of the hottest parts of the red hot GT. Since my interview, gold is up ~$220/oz. to $1,515/oz., but Scottie Resources' share price is down 31% to C$0.145. Both of Scottie's sizable, contiguous land packages share borders with Ascot Resources (AOT.V). (See map below.)

The 1) Bow, 2) Scottie Gold Mine, 3) (newly optioned, 100% of 4,877 ha) Summit Lake and 4) Stock properties, totaling 8,178 hectares, are 20-30 km south of Pretium Resources' (PVG.T) ultra high-grade, 400k oz/year Brucejack mine and west of Ascot's advanced exploration, past-producing Premier-Dilworth project.

Scottie's second contiguous block consists of 1) Ruby Silver, 2) Bitter Creek and 3) Black Hills, a combined 10,366 hectares. These properties are west of Ascot's Red Mountain project. A 2017 BFS done on Red Mountain using US$1,250/oz. gold returned an after-tax IRR of 32%. At $1,450/oz., the IRR jumps to 44%. And, that's with only a 5.4-year operating mine life.

Is Scottie Resources under-followed and undervalued?

CEO Rourke and team believe their company is worth considerably more than its enterprise value [market cap + debt - cash] (EV) of C$9.1 million = ~US$6.9 million. (See corporate presentation.) Scottie is trading at a 92% discount to the average of EVs of GT Gold (GTT.V), Ascot and Tudor Gold (TUD.V).

Admittedly, those companies warrant significant premiums. For one thing, they have a lot more drill results in hand. However, neither GT Gold nor Tudor have delivered maiden resources on their primary Golden Triangle properties.

Ascot has three or four projects on its combined 25,164 hectare holdings, including the recently acquired IDM Mining and Silver Coin properties. It wants to produce from multiple mine sites, feeding a central mill. Ascot's CEO recently said that he thinks AOT could reach production by the end of next year. That would draw a lot of attention to Scottie, look at the map!

Scottie's best intercepts, and past production profile at the Scottie Gold mine property (95.4k ounces @ 16.2 g/t gold) could prove superior to Ascot's grade (2.826 million ounces Measured, Indicated + Inferred @ ~7.4 g/t gold). Higher grade, 10+ g/t gold, would be valuable to Ascot to mix with its 7-8 g/t mill feed.

To be clear, Scottie has a lot more drilling to do before it can provide line of sight to a meaningful high-grade resource.

Every GT junior says it's in a great spot, some are misinformed....

There's reason to take Scottie's CEO and new full-time VP of Exploration seriously when they brag about their properties being situated in a top location in the Triangle. Two of the very best geologists working in the region, JoAnne Nelson and Jeff Kyba, said the following in this 2014 British Columbia Geological paper,

"One of the most important mineral trends of northwestern British Columbia extends from near the town of Stewart north to the Treaty Glacier, in the western part of the Stikine arc terrane. Major deposits along this trend include KSM (Seabridge Gold), Brucejack, (Pretium Resources), Silbak-Premier, Big Missouri and Red Mountain (Ascot Resources) and Scottie Gold (Scottie Resources)."

Scottie Resources offers a compelling risk-adjusted investment opportunity. Look no further than the gold price. It was at ~$1,295/oz. the day my CEO interview was posted. Earlier this month it smashed through $1,500/oz., and is now at $1,515/oz. Gold is at a 64-month high!

"Rock Star" VP of Exploration has tremendous GT experience

In June, Scottie hired a literal, "rock star," a full-time VP of Exploration. Thomas Mumford, Ph.D., P. Geo, is an exploration geologist with a comprehensive field, technical and academic background.

He's passionate about grassroots exploration and has 15 years' extensive project management experience. Thomas' expertise, much of it gained in the GT, greatly enhances the team's ability to design cost effective, high impact drill programs.

2,000 meter / 12-hole drill program to start by mid-September

On August 20th, the company announced that 2,000 meters, in 12 holes, split between the Scottie Gold mine and Bow properties, will start by mid-September. The program is designed to follow up on, and step-out from, historical near-surface high-grade intercepts at Bow. And, assess a newly discovered zone on the Scottie Gold property recently exposed from glacial retreat.

Thirteen gold-bearing vein zones have been identified between the contiguous Scottie Gold and Bow properties, but mine production was primarily from a single vein (the M-zone). (See image below.)

Highlights from Bow property historical drill hole intercepts include:

84-7: 70.15 g/t Au over 4.17m / 91-5: 57.94 g/t Au over 2.60m

91-6: 28.11 g/t Au over 2.64m / 05-03: 18.48 g/t Au over 1.83m

All intercepts reported above are true widths and are located at vertical depths of less than 45m. No drilling has tested mineralization below 55 m in vertical depth. Management believes that the near-surface, high-grade veins pinch and swell, meaning that mineralization could be open at depth. Results are expected in late October.

CEO Rourke commented in the latest press release,

"Based on the historical drilling and extensive fieldwork over the last 2 years, the initial drill program is designed to expand & confirm the geometry and continuity of high grade gold zones. The 2019 fieldwork and drill program will lead to a larger, more targeted exploration program on the Scottie and Bow properties, as well as our newly acquired Summit Lake claims in 2020