Comstock Metals Ltd. (TSXV:CSL) announced final results from its 2016 drill campaign at its QV gold property in Yukon’s White Gold district. The program
consisted of a total of 34 holes spanning ~2.4km and indicates that the QV deposit remains open to the Southwest and Northeast but that further drilling
is required at the Shadow and Stewart targets. We view the results positively as they demonstrate the potential for QV to grow beyond the existing
resource. We believe that the pending winter exploration program at Comstock’s Preview SW gold project in Saskatchewan is likely to help close the
stock’s valuation gap to peers.
RAB drill results suggest QV is likely to grow
. In 2016, Comstock completed a 34-hole (~2.4km) rotary air blast (RAB) drilling program
at its QV project in the White Gold District, Yukon. The results from this lower cost scout drilling method suggest that the VG zone extends to the
Northeast and Southwest. The VG zone was extended North of the Telegraph fault by at least 200m to the Northeast by holes 16QVRAB006 and 16QVRAB014
(Figure 1). Results from step-out hole 16QVRAB024, that was drilled 750m West-southwest along strike of the VG deposit, indicate that resource expansion
potential exists to the West of the current resource. In addition, a new potential zone was identified 150-200m South of the main VG deposit by hole
16QVRAB001 that returned 7.79 g/t Au over 3.05m.
The market does not appear to account for Comstock’s resource growth potential. At C$ 9/oz, Comstock currently trades at a discount
to peers which trade at $C 40/oz. In our view, the market does not account for the exploration upside at either the company’s QV Property or Preview
SW gold project in Saskatchewan. We believe that the pending winter exploration program from Preview may close the valuation gap to peers.
Company Description: Comstock Metals Ltd (TSXV:CSL) is an exploration company focused on its two wholly owned resource-stage Canadian
projects. The 16,335 ha QV Property is located in the White Gold district of the Yukon and hosts an Inferred resource of 230k oz Au (4.39 million
tonnes at 1.65 g/t Au). The Preview SW gold project is located 40 km north of La Ronge in Northern Saskatchewan and hosts a resource of 429k oz
Au (8.3 million tonnes at 1.61 g/t Au).
Derek Macpherson | VP Mining Analysis
Sunneva Bernhardsdottir | Associate, Mining Analysis
Victoria Ellis Hayes | Associate
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