This past month I participated in a financing for a gold exploration company called Ashley Gold (ASHL.C). You may be wondering why, at a time when gold explorers are throwing nooses over the rafters and writing ‘goodbye cruel world’ notes, I would commit to leaving my cash in a four-month hold on one of them, and in doing so take out a sizable chunk of the company.

Well here’s my thinking:

No, it’s not that I’m a huge fan of the reality TV show Hardcore Pawn, which features a woman named Ashley Gold [seen right].

It’s more that I think gold is going to make a comeback.

Not a massive spike, not a ‘back to the old days’ rally, but I do believe a return is overdue and when it does happen, there’ll be tides coming with it.

Ashley is tiny. Like, really tiny. $1.9m market cap, which means those tides may have an outsized effect.

And what comes with that? Properties with historic exploration, that are close to infrastructure and neighbours having success. Nothing crazy, nothing they need to overspend on to keep, just good little properties that, at this stage, could use a little rock kicking to see if the historic miners missed anything.

The Basics:

• Ashley Gold boasts a proficient board and team with a history of successful financing, discovering, and developing. These guys aren’t going all in on a whim, they’re taking educated guesses on properties with lots of potential upside that are close to the action.
• Their aim is to establish themselves as a long-term growth-focused prospect generator with minimal costs, that will grind out the work with low risk and work to develop in the same way the Metalla Royalty and Streaming’s (MTA.V) of the world have.. I like that, because Metalla was one of my first deals and became a $300m beast from similar humble beginnings.

Their Projects, all near Dryden, Ontario:

• They own Tabor Lake Mine, known for its high gold concentration based on historical drills. A new drilling project is in the pipeline.
• The Howie Lake property, which Ashley Gold fully owns, is adjacent to Dynasty Gold’s (DYG.V) significant gold resource. New studies suggest this property has a gold system similar to Dynasty’s, with vast areas yet to be explored.
• Their Alto-Gardnar property is near Treasury Metals’ (TML.T) significant gold resource.

Why Now?

• Currently, commodity stocks are the most affordable they’ve been since the Great Depression.
• Gold can help safeguard investments against inflation, which we’re having a bit of, you may have heard.
• With the rising prices of precious metals, there’s potential for economically viable exploration.

When I met with Darcy Christian, Ashley’s CEO, I told him that if I was going to work with him on telling his story, he had to be prepared that, should he miss his milestones, I might say mean things about him, because that’s how we roll here. We’re not gormless promoters, we’re journalists and our reputation matters.

That brought a wry smile.

I know that smile. That’s the smile of a guy who is looking to build something real and has nothing to hide, and has been pitched by a hundred marketing guys who want to send a million stock options to Germany and a few hundo K shares to their Twitter guy, and a half million bucks to this big swinging dick or that shady dealer for Google ads, and he’s decided they can all pound sand.

He’s been waiting for someone to say, ‘yes but is there a company here‘, because people who would give a shit about that line of questioning are the ones he’s trying to talk to, and we did indeed ask that question.

“We’re not builkding a four month share play here,” he says. “We’re taking the necessary steps to move our projects forward, just enough to get a good read on them and see what we should build towards going forward, and we’re going to do that one step at a time so we don’t risk the whole thing trying to sprint instead of jog.”

To do that, Ashley needed to raise a little money – focus on the word ‘little’. Their raise was a tiny one, but so too is their market cap, and so too was their need.

“All we took was all we need,” Christian says. “No panic, no rush, we have some work to do and now the cheques are in, we’re doing it.”

But Are They Really?
Yes sir, they’re moving on the Howie project which, to me, is the pick of the bunch.

• The Howie Lake claims share a common boundary with the Thundercloud Lake (Pelham Project) that is currently operated by Dynasty Gold and hosts a defined resource of 180,000 oz Au.
• The Howie Lake Property is located 55 km to the southeast of Dryden, Ontario.
• The property can be accessed through a year-round gravel road that leads south of Trans-Canada Highway #17, the main access road from Thunder Bay, Ontario.

This means MORE work can be done because the weather isn’t a killer, less costs in setting up because they don’t need to build the infrastructure that’s already there, and the employees can drive in to town for lunch, rather than needing to be choppered in.

What’s The Plan?
They’ve already found some areas with gold from previous work. Now, the plan to collect samples from areas where old data might be missing and look for signs of gold in new spots.

“We have historic data but it’s old, no cores around, so we’re going to double check, see what was missed, confirm what we can, and depending on these results, we’ll decide on the next steps for really progressing things.”

For you, the casual retail investor, those words probably don’t scream, “MA! GET THE CASH OUT FROM UNDER THE MATTRESS, WE’RE ALL IN!” but I’d suggest Ma might want to kick a few bucks out from under the Tempurpedic, because it being early stage on the exploration front is exactly why the market cap is only $1.9 million.

Why is the Howie Property Important?

1. It’s close to another significant property owned by a company called Dynasty Gold. There’s a belief that gold presence in both properties might be linked.
2. Several signs show that gold might be present in various parts of the Howie property. Some of these signs were noted way back in the 1980s and Ashley plans to start more detailed work in these areas next month.

What Do We Already Know?
The Howie property has spots where signs of gold have been found in the past:

1. Main Katisha: Gold traces found up to 100 meters, with differing amounts found in earlier sampling from 1.2 grams per tonne Au to 30 g/t Aus – but depth is largely unknown.
2. South Katisha: Another spot with gold, albeit limited data.
3. Howie zone: Close to South Katisha and believed to be an extension of it. Some samples here showed decent gold amounts up to 5 g/t Au.
4. Zig Zag, Fiji, Twilight, Howie Lake, Kawie zones: Various other spots with different signs of gold presence, ranging from interesting to ‘k cool ok, maybe later.’

Why Did I Invest?

Because people are important, and these people are doing the work, sticking to their knitting, and giving a stiff arm to the super hypey bullshit crews that will jump a share price 30% in day one of a three-day campaign, and cash out on day 2.

I like builders. I like the guys who go up to the property to make sure things are going to plan. I like the CEOs who’ll save a few bucks by lifting rocks themselves, rather than chowing at Cactus Club and shaking hands at Hollyburn.

They might miss.  Chances are, they’ll hit something because they’re not flying blind, but it’s anyones guess as to whether what they hit makes heads turn. That’s just reality of any stage 1 mining explorer and anyone who doesn’t lay out the risks is doing you dirty.

But why I bought in was, at a $1.9 million market cap with only 24 million shares out, this thing is right at that sweet spot for guys like me, where ONE SINGLE GOOD NEWS RELEASE will make a significant upward move on the share price, and where a decent sized investment gets you 5% of the whole damn company. I’m not just an investor, I’m a bully at the table.

And others have started to notice, with trading volume up significantly this month and the stock looking to break out several times.

There may be some weak hands to work through, as those gains haven’t stuck more than a few days, but they tend not to when a financing is happening.

The next month will tell you everything about Ashley Gold, the people making it run, the reality under the ground, and the intestinal fortitude of the shareholder base.

Personally, I’m not even looking at the share price on the daily, because my money is here for the forseeable. I’m betting they can bring results that firm up the underlying theory that there’s gold in them thar hills, and these guys will be sturdy enough to stick around long enough to find some.

If I’m wrong, I’ll lose my stake. But if Im right, I have the chance to get my stake back again and again as they do the work. I think that’s a good trade off.

— Chris Parry

FULL DISCLOSURE: They’re a client and I’m a holder, and I’m conflicted up and down as a result, but also I don’t bullshit about these things, as anyone who has read this site for a week or more can attest.