Evergold Corp (TSX-V:EVER, OTC:EVGUF) said cost concerns and exceptionally poor market conditions have necessitated postponing the next phase of drilling at the promising but remote Golden Lion project in north-central British Columbia despite a strong $1.9 million cash position.
In an update to investors, the company said market conditions in the junior mining and exploration space have deteriorated, and are “presently as challenging as they have been in a generation”.
“Market trading volumes are exceptionally low, investors have an overriding ‘risk off’ attitude, are not responding to positive news, and available capital is limited. In this difficult environment management is conserving capital and operating with a heightened degree of caution,” it added.
READ: Evergold plans follow-up drilling at its Golden Lion property in British Columbia
In a statement, Evergold president and CEO Kevin Keough noted, however, that: "Evergold has several very fine property assets that have the potential to make shareholders money in the medium term."
"In the meantime, we must manage through the current really tough markets. This entails husbanding our capital, and deploying what we have to maximum advantage. We will provide a further update on plans, including proposed drilling at Golden Lion and Holy Cross, as the summer progresses," he added.
The junior explorer said tempting new targets are emerging from recent fieldwork at both the company's Holy Cross, British Columbia and Rockland, Nevada properties, while maiden drilling at the Holy Cross Property is being considered for September this year.
Evergold provided additional updates on its properties as follows:
Golden Lion Property
The company said the GL1 Main Zone Target warrants a substantial next phase of drilling that is both large enough to materially advance geological understanding, and large enough also to drive down costs per metre of drilling, which are presently high given the helicopter-accessible-only location and relatively small scale of the company's drill programs to date.
Exploration costs should significantly decline with the construction of a new bridge this summer over the Toodoggone River, and the extension of the road north across the river to Thesis Gold's nearby Ranch camp by other operators.
Evergold said it intends to take advantage of the improvements to local infrastructure to return to the GL1 Main zone target, operating at a lower cost, when conditions allow.
Holy Cross Property
The company plans to carry out an additional roughly 30 line-kilometre induced polarization survey in July or August to finalize drill targets, with drilling expected to be carried out later in the field season.
Further details will be announced when plans are finalised, it added.
Rockland, Nevada Property
A draft plan of operations for Phase 1 drilling at Rockland East is currently under review by permitting authorities. Permit receipt is anticipated in August or September.
Contact the author at jon.hopkins@proactiveinvestors.com