subject: Evolving Gold delivers results: one advanced project, two new discoveries, major upside [print this page] Evolving Gold delivers results: one advanced project, two new discoveries, major upside
evolvinggold.com 604.685.6375
Quinton Hennigh
President
Evolving Gold's (TSX: EVG) drill program in 2010 at its flagship Rattlesnake Hills project in Wyoming revealed consistently higher grades at the project's North Stock zone and improving grades at the Antelope Basin zone. After drilling almost 85,000 ft in 2010, company president Quinton Hennigh is confident resource estimates for both zones will be ready this year. He discusses the project's progress and two other high-potential properties of Evolving Gold.
Resource Intelligence: Why is Rattlesnake Hills the most prominent among your four projects?
Quinton Hennigh: Rattlesnake Hills is our flagship property because it's a very large gold system. We have 100% interest in a very large land position around Rattlesnake; about 14,000 acres. To date, we have only focused on a small part of what appears to be a much larger system.
RI: At what stage is the project now?
QH: Parts of it, advanced. We drilled almost 85,000 feet in 2010 and nearly 200,000 feet over the life of the project. Other targets have yet to be explored giving us lots of upside.
RI: When do you think will it be mine-ready?
QH: While this project is advanced in terms of drilling, it has to go through several stages of review. We're going to do a Preliminary Economic Assessment that will guide us as far as the economic viability of the deposit. Including prefeasibility, feasibility, permitting and other aspects, we are looking at about six or seven years.
RI: Let's talk about the financial requirements of this project.
QH: We've spent nearly $20 million on the project over a three-year period, almost entirely for the very intensive drill program. To take this to feasibility we will need roughly $15-$20 million. To determine the capital costs required in developing the mine, we must take it through feasibility. Evolving has about $13 million or so in the bank, so we do not anticipate needing money in the short term.
RI: With gold now around $1,400 per ounce, could you give us a sense of the economic potential of the project?
QH: Speaking as an exploration geologist and scribbling numbers on the back of an envelope, we do feel that this should have fairly good economics. The grades we're seeing at North Stock and Antelope Basin are consistently higher than we anticipated. We are confident that this will have very good economics with respect to other similar deposits of similar scale and type.
RI: What aspects of your infrastructure and ore body give you cause to believe it will be a low-cost project?
QH: Grade is king in any gold deposit. We see some very high grades in places at North Stock. But the main thing about Rattlesnake is that it's an alkalic gold system and will likely be metallurgically friendly. Much of the cost of mining centres on extracting the gold from the rock. We believe these costs should be reasonably low.
RI: Do gold price forecasts help you at all?
QH: The price of gold absolutely helps on a number of fronts. It makes it easier to raise capital and increases the in situ value of the Rattlesnake Hills project. We are starting to see a number of acquisitions in the gold mining industry that tell you where valuations are, and they are going up. In the long run, the high gold price will make the deposit much more economically favourable when it goes into production.
RI: What other company developments, in your opinion, add value to Evolving Gold?
QH: We have other projects that people don't hear as much about but have large potential. Our Carlin/Humboldt project in Nevada, situated on the Carlin trend, produced high-grade results in a drill last year. We are currently doing some drilling to offset these high-grade results. That story is going to unfold over the next 6 to 8 months. Our Jake Creek property produced some good results announced in November 2010. One hole hit fairly high-grade mineralization, nearly 12 gpt. We plan on drilling more at Jake Creek starting in March.
RI: If I were an investor, could you give me at least three reasons why I should invest in Evolving Gold?
QH: I think the best reason is the Rattlesnake property itself. I think the company will continue to see upside in share price from that property alone. Second reason, we feel a discovery at Carlin/Humboldt could be fairly large given the number of +5 million ounce deposits in the area. This would add tremendous value for shareholders. Third, our Jake Creek property could produce a discovery of a significant high-grade vein system.
RI: Is there any other infomation investors should know about?
QH: We like to drill. Here at Evolving Gold, we are very serious about making discoveries. We believe this is done through the drill bit. Over four years, we have taken the money investors have given us and put it in the ground producing results. Our track record speaks for itself.
Investor Highlights:
Rattlesnake Hills is starting to reveal grades in the range of 1.3g to 1.8g more consistently at its North Stock zone
Being an alkalic gold system, Rattlesnake Hills is metallurgically friendly, making cost of mining and recovering gold potentially low
Evolving Gold's Carlin/Humboldt project in Nevada revealed high-grade assay results in February 2010, confirming the company's belief that it has discovered a strong significant gold bearing system
One of the two drill holes made at the company's Jake Creek property revealed high-grade mineralization at 12 gpt. The project could also add tremendous value to Evolving Gold
