Monday, 13 February 2012

Tarsis Resources' business model is built for large gains over long haul

Tarsis Resources (CVE:TCC) is a Canadian explorer and prospect generator that acquires properties on attractive terms, adds value and then vends or options them to qualified partners who fund development.

The company is still in the preliminary stages of its evolution and carries a market capitalization of only $9.6 million. The company was formed when a package of projects was spun out from Almaden Minerals (TSE:AMM) (AMEX:AAU) in 2007 and it still maintains a close relationship with Almaden.  Almaden is a mature project generator capitalized at $162.8 million, and illustrates the long term growth potential in this business model.

Tarsis’ initial property portfolio included Caribou Creek, Cabin Lake, Mor, Goz, Meister, Tim, and Prospector Mountain in the Yukon and a very prospective Mexican property known as Erika.

Since then, the company has acquired additional projects at White River, Burns, Rosie and Rogue in the Yukon, with an ongoing generative exploration effort that is targeting porphyry epithermal gold and copper resources and sediment-hosted gold resources primarily in Yukon.
White River is 100%-owned and is considered a key project that contains extended zones of significant gold, copper, and silver values.
White River contains a target area that measures 4.5 kilometres by 2 kilometres and includes the HG and Cool Zones, where anomalous values for copper >50 parts per million (ppm), arsenic >50 ppm, and gold >15 ppb were detected in soil geochemistry.
Prospecting along strike at both ends of the HG and Cool zones discovered locally-derived talus yielding significant gold-copper-silver values. Prospecting samples on the Cool Zone include one sample grading 18.9 grams per tonne (g/t) Au, 150 g/t Ag and 22.1% Cu and the zone is in excess of 500 metres along trend.
The HG Zone is more than 1,100 metres along trend, and one prospecting sample graded 39.8 g/t Au, 521 g/t Ag and 1.345% Cu.  Follow up trenching of this zone returned anomalous gold, copper and silver in several trenches with a highlight of 1.0 metre grading 82.20 g/t Au.  Four new showings were also indentified between the Cool and HG Zones, and an additional two showings located 700 metres southwest and 550 metres south of these zones also reported significant gold, silver and copper values.
Strongly anomalous gold values were reported in nine of 11 trenches that were recently completed. Highlights on the HG Zone include TR-HG11-02, which assayed 82.20 g/t Au over 1 metre, and included samples grading 214.0 g/t Au and 129.0 g/t Au. Trenches at the Cool Zone returned strongly anomalous gold, copper and silver values, while at the MS2 zone, trenching identified strongly anomalous gold and arsenic values in a stratabound setting.
A semi-contiguous gold-in-soil anomaly extending over 1,100 metres, and with a width of up to 250 metres was also identified at White River East.  This target is located 8 km east of the main target area.
Tarsis has developed numerous gold, silver and copper targets across White River that it believes have the potential to host the next major discovery in the Yukon. Drilling targets have been defined and will be drill tested in the current calendar year.
The company is also exploring the 100%-owned Erika Project that covers 16,000 hectares and is located in Guerrero State, Mexico. 

Erika has potential for sediment-hosted (Carlin-style) gold mineralization within an established mining district, and is 20 kilometres from the Goldcorp (NYSE:GG) Los Filos Mine, which produced 300,000 ounces of gold in 2010, and is Mexico’s largest gold mine. Torex Gold Resources (TSE:TXG) is exploring the adjoining property to Erika, hosting approximately 3.9 million ounces of gold. 

Tarsis has drilled across a 650 metre wide zone containing a transitional sequence of calcareous siltstone and mudstone. Drilling highlights from this zone included ER-11-14, which intersected two gold zones grading 1.05 g/t Au over 0.13 metres at 271.50 metres, and 1.14 g/t Au over 10.28 metres at 273.11 metres, and included higher grade intercepts grading 2.25 g/t Au over 3.60 metres and 2.79 g/t Au over 1.96 metres.

ER-11-15 intersected 1.08 g/t Au over 3.18 metres at a depth of 296.42 metres and includes a higher grade interval grading 1.78 g/t Au over 1.40 metres.

Tarsis has also completed a ground magnetic survey and believes that the property has potential to host a significant sediment-hosted gold system that may replicate similar styled gold deposits in Nevada that are very significant contributors to world gold production.

Future exploration will seek feeder structures in areas of favorable stratigraphy that may carry thicker and higher grades of gold mineralization.

Surface sampling has also defined a series of highly anomalous gold in soil and pathfinder geochemical responses that are up to 6 km from the area that was drilled.  The company said it believes these anomalies have significant potential and warrant drill testing.

Meanwhile, at its Yukon properties, Tarsis has optioned a 60% interest in Prospector Mountain to Silver Quest, which is now Independence Gold (CVE:IGO). The option consideration includes an exploration commitment of $4 million over four years, along with the staggered payments of $300,000 and issuance of 1,000,000 shares in Silver Quest. Tarsis has already received 400,000 shares and $100,000 in cash.

Silver Quest has spent approximately $2 million in drilling and exploration at Prospector Mountain, where a gold, silver, and copper porphyry system is the target. Early drilling highlights on the 1,400 metre long Bonanza Zone include 0.57 metres grading 14.15 g/t Au, at a depth of 78.75 metres. More drilling results from the 2011 field season are expected in the near future.
Tarsis follows the Almaden business model that is based on a highly skilled exploration effort running on frugal overheads, and a small issued capital of 27.4 million shares and 7.7 million options and warrants. This effort is driven by Marc Blythe, who serves as president, CEO and director, and was previously vice president of mining for Almaden Minerals from 2006 to 2011.
Adrian Fleming is a director and Australian geologist with 35 years of senior experience. He established Underworld Resources in 2006, which was acquired by Kinross (TSE:K) in 2009.  Kinross also holds 2.7 million shares in Tarsis for a 9.9% interest, and further attests to the quality of the exploration effort that is underway.
Gerald Carlson is an engineer who has been involved with global exploration efforts in precious and base metals for 35 years. He is the past president of AMEBC and is also a director of Almaden.
Almaden’s chairman, Duane Poliquin, serves as a senior advisor.
The company is currently completing a $1 million financing and plans to continue to manage its share structure to minimize dilution.
Tarsis certainly has a strong technical team with a strong track record, and is built for large gains over the long haul.

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