Resource World Magazine

26 www.resourceworld.com a u g u s t / s e p t e m b e r 2 0 1 6 b r o k e r ' s p i c k s S t e w Vo r b e r g I n the current market environment where money for exploration is difficult to raise, the quest for quick cash flow has become the holy-grail for a number of junior companies. The idea is simple enough; raise a small amount of capital, enough to start a small mining operation and generate cash flow to help grow the company while minimiz- ing excessive shareholder dilution. Unfortunately, executing this kind of plan is often easier said than done. At the very least you need a capable development team with a promising project in a mining friendly jurisdiction. I believe Winston Gold Mining Corp. [WGC-CSE] is a company that has these qualities. Winston's development team is led by Mike Gunsinger, Director of Operations, a very experienced high-grade underground miner who has advanced numerous projects into production. The company is a relatively new listing that was formed with the goal of quickly exploiting a known, high-grade, gold vein system, located just 37 km southeast of Helena, Montana. The project, known as the Winston District Gold Project, is easily accessible by paved highway and is close to infrastructure. This leased property has historically produced over 100,000 ounces of gold from 150,000 tons of mined material – that works out to an average historic grade of 0.66 oz/ton or 22.6 grams/tonne. Most of this production came from the Custer Vein system, which was only mined to the water table. No modern drilling has been performed on this vein system and there is no evidence that mineralization does not continue to depth. Between 1984 and 1996, previous oper- ators drilled over 630 holes (worth over US $12 million in exploration) with the goal of trying to outline a near surface deposit amenable to open pit mining. Only a small low-grade resource was outlined and the project was dropped. Winston's geologic team took this data and identified a num- ber of high-grade vein structures that splayed off of the main Custer Vein system. These high-grade veins are known as the Edna Trend. Winston plans to drill 5,500 feet of core into the Edna Trend to verify and extend the zone to the west. In addition, the com- pany plans on drilling an additional 3,330 feet to test mineralization below the old workings of the Custer Vein. The company's mantra is "Drill for Structure, Mine for Gold." Taking that approach, Winston intends to waste no time opening up an old mining adit and driving towards the Edna Vein trend. Even though Montana has a ban on surface cya- nide heap leach operations, the state is very progressive towards small underground mining operations. Winston's operation will comply with Montana's small miner's laws and the company's management has built a good working relationship with the Department of Environmental Quality (DEQ). As a result, permitting a small mining operation should not be a long drawn-out process. I like this company because they have an experienced team with a no-nonsense cost- effective approach to mining. However, there are still a lot of associated risks. There is no Preliminary Economic Assessment or NI-43-101 compliant resource estimates on the property. As a result, investors have no third party confirmation of the size or grade of mineralization or whether or not it can be economically exploited. The company still needs to complete some confirmation drilling but based on historic results, I believe there is a good chance that they will confirm and extend the high-grade vein systems on the prop- erty. This should provide the company enough confidence to start small-scale mining operations. n Stew Vorberg is an Investment Advisor with Mackie Research Capital Corporation (MRCC). This article was prepared, in part, under contract by Thomas Schuster. The opinions, estimates and projections herein are those of the author and may not reflect that of MRCC. The information and opinions con- tained herein have been compiled and derived from sources believed to be reliable, but no rep- resentation or warranty, expressed or implied, is made as to their accuracy or completeness. The issuer(s) mentioned in this article may not be suitable for all investors. Please consult an investment professional for advice regard- ing your particular circumstance. Neither the author nor MRCC accepts liability whatsoever for any loss arising from any use of this article or its contents. Information may be available to MRCC which is not reflected herein. This article is not to be construed as an offer to sell or a solicitation for an offer to buy any securi- ties. The information contained in this article is not intended to constitute a research report. Stew Vorberg is a beneficial owner of the com- pany highlighted in this article. Winston Gold Mining envisions small high-grade operation COMPANy AIMS TO RE-OPEN OLD GOLD MINE

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