Balmoral (BAR, TSX) Welcomes Strategic Investment From Eric Sprott

The wisdom of buying a really good play on weakness…

Some relatively minor selling pressure came into Balmoral Resources (BAR, TSX) Friday morning, perhaps due to the drop in Gold and the pullback in Wallbridge (WM, TSX) on profit taking, but all charts on BAR show a primary uptrend and are pointing to an eventual breakout through key resistance at 24-25 cents.  So the stock was a smart buy on the dip to 20 cents early in yesterday’s session.  Bargain hunters quickly jumped in and drove the stock back up to a closing price of 24 cents on the news that Eric Sprott did indeed participate in the company’s just-completed financing for $3.5 million.

Sprott invested exactly $1 million by purchasing 5,882,353 units at a price of 17 cents per unit.  Each unit included half a warrant to purchase another share at 30 cents for a period of 18 months.

Giddyup is what John Foulkes, Vice President, said about the news on Twitter.  It was an off day for Gold but a good day for Balmoral shareholders.  The company is now fully funded for 2020 with approximately $6 million in working capital.  With Sprott’s endorsement, look for some follow through buying in BAR Monday morning, perhaps a break above the mid-20’s resistance.

Next up is assay results from 9 holes that have already been drilled, part of Balmoral’s Phase II drill program at Area 52.

The goal for Phase 1 was just to get a feel for what’s happening on the southern side of Area 51, a corridor where Wallbridge (WM, TSX) has been pulling really-really great holes from (like 27 g/t Au over 38 m). With only a limited 4-hole program, Balmoral was successful in confirming Area 51-style mineralization at Area 52.  CEO Darin was also particularly excited about having discovered a new high-grade near-surface Gold zone proximal to a previously untested segment of this major regional fault system.

Hole 19–03 assayed 14 g/t Au over 3.3 m at a depth of 133 m (Wallbridge’s biggest hits are down around 500–600 m).  What’s intriguing about Hole 19–03 is that it intersected good grades in the “sediments”.  None of the 4 holes drilled during Phase I hit the east-west shear with the brittle monzonite body.  To my understanding, all 9 holes from Phase 2 hit the brittle monzonite body, a zone that should be more juicy according to the geology.

So Balmoral’s Phase I was successful in terms of showing Area 51-style mineralization extends onto its property.  Monzonite, the preferential rock type for Wallbridge, is there.  Finding decent grades, up to 14 g/t Au, much shallower and in a different rock type (sediments) was a bonus.

Moving into what we know about Balmoral’s Phase II program, keep the context in mind – something like 400+ holes have been drilled at Fenelon compared to 4 in the areas surrounding it.

All 9 holes drilled during Phase 2 tested that shear zone pictured above, and where it intersects with the monzonite unit.  Balmoral’s decision to hold the rigs on that shear zone and nothing else should tell you a lot (Foulkes has been hinting).  Initially the plan was to drill 6 holes but they drilled 9.  Plus, as per previously released news, we know visible Gold was intersected in at least 1 of those holes (the very first hole!).  Given the VG, when the assays are published, likely within the next few weeks, the odds favor Balmoral having at least 1 hole with a “headline” number (Wallbridge should have another announcement in that time frame, too, or sooner).